The "Like Products" rule as a normative concept in the WTO system : a critique of its effectiveness and consistency with trade liberalization

Publication Type:
Thesis
Issue Date:
2007
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NO FULL TEXT AVAILABLE. Access is restricted indefinitely. ----- The "like products" rule is a non-discrimination policy tool that represents the core of the World Trade Organization (hereinafter "WTO") trade liberalization system. It is meant to lead to consistent outcomes, in terms of trade benefits, for all countries at all developmental levels. The WTO seeks to achieve its trade liberalization objectives through the adoption of a non-discrimination policy under the Most Favored Nation Treatment (MFN) principle in Article I of the General Agreement on Tariffs and Trade ("GA TT") and the national treatment principle in Article III. To see how effective 'like products" rule works in actual trade practice it is necessary to look at a free trade example (Jordan-U.S free trade). The thesis includes a comparative analysis of pharmaceutical industries in both countries. Examination of free trade between the two countries under the "like products" rule will show the impact of economic or technological differences on the ability of the countries to benefit from free trade based on the "like products". The pursuit of the trade liberalization objectives underpinned by the MFN and the national treatment principle is essentially dependent on a proper definition and articulation of what constitutes a "like product". In spite of the significance of the "like products" concept, its scope and definition is far from clear. The GA IT Agreement included no explanation as to the criteria to determine likeness among products and the issue of finding appropriate criteria was and still remains a major difficulty when applying Article III to a trade conflict. Interpretation of the "like products" term has been subject to scholarly and judicial discussion, however, scholarly analysis related to interpretation of likeness is still limited. Attempts to address the interpretation of likeness by the WTO Dispute Settlement Body (hereinafter "DSB") (the Panel and Appellate Body) has not made any significant difference to the issue. This thesis seeks to examine the "like products" rule in Article III of GA IT as a normative concept and to determine whether its effects are consistent with GA IT/WTO development objectives of raising standards of living, sustainable growth and economic efficiency. In particular, the thesis examines whether the application of the rule is capable of producing consistent outcomes, in terms of trade benefits and competitiveness, to countries at all developmental levels. The thesis seeks to conclude that the current case-by-case analysis approach (brought by the 1970 Working Party report on Border Tax Adjustments) to determine the concept of likeness has failed to provide a unified definition to what can be considered as "like products". The existence of economic and technological inequality undermines the functioning of the "like products" rule. The Jordan-U.S free trade example of the pharmaceutical industry in relation to "like products" rule obviously confirms in practice that economic power and the technological gap between countries can alter the outcome of the application of the "like products" rule. This thesis has 12 chapters. Chapter 1 is the introduction. Chapters 2-6 will examine the "like products" interpretation in Article III of GA TI/WTO in light of the DSB decisions and the relevant scholarly discussion. Chapters 7-8 are devoted to an analysis to the GA TT export-led growth model and relationship between national treatment and competition. The thesis examines the Jordan-U.S Free Trade Agreement and specifically pharmaceuticals trade in chapters 9-11. The analysis of Jordan-U.S free trade example will reveal whether the application of "like products" rule leads to consistent outcomes in terms of trade benefits for all sides regardless of developmental level. Chapter 12 is the conclusion.
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