LEGL 4900 Exam 2 (Chapter 8-12)
domestic like product
"a product in which is like, or...most similar in characteristic in uses with, the article subject to an investigation"
Import relief
"positive adjustment to import competition" --the way the US refers to safeguards -President can grant this for the ITC
Smoot-Hawley Tariff Act
(1930) -signed into law by Pres Hoover, the US congress imposed the highest tariff levels in US history
indirect non-tariff barriers
- their effect is to discriminate against foreign-made products or firms - laws - regulations - rules of administrative agencies
ad valorem tax
-% of value tax A tax levied according to value, generally used to refer to real estate tax. Also called the general tax. --usually nonfungible goods (chairs, machinery, special steel)
Doha Development Round
--2001-present --GATT negotiations (a WTO round) Negotiations for trade begun in 2001 with the objective of lowering trade barriers around the world.
Japan Line ltd v. City of Los Angeles
--Can charge port fees Ports have the ability to tax but must tax all equally --Court ruled that an ad valorem property tax applied to cargo containers exclusively in foreign commerce violates the Commerce clause bc it resulted in multiple taxation of instrumentalities of foreign commerce!! --multiple taxation problem case
Uruguay Round
--End of this round the WTO was estab'd --Says talking about services and eliminated many tariffs internationally A series of negotiations under the General Agreement on Tariffs and Trade (GATT) that began in ______ in 1986 and concluded in 1994 with agreement to create the World Trade Organization. The ______ Round followed earlier GATT negotiations such as the Kennedy Round and the Tokyo Round.
local content requirement
--TRIM prohibits A requirement stipulating that a certain proportion of the value of the goods made in one country must originate from that country.
trade balancing requirements
--TRIM prohibits WTO laws that condition a company's right to import foreign goods on the basis of the volume of goods that company exports
Negotiation Rounds:
--negotiation sessions under GATT are called rounds -- 1947 to present --all had same goal of trade liberalization
Ministerial Conference (WTO)
--oversees the WTO, made up of trade reps by member nations --US ambassador to this is the United States Trade Representative
Commerce Clause
--vests the fed gov't with exclusive control over foreign commerce -The clause in the Constitution (Article I, Section 8, Clause 1) that gives Congress the power to regulate all business activities that cross state lines or affect more than one state or other nations.
Arizona v. US
-Dealt w bunch of state laws that Arizona passed... making it less hospitable to illegal immigrants... "if we have suspicion youre here illegally an officer can stop you and ask for your ID" --Court Ruling: AZ youre shut down, not ok -Has to do with chinese exclusion act of 1882
United States v Golden Ship Trading Co.
-Foreign producer: maker of t-shirts says they're from DR, importer declares on form, and they're actually mostly from China (so its rlly Chinese shirt) - Court Ruling: You should've checked it out! They lost! LITTLE ROom for excuses→ found negligent but not criminal fraud
International Organization for Standardization (ISO)
-GENEVA --nongovernmental organization comprising the natl standards institutes of 163 countries. Standards are not legally binding
StarKist Foods Inc v. US (1995)
-Icelandic Tuna tariff helped Starkist (a US tuna firm) -Ruling: Starkist lost, challenge reciprocal
Nissan Motor MFG Corp v. US
-Nissan importing robots + computers and would tell customs its going to FTZ and theyd just be testing equip and if it doesnt work we will send back Court ruling: Nissan in the wrong!! Can't just use it and not report to customs
Ferrostaal Metals Corp v US
-Steel sheets from japan -Hot-dip galvanized in NZ Question: Is it from NZ or Japan now?? Court's Ruling**: metals company won and they said it was a substantial transformation
EEC-Import Regime for Bananas (European Economic Community)
-There was 20% tariff on bananas and had agreed by GATT rules -- what we call a "bound tariff" 1993 they move to complex "tariff rate quota" system --Panel Ruling: The EEC had deprived the complaining Latin American countries of the benefits to which they were entitled under the schedule of concessions
Actionable Subsidies
