Like Products


Japan – Alcohol and EC – Asbestos

  • Many principles in the WTO (e.g. MFN and National Treatment) compare a nation’s treatment of a domestic or imported product with another.
    • If goods are “like” then the treatment afforded to them may be compared.
  • The decision in Japan – Alcohol showed that there are two distinct tests of likeness, for different section of National Treatment.

Sentence One of GATT Art. 3:2 (The Bullseye)

  • The test in the first sentence has a narrow application: only for products that are close to identical
    • To identify if products are close to identical, we use the Border Tax Adjustment Test
      • Identical tariff classifications
      • Similar end uses
      • Similar properties, including quality
      • Are seemingly similar according to the tastes and habits of consumers
    • This strict test, however, is tempered by a ”case by case” basis mentioned by the DSB in the Japan – Alcohol case
  • Once it is established, with the above test, that the products are close to identical, IFF
    • There is any difference in tax (including a de minimisdifference)
    • Then there is a breach

Sentence Two of GATT Art. 3:2 (The Rest of the Target) – “Directly competitive and substitutable”

  • The test in the second sentence has a broader application due to its reference to the first paragraph.
    • The goods must be directly competitive and substitutable
      • The test, here, is less strict than the Border Tax Adjustment Tax used in GATT Art. 3:2, Sentence 1
      • The main factor is cross price elasticity
        • If the price/supple of one good affects the price of another, then they are considered like
  • IFF the goods are directly competitive and substitutable,
  • AND they are taxed dissimilarly (a de minimisdifference, here, is not sufficient)
  • AND it is “so as to afford protection” to the domestic good (GATT Art. 3:1)
    • Note: here,intent is not tested; rather the practical effect of the barrier is looked to: an objective test.
  • THEN there is a breach

Likeness in EC – Asbestos (Between Bullseye and Border)

In EC – Asbestos, analysing GATT Art. 3:4, the Panel accepted the use of the Border Tax Adjustment test, but included the PPM’s (Process and Production Methods) of “health risks”, albeit within the scope of the current test.

Casenotes

  • Japan – Alcohol
    • Facts
      • Japan taxed Shoju differently from Vodka (very similar drinks, just Shoju is from Japan)
      • This seemed to be discrimination: whilst the products were not identical, they may have been like
    • Held
      • Shoju and Vodka are like, under Art. 3:2 sentence 1
      • Shoju and Whisky, etc. are directly competitive and substituteable, under Art. 3:2 sentence 2
  • EC – Asbestos
    • Note
      • It may be that this whole decision is obiter
      • It should have been decided on Article 20 or SPS grounds, though this wasn’t brought up in the Panel, so the Appellate Body could not consider it
    • Facts
      • Canada wanted to export asbestos fibreboard to Europe, which had a ban on it
      • The asbestos product was banned in Europe, but similar, non-carcinogenic, non-asbestos products were legal
  • Were these products like?
    • Held
      • The Appellate body stated that it would have been better to bring the case under TBT, but, this wasn’t brought up in the Panel, and the Appellate Body lacks power of remand,
      • Thus, the case was decided on GATT Art. 4.
        • It would have been decided on GATT Art. 20, but it was already found to be not “like,” thus, an analysis of GATT Art. 20was not required.
        • Thus, any discussion of GATT Art. 20 would technically be Dicta, although it has been held as binding
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