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«Russia and the World Community’s Respond to a Challenge of Instability of Economic and Legal Systems Materials of the International Scientific-practical Conference ...»

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Also, it was necessary for the Court to explain in more detail how the new test was to be applied to national measures falling within the category of ‘selling arrangements’. Generally it was a discrimination test, but at least some cases could indicate that the Court had slowly started to develop this test to include certain non-discriminatory restrictions. Whereas Article 34 TFEU, on import restrictions, has been interpreted as including non-discriminatory restrictions, Article 35, which prohibits quantitative export restrictions and measures having equivalent effect, was interpreted as only prohibiting discrimination. This difference was hard to understand, given that the two provisions are identically phrased with the only difference being that one focuses on imports and the other on exports.101 The most likely explanation for the difference in interpretation is that export restrictions are much more seldom and are thus not normally that restrictive to trade.

2.1.2. Services and establishment The freedom to provide services was also interpreted very early on as including non-discriminatory restrictions.102 To begin with the Court seemed reluctant to take the step of prohibiting non-discriminatory restrictions on freedom of establishment, 103 but eventually the Court also came round to doing so. Para. 17.

This was indicated in several cases dealing with the marketing of products such as Case C-405/98, Gourmet International Products [2001] ECR I-01795; Case 239/02, Egberts [2004] ECR I-7007; and Case C-322/01, Deutscher Apothekerverband [2003] ECR I-14887. See also D. Wilsher, ‘Does Keck Discrimination make any sense? An assessment of the non-discrimination principle within the European Single Market’, European Law Review (2008), 3-22.

The Court has indicated a slightly different interpretation of Article 35 in Case C-205/07, Gysbrechts [2008] ECR I-9947, but it is not clear that the Court has taken the step of including non-discriminatory restrictions. For a discussion of the case see W.-H. Roth, ‘Case C-250/07, Lodewijk Gysbrechts, Saturel Inter BVBA, Judgment of the Court of Justice (Grand Chamber) of 16 December 2008, not yet reported’, Common Market Law Review, 47, no. 2 (2010), 509-520.

This was clear after the judgment in Case C-76/90, Sger [1991] ECR I-4221, but was also indicated in earlier cases.

Thus in Case 221/85, Commission v Belgium [1987] ECR 719, the Court dismissed the argument by the Commission that Article 49 TFEU (then Article 52 EC) also prohibited non-discriminatory restrictions.

This step was indicated in Case C-19/92, Kraus [1993] ECR I-1663; and it was confirmed in Case C-55/94, Gebhard [1995] ECR I-416, para. 37.

The Court found that any national rule that is likely to impede or make the exercise of these two freedoms less attractive should be regarded as a restriction, and should be submitted to a review as to whether the national rule served overriding reasons relating to the public interest and was proportional.

After the Court handed down its judgment in Keck, it was logical to ask whether this judgment would also limit the review of non-discriminatory restrictions under the rules on establishment and services (Articles 49 and 56 TFEU) in the same way as for Article 34. The Member States tried to argue this in a number of cases, normally arguing that only rules impeding market access should be submitted to the test. 105 However, the Court has handed down judgments that have not clearly indicates whether it agrees with this limitation or not. 106 Therefore there is still a debate about the extent to which non-discriminatory restrictions can be challenged under Articles 49 and 56. 2.2.1. Goods and GATT GATT Article XI prohibits quantitative restrictions on imports and exports.

The provision gives examples of non-tariff import measures such as quotas or import licences, and also includes ‘other measures’ which may act as restrictions on imports or exports. Article XI applies to restrictions on importation or exportation (i.e. border measures) whereas internal measures affecting traded goods should be examined under Article III. As the ote to Article III indicates, the fact that the imported goods are restricted at the point of import does not necessarily mean that a measure falls under Article XI. If the restriction on imports is only equivalent to restrictions that are also imposed on domestic products, then Article XI does not apply. For instance, an import ban will not contravene Article XI if the sale of like domestic products is also prohibited. The cases include, on Article 49, Case C-415/93, Bosman [1995] ECR I-4921 ; Case C-190/98, Graf [2000] ECR I-493; Case C-493/99, Commission v Germany [2001] ECR I-8163 ; Case C-464/02, Commission v Denmark [2005] ECR I-7929 ; and on Article 56, Case C-384/93, Alpine Investment [1995] ECR I-1141 ; and Joined Cases C-34-36/95, Agostini [1997] ECR I-3843.

It should be added that there are cases where it is assumed that Article 56 is limited to prohibiting discrimination, but it is unclear how they fit in with the rest of the case law; see for instance Joined Cases C-544/03 & CMobistar [2005] ECR I-7723. Interestingly the case is about an excise tax and in relation to direct taxes it has been argued – with some support in the case law – that the Court restricts itself to examining discriminatory taxes, see e.g. C. Barnard, The Substantive Law of the EU, 3rd ed. (Oxford: Oxford University Press, 2010), pp. 336-344. Advocate General Geelhoed has suggested this, as it is very difficult to apply a test of nondiscriminatory restriction in the area of taxation since taxes are by their nature restrictive; see his Opinion in Case C-374/04, ACT [2006] ECR I-11673, para. 36; and the Opinion in Case C-524/04, Thin Cap [2007] ECR Ipara. 48.