-aka Adverse Effects Subsidies -subsidies that are not automatically prohibited, but may still be "actionable" bc of their harmful effect Requirement: 1. causes material injury to domestic producers of like product 2. violates a trade agreement 3. causes "serious prejudice" to the interests of the complaining country
Specific Tariff (or flat tariff)
-computed tariff on the basis of physical units --goods that are fungible (crude oil, wheat, or standard sized lumber) usually fall under this class
WTO
-headquarters: Geneva, Switz -FUNCTIONS: 1. to facilitate cooperation between member nations on trade issues 2. to administer WTO agreements 3. to provide a forum for for future trade negotiations 4. to monitor national trade policies 5. to assist developing nations in complying w WTO agreements 6. provide a forum for the settlement of trade disputes between members
Tariff-Rate Quota
-not really a quota at all, but a tariff rate that increases according to the quantity of good imported --it is limitation or ceiling on the quantity of goods that can be imported into a country at a given tariff rate
Pasquera Mares Australes Ltda. v. US
-pasquera, a chilean salmon exporter, accused of dumping salmon in the US -Ruling: Pasquera violated ad law by selling salmon at less than fair value
Provisional Safeguards
-tariffs only must be lifted within 200 days -where critical circumstances exist that could cause irreparable harm to a domestic industry
Allocated Quota
-type of Absolute Importing government assigns quantities to specific countries
Global Quota
-type of Absolute imposed by an importing nation on a particular product regardless of its country of origin
Auctioned Quota
-type of Absolute one in which a country sells the quota rights through bidding
Zero Quota
-type of Absolute sometimes used when referring to a complete ban on the import of a product in that it permits zero quantities be imported
Principles of WTO Trade Law
1-7
WTO 5 Major Agreements
1. Agreement EStablishing the WTO 2. General Agreements on Tarrifs and Trade 1947, (GATT 1947 og agreement) 3. General Agreements on Tariffs and Trade (GATT 1994) 4. General Agreement on Trade in Services (GATS) 5. WTO Dispute Settlement Understanding
2 categories of better than-MFN tariff treatment WTO
1. trade preferences for developing countries 2. free trade areas, customs unions, and common markets
Bretton Woods Conference
1944, (FDR) , The common name for the United Nations Monetary and Financial Conference held in New Hampshire, 44 nations at war with the Allied nations met to create a world bank to stabilize international currency, increase investment in under-developed areas, and speed the economic recovery of Europe. --CREATED: 1. International Monetary Fund 2. World Bank 3. International Trade Organization
GATS (General Agreement on Trade in Services)
A WTO initiative in an effort to get countries to reduce trade barriers in the service industries --opens domestic markets to foreign service producers
Codex Alimentarius
A collection of internationally recognized standards, codes of practice, guidelines, and other recommendations relating to foods, food production, and food safety. --Today, the Commission develops important standards on the basis of worldwide scientific studies
Common Market
A customs union with common policies on product regulation, and free movement of goods, services, capital and labour. --The EU is example
Binding Ruling
A determination, made by U.S. Customs, and only applicable to the United States, that classifies a specific product and assigns it a tariff rate before the goods are imported. The ruling is binding on U.S. Customs, which means that it cannot "change its mind" after the product is imported. --AKA ruling letter
same-condition drawback
A drawback of duties paid on imported goods that are re-exported in the "same condition" as they were imported, provided they were not significantly altered.
CE Mark
A product safety standard of the European Union -an internationally recognizable symbol for quality and product safety for many diff types of products
Reciprocal trade
A system of trading in which the objective is equal exchange of commodities rather than profit. --lower our tariff if they lowered theirs
Tariff
A tax on imported goods
Customs Broker
An authorized agent, licensed by federal law, to act for and on behalf of importers in making entry of goods.
Dole v. Carter
Crown of St. Stephen, ancestral ruler of Hungary US took possession during WWII, Hungary wants it back We did not give it back then bc they were part of Soviet Union --Dole lost, Carter won... US can unilaterally decide to give crown back!
