COMMENTARY ON THE “NATIONAL TREATMENT” PRINCIPLE STIPULATED IN ARTICLE III

 
Abstract:
Article III of the General Agreement on Tariffs and Trade (GATT) regulates National Treatment and is one of the most important provisions in the international trade system. The main objective of Article III is to ensure that imported goods are treated fairly, like domestically produced goods, once they have passed through tariff barriers. However, the application of this regulation remains controversial and requires further analysis.
Key words: GATT, national treatment, NT principle.
File PDF: COMMENTARY ON THE “NATIONAL TREATMENT” PRINCIPLE STIPULATED IN ARTICLE III OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994 (GATT 1994)
I. Introduction
Article III of the General Agreement on Tariffs and Trade 1994 (“1994 GATT”) stipulates “national treatment”. [1] It stated that “Products imported from the territory of any contracting party into the territory of any other contracting party shall be accorded treatment no less favorable than that accorded to like products of national origin.”[2] This principle requires member countries not to discriminate between imported goods and domestic produced goods once tariffs have been applied.[3] In other words, domestic goods must not be favored over imported goods through measures such as domestic taxes or other regulations. Specifically, the principle of “national treatment” is defined as follows: National Treatment (“NT principle”) means that “Based on trade commitments, a country will grant products, services, and suppliers from other countries no less favorable treatment than it grants to its own products, services, and suppliers.”[4] This means the importing country must not discriminate between domestic and foreign products, services, and suppliers concerning domestic taxes and fees as well as competition conditions. Moreover, in the World Trade Organization (“WTO”), the NT principle is stipulated in Article III of 1994 GATT, Article XVII of the General Agreement on Trade in Services 1994 (“GATS”),[5] and Article III of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPs”).[6] Accordingly, foreign goods, services, and intellectual property rights, after passing customs procedures (having paid the legally required taxes) or being registered for protection, must be treated equally as domestic goods, services, and intellectual property rights.
In Vietnam, Ordinance No. 41/2002/PL-UBTVQH10[7], dated May 25, 2002, on Most Favored Nation (“MFN”) and NT principle in International Trade, is currently in effect. The NT principle, combined with the MFN principle, is the foundational principle of the WTO that aims to achieve non-discrimination and trade liberalization among member countries.