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Trade And Development Symposium. Perspectives On the Multilateral Trading System. How To Encourage The Network Trade Rules Interconnections? An Application To The Case Of Non Tariff Barriers

Report by Vaillant, Marcel, 2011

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The focus of this paper is different and is also a by-product of the globalization process. The extension of the set of economic activities in the international economy provokes an extension of the themes that require necessary consideration in trade agreements. The adaptation speed in the multilateral field is structurally slow. Countries are less willing to establish rules on the basis of Most Favored Nation than within preferential trade agreements. Hence the demands to expand and deepen in new topics have been channeled through the proliferation of preferential trade agreements. The content of commitments and themes in the agenda of international trade negotiations between national jurisdictions has widened: from the trade of goods to the trade of services, as well as to the mobility of some production factors. At the same time, the field where commitments are achieved has increased exponentially: bilateral agreements, plurilateral agreements, agreements between groups of countries, extension of agreement . This paper chooses, within the wider subject related to goods, the topic of non-tariff barriers, which will be more thoroughly developed in the third section.

16 - 17 December 2011


TRADE AND
DEVELOPMENT SYMPOSIUM
Perspectives on the Multilateral Trading System


How to encourage the network
trade rules interconnections?


An application to the case
of Non Tariff Barriers


By Marcel Vaillant


A Collection of Short Essays




2


Introduction


The current international trade agenda is usually
dominated by market-access issues. How much
access in my own market should be provided
in order to get better access conditions in the
neighbors’? The fragmentation of international
economic activity has strengthened the link
between protection of one’s own market and
foreign market access conditions. Baldwin and
Nicoud (2008) have pointed out that this is good
news from the perspective of expected results
related to the endogenous mechanisms of trade
liberalization1. Unilateral domestic trade policies
will increasingly become more open if countries
perceive that by reducing their own barriers they
will also reduce the neighbor’s. This mechanism
seems to have started acting gradually in the
conditions of trade in goods and particularly
in certain manufacturing sectors that tend to
converge to a trade of zero for zero. However,
there are still areas where a negotiating effort
is required as to get improvements in markets of
deeper distortion (certain sectors of agriculture
and manufacturing). The trade liberalization
topics included in the last package of the Doha
Round negotiations contained these topics, while
proposing a possible path to reach important
results in this direction, but the world is still
awaiting improvements in this field.


The focus of this paper is different and is also a by-
product of the globalization process. As the range
of economic activities in the international economy
expands, the themes that require necessary
consideration in trade agreements also grow. The
extension of the set of economic activities in the
international economy provokes an extension of
the themes that require necessary consideration
in trade agreements. The adaptation speed in the
multilateral field is structurally slow. Countries
are less willing to establish rules on the basis of
Most Favored Nation than within preferential trade
agreements. Hence the demands to expand and
deepen in new topics have been channeled through
the proliferation of preferential trade agreements.
The content of commitments and themes in the
agenda of international trade negotiations between
national jurisdictions has widened: from the trade
of goods to the trade of services, as well as to the
mobility of some production factors. At the same
time, the field where commitments are achieved
has increased exponentially: bilateral agreements,
plurilateral agreements, agreements between
groups of countries, extension of agreements. For
a diagnosis of what is happening, it is necessary to
build a complex and large matrix of information


that crosses the fields of commitment (columns of
the matrix) with its issues or contents (“lines”).


The biggest threat that looms over the international
trade system is the consistency, applicability
and use of the established set of rules. What is
committed in a certain “line” of the referred matrix
is different and often difficult to translate into
what is committed in another, and in some cases
rules can be openly inconsistent. It is necessary
to find issues that enable a systematic approach
to this problem, as to apply a methodology that
is plausible of being applied and then replicated
to other themes. It is necessary to obtain a result
based on a new working methodology. Pointing in
this direction, this paper chooses, within the wider
subject related to goods, the topic of non-tariff
barriers, which will be more thoroughly developed
in the third section.


