Professor dr' juris Ola Mestad

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• Professor dr. juris Ola Mestad
• Centre for European Law and Scandinavian
  Institute of Maritime Law
• International Economic Law Course Spring 2009

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Todays Items

• Education and national treatment Article XVII
• Disciplining regulatory behaviour Article VI
• Maritime Services negotiations
• Services and investment

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I. What Is Special With Education?

• Only 46 WTO members have made education
  commitments
• What about your own country?
• Education is a key feature of national identity
  building
• It has a strong cultural component
• Investment in education is probably the single
  most important investment that a country can
  undertake
• This makes it different from other public
  services like health and welfare, that are based
  on a distributive justice rationale

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The Case of Jamaicas Higher Education Commitments

• Jamaica has bound higher education in its
  schedule without qualifications
• September 2003 Request for like allocation of
  public funding to institutions boasting
  franchised degrees from a number of foreign
  universities
• It was evident that many Caribbean governments
  lacked the capacity for formulating effective
  policy responses (The University of the West
  Indies)

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Public Funding and Article XVII National Treatment

• 1. In the sectors inscribed in its Schedule, and
  subject to any conditions and qualifications set
  out therein, each Member shall accord to services
  and service suppliers of any other Member, in
  respect of all measures affecting the supply of
  services, treatment no less favourable than that
  it accords to its own like services and service
  suppliers.
• 2. A Member may meet the requirement of paragraph
  1 by according to services and service suppliers
  of any other Member, either formally identical
  treatment or formally different treatment to that
  it accords to its own like services and service
  suppliers.
• 3. Formally identical or formally different
  treatment shall be considered to be less
  favourable if it modifies the conditions of
  competition in favour of services or service
  suppliers of the Member compared to like services
  or service suppliers of any other Member.

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National Treatment and Public Funding

• Is public funding covered by the National
  Treatment obligation?
• all measures affecting the supply (Art. XVII.1)
• The relevant test is the effect on the
  conditions of competition (Art. XVII.3)
• Likeness test in respect of education
• Leading to same exams or similar levels?
• Public funding to other subjects is covered

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What About Direct Government Supply of Education

• Does national treatment with respect to public
  funding also cover direct government supply of
  education?
• Interpretation of whether government supply is a
  measure
• In my opinion, it is not
• A measure is a kind of intervention
• Examples from the definition in Art. XXVIII a
  law, regulation, rule, procedure, decision,
  administrative action, or any other form
• As long as the government is only funding its own
  activities, national treatment does not require
  funding of international education suppliers
• If the government is also funding national
  individual suppliers, the national treatment
  obligation applies

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The Concept of Government Supply of Education

• Government supply also covers sub-levels of
  government like provinces, counties,
  municipalities
• Should it also cover supra-levels of government
  like The University of the West Indies?
• This is delegated governmental activites, but
  delegated to a supranational or intergovernmental
  institution
• Is that really different from delegation of
  activities to sub-levels?
• Compare the definition of measures by Members
  in Art. I.3(a)
• Would a denial of analogy be a dicrimination of
  poorer small contries, that really should be
  encouraged to co-operate between themselves?

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II. Regulatory Behaviour

• Quantitative restrictions Article XVI Market
  Access
• Covered last time
• Qualitative restrictions Article VI Domestic
  Regulation
• Hotly debated issue why?
• Mainly still to be negotiated

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Article VI Domestic Regulation

• 1. In sectors where specific commitments are
  undertaken, each Member shall ensure that all
  measures of general application affecting trade
  in services are administered in a reasonable,
  objective and impartial manner.
• 2. (a) Each Member shall maintain or institute as
  soon as practicable judicial, arbitral or
  administrative tribunals or procedures which
  provide, at the request of an affected service
  supplier, for the prompt review of, and where
  justified, appropriate remedies for,
  administrative decisions affecting trade in
  services. Where such procedures are not
  independent of the agency entrusted with the
  administrative decision concerned, the Member
  shall ensure that the procedures in fact provide
  for an objective and impartial review.
• (b) The provisions of subparagraph (a) shall not
  be construed to require a Member to institute
  such tribunals or procedures where this would be
  inconsistent with its constitutional structure or
  the nature of its legal system.

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Article VI Domestic Regulation cont

• 3. Where authorization is required for the supply
  of a service on which a specific commitment has
  been made, the competent authorities of a Member
  shall, within a reasonable period of time after
  the submission of an application considered
  complete under domestic laws and regulations,
  inform the applicant of the decision concerning
  the application. At the request of the applicant,
  the competent authorities of the Member shall
  provide, without undue delay, information
  concerning the status of the application.

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Article VI Domestic Regulation cont

• 4. With a view to ensuring that measures relating
  to qualification requirements and procedures,
  technical standards and licensing requirements do
  not constitute unnecessary barriers to trade in
  services, the Council for Trade in Services
  shall, through appropriate bodies it may
  establish, develop any necessary disciplines.
  Such disciplines shall aim to ensure that such
  requirements are, inter alia
• (a) based on objective and transparent criteria,
  such as competence and the ability to supply the
  service
• (b) not more burdensome than necessary to ensure
  the quality of the service
• (c) in the case of licensing procedures, not in
  themselves a restriction on the supply of the
  service.

