The essay is an in depth analysis of world trade law on alcohol regulation. The case scenario entails what Xenia introducing a new law that regulates sale of beer domestically. Xenia proposed that high content alcohol 4.0% and above be only sold in state-run liquor stores and need to be packed in containers that can be recycled and labeled 'alcoholic liquor'. On the other hand, Xenia proposed that low alcohol beer, less than 4.0% might be sold in private retail shops plus supermarkets provided they are packed in recyclable containers and easily identified as light beer. All these are aimed according to the WTO member to address the problem of alcohol abuse, reduce the quantities of non-recyclable household waste.
Consequently, Pollonia another member of WTO holds that the proposal brought forth by Xenia is discriminatory to alcohol with a content of 4.5%, which according to the member violates Article III GATT 1994. Further, the actions of the first member cannot be justified on the grounds of environmental, health or social policy, this is what Pollonia holds. The purpose is thus to advice Pollonia.
Advice to Pollonia
It is worth noting that Article II of the GATT 1994 call for non-discriminatory in doing trade between member countries. However, there is the GAAT Escape Clause which is article XIX of GATT 1947. The clause allows a member country to take temporary measures or corrective actions to save guard its domestic industries and providing import relief. These help domestic industries to be protected from foreign competition hence a better balance of payment for the country in question. However, Article XI provision "that no prohibitions or restrictions made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any party on the importation of any product of the territory of another party" seems top have been violated by Xenia (Schaffer, et al., 2009).
It is worth noting that there are exceptions to what Article XI provides. Article XX(b) holds that 'nothing in this agreement shall be construed to prevent the adoption or enforcement by any country measures. necessary to protect human, animals, plants life or health' Pollonia need to know that if Xenia can prove that high content alcohol is harmful to human health then it is not in violation of provision therein.
According to Article III of GATT 1994, the requirement for the containers used to pack alcohol having the signs 'low alcohol beer' and 'high alcohol beer' is essentially ancillary to the dual retail system. This means that the use of such labels is inconsistent with provision in the agreement (Towers, 2010).
According to the general agreement on tariffs and trade of 1994as stipulated by article I and III of GATT caters for non-discrimination of the like products. The first article stipulates that if there are favors given to the product of the country, they should apply to all the products imported from the country who are members of the World Trade Organization. The law also provides that there no product from any country that should get favor that will distort the business (Gottfried, 2004). This law was put in place because each state has different tariffs and provision that they had put in regulation of products in their country. Therefore, there was need to reduce or otherwise remove completely such differences. The law has made amended of late to accommodate some other barriers that wren not initially accommodated.
The law has made two main exceptions in its pursuit of harmonization. The first one affects the region agreements where the countries are WTO members. The party concerned can establish a preferential tariff in the region. The tariffs that has to be introduced should be agreed apron the two parties and in consistent with the WTO provisions. The second exception was made for those countries that are developing. The law gives provision for the countries to import goods from such countries with zero tariff rates. This should be done regardless of the high tariffs from the developed countries. This was meant to promote economy to places where it is mostly needed (Cowle, 1990).
In the third article of GATT law, it stipulates national agreement rule on the way the product from other country be treated. It says that the products imported from other country should be treated as the product from the country. It prohibits forming a law that favors the local producers against their competitors who are making similar products. The law also protects the imported goods by saying that the product should receive similar favors as the products that have been made in the country. To ensure that this followed the country should have a provision to protect them under their law.
The law also ensures that they define what like products are to avoid collision on the like products. The law also provides a law that put limits in the measures that parties should take in the process of restricting trade. It ensures that they are no such things as quotas system s, export and import licenses of goods. They also ensure that there are no other related issues. They took these initiates as they felt that such makes the trade to be less or more deterred other than being heightened.
The law also gives exception on the trade of goods inconsistent with the environmental law.
The law ensures that the products that are manufactured by the parties are cannot harm the animals, human beings, or plant life. Any party that is construed to prevent adoption of such enforcement law is liable to changing their laws within fifteen tom eighteen months. The country that need to accomplish the law stipulated by GATTs provision about making their law to protect environment must complete the following requirements; they should show that they have a will to protect the environment by the laws that they form. The law that they have to come up with should take trade-impacting measures to ensure that they do not harm trade among the party members. The law also shows s that if trade-impacting measure is to be impacted, the law should be least restrictive towards achieving the required objectives.
The law also ensures that the states do not disguise their law in the name of environment conservation but in turn, they are putting barriers in the trade or restricting it instead (Gottfried, 2004). Therefore, the country making such provision should ensure that they complete several hurdles to convince the WTO that they are doing it out of a good will. The law they made against certain exception should be well stipulated that they re protecting the exhaustible natural resources. These are described as living and non-living things, renewable and non-renewable resources that include air, water among others. The law should primary show the beginning and the end of the effect of the law formed.
Once the law passes the test made by the provision, it has to pas the last part, which is chapeau, which is a part that shows how the law should be applied. In this, the law should consider three parts. The first one is that the law should not be arbitrarily discriminatory, unjustifiably discriminatory or at any way be disguised to restrict trade.
According to The World Trade Organization, 1994, these tests were well defined by the Appellate Body that gave criterion on products that do not meet the requirements. The first one is that no state can require another one to comply with certain specific environmental technologies. Otherwise, the state can adopt technologies that have similar final effects in the production of the goods. The law also makes provision that the country must be sensitive when putting measures in that are to regulate the other country of the condition that may be prevailing. They should ensure that they check on the differences in the conditions. In addition, the country cannot just put measures to a certain country without first consulting each other. In addition, the countries that are to be affected by the adjustments of the measures should be given enough time to ensure that they adjust first to the change. Finally, the transition period of enacting any measure that may affect the trade should be transparent, follow the appropriate procedures that are there to safe guard foreign states and producers and be given time to ensure that they review such measures.
Therefore, according to the case of Xenia introducing a new liquor law, the procedures are clear on what he is supposed to do. Nevertheless, there some of the things that according to the GATT provisions he is going wrong. The first one is providing a law that is favoring domestic liquor to the imported one. This one is not be supposed by the World Trade Organization. The next one is that act of labeling of alcoholic content and decimating against some alcohol in where they are to be sold is inconsistent with the GATT provision as adopted by the WTO (The World Trade Organization, 1994).Therefore, Pollonia is justified to stop Xenia law. However, according to the provision Xenia can be given fifteen to eighteen months to model his law to be consistent with the provisions or dispose the whole idea. He should also have contacted the affected parties to ensure that they conform to the law.
From the review of the scenario, it is evident that although the issue brought forth by Xenia are genuine, there are a number of things that need to have been done prior to coming up with such laws. Among them include; thoroughly negotiating with the other party on what to be done, there was also need for her to demonstrate the necessity to protect the environment and human health. Additionally, the act amounts top discriminatory against alcohol of higher contents. Moreover, the need to label the containers is incompatible with provisions of GATT articles. It is important to be noted by Pollonia that there is still legal room to successfully challenge what has been brought forth by Xenia.