Otter Products, LLC. v US
Customs didn't know what this was Otterbox used the code "other articles of plastic" bc it had low duty US said it belonged under "suitcase and other container" bc it had high duty Otterbox appealed and won! It now was "other articles of plastic" "Principal use"
Dutiable value
Customs value of goods entered into any country - must be reported by the importer-of-record to national customs authorities at time of entry
Substitution Drawback
Duties paid on imported goods may be received by a U.S. firm that imports goods and then exports other goods of the "same kind and quality "
Posse Comitatus Act
Federal govt can't command state/local government in sanctuary cities --Sanctuary city policy
GATT (1947)
General Agreement of Trade and Tariffs --pre-WTO// WTO b4 it was WTO --deficiency was that it only applied to trade in goooodddssss - between 23 nations. Became foundation fo postwar global commerce. To prevent discrimination in trade, establish an administration for handling complaints and a framework for negotiations. Bargaining sessions/rounds to be held periodically to remove tariffs and lower non-tariff barriers to trade. By 1990 there were 97 members. GATT has most definitely contributed to expansion of world trade in 50s and 60s and fought against protectionism in the troubled economic times of the 70s. --NEVER RATIFIED BY CONGRESS
Bound Rate
Maximum tariff rate a country may charge on an item
MFN
Most-favored nation status means that states promise not to practice discriminatory trade policy. A state with MFN status must receive treatment equal to that of any other state's trading partners under trading agreement.
Escape Clause
Permits the seller to continue to market the property until all the buyer's contingencies have been satisfied or removed.
Youngstown Sheet & Tube Co. v. Sawyer
President Truman issues executive order to have Sawyer seize all steel mills to avert suspected strikes. Result: The President does not have the power to do this because he does not have the power to seize private property. - infringes on 5th A rights.
Inherent Powers
President's powers that are expressly granted to the President in Article II --power to make treaties, appoint ambassadors, recieve foreign ambassadors, or to act as commander-in-chief of the armed forces, and to appoint SC judges
constructed value
Price of the dumped product compared to the cost of producing the product in the exporting country plus a reasonable amount for selling, packaging, administration, and other costs and for a reasonable profit
anti-circumvention
Prohibit circumventing technological access controls and copy-prevention systems
Absolute Quota
Quota that places an absolute maximum on the number or amount of a Good/Service that can enter a Nation Types: Global, Allocated, Zero, and Auctioned
product standard
Safety requirements, product features, and packaging requirements.
dumping margin
The difference between the market price of a product and its fair market value
United States Trade Representative (USTR)
The key U.S. Cabinet-level agency charged with negotiating international trade agreements
Reciprocal Trade Agreements Act (1934)
This act reversed traditional high-protective-tariff policies by allowing the president to negotiate lower tariffs with trade partners, without Senate approval. Its chief architect was Secretary of State Cordell Hull, who believed that tariff barriers choked off foreign trade. --created partnership between exec and congressional branches of gov't in setting tariff and trade policy
Non-preferential rules of origin
Those applicable to imports of DEVELOPED countries that will receive normal tariff treatment.
Normal Trade Relations (NTR) Status
Unconditional MFN trade renamed to this!! --countries with whom the US has normal trade relations receive a favorable, negotiated rate well below the og 1930 Smoot-Hawley rate
Trade-Related Investment Measures (TRIMs)
WTO agreement on trade measures governments can impose on foreign firms -has direct or indirect effect on trade of goods
Chinese Exclusion Act of 1882
Wave of Chinese immigration to work mostly in California... lots of anti-Chinese sentiment Immigration = plenary power (means no judicial review) Ruling: there is no judicial review on immigration! Ruling has never been overturned Trump's Muslim Ban similar SC upheld it and trump admin changed some things
contract manufacturing
a business arrangement in which the production ofn goods is contracted or "outsourced: by any one firm to a manufacturing firm, often overseas
Negative Determination
a decision by the agency either to not initiate an investigation or that a material injury does not exist
tariff schedule
a document listing all the possible Harmonized System classification categories, as well as their associated tariff rates for the different types of countries --bound rates are publishes in each country's this
Commercial Presence
a foreign company setting up subsidiaries or branches to provide services in another country
Presidential Proclamation
a formal statement issued by the president to the nation, often, but not always, to declare ceremonial occasions --first Proclamation was Washington's creation of a national day of Thanksgiving
sanitary and phytosanitary measure
a government rule or regulation that protects or enhances food, animal, or plant safety or quality, including preventing the spread of pathogens and disease
Trade Preference
a law that grants favorable trade and tariff treatment to products coming from developing countries, and is intended to aid in their economic development
Nontariff Barrier
a nontax measure imposed by a government to favor domestic over foreign suppliers
Federal Preemption
a principle asserting the supremacy of federal legislation over state legislation when both pertain to the same matter
Competitive Need Limitation
a quantitative limit on imports from each beneficiary country (beneficiary developing countries)
Drawback
a refund of duties already paid on imported goods when the goods are reexported or destroyed
Manufacturing Drawback
a refund of duties and taxes paid on merchandise that is imported, subjected to manufacture or production, and then exported within 5 years!
