MINISTRY OF JUSTICE
HANOI LAW UNIVERSITY
----------
ASSIGNMENT
SUBJECT: WTO LAW
TOPIC: Study the WTO dispute of Argentina - Measures Affecting Imports
of Footwear, Textiles, Apparel and Other Items, 1998 (DS56).
As counsel of the respondent, present the requested issuses.
Class : TL1
Group : 06
Hanoi, 2021
1
MINUTES OF DETERMINING PARTICIPATION LEVEL AND RESULTS OF
GROUP WORK
Date: November 13, 2024 Location: Hanoi Law University
Group: 06 Class: TL1 Faculty: Legal Foreign Languages
The number of group members: 10
Present: 09 Absent: 01 (442959 – Đặng Hải Phương – without reason)
Assignment Title: Group Assignment
Course: WTO Law
Determining the participation level and results of each student in Group 06’s project, with the
following results:
Student assessment Teacher's Assessment
Number Code Name Points Points
Student’s Teacher's
A B C (in (in
Signature Signature
numbers) words)
46263 Nguyễn Thị Bích Ngọc x
1
2
46233 Lưu Thị Thảo Nguyên x
2
3
46263 Vũ Thanh Nhàn x
3
4
46266 Nguyễn Minh Nhật x
4
4
46265 Nguyễn Phương Nhi x
5
4
46263 Trương Yến Nhi x
6
5
46263 Nguyễn Lâm Oanh x
7
6
44295 Đặng Hải Phương
8
9
46263 Nguyễn Lâm Phương x
9
7
46263 Thái Trần Tú Phương x
10
8
Written assignment scores: Ha Noi, November 13, 2024
- First evaluator: Group Leader
- Second evaluator:
Presentation scores:
- Presentation evaluator: Vũ Thanh Nhàn
Final concluding score:
- Final evaluation by teacher:
ABBREVIATIONS LIST
DSB Dispute Settlement Body
DSU Dispute Settlement Understanding
GATT General Agreement on Tariffs and Trade
IMF International Monetary Fund
WTO World Trade Organization
TABLE OF CONTENTS
INTRODUCTION..............................................................................................................1
CONTENT..........................................................................................................................1
1. Summary of the case................................................................................................1
2. Legal issues................................................................................................................2
3. Legal arguments of the respondent (Argentina)...................................................2
4. The opinion of the DSB and Comments.................................................................3
4.1. The opinion of the DSB........................................................................................3
4.2. Comments on the opinion of the DSB.................................................................3
CONCLUSION...................................................................................................................4
REFERENCES...................................................................................................................5
INTRODUCTION
The global trade system is built on principles of fairness, freedom, and non-
discrimination, safeguarded by the rules of the World Trade Organization (WTO).
However, balancing national interests with international commitments remains a
significant challenge for member states. The case of "Argentina – Measures Affecting
Imports of Footwear, Textiles, Apparel, and Other Items" (DS56) in 1998 serves as a
prominent example of these conflicts. The European Union (EU) lodged a complaint
against Argentina for implementing a minimum customs value system, alleging violations
of WTO rules and sparking debates over the legality of protective economic measures.
This essay will analyze the factual background, legal issues, arguments presented by the
parties, and the legal implications of the case, providing a deeper insight into how the
WTO resolves international trade disputes.
CONTENT
1. Summary of the case
Case Name: DS56: Argentina – Measures Affecting Imports of Footwear, Textiles,
Apparel and Other Items.
Complainant: United States (US)
Respondent: Argentina
Factual background:
Argentina still carries on its Minimum Specific Import Duties, also called DIEM,
after signing an agreement to a maximum bound rate of 35 percent ad valorem on imports
of textiles, apparel, and footwear: A complaint was made by the Americans against
Argentina for specific duties that excess of 35 percent of the actual value of textiles,
apparel, footwear, and other items, which is higher and apply a statistical tax of 3% ad
valorem statistical tax by not considering commitments that Argentina made with the
IMF.1
The Panel claimed that Argentina's actions violated GATT 1994 Articles II and
VIII. With the Dispute Panel Report, Argentina disagreed with the Panel's judgment 2 and
appealed after it decided in favor of the United States.3
1
Appeallate Body Report, at para 2,3
2
Appeallate Body Report, at para 4
3
Appeallate Body Report, at para 9
1
Law:
Article II:1, VIII, XV:2, XXIII of GATT 1994
Article 11, Article 13 of DSU
Art. 7 Textiles and Clothing
Panel Report: EEC - Bananas II
2. Legal issues
- Whether the application by a Member of a type of duty other than the type provided
for in that Member's Schedule is, in itself, inconsistent with Article II?
- Whether the Panel erred in concluding that Argentina had acted inconsistently with
its obligations under Article II of GATT "in all cases"?
- Whether the Panel erred in its application of Article VIII of the GATT 1994 to the
3%ad valorem statistical tax by not taking into account commitments that Argentina states
it made to the IMF?
- Whether the Panel acted inconsistently with Article 11 of DSU in: (i) admitting
certain evidence submitted by the United States two days prior to the second substantive
meeting of the Panel with the parties, and granting Argentina only two weeks to respond;
and (i) not seeking information from, and consulting with, the IMF so as to obtain its
opinion on specific aspects of the matter concerning the statistical tax imposed by
Argentina?
3. Legal arguments of the respondent (Argentina)
First, regarding whether the application of a type of duty other than that provided
in the Member's Schedule breaches Article II of the GATT 1994, Argentina contended that
the imposition of higher duties was necessary for domestic economic protection.
