International Operations Wk. 10

International Business Operations and International Law

Raison D’etre for the Multinational Dispute Settlement System

  • Date: December 8, 2025

Overview of Today's Topic

  • Case Study: European Communities – Measures Prohibiting the Importation and Marketing of Seal Products

    • Dispute Numbers: DS401, DS402

    • Complainants: Canada, Norway

I. Measure at Issue

  • Regulation: Regulation (EC) No. 1007/2009

    • Date Issued: 16 September 2009

    • Scope: On trade in seal products, including subsequent related measures.

II. Claims by Complainants

  • Allegations: Canada and Norway claim that the EC measures are inconsistent with the obligations under several agreements, which include:

    • Article 2.1 and 2.2 of the TBT Agreement (Technical Barriers to Trade Agreement).

    • Articles I:1 and XI:1 of GATT 1994 (General Agreement on Tariffs and Trade).

    • Article 4.2 of the Agriculture Agreement.

III. Relevant Provisions

  • A. Article 2.1 and 2.2 of the TBT Agreement

    • Article 2.1: Members shall ensure that, with respect to their central government bodies, products imported from the territory of any Member shall be accorded treatment no less favorable than that accorded to like products of national origin and to like products originating in any other country.

    • Article 2.2: Members shall ensure that technical regulations are not prepared, adopted, or applied with a view to or with the effect of creating unnecessary obstacles to international trade.

    • Key Points:

      • Technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective.

      • Considerations for legitimate objectives include national security, prevention of deceptive practices, protection of health, safety, and the environment.

      • Relevant elements include scientific and technical information, processing technology, and intended end-users of products.

  • B. Articles I:1 and XI:1 of GATT 1994

    • Article I:1: A contracting party must accord immediately and unconditionally to like products originating in or destined for the territories of all other contracting parties the advantages, favours, privileges, or immunities granted to any product originating in or destined for any country.

    • Article XI:1: No prohibitions or restrictions other than duties, taxes, or other charges—whether made effective through quotas, import or export licenses, or other measures—shall be maintained by a contracting party regarding the importation of any product from another contracting party or the exportation of any product destined for another contracting party.

  • C. Article 4.2 of the Agriculture Agreement

    • Obligations: Members shall not maintain or resort to any measures requiring conversion into ordinary customs duties except as provided for in Article 5 and Annex 5.

    • Included Measures: Quantitative import restrictions, variable import levies, minimum import prices, discretionary import licensing, and similar border measures other than ordinary customs duties.

  • D. Annex 1.1 of the TBT Agreement

    • Definition: A technical regulation is defined as a document that lays down product characteristics or their related processes and production methods, including applicable administrative provisions, that compliance is mandatory.

    • Components: May include terminology, symbols, packaging, marking, or labeling requirements as they apply to a product, process, or production method.

IV. Conclusion on EU-Seal Products (DS401, DS402)

  • Panel’s Finding: The EU Seal Regime is considered a “technical regulation” under the TBT, leading to a violation of Articles 2.1, 2.2, 5.1.2, and 5.2.1 of the TBT.

  • Appellate Body’s Finding: The EU Seal Regime is NOT recognized as a “technical regulation” under the TBT, resulting in no violation of Articles 2.1, 2.2, 5.1.2, 5.2.1 of the TBT.

    • GATT Violation: There is a violation of GATT Article I:1.

    • Exception Not Found: The measure does not meet the exception of being “necessary to protect public morals” within the meaning of Article XX(a) of the GATT 1994.

Next Steps

  • Further Discussion Topics: Address issues and reform of the International Dispute Settlement System, focusing on Renewable Energy Cases.

    • Legal Frameworks for Discussion: The Vienna Convention on the Law of Treaties and the Draft Articles on State Responsibility.