Problem/Opportunity Statement and
State of Play


By shifting the focus of attention from
liberalization seeking to improve market access,
to the consistency, applicability and use of
established rules in agreements, it becomes
meaningless to continue with the procedure of
basing the agreement on a single undertaking
principle, by which all sectors and issues are
agreed upon simultaneously. In this proposal, a
phased approach in which issues are selected in
accordance to an increasing degree of difficulty
seems to make more sense. What is being proposed
is not an attempt to establish an alternative
strategy from the prevailing status quo, but a
complimentary path in which results could be
achieved faster than in conventional multilateral
negotiations. The aim is to improve the system
through the improvement of its consistency,
allocating the scarce political resources of
negotiation as efficiently as possible. The required
systemic order needs to establish some degree of
association between “lines” (agenda issues) and
columns (fields of negotiation), that establishes
an order of prevalence as to define which are the
most suitable fields to use in each case and to
expand from that particular place to the rest of
the space. In fact, that association exists. Think
of a simplified matrix including agenda issues and
negotiation fields (see table 1).


Given the virtual state of paralysis of multilateral
trade negotiations this is an excellent time to deal
with this subject. It has been repeatedly pointed
out that the threats of excessive fragmentation
of the system of international trade-rules would


How to encourage the network trade rules interconnections? December 2011
An application to the case of Non Tariff Barriers?


1 This mechanism works better in East Asia, than in Latin America or Sub-Saharan Africa where network trade is more rare. Works
better where there is a comparative advantage in the production of complex good. This comparative advantage may be endogenous
too. As if there is too much regional protection, the production of complex goods in networks becomes more difficult




3


be exacerbated in a world where multilateralism
is undergoing a period of weakness. The current
proposal seeks to achieve the opposite result:
strengthen multilateralism by imposing a higher
degree of specialization in the agenda and
allocating the political resources available for the
negotiations on goals or results that are likely to
be reached fast.


The world of economic relations works as a network
that has interconnection mechanisms that can be
differentiated by the subset of countries that are
included in the sample. This lack of harmonization
for movements from the jurisdiction of one
agreement to another can be expressed as an
additional transaction cost and can potentially
become an irreversible obstacle leading to the
fragmentation of the international trade system
as a whole.


To understand the current situation we can think
of different types of interconnected systems
that require mechanisms that enable them, at a
minimum cost, to work efficiently in their inter-
linkages. A simple example are electric grids,
despite the fact of being basic, mature and
associated to a homogenous service, it is possible to
find many differences between systems belonging
to different national jurisdictions that entail a
restriction to the mutual interconnectivity. If
one adopts the perspective of a travelling user
of electronic devices you can see the type of
problem we are facing. Different connection-chips
are used all over the world. These differences in
connection modes can be counted by tens. Being a
relatively simple and old problem, universal chips
have been invented to overcome this difficulty.
Trouble emerges when those chips do not exist.
This chips situation is comparable to the current
state of the international trade system in many of
its agenda topics. It could also be exemplified with
physical transportation networks and the capacity
to develop inter-linkages between different types
of transportation and national systems. In this
case, we can observe a transition from isolated
national systems with different means of transport
that retain a certain autonomy to an integral
development of different types of transport that
seek to articulate themselves in an international
system that links them together. From their
very origin information technologies exemplify
interconnected systems that where created on a
global and universal scale, in contraposition with
electric systems that where created on national
bases and norms. Even so, it is still possible to
present examples of fragmentation in the design


of more basic operative systems that can become
an obstacle to its proper functioning. Again we see
that the system’s capacity to properly function
depends on its ability to establish inter-linkages.
The international trade system requires an
operative system that works behind all the other
existing networks of trade agreements and that
provides support and robust functioning. This is
precisely the role that the World Trade Organization
(WTO) should play, which widely transcends any
specific negotiation round in which market access
is exchanged on a reciprocal basis.2


