It is a Memorandum.
Anchuria – Measures Affecting Fruit Juice1
Instructions: Please prepare a briefing memorandum to Ambassador Mendoza of Anchuria answering the questions set out below. Your memorandum should be based on the cited provisions of the GATT, the WTO Agreement on Subsidies and Countervailing Measures, and the WTO Agreement on Sanitary and Phytosanitary Measures, together with the readings in Jackson et al. Additional research should be unnecessary and may well be counterproductive. Please answer each question separately and number each answer. Please turn in a hard copy of your memorandum in class and submit an electronic copy via TWEN. On both the hard copy and electronic copy, please use only an anonymous number to identify yourself.
You are a lawyer with Hardy & Housman, a law firm that advises and represents the Government of Anchuria in international trade law matters. Anchuria is a small developing country and member of the World Trade Organization. Anchuria has recently received a request for consultations pursuant to the WTO Dispute Settlement Understanding from the Government of Nordlandia, a wealthy industrial country that is also a member of the WTO.
Nordlandia’s request for consultations explains that Superdrink Corporation, a Nordlandian company, has reported that it faces unlawful and unjustifiable trade barriers in Anchuria that restrict its efforts to export its products to Anchuria. Superdrink is one of the world’s largest producers of fruit juices, among other beverages. As explained below in more detail, the request for consultations asserts that the trade barriers constitute violations of GATT articles I(1), II(1), III(2), and III(4), and XI(1), the WTO Agreement on Subsidies and Countervailing Measures, and the WTO Agreement on Sanitary and Phytosanitary Measures.
Under its WTO Schedule of Concessions, Anchuria’s bound duties on imported fruit juices (tariff heading 2009) are 15 percent ad valorem. Anchuria assesses customs duties at these rates on fruit juices imported from Nordlandia.
Ambassador Teresa Mendoza, Anchuria’s Permanent Representative to the WTO, asks you to advise Anchuria’s Government on whether any of the trade measures identified by Nordlandia in paragraphs (i) through (iv) below constitutes a violation of one or more of the cited GATT provisions and WTO Agreements. In part (i), Ambassador Mendoza asks you whether Anchuria can successfully assert a defense under article XXIV or the Enabling Clause. In part (iv), the Ambassador asks you whether Anchuria can successfully assert a defense under article XX(b) or (g).
(i) Anchuria has entered into a tripartite trade agreement with Frankonia (a wealthy industrial country that is a WTO member) and Costa Brava (a small developing country that is a WTO member) governing trade in food and beverages among the three countries. Pursuant to the trade agreement, Anchuria imposes customs duties of 10 percent on fruit juices produced in Frankonia or Costa Brava and imported into Anchuria. Nordlandia alleges that this treatment violates GATT article I. As indicated above, your advice should include discussion of whether Anchuria can assert a defense under article XXIV or the Enabling Clause. The tripartite trade
1 Adapted from Peter Van den Bossche, The Law and Policy of the World Trade Organization: Text, Cases and Materials 372-73 & 689-91 (2005).
??1
agreement also reduces the Frankonian and Costa Bravan customs duties on Anchuria’s exports of fruit juices to those two countries.
(ii) In addition to customs duties, Anchuria imposes an internal excise tax of 4 percent on mango, papaya, and guava fruit juices, and 5 percent on all other fruit juices. Anchuria is a large grower of mangos, papayas, and guavas, as well as producing juices of these fruits. Superdrink exports orange juice, grapefruit juice, pineapple juice, grape juice, apple juice, and cranberry juice to Anchuria. Nordlandia alleges that Anchuria’s taxation of fruit juices violates GATT articles II:1 and GATT article III:2.
(iii) Anchuria has established a program of government-subsidized low-interest loans to assist small businesses. Under the program, small cafes in Anchuria are eligible to receive government-subsidized low-interest loans to assist them in financing the purchase of fruit juices made in Anchuria. Nordlandia alleges that this program violates GATT article III:4 and the WTO Agreement on Subsidies and Countervailing Measures.
(iv) Since 2010, Anchurian law has prohibited the importation and domestic sale of fruit juice in cardboard cartons. It only allows the importation and domestic sale of fruit juice in glass bottles. According to Anchuria’s Bureau of Public Health and Environmental Protection, glass bottles can be recycled more easily and efficiently than cardboard cartons. The Bureau of Public Health and Environmental Protection claims that glass bottles are almost 100 percent recyclable, while cardboard cartons are only 70 percent recyclable. The Bureau of Public Health and Environmental Protection also claims that cardboard cartons degrade with time and then contaminate any liquid they hold. The Bureau has obtained some scientific studies in support of its position on the recyclability and the danger of contamination. The majority of scientific studies on the recyclability of glass bottles and cardboard cartons conclude, however, that there is little difference in practice between the two types of container. The majority of scientific studies on the danger of contamination conclude that, if any such danger exists, it arises only long after the fruit juice held in the cardboard carton would have spoiled in the ordinary course of time.
Before 2010, Superdrink was the main exporter of fruit juice in cardboard cartons to Anchuria. Its business was, therefore, seriously affected by Anchuria’s prohibition on the importation and domestic sale of fruit juice in cardboard cartons. According to the Government of Nordlandia, Anchuria sets an exaggeratedly high level of environmental and public health protection. Nordlandia argues that there is no scientific basis for the import ban. In the alternative, Nordlandia argues that Anchuria, rather than prohibiting the importation and domestic sale of fruit juices in cardboard cartons, could achieve its environmental objectives by imposing an environmental tax on cardboard cartons that would discourage the use of cardboard cartons. It should be noted that Anchuria does not prohibit the use of cardboard cartons for alcoholic beverages such as wine. Moreover, Nordlandia asserts that Anchuria did not take
into consideration that Nordlandia, unlike Anchuria, has a long tradition of using cardboard cartons for fruit juices. Nordlandia also notes that Anchuria rejected out of hand Nordlandia’s invitation to start international negotiations on a gradual reduction in the use of cardboard cartons for fruit juices.
2
Anchuria introduced the prohibition on the importation and domestic sale of fruit juice in cardboard cartons in 2010 under pressure from Anchuria’s environmental NGOs and consumer advocates. In addition, behind the scenes, TrueBleu S.A. and Verras S.A., the country’s two manufacturers of glass bottles, also lobbied hard for the prohibition on the importation and domestic sale of fruit juice in cardboard cartons.
Nordlandia’s request for consultations claims that the import ban violates GATT article XI. Nordlandia also claims that the measure violates the WTO Agreement on Sanitary and Phytosanitary Measures because it is maintained without sufficient scientific evidence, in violation of article 2.2. With respect to the alleged violation of article XI, Ambassador Mendoza asks you to evaluate whether Anchuria can assert a defense under article XX(b) or (g).
the file of the assignment will be attached and the source that need to rely on will be attach too which are the WTO and GATT agreement .