The General Agreement on Tariffs and Trade (GATT) 1947 functioned as a means of adjusting trade relationships between countries trying to improve their economies. Contracting parties to this agreement have been bound by it to treat other contracting parties on an equal and reciprocal basis as well as to curb protectionism. At the start of 1995, the GATT has been succeeded by the World Trade Organization (WTO) and has since been the most important development in international trade. However, it is still essential to note that the GATT as amended is still the central piece of the WTO law .
A Dispute Settlement Body (DSB) has been set up under Article IV of WTO Agreement and the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). This body is responsible for disputes arising from the WTO Agreement, GATT 1994, GATS, TRIPs, DSU and Plurilateral Trade Agreements. The mechanisms for settling disputes that arise are done through consultation, mediation or conciliation, arbitration and panel proceedings. Consultation is compulsory is the first stage of the dispute settlement mechanism. If consultation fails, a panel can then be appointed for the second stage which is the panel proceedings . The case in question here involves a dispute between two WTO members which are Australia and Rwanda. Rwanda states that the actions taken by Australia through the Gorilla and Forest Preservation Act 2005 (Cth) to prevent the entry of coffee and timber exported by Rwanda contravenes the General Agreement on Tariffs and Trade (GATT). The issue that arises here is on whether the Gorilla and Forest Preservation Act 2005 (Cth) passed by the Australian Government is actually in breach of the GATT. Both countries can attempt to solve this dispute through consultation by information the DSB for their progress to be monitored. If the consultation fails, the complaining party, in this case Rwanda can then ask for a panel to be appointed. Australia can block the creation of a panel once but when the DSB meets for a second time, it can no longer be blocked unless there is a consensus against appointing the panel .
Based on the scenario, Rwanda would have a number of options available to them to make claims against Australia’s acts. The first claim would come under Article I (1) GATT 1994 which concerns the “Most Favoured Nation’ obligation. It states that equal treatment must be implied to all foreign countries within the host country’s territory . Goods from all WTO member countries must be allowed to enter a destination market under the same conditions, subject exceptions in Article I (2), (3), (4), III, and XXIV GATT 1994 . In addition, Article I (1) GATT 1994 states that any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties . The ‘like product’ stated is defined as identical products and closely related or similar products . The case relating here is the Automobile Panel Report case . In relations to the case, the term ‘like products’ would mainly concern the coffee grown by Rwanda and the timber exported by them. Since coffee grown in Rwanda is considered to be similar or closely related to those grown in other countries it would be considered as like products. This goes the same for the timber exported by Rwanda as timber would be an identical or similar product to those exported by other countries to Australia thus classifying it as a like product. Because of the fact that both export goods of Rwanda are considered to be like products when compared to those originating from other contracting parties with Australia, Australia would be in breach of Article I (1) GATT 1994 if they were to forbid the import of Rwanda’s coffee and timber.
The next claim that Rwanda may possibly...
Please join StudyMode to read the full document