With respect to the international trading
system, multilateralism established exceptions
to the principle of the most favored nation
(discrimination) that enabled the development of
multiple preferential commercial agreements, but
later multilateralism worked as if these agreements
didn’t exist. The international community built
systems that overlap and that work in isolation of
with very weak interconnections. Only recently,
in the Doha Round, a more defined movement can
be perceived that tries to consider this other part
of the system through the basic and fundamental
objective of promoting transparency through an
adequate information system.3


Responses


This section outlines a concrete proposal and
presents a specific example to implement the
above referred proposal. The proposal involves
establishing a list of issues that have systemic
effects that generate a different negotiation
dynamic and set forward a new method. This
proposal would involve dealing with issues that
are ranked according to their relevance inside the
system. Dealing with them on an individual basis
decoupled from the conventional agenda that will
follow its own known track. This list should be
short and essential. Long agendas that include
issues of different relevance and with no hierarchy
are the starting point of a new failure in trade
negotiations. Besides, the proposal involves a new
method that combines both the preferential and
multilateral spaces. It is also necessary to built or
adapt new rules of approval for the consolidation
of obtained results. The process should have a
defined institutional leadership and the necessary
attributes to exercise it.


3.1 Non trade barriers (NTBs)


I chose the issue of non-tariff barriers (NTBs)
applied in the trade of goods since it is a mature


2 This necessity to concentrate on the systematic aspects and consistency of the international trade system has been pointed out
with different intensity over the past years. A central reference in this regard is Baldwin and Low , 2009.


3 Important steps have been taken in this direction with the creation of the Data Base on regional Trade Agreements, available
online on the ITO webpage. There is still a long way to go, for example there is still no consistent and universal data base for
international trade that contains information on all preferential trade relations and its degree of usage.




4


and well-known subject and there is consensus
about the need to advance towards its eradication
inside the international trade system4. It is a
well known fact that the NTBs erode efforts
undertaken in any trade agreement that seeks to
reduce barriers in reciprocal trade. As the trade
liberalization processes advance lower tariffs
tend to be partially replaced by NTBs (both at the
extensive margin of new barriers, as well as the
intensive margin in the use of pre-existing ones).5


The current period of financial and economic crisis
has been especially critical in this sense as the
use of these measures has proliferated6. Several
studies illustrate this point. Even when many
NTBs have a conjuncture root and are likely to
gradually disappear governments’ inertia in the
application of such measures that may prolong
its effects. Trade relations are currently affected
by what is known as the murky protectionism,
the proliferation and intensification of the use of
non conventional measures with a protectionist
objective (Baldwin and Evenett,2009).


The proliferation of NTBs attacks one of the basic
principles that should guide the international
trading system as a whole: the transparency
of trade rules. Transparency is cornerstone to
the construction of a consistent international
system. Saez and Vaillant (2009) argue that
transparency is a general goal regardless of the
level of specific restrictions applied in each of the
negotiated rules. It has the advantage that it can
be achieved with each country’s unilateral effort.
Transparency is a prerequisite for any trade
negotiation. It is necessary to reclaim it to the
partner and it is essential to have the ability to
provide it unilaterally. It is a topic where every
possible area of rule building is combined.


The distortion effect of a NTB exceeds the concrete
size that it may have in terms of an equivalent tariff
that generates the same short term effects. NTBs
prolong its effect in time through the expectations
that they generate around the uncertainty related
to the rules of future trade and have permanent
consequences in the allocation of production,
consumption and trade.


The primacy of the multilateral framework in the
BNA issue should be unquestioned. It is unreasonable
to justify the existence of NTBs applied on a
discriminatory basis.7 Trade agreements should
be designed in such a way that exceptions to the
principle to the most favored nation are only


possible when the applied trade barriers are known.
This might imply a modification of the Article XXIV
so there are no doubts about its interpretation.
It might also require adjustments in the content
of many preferential trade agreements. The issue
calls for action and not only at a multilateral
level, but implementing a global dynamic of trade
agreement adjustments.


