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The conditions for market access and marketing of foreign goods in Canada measured against the obligations of the WTO and WCO member states

by Dr. Ota Fischer-Zach

I. Subject of investigation and aims of the doctorate

The cross-border trade in goods conflicts with the interest that individual countries have in the economic interventions by their governments. Such interventions can have international effects.

Owing to risk that individual countries will take protectionist measures, one of the most important tasks of the WTO is to ensure legal security. Achieving this objective requires a regulatory framework with a clearly defined catalogue of rights and duties. The most important pillar of this framework is the WTO (World Trade Organization). The WTO and its organs form the institutional framework which implements and administers the material legal order which they have created. Substantively, the WTO legal order consists of three pillars: the trade in goods (a. o. GATT), trade in services (GATS) and intellectual property rights (TRIPS). The Trade Policy Review Mechanism (TPRM) and the Understanding on Rules and Procedures governing the Settlement of Disputes (DSU) complement these three regulatory areas.

The WTO legal order does not advocate unconditional free-trade but reflects the awareness that governmental intervention in the economy may be necessary and therefore permits it under certain conditions. Although such interventions are permissible under international law they are restricted through recurring principles in the WTO legal order (e.g. Most-Favoured-Nation Treatment and National Treatment). This reflects the fact that the WTO legal order is based on international law whose objective is trade liberalization. This objective is achieved by the successive reduction of tariff and non-tariff trade barriers.

Customs law also represents an important component of the world trade order. Besides the WTO, the World Customs Organisation (WCO) is the most important international organization in this field.  Of central importance is the International Convention on the Simplification and Harmonization of Customs procedures (Kyoto Convention) of 18th May 1973. This agreement was revised thoroughly and adopted on 26th June 1999 (Revised Kyoto Convention 1999).

Canada is a member of the WTO and WCO and accounts for a high percentage of world trade: according to world trade statistics, Canada is in 9th place regarding exports and in 10th place regarding imports. It therefore plays an important role in both international organizations.

The doctorate investigates the conditions for accessing the Canadian market and marketing goods in light of the requirements of the WTO and WCO legal orders.

Market access is dependent on tariff and non-tariff governmental measures which regulate border crossings. In the WTO legal order market access is regulated by Arts. II and XI of the GATT. The marketing of goods is regulated by internal measures applied after the goods have entered the country (cf. GATT Art. III).

According to Art. 26 of the Vienna Convention on the Law of Treaties (VCLT) and Art. XVI:4 of the Agreement Establishing the WTO, in particular, the parties of the agreement are obliged to ensure that its laws, regulations and administrative procedures comply with international standards. The investigation compares national and world trade standards in terms of target-performance in order to establish whether a country is complying with its international obligations.

Against this background, the doctorate aims to:

-    describe the fundamental aspects of the Canadian market access and marketing conditions for goods
-    examine whether the Canadian market access and marketing conditions for goods comply with the WTO legal order
-    consider the requirements of customs law under the WCO and WTO legal orders, with particular reference to the Revised Kyoto Convention 1999.
-    describe a normal case without conflicts and identify possible frictions in order to understand the structures of the Canadian international trade law
-    analyse exemplary measures in world trade which the trade partners of Canada regard as trade barriers

II. Structure of investigation

The procedure for the investigation is determined by the aforementioned subject and aims of the doctorate. The structure is as follows:

-    Chapter 1 introduces the fundamental legal, economic and methodological structures of the doctorate;
-    Chapter 2 describes the Canadian economic and legal system;
-    Chapter 3 deals with Canada’s integration into the WTO/WCO and regional trade agreements - especially the NAFTA.
-    Chapter 4 describes the basics of constitutional law and the relevant organisations involved in the application of Canadian international trade law as well as the legal practice on this subject. It also provides an overview of Canadian legislation in this field.
-    the investigation focuses on Canadian customs procedural law in Chapter 5. The legal aspects of this topic are not systematically regulated under Canadian customs law. The relevant requirements are scattered throughout two important Canadian customs laws: the Customs Act and Canadian customs tariff. This chapter aims to provide a structured description of this legal area which tends to be marginalised in the Canadian literature on customs law. It also examines the conformity of Canadian customs procedural law with the Revised Kyoto Convention 1999. This chapter examines the Canadian law on customs duty (i.e. rules of origin, customs value and customs tariff) against the background of world trade and the requirements of world customs law. It concludes by analysing the extent to which Canada has implemented the international provisions in the area of trade facilitation.
-    Chapter 6 explains how non-tariff trade barriers are applied in Canada and the related legal practice. It asks whether it complies with the world trade law relating to e.g. subsidies and countervailing measures as well as government procurement.
-    Chapte 7 investigates trade barriers in the area of the protection of intellectual property rights (IPR).
-    the final chapter provides examples of specific governmental measures and subjects them to an analysis from the perspective of world trade law. It uses different sources to identify possible trade barriers. For example, each year the EU and USA publish state- and sector-specific reports about trade barriers in the international traffic of goods and services. Examples discussed include the state-regulated import and sales of alcoholic beverages as regulated by the Canadian Liquor Boards. Moreover there is the topic of geographical indications, standardized in Art. 22 ff. of the TRIPS that provokes different legal understandings between European and transatlantic law. In conclusion, the chapter examines the Ontario Green Energy Act fostering renewable energies from the perspective of world trade law.

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