Countervailing Duty
a special tax that increases the price of goods to a competitive level; used against illegal trade activities such as subsidies or dumping --purpose of offsetting the subsidy
Upstream Subsidy
a subsidy bestowed on raw materials or component parts for use in an exported product
prohibited subsidy
a subsidy that is impermissible per se and banned under all conditions
Tariff bindings
agreed tariff rates --bc the rates become bound, or capped at that rate
trade agreement
agreement by a group of countries to promote trade among them
Trade Preferences
aka Preferential Tariff Treatment -WTO traditionally grants this status to developing nations
Rejected Merchandise Drawback
allowed for imported merchandise that was shipped without consent, is defective, or does not conform to specifications or to samples. --within 3 years
tariff concession
an agreement to reduce a tariff to a specified level --if country wishes to modify or withdraw a ______ and raise its bound rate on an item, it must negotiate with countr(y,ies) most affected and by agreement reduce or offset tariffs on other items equal to an equivalent amount in trade!
Generalized System of Preferences (GSP)
an agreement where a large number of developed countries permit duty-free imports of a selected list of products that originate from specific countries --most well-known trade preference
Market-Oriented Exporter
an exporting firm in an NME country that is not under government control and that does business on competitive terms
Congressional-executive agreement
an international trade agreements between the president, representing the US, and a foreign country, negotiated and concluded by a simple majority vote in both Senate and House of Reps.
Executive Order
an official, legally binding regulation issued by pres, used to set policy and direct gov't operations
conditional MFN trade
any trade advantage applied to an item imported into a country will also be applied to the same or like items coming from any other country that has MFN status with the importing country, provided that country reciprocates and lowers tariff rates in an equivalent amount in return
Foreign Trade Zones (FTZ)
are legally defined sites-- warehouses and manufacturing facilities-- operated pursuant to legislation and under govt license, that are legally "outside" the customs territory of the country they are in --in US operates under US Foreign Trade Zone Board --must be within 60 miles of port of entry
International Trade Commission (ITC)
assesses the effects of dumping on domestic businesses and then makes recommendations to the president concerning temporary import restrictions --members appointed by Pres and are subject to Senate approval
Carl Zeiss, Inc v. US
case dealing with rule of relative specificity -"Medical + surgical goods" Specific types of microscropes (this one was used bc it was more detailed and accurate) *CARL ZEISS loses again!
Better Homes Plastic Corp v. US
case dealing with rule of relative specificity//found that rule of relative specificity does not apply bc components in parts of sets or in multiple parts -"Curtain"--high tariff or "household and toilet article of plastic"--lower tariff *Court ruled that it is "household and toilet article of plastic"
Design Standards
characteristics that govern how a product should be designed --used in Japan
Compound Tariff Rate
combination of both ad valorem and specific rates. -for tariffs
Trade Expansion Act (1962)
congress authorized the negotiation of across-the-board tariff reductions through multi-lateral trade negotiations. --allowed for faster reduction of tariffs worldwide
Free Trade Area
consists of 2 or more countries that are party to a free trade agreement that reduces or eliminates tariffs on goods, removes trade barriers, and usually addresses other common concerns regarding trade between them.
Court of International Trade (CIT)
consists of 9 judges who hear cases arising from the trade or tariff laws of the US. LOCATED IN NYC --court has exclusive jurisdiction over all civil actions against US involving (1) revenue from imports or tonnage (2) tariffs,duties, or fees on merch (3)embargoes or other quantitative restriction of the importation of merch for reasons other than public health or safety (4) administration or enforcement of customs laws
Import-Export Clause
constitution prohibits the states from taxing both imports or exports
Consumption Abroad
consumers or firms making use of a service in another country
Surrogate Market Economy Country
country that has a level of economic development comparable to that of the NME country and that is a significant producer of comparable merchandise
Schedule of Concessions
country's tariff bindings are recorded in each country's ____ ______ _____________ at the WTO --they are legal commitments considered part of the GATT agreement itself --in the US these are found in the Harmonized Tariff Schedule of the United States
Performance Standards
describes how products should function --US standard
presidential memorandum
direct agencies to take specific actions as if the president were supervising its activities --less formal than executive order and it doesnt create enforceable legal rights
safeguards against injury
emergency remedies provided by law, usually tariffs, used to protect a domestic industry from injury resulting from increased imports of a like or competing products
Nondiscrimination
every WTO member has an equal opportunity to trade with another WTO member - based on the most-favored nation principle which asserts that one cannot grant special advantages to certain countries through favorable trade policies with the exception of RTAs and GSP = generalized system of preferences which allows AICs to apply lower tariffs on LDCs. It is also based on national treatment which asserts that governments cannot use domestic policies such as taxation, subsidies, etc. to help their domestic industries and hurt foreign industries
Specific Subsidy
given to a select company or limited # of comapnies, to a select industry or group of industries, ... -subsidy
Rule of Relative Specificity
if an article can be classified under 2 or more headings or subheadings, it must be classified under the one that most specifically--most narrowly-- describes the article with the greatest degree of certainty and accuracy
Take Care Clause
in Article II --Imposes duty on the President "he shall take care that the laws be faithfully executed" -duty to execute the laws
normal trade relations
in the US, the term "most favored nation" is now referred to as this
presence of natural persons
individuals traveling from their own country to supply services in another(teachers and consultants)
Material Injury
injury that is not inconsequential, immaterial, or unimportant -determinants: 1. import volume 2. effect on prices for like domestic products 3. the impacy on the domestic industry sales, profits, market share, wages. unemployment etc
Customs Union
is a free trade area with a Common External Tariff.
Import Substitution Subsidy
is a govt subsidy whose payment is contingent on its recipient using or purchasing domestically made goods over imported goods
quota
is a quantitative restriction on imports
foreign like product
is merchandise produced in the same country and by the same person as the allegedly dumped merchandise, or the same component materials, or the same general class or kind of merch dumped in the US
Market-Oriented Industry
is one in which resources and labor costs are procured at free market prices, there is little govt involvement in controlling production and capacity decisions, where prices are set by markets, and where the producers are mostly privately owned
Sole Executive International Agreement
is one negotiated and put into legal effect without congressional approval --they are not treaties and are not used as subs for treaties and aren't used for setting nat'l policy
Transaction value
is the price that is actually paid or payable for the goods when sold for export -plus: (1) packing and container costs (2) selling commission paid by the buyer (3) value of any "assist" (4) any royalty or license fee (5) the proceeds of any subsequent resale of the merch that accrues to the seller!
Government Procurement
is the purchase of goods and services by govt agencies at all levels
Technical Regulation
law or regulation affecting a product's characteristics-such as its performance, design, construction, chemical composition, materials, packaging, or labeling-that must be met before a product can be imported or sold in a country
American National Standards Institute (ANSI)
maintains an online "standards" portal that gives firms access to English translations of standards and technical regulations in China, India, SK, and other standards.
Wholly obtained
means that it is wholly the "growth, product, or manufacture" of one country
Substantial Transformation
occurs when the processing of an article results in a new and different article having a distinct name, character, or use; occurs when an HS classification changes
multiple taxation
occurs when the same service or property is subjected to the same or a similar tax by the governmental authorities of more than one nation --Japan Line lts discusses problems of this
2 types of rules of origin
preferential and non-preferential
export price
price at which a product is sold to an unaffiliated or unrelated buyer in the importing country, exclusive of shipping and insurance charges
Tariff Engineering
process of modifying or engineering a product prior to importation for the purposes of obtaining a lower rate of duty
procurement offsets
prohibits a procuring agency from awarding a contract to a foreign firm on the basis of certain conditions
Balance of Payments (BOP)
record of a country's transactions with the rest of the world --when a nation's outflow of foreign exchange exceeds receipts its ________ deficit can arise
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
refers to govt rules or regulations on IPRs(intellectual property rights) that have a direct or indirect effect on trade in goods
transparency
refers to the degree to which a foreign gov't's import laws or regulations are made open to the public, including foreign firms
unconditional MFN trade
requires that if a nation negotiates a reduced tariff rate on a certain product imported from one WTO member, that rate of duty automatically becomes applicable to like products imported from any and all other WTO members
global safeguards
safeguard measures placed on imports of specific products without discrimination as to their countries of origin
dumping
selling products in a foreign country at lower prices than those charged in the producing country
Direct nontariff barriers
specifically limit imports of goods or services or deny access to foreign firms to local markets EX: embargoes, quotas,
Water' Edge Election
state of CA in 1986 instituted this, allowing "multinational" corporate tax pauers the option of excluding the income of related entities that are incorporated in a foreign country or tht earn a majority of their income in a foreign country
tariff shift rule
states that the country of origin is the last country in which all 'inputs' into the finished article underwent a defined change in tariff classification
Trade Promotion Authority
statute gives the Pres limited and temporary authority to negotiate trade agreements pursuant to the objectives set out by Congress
Export Subsidy
subsidy made available to domestic firms upon the export of their products or made contingent on export performance
Technical Barriers to Trade
technical regulations and standards that apply to imported foreign products, even if they also apply equally to domestic products
Trade Compensation
the act of lowering import duties on certain products coming from a foreign country for the purpose of offsetting increased duties imposed on other products from that country
Beneficiary Developing Countries
the developing nations that are eligible for preferential treatment under WTO program are known as this
Liquidation
the final computation and assesment of the applicable duty on entered goods by Customs -"closes the book" and makes the entry complete -can dispute this within 90 days
Global Supply Chain
the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized
Ultimate Purchaser
the last person in the US who receives an article in the form in which it was imported
Dutiable Status
the legal status of imported goods at the time of entry for purposes of complaince with the tariff and customs law -Determined by 3 factors!! (1) classification (2) customs value (3) country of origin
Principal Use
the ordinary use to which articles of the same class and kind as those being imported are usually put and which is greater than any other single use of the article
Unilateralism
the policy of a nation should retaliate unilaterally against another country that discriminates against its products or firms rather than relying on an establishes international or multilateral framework for resolving trade disputes
Tariffication
the process by which a country agrees to "convert" its quotas, import licenses, and other non-tariff barriers on specific items to tariffs
Trade Liberalization
the process of reducing barriers to trade -all negotiation rounds of GATT had this one purpose
Japan Industrial Standard Mark (JIS Mark)
the symbol of approved product in Japan --mark indicates that the manufacturer has submitted to on-site inspections by appropriate Japanese ministry and has met accepted standards for quality control
Non-Market Economy Countries (NMEs)
these are countries whose political and economic systems are rooted in socialist principles of a state-controlled economy
Preferential Rules of Origin
those applicable to goods traded within a free trade area or customs union, or that receive preferential tariff treatment under trade preference programs for developing countries
unfair trade practices
trading practices that derive a gain at the expense of competition
equal dignity rule
treaties are binding on both the federal and state governments with the same force as an act of Congress
General Rules of Interpretation (GRI)
used to determine its tariff classification of good, found at the beginning of the tariff schedule
Free Trade Agreement (FTA)
usually refers to a trade agrmnt w broader coverage tht establishes a "free trade area" in which special tariff and customs provisions governs the flow of trade btween participating countries
Notice of Adjustment
when Customs at the port of entry determines additional duties are owed, THIS is sent to the importer