3.2 Case Study


The key is to generate procedures that ensure
a friendly link between multilateralism and
regionalism that is applied to the detection and
elimination of NTBs on the basis of the favored
nation principle. Regional agreements provoke
a dynamic of information exchange between its
members that is deeper and more detailed than
what is possible in a multilateral space. Besides,
given the greater relative proximity, higher
reciprocal knowledge among members allows a
better detection of these barriers. Moreover,
possibilities of retaliation are higher and appear
quicker and conveniently. All of these elements
are oriented in the direction that the scope of the
preferential agreements may be used as a stage
for a strategy with this objective.


Trade disputes in the context of regional
agreements that result in the removal of NTBs
must become extensive to the multilateral trading
system and its application mandatory on a non
discriminatory basis. The system requires the
construction of an strong inter-linkage between
the preferential trade system and the multilateral
system, reinforcing compliance paths between
them. This creation of fluid and almost automatic
inter-linkages should gradually extend to other
matters.


By reporting the facts of one case we can illustrate
the central point of this paper. The case relates to
the recent barriers to the imports of refurbished
tires into Brazil. This case began as a regional
trade dispute (Paraguay and Uruguay against
Brazil ) and then led to a case in Geneva with the
European Union (E.U.) in the context of the dispute
settlement understandig of the WTO (Lavopa and
Vaillant, 2011). Since the early nineties Brazil
prohibited imports of used tires8. In the past
decade, this prohibition was extended to include
refurbished tires. In the 2000s, while culminating
the process of creation of a free trade zone within
MERCOSUR that liberalized inter-regional trade
for these products, a possible trade flow from


4 The WTO’s 2012 trade report is on non-tariff barriers.
5 See Kee, Nicita and Olarreaga (2009) where they show that there is substitution between tariffs and NTBs and that NTBs are the


market access problem today (SPS and TBTs more generally).
6 See the ten reports of Global Trade Alert (http://www.globaltradealert.org/), particularly the last one (Evennet, 2011).
7 Note that even NTBs that are applied non-discriminatorily may have a discriminatory effect (see paper by Crozet and Mirza,


xxxx).
8 Brazil justifies this measure to preserve the environment through preventing an increase in stock of used tires. According to the


objectives of public health, it is said that used tires stock is positively related to the mosquito population that transmits Dengue




5


the region to Brazil was anticipated. Neighbor
countries would import used tires from the rest
of the world, refurbish them in the region and
export them to Brazil. As to avoid this trade flow,
Brazil extended the ban on imports of used tires
to refurbished ones. This measure led to a dispute
within MERCOSUR that resulted in a ruling that
mandated Brazil to lift the measures for Paraguay
and Uruguay. Brazil complied with the ruling but
only lifted the measure for its regional partners.
This generated a response from the E.U., which
filed a case before the WTO’s dispute settlement
understanding arguing that the discriminatory
treatment from Brazil was unjustified. The
process involved the creation of a special group
that primarily ruled in favor of Brazil. The E.U.
appealed before the appellate body of the WTO’s
dispute settlement understanding, which body
ruled in its favor. In order to comply with Geneva,
Brazil re-established its ban at a regional level
thus violating the ruling of MERCOSUR’s Permanent
Revision Tribunal.


Synergies did not develop in the expect direction
to create a virtuous circle and the story unfolded
in a vicious circle. According to this brief
paper’s perspective part of the problem was the
inexistence of operative interconnections between
the set of rules of preferential agreements and
the WTO’s multilateral agreement, which would
have created consistency between both decisions
towards of the elimination of the discriminatory
NTBs. It is necessary to design linkage mechanisms
that create consistency and enable the extension
of the capacities that agreements have of obliging
its members to comply with the content of the
agreements they subscribe. A considerable amount
of NTBs are protectionist detour mechanisms
that use undercover instruments that were
designed with other objectives. For this reason,
its control requires an efficient and timely use of
information.9


