National Treatment under GATT Article III: 2 and its Applicability in the Context of Korea’s FTAs

Sherzod Shadikhodjaev ()
Additional contact information
Sherzod Shadikhodjaev: Korea Institute for International Economic Policy

East Asian Economic Review, 2008, vol. 12, issue 1, 65-109

Abstract: GATT Article III: 2 on national treatment on internal taxation is an integral part of Korea's FTAs. Therefore, GATT/WTO case law provides useful guidance on proper application of this provision in the FTA context. Article III:2 involves a multi-tiered test of several issues including likeness, discriminatory threshold, and protective application of a tax measure. When the FTA parties enter into a dispute over national treatment, the problem of applicable law may arise. First, FTA panels are not obliged to rely on GATT/WTO jurisprudence. Nevertheless, given the incorporation of GATT Article III into the FTA, it is suggested that FTA panels follow WTO case law to secure consistent and predictable applGATT Article III: 2 on national treatment on internal taxation is an integral part of Korea's FTAs. Therefore, GATT/WTO case law provides useful guidance on proper application of this provision in the FTA context. Article III:2 involves a multi-tiered test of several issues including likeness, discriminatory threshold, and protective application of a tax measure. When the FTA parties enter into a dispute over national treatment, the problem of applicable law may arise. First, FTA panels are not obliged to rely on GATT/WTO jurisprudence. Nevertheless, given the incorporation of GATT Article III into the FTA, it is suggested that FTA panels follow WTO case law to secure consistent and predictable application of the national treatment rule. Second, it is questionable whether WTO panels can examine claims under the GATT-plus provisions on national treatment contained in the FTA. In order to avoid possible jurisprudential difficulties, disputing parties may choose to refer the matter to an FTA panel, instead of launching a WTO dispute settlement procedure. Alternatively, the parties may agree, pursuant to DSU Article 7.3, on non-standard terms of reference of the panel where a GATT-plus provision is explicitly listed. In both scenarios, the GATT-plus provisions, as a lex posterior, should prevail over the corresponding GATT provisions.

Keywords: Non-discrimination; National Treatment; Internal Taxation; Like Product; Directly Competitive Or Substitutable Product; FTA (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2008
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.11644/KIEP.JEAI.2008.12.1.180 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:eaerev:0137

Access Statistics for this article

East Asian Economic Review is currently edited by JE Lee

More articles in East Asian Economic Review from Korea Institute for International Economic Policy [30147] 3rd Floor Building C Sejong National Research Complex 370 Sicheong-daero Sejong-si, Korea. Contact information at EDIRC.
Bibliographic data for series maintained by JE Lee ().