See e.g. L. Danielle, ‘Non-Discriminatory Restrictions to the Free movement of Persons’, European Law Review, 22 (1999), 191-200; K. E. Srensen, ‘Restriktionsforbuddet p etableringsrettens omrde’, Europarttslig Tidsskrift, 2 (1999), 620-641, H. Toner, ‘Non-discriminatory Obstacles to the Exercise of Treaty Rights – Articles 39, 43, 49 and 18 EC’, Yearbook of European Law, 23 (2004), 275-392; E. I. Kaldellis, ‘Freedom of Establishment versus Freedom to Provide Services: An Evaluation of Case-law Developments in the Area of Indistinctly Applicable Rules’, Legal Issues of Economic Integration, 28 (2001), 23-55; E. Spaventa, ‘From Gebhard to Carpenter: Towards a (non)economic European Constitution’, Common Market Law Review, 41 (2004), 743and J. Snell, ‘The Notion of Market Access: A Concept or a Slogan?’, Common Market Law Review (2010), 437-472, and the discussion in section 4.3 below.

See WT/DS135/R, EC – Asbestos, para. 8.92.

By focusing on rules which only apply to importation or exportation, Article XI seems to be a rule prohibiting national discrimination. Nevertheless it is possible that the WTO panels could interpret Article XI more broadly, to include certain non-discriminatory restrictions. 109 So far, the only attempt to go in this direction was suggested in the unadopted GATT panel reports concerning US restrictions on the import of tuna. 110 The USA regulated the taking of dolphins that was incidental to the harvesting of yellowfin tuna in the Eastern Tropical Pacific Ocean (ETP) by US fishermen. To supplement this national regulation of a fishing technique, all imports of yellowfin tuna were prohibited if the tuna was harvested in the ETP without similar reductions in the taking of dolphins. The USA argued that these measures were covered by GATT Article III:4 as they were requirements affecting the internal sale of tuna. This was not altered by the fact that the measures for imported tuna were enforced at the time of importation, since this was only a border adjustment measure pursuant according to the note to Article III. Were the panel to have followed this argument, the case would then have been focussed on an analysis of whether imported tuna was discriminated against compared to domestically harvested tuna. But the panel found that the border adjustment measures that were covered by the note to Article III were ‘only those covered measures that are applied to the product as such.’ Article III:4 calls for a comparison of the treatment of imported tuna as a product with the treatment of domestic tuna as a product, and not for a comparison of the policies of the country of origin with those of the country of importation. Rules not affecting the product as such, like the US measure on tuna, are not covered by Article III. Having established that Article III did not apply, the panel found that the US measures were inconsistent with Article XI. This indicates that the scope of Article XI has been expanded, while the scope of Article III has been limited. Since the PPMs in question were inconsistent with Article XI, whether or not they were discriminatory, the reports indicate that some non-discriminatory measures are covered by Article XI.

The stipulation that the measures are not ‘applied to the product as such’ seems to be the key to distinguishing between those rules falling within the scope of Article XI and those falling within the scope of Article III. A narrow interpretation of the reports in the Tuna cases would limit them to import restrictions that focus on PPMs, since these deal with the circumstances leading to the creation of the product and may not affect the product itself. Some PPMs may be manifest in the product, such as a requirement that certain ingredients or components should be used, and since these do affect the product they may still This has been suggested by Weiler, The EU, The WTO and the NAFTA, p. 229.

See BISD 39S/155, US – Tuna I and BISD DS29/R, US – Tuna II.

See BISD 39S/155, US – Tuna I, para. 5.14 and BISD DS29/R, US – Tuna II para. 5.8.

For a critical analysis of the product/PPM distinction see R. Howse and D. Regan, ‘The Product/Process Distinction – An Illusory Basis for Disciplining “Unilateralism” in Trade Policy’, Journal of International Economic Law, 11 (2000), 249-289; and Ortino, Basic Legal Instruments, pp. 85-92.

be covered by Article III.113 Other requirements will not directly affect the product, such as requirements that products should be produced in a specific location, while observing specific employee-protection rules or by workers with certain skills or a certain minimum pay. Even if such requirements fall under Article XI, Members do not always concern themselves with the conditions under which products are produced in other countries. When they do so, it will normally be for environmental or social policy reasons. However the reports are controversial, and it has been debated whether today a panel would reach a similar result. The reports seem subsequently to have been confirmed by a WTO panel in WT/DS58/R, US – Shrimp. However, since the USA did not challenge the argument that the measure was covered by Article XI, it is still uncertain whether the panel confirmed the US-Tuna decision.

On a more limited scale, GATT Article IX on marks of origin and Article X on transparency potentially prohibit certain non-discriminatory restrictions.

2.2.2. TBT and SPS Agreements The Agreement on Technical Barriers to Trade (TBT Agreement) requires technical regulations to comply with some requirements which go beyond the non-discrimination principle. According to Article 2.2, Members must ensure that their technical regulations are not more trade-restrictive than necessary to fulfil a legitimate objective, taking into account the risks which non-fulfilment would create. Such legitimate objectives are, inter alia: national security requirements, the prevention of deceptive practices, protection of human health or safety, animal or plant life or health, or the environment.

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