3.3 Where to start?


As in the majority of trade policy affairs, the first
battle is for transparency. It is necessary to have
precise definitions and an updated taxonomy of
the non-tariff measures (NTM) that enable their
precise identification. Overall, any NTM can
become a barrier if it is applied in a way that it
discriminates the suppliers by origin. However,
some NTMs have a greater potential for being
used with that aim. The international community


is not at a starting point in this matter. Several
multilateral agencies related to international
trade system have begun a work process which,
among other results, has established an updated
classification of the NTMs (UNCTAD, 2009).10
Besides there is the objective of updating and
extending coverage of the global database
including measures implemented by country and
product. The followed working process indicates
that to some extent the proposed methodology is
reasonable. Work was carried out with national
cases, with regional integration organizations and
coordination between multilateral agencies. The
efforts towards the identification of the problem
are clear and the progress made, as well as the
proposals, are feasible to consider given the degree
of autonomy that the technical structures of the
involved international agencies can exercise. If
the proposed program is respected there would be
a major step towards transparency.


However, a deeper political involvement is required
from countries through the legitimization of a
program of elimination of NTB that should be led by
the WTO and not only be restricted to developing
economies11. For the purpose of reaching an
operative mechanism of interconnection between
the multilateral trade system and preferential
agreements, it is necessary to create a space
that directly involves them. In other words, it
is essential to consolidate the commitment of
countries, their preferential agreements and the
multilateral framework into a single program. This
program should be capable of identifying measures
and establishing proper incentives to generate a
dynamic of gradual elimination, as well as making
harder the emergence of new measures. Inside
this scheme it may be necessary to establish
temporary tariff safeguard mechanisms that are
easy to implement and discourage the use of
diffuse NTMs12.


The proliferation of NTBs reveals that there
are incentives to their implementation. The
key element that protects them is the opacity
they may have and the capacity of generating
protection without being detected or without
giving the affected country the possibility of
establishing an effective retaliation mechanism.
It is clear that it also reveals a weakness in the
dispute settlement mechanisms that have been
established in the different trade agreements.
Here are some important issues to consider that
serve as an indicative guide of what is left to do:


9 This would also avoid the problema of “fórum shopping” as Pawlyn et al (2009) called it.
10 Following a UNCTAD initiative, in the year 2006 the Group of Eminent People on NTBs gathered and worked alongside a technical


team called Multiagency Support Team (MAST) (UNCTAD, World Bank, WTO, ITC, IMF, OECD, European Commision, USDA,
USITC).


11 The restrictivness of NTBs in developed countries is often very high and therefore of an important concern (see Kee, Nicita and
Olarreaga (EJ 2009).


12 Temporary is the crucial concept in this framework. The safeguards need to have a maximum limit, otherwise we introduce the
uncertainty that we were talking earlier.




6


i. Create a program for eliminating and
controlling NTBs that combines participation of
countries within the preferential agreements
they integrate with the trade multilateral
framework.


ii. Make the conventional trade negotiation
program independent, generate a different
mechanism for these systemic aspects that have
the objective of improving the functioning of
international trade systems through more fluid
interconnections between the multilateral and
regional level.


iii. Strengthen the role of preferential agreements
since –they entail fewer actors who know each
other closely– they are more effective than the
multilateral system in detecting the trade-
restricting NTMs. Particularly, in a first stage it
is relevant to include plurilateral agreements
that have a greater capacity of acting as a
technical secretariat to enable them develop
an ambitious and complex agenda.


iv. Perfection the exception to the principle of the
most favored nation in the WTO – the accepted
discrimination should be restricted to only
includes tariff discrimination (modification of
Article XXIV).


v. Establish a coordination mechanism between
regional and multilateral dispute settlement
mechanisms that tend towards the harmonization
of criteria and procedural aspects, as well as
establishes criteria of predominance among
them. For example, if a regional tribunal
detects a NTBit could trigger the removal on the
basis of the most favored nation. Consequently,
more and better regional market access should
imply more and better access on the bases of
the most favored nation.