Argentina argued that applying an alternative duty under special economic circumstances
did not inherently constitute a breach of Article II commitments.
Second, regarding the Panel's conclusion that Argentina violated its obligations
under Article II "in all cases", Argentina challenged the Panel's broad determination,
arguing it did not sufficiently consider the unique economic context and necessity for
such duties, which were prompted by domestic exigencies.
Third, on the 3% ad valorem statistical tax and IMF commitments under Article
VIII of the GATT 1994, Argentina defended this tax as a critical emergency measure
2
consistent with its commitments to the IMF, asserting that the Panel inadequately
assessed its role in
Argentina's economic restructuring, which was necessitated by severe financial crisis
conditions.
Forth, the Panel's procedural inconsistencies with Article 11 of the DSU:
(i) Late Evidence Admission from the U.S.: Argentina contended that the Panel’s
acceptance of evidence from the United States only two days before the second
substantive meeting undermined procedural fairness. It argued that this disadvantaged
Argentina’s ability to respond effectively, thereby breaching the DSU’s standards for fair
proceedings.
(ii) Lack of IMF Consultation: The Panel's failure to seek additional information
and consult with the IMF on Argentina’s statistical tax weakened the assessment of key
economic factors. Argentina asserted that this omission compromised the judgment's
fairness and completeness, overlooking Argentina's economic obligations and
commitments.
4. The opinion of the DSB and Comments
4.1. The opinion of the DSB
First, the minimum specific duties imposed by Argentina on textiles and apparel
are inconsistent with the requirements of Article II of GATT. Argentina’s DIEM system
may result in customs duties exceeding the bound rate of 35% ad valorem as per its
Schedule of Concessions.
Second, the statistical tax of three per cent ad valorem imposed by Argentina on
imports is inconsistent with the requirements of Article VIII of GATT. This tax is
unreasonable as it leads to charges that exceed the estimated cost of the services provided.
Additionally, this statistical tax is considered a measure designed for fiscal purposes,
which is inconsistent with GATT provisions.
The Panel recommends that the Dispute Settlement Body request Argentina to
bring its measures into conformity with its obligations under the WTO Agreement.
4.2. Comments on the opinion of the DSB
First, regarding the dispute settlement process in case DS56, it can be seen that the
process was carried out carefully and in full compliance with WTO rules through the two
levels of review, the Panel and the Appellate Body. This allowed both parties to ensure
3
their interests were protected and to review the initial decisions, reflecting fairness and
transparency within the WTO’s judicial framework. However, the DSB tends to apply the
law rigidly without flexibility based on real-world circumstances. The resolution should
consider not only GATT provisions or related clauses but also the economic context and
specific circumstances of the responding Member. Flexibility in applying the procedure
and considering these specific factors could enhance fairness and practical relevance.
Second, the minimum duties applied by Argentina on textiles are not necessarily
inconsistent with Article II of GATT, considering Argentina's specific economic
conditions, including the need to protect its domestic industries. This could be seen as a
legitimate measure to protect domestic production from unfair competition from imported
goods, especially when considering the development and scale of the textile industry in
Argentina.
Third, we do not fully agree with the DSB’s conclusion that the 3% ad valorem
statistical tax violates Article VIII of GATT 1994. We believe that the DSB's decision
lacked a thorough consideration of Argentina's economic circumstances and its
international commitments, particularly with the IMF, when assessing the 3% statistical
tax and specific import duties. Argentina's application of specific duties to protect its
domestic industry is reasonable in the context of an economy needing protection from
international competition. This weakens Argentina’s legitimate defensive measures for its
domestic industry, especially for small and medium enterprises in the development stage,
facing unfair competition from cheap imported goods.
The DSB focused on the violation of GATT provisions without sufficiently
considering the circumstances leading to these measures. Protecting domestic industries in
the face of an economic downturn or threats from low-priced imports not only serves
defensive purposes but also helps avoid severe consequences for domestic businesses and
workers, who are vulnerable to fierce international competition.
CONCLUSION
In the context of increasing global integration, understanding the principles of the
WTO is crucial for avoiding unnecessary disputes and risks. As a WTO member,
countries must equip themselves with knowledge to navigate potential challenges.
Through the case study of DS56: Argentina – Measures Affecting Imports of Footwear,
Textiles, Apparel, and Other Items, we hope to clarify these key principles. We welcome
feedback from teachers and peers to improve our work, as it includes personal viewpoints
and may have areas for enhancement. Thank you for your attention and guidance.
4
REFERENCES
1. Professor Dr Surya P. Subedi DPhil (Oxford); Barrister (England) Professor of
International Law School of Law, University of Leeds, UK (2017), Textbook on
international trade and business law, Youth Publishing House, Hanoi Law
University.
2. Panel Report, Argentina - Affecting Imports of Footwear, Textiles, Apparel and
Other Items - complaint by the United States, WT/DS56/R, adopted 25 November
1997.
3. General Agreement on Tariffs and Trade
4. Understanding of Rules and Procedures Governing the Settlement of Disputes
5. Argentina - Measures Affecting Imports of Footwear, Textiles, Apparel, and Other
Items
6. WTO Dispute Settlement: One-Page Case Summaries
7. Agreement Between the IMF and the WTO
8. Appellate Body Report, Argentina - Measures Affecting Imports of Footwear,
Textiles, Apparel and Other Items - Complaint by the United States,
WT/DS56/AB/R, adopted 27/03/1998
9. General Agreement on Tariffs and Trade (GATT) 1994
10. WTO ANALYTICAL INDEX
