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The Agreement on Import Licensing Procedures

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Abstract

With only eight articles and occupying a mere six pages of text, the Agreement on Import Licensing Procedures (“AILP” or “Agreement”) is one of the shortest and least controversial of the Uruguay Round Agreements.1 Only one WTO panel decision has interpreted the Agreement, and even there the AILP was not the central focus of the dispute.2 The AILP differs little from the identically-named Tokyo Round agreement (often referred to as the Import Licensing Code), although there were a few changes designed to tighten up the procedures to be followed by Members in operating import licensing programs. Most significantly, of course, the Code only applied to those GATT contracting parties who chose to sign it. The AILP, as one of the multilateral Uruguay Round agreements, is binding on all members of the WTO.

Keywords

  • Supra Note
  • Dispute Settlement
  • Export Performance
  • Uruguay Round
  • License System

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It is important to note that, as explained in Part V of this chapter, the Agreement only applies to the procedures governing import licensing, and not to the underlying rules governing license allocation.

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References

  1. Report of the WTO Panel, European Communities—Measures Affecting the Importation of Certain Poultry Products, WT/DS69/R (1998) (“EC-Poultry”), upheld in Report of the Appellate Body, European Communities—Measures Affecting the Importation of Certain Poultry Products, WT/DS69/AB/R (1998) (“EC-Poultry (AB)”). However, nearly fifty requests for