Conclusion


The failure of the multilateral system in bringing
together the sufficient required political support
for concluding the trade negotiation round is
freezing many new ideas and proposed routes
towards the development of the trade system. In
2008, a possible format for the completion of the
Doha Round was reached but, unfortunately, it
never came through. The task that is left before
us is not very different from the one presented
three years ago, and there is still no perspective
of it being reached.


The only noticeable activity from which it is
possible to establish results are the different
preferential trade agreements that are still being
subscribed. It is audacious to make a general
judgment on the potential contribution of the new
trade agreements to the construction of a more


consistent international trade system. On the
contrary, it is well known that the proliferation
of preferential trade agreements in a weakened
multilateral context is not a desirable scenario
as it can provoke fragmentation in rules and an
increase of inconsistency and related conflicts.


The diagnosis made on the network of trade
rules is that it poorly interconnects different
areas. These shortcomings are related to the
fact that the multilateral framework –which
should act as a global link articulator (a sort of
background operating system of the international
trade system)–, in fact has evolved ignoring the
implications of the preferential trade agreements
it helped create. The interconnections between
the different types of agreements must be
strengthened and this process should be used as a
weapon to strengthen the multilateral agreement.
A short and substantive list of issues that can be
decoupled from the logic of round negotiations
should be created. This list would allow a dynamic
of permanent evolution and generate faster
results than the trade rounds that have been taken
forward until now. It’s all about innovating the
work methodology.


The case of NTBs is one of the relevant areas
in which it is feasible to apply the proposed
methodology. Non-tariff barriers erode the results
obtained in all kind of agreements. It is an element
that reduces clarity in the system, has both static
and dynamic negative effects and obstructs the
development of trade. Despite being a well-
known and mature matter it poses a threat to the
consistency of the system that remains totally
valid. The recent evolution, during the current
crisis period, illustrates this point.


The referred ongoing efforts and work dynamics
should be reinforced and complemented with
a defined political involvement from countries
through all the preferential agreements they
are part of. The key is to build a self-sufficient
mechanism –as Baldwin y Nicoud (2009) identified
in the case of tariffs–, to be applied to NTBs.
Today, facts reveal the opposite; as the current
system’s structure provides incentives for a gradual
increase in the use, of NTBs. Besides, interaction
between fields in many cases does not generate
virtuous circles. In fact, as exemplified in the case
of tire imports to Brazil, the opposite happens.


Strategies towards the elimination and control
of NTBs should be harmonized and unified, and
multilateral and preferential trade spaces must be
interconnected in a more fluent and efficient way.
This paper schematically developed some concrete
ideas as to how develop this interconnection.
Some of the challenges related to NTBs, include
increasing transparency and strengthening the
linkages between areas in order to create a set of




7


trading rules that generate adequate incentives.
This approach could later be extended to other
aspects that have a systemic impact.


Marcel Vaillant, University of Uruguay


References


Baldwin, Richard E. and Frédéric Robert-Nicoud,
(2008). “A simple model of.the juggernaut effect
of trade liberalization”, Centre for Economic
Performance, London School of Economics and
Political Science.


Baldwin, Richard E and Low Patrick, (2009).
“Multilateralizing Regionalism, Challenges for
the Global Trading System”. Edited by Richard
Baldwin Institut Universitaire de Hautes Etudes
Internationales, Geneva Patrick LowWorld Trade
Organization, Geneva Cambridge University
Press.


Baldwin R. and Evenett S., 2009. “The collapse of
global trade, murky protectionism, and the crisis”,
Edited b y: A Vox EU . org Publication, Institut
Universitaire de Hautes Etudes Internationales,
Geneva, CEPR.


Crozet, M., Milet E., Mirza, D., 2011. “The
discriminatory effect of domestic regulations on
international services trade: evidence from firm
level data”, Unpublished paper presented in
recent conference.


Evenett, S, 2011. “Trade Tensions Mount: The
10th GTA Report”. Global Trade Alert, CEPR,
London-Geneva.


Kee, H, Nicita, A. and Olarreaga, M. 2009.
“Estimating Trade Restrictiveness Indices”.
Economic Journal, Vol. 119, No. 534, pp. 172-
199, January.


Lavopa F. and Vaillant M., 2011. “Options for a
friendly relation between multilateralism and
preferential trade agreements: the case of tire
imports in Brazil”. Elaborated for the Regional
Course on WTO Trade Policy, Sergio Arboleda
University, Colombia., forthcoming.


Pauwelyn, Joost and Eduardo Salles, 2009.
“Forum Shopping Before International Tribunals:
(Real) Concerns, (Im)possible Solutions”. Cornell
International Law Journal 42 (2009): 77-118.Saez,
S. and Vaillant, M., 2010: “The Negotiation and
Management of Regulations in the Trade in Services
, 2010”, in The Negotiation and Management of
Regulations in the Trade in Services , 2010, World
Bank, Washington.


UNCTAD, 2009. “Non tariff measures: evidence
from selected developing countries and future
agenda, Developing countries in international
trade studies”, United Nations, Geneva.


Table 1. Information matrix: issues by type of agreement (degree of relevance)


XXX- High relevance; XX- Medium relevance; X- Low relevance.


ISSUES/TYPE OF TRADE AGREEMENT MULTILATERAL PREFERENTIAL
Goods Market Acces barriers XX XXX


Rules XXX X
Services Market Acces barriers XX XXX


Rules XX XX
Complementary matters X XXX




8


www.ictsdsymposium.org
Please note that this paper is in draft form. It will be revised and included


in an e-book that ICTSD will publish shortly after the WTO ministerial conference.


The views expressed in this paper are those of the authors and do not
necessarily represent those of ICTSD or SECO.


Table 2. Tire Case Brazil-Uruguay in MERCOSUR and Brazil-UE in WTO


Source: Lavopa y Vaillant, 2011.


ACTOR RULES OBJECTIVE INSTRUMENT-RESULT
Brazil “Portaria” DECEX


8/1991
Preserve the
environment through the
prohibition of increasing
the stock of used tires


Prohibition to the importation
of used tires


Brazil SECEX “Portaria” No.
8/2000
(September)


Preserve the
environment through the
prohibition of increasing
the stock of used tires


Explicitly include the
prohibition of the importation
of retreaded tires


Uruguay Decision 22/2000 CMC
(june) y Asuncion
Treaty (1991)


Reduce non tariff
restrictions within
MERCOSUR


Crystallize inventory declaring
a specific date


Ad hoc
Tribunal
MERCOSUR


Court Ruling 2002
(January)


Determine the legitimacy
of rule No. 8/2000


It was established that it was
a restriction to trade non-
existent to the date.


Brazil “Portaria” SECEX
2/2002 (March)


Comply with the court
ruling


Eliminated the prohibition
related to the retreaded tires


Brazil “Portaria” SECEX
17/2003 (December) y
14/2004 (November)


Comply the court ruling
and re-establish a policy
regarding retreaded tires


Prohibit importation licenses
to retreaded tires and exempts
MERCOSUR countries


European
Union


Violation of the GATT,
1994. Article XX
headline and b). Case
2005 is presented.


Case is taken to the
dispute settlement
understandig of WTO.


Constitution of a special group.
(January 2006)


Grupo
Especial del
MSD de la
OMC


Article XX headline and
b)


Evaluate the EUs
complaint regarding
Brazil’s failure in
complying rule 14/2004.


Brazil’s action falls inside XX
and b)


Appellate
Body DSU-WTO


Article XX headline and
b).
Article XI.
Report dated
December, 2007.


Revision of the appeal
made by the EU to the
rulling


Measure could fall inside b)
but not under headline (XX).
The measure is discriminatory
to comply with the MERCOSUR
tribunal. Violation XI not
justified by XX.


Brazil “Portaria” SECEX
24/2009


React to the DSU-WTO Prohibition to the expedition
of new licenses for the
importation of used and
retreaded tires, independently
from their origin.




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