‘Likeness’ Standard under Article III:4 – relationship with ‘likeness’ standard under Article III:2

The Art III:2 and Art III:4 cover the prohibition of discrimination concerning similar imported and domestic products. The inadmissible discrimination exists if either the same products are treated dissimilarly or if goods beyond the product-related criteria are discriminately treated, so as to afford protection to domestic production[1]. The textual concept of ‘like product’ in Article III:2 may suggest a similarly narrow reading of ‘like product’ in Article III:4, since both provisions form part of the same Article. Hence, the question arises of what is the relationship between ‘like products’ under Art III:2 and Article III:4.

In the EC- Asbestos case, the Appellate Body examined the relationship between these paragraphs and stated that Article III:2 constitutes part of the context of Article III:4. Nevertheless, as mentioned above the Appellate Body hold that Article III:1 had ‘particular contextual significance’ for the interpretation of Article III:4:

Accordingly, in interpreting the term ‘like products’ in Article III:4, we must turn, first, to the ‘general principle’ in Article III:1, rather than to the term ‘like products’ in Article III:2.[2]

Then, it proceeded to distinguish the concept of ‘likeness’ in Japan — Alcoholic Beverages from that in EC — Asbestos and recognized the different respective structures of both paragraphs. Art III:2 contains two separate commitments: the first sentence lays down obligations in respect of ‘like products’ and the second relies on obligations concerning ‘directly competitive or substitutable’ products respectively. Conversely, Article III:4 does not distinguish between different standards of product relationships and contains only one obligation which applies exclusively to ‘like product’[3]. As a result, the ‘general principle’ articulated in Article III:1 is expressed in Article III:4, not through two distinct obligations, as in the two sentences in Article III:2, but through a single obligation that applies solely to ‘like products’. The ‘accordion’ of ‘likeness’ stretches in a different way in Article III:4 and therefore ‘like product’ involved in this paragraph is not equivalent with the one from paragraph 2.[4]

Furthermore, referring to the EEC – Animal Feed Proteins case, Appellate Body clearly rejected the narrow interpretation of ‘like products’ of Art III:2 with regard to Article III:4 GATT.[5] Following this argumentation, it was stressed that the ‘likeness’ standard has ‘a relatively broad product scope’ for article III:4 of the GATT, although no broader than in article III:2, second sentence. However, there is no sharp distinction between the term ‘like products’ in Art III:4 and directly competitive or substitutable’ products in Article III:2, second sentence and both forms of regulation can often be used to achieve the same ends[6].

It is argued by the scholars and commentators that Appellate Body implicitly confirmed that the breath of ‘like products’ in Article III:4 should be essentially identical to the breadth of ‘directly competitive or substitutable products’ articulated in Article III:2 GATT.[7] In particular, it is highly improbable that two products would be ‘directly competitive or substitutable’ in terms of Article III:2, second sentence, but not ‘like’ in terms of Article III:4 GATT; or vice versa. [8] In effect, the ‘likeness’ standard in Art III:4 should rely on the same market-based factors as they apply to the ‘directly competitive or substitutable products’ of Article III:2, second sentence.

[1] Horn H., Mavroidis P.C., Non-discrimination, the Interpretation of National Treatment in the GATT/WTO Case-law on Tax Discrimination, p. 41f

[2] Appellate Body Report, EC – Asbestos, para. 94.

[3] Appellate Body Report, EC – Asbestos, para. 96.

[4] Appellate Body Report, EC – Asbestos, paras. 94-96.

[5] Panel Report, EEC – Animal Feed Proteins, paras. 4.2 f.

[6] Appellate Body Report, EC – Asbestos, para. 99;

[7] Choi W.-M., ‘Like Products’ in International Trade Law: Towards a Consistent GATT/WTO Jurisprudence pp. 111–14;

[8] Diebold N. F., Non-Discrimination in International Trade in Services, ‘Likeness’ in WTO/GATS, p. 115.

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