There's so much to say about the non-discrimination issue right now that I'm not quite sure where to begin. I've got four posts here today, and for DSC subscribers I also did one on the DSC blog for the Tuna case. To start things off, here's a quick post on the individual product/best treatment/asymmetric impact issue.
This is from the U.S. second written submission in the Clove Cigarettes (DS406) case:
119. Indonesia would have the Panel consider the “less favorable treatment” claim without respect to the context of the relevant Agreements and based on an extreme view that has been squarely rejected by the Appellate Body. Indonesia submits that all different types of cigarettes are a single “like product”, and that if any domestic cigarette is permitted under section 907(a)(1)(A), the measure accords less favorable treatment to Indonesian products. ...
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121. ... the “best treatment” approach advocated by Indonesia is inconsistent with the language of GATT Article III:4 and Article 2.1 of the TBT Agreement. The relevant comparison is the treatment accorded to imported “products” and like domestic “products” – not single imports and compared to single like domestic products. There is no textual basis to interpret either national treatment provisions as providing for treatment of “an imported product” that is no less favorable than the treatment of “a domestic product.”122. Nor is it consistent with the Article III principle that measures should not be applied so as to afford protection to domestic production and the TBT affirmation that Members may take measures to protect the public health, including by laying down product characteristics. Were Indonesia’s view to prevail – and if national treatment obligations were violated when a single import is restricted by a measure and a single like domestic product is not – Members’ ability to regulate for the protection of human health or any other purpose would be seriously encumbered. Any measure that distinguished between products for legitimate reasons – for example to protect public health – could be construed as resulting in national treatment violations.
123. Further, in EC – Asbestos the Appellate Body has rejected the “best treatment” approach Indonesia advances. The Appellate Body affirmed that the relevant comparison for purposes of the “less favorable treatment” is not between an import as compared to the “best” treated likedomestic product, but rather “a complaining Member must [...] establish that the measure accordsto the group of ‘like’ imported products ‘less favorable treatment’ than that it accords to the groupof ‘like’ domestic products.” In referring to the “group of ‘like’ imported products” and the“group of ‘like’ domestic products,” the Appellate Body reflected that the type of distinctions with which Article III:4 is concerned are those that distinguish between products based on wether they are domestic or imported, or said another way, based on origin.
So the U.S. takes a strong stance against the individual product/best treatment approach.