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Article VI Domestic Regulation cont

• 5. (a) In sectors in which a Member has
  undertaken specific commitments, pending the
  entry into force of disciplines developed in
  these sectors pursuant to paragraph 4, the Member
  shall not apply licensing and qualification
  requirements and technical standards that nullify
  or impair such specific commitments in a manner
  which
• (i) does not comply with the criteria outlined in
  subparagraphs 4(a), (b) or (c) and
• (ii) could not reasonably have been expected of
  that Member at the time the specific commitments
  in those sectors were made.
• (b) In determining whether a Member is in
  conformity with the obligation under
  paragraph 5(a), account shall be taken of
  international standards of relevant international
  organizations applied by that Member.
• 6. In sectors where specific commitments
  regarding professional services are undertaken,
  each Member shall provide for adequate procedures
  to verify the competence of professionals of any
  other Member.

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III. Two Paradoxes of Liberalization of Maritime
Services

• Maritime transport is one of the globally most
  liberalized service sectors, but it seems nearly
  impossible to reach a binding liberalization
  agreement in the WTO
• Most of the total volume of goods covered by WTO
  GATT is transported by ship but there seems to be
  no connection between binding liberalization of
  trade in goods and performance of or trade in
  maritime services

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Typical Maritime Sector Restrictions

• Cargo sharing agreements
• Bilateral
• Liner conferences
• National preferences
• Restricted access to government and strategic
  cargoes
• Cabotage
• Cargo reservations
• Limitations on local presence and investment
• Other
• Tax treatment

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Annex on Negotiations on Maritime Transport
Services

• 1.  Article II and the Annex on Article II
  Exemptions shall enter into force for
  international shipping, auxiliary services and
  access to and use of port facilities only on
• (a) the implementation date to be determined
  under paragraph 4 of the Ministerial Decision on
  Negotiations on Maritime Transport Services or,
• (b) should the negotiations not succeed, the date
  of the final report of the Negotiating Group on
  Maritime Transport Services provided for in that
  Decision.
• 2.  Paragraph 1 shall not apply to any specific
  commitment which is inscribed in a Members
  Schedule.
• 3.  From the conclusion of the negotiations
  referred to in paragraph 1, and before the
  implementation date, a Member may improve, modify
  or withdraw all or part of its specific
  commitments in this sector .

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The Involved Interests

• EU, Japan, Norway and other shipping countries
  want liberalization
• EU and Norway are aligned
• Joint initiatives
• Previously there has been some tactical
  disagreement, also within the EU
• The difficult, and most important player, the US,
  is reluctant
• Changed emphasis over the years?
• Cabotage
• Mulitimodal transport
• Developing countries
• Some transformation of interests over the last
  years?

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Doha Round Status March 2009

• All negotiations have broken down (July 2008)
• Maritime services still not generally covered
  under GATS MFN obligations
• Countries with scheduled commitments in the
  relevant sector are bound by their commitments as
  well as by the MFN obligation (Art. II)
• The sector negotiations apparently even more
  difficult (but not so generally important) than
  agriculture and the special safeguard measure to
  protect developing countries against import
  surges in food which finally made the
  negotiations brake down in July

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IV. Services and Investment

• Mode 3 commercial presence is in reality
  including investment Article I.2 c)
• The failed request for a broader agenda for the
  Doha round to include trade and investment
• See Van den Bossche 90-91, Dolzer Schreuer
  26-27
• European Communities Developing countries

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Performance Requirements under TRIMs (under GATT)

• Agreement on Trade-Related Investment Measures
• Members, 
• Desiring to promote the expansion and
  progressive liberalisation of world trade and to
  facilitate investment across international
  frontiers so as to increase the economic growth
  of all trading partners, particularly developing
  country Members, while ensuring free competition
•             Recognizing that certain investment
  measures can cause trade-restrictive and
  distorting effects

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TRIMs cont

• Article 2 National Treatment and Quantitative
  Restrictions
• 1. Without prejudice to other rights and
  obligations under GATT 1994, no Member shall
  apply any TRIM that is inconsistent with the
  provisions of Article III or Article XI of GATT
  1994.
• 2. An illustrative list of TRIMs that are
  inconsistent with the obligation of national
  treatment provided for in paragraph 4 of
  Article III of GATT 1994 and the obligation of
  general elimination of quantitative restrictions
  provided for in paragraph 1 of Article XI of GATT
  1994 is contained in the Annex to this Agreement.
  

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TRIMs Annex Illustrative List

• 1. TRIMs that are inconsistent with the
  obligation of national treatment provided for in
  paragraph 4 of Article III of GATT 1994 include
  those which are mandatory or enforceable under
  domestic law or under administrative rulings, or
  compliance with which is necessary to obtain an
  advantage, and which require 
• (a) the purchase or use by an enterprise of
  products of domestic origin or from any domestic
  source, whether specified in terms of particular
  products, in terms of volume or value of
  products, or in terms of a proportion of volume
  or value of its local production  or
• (b) that an enterprises purchases or use of
  imported products be limited to an amount related
  to the volume or value of local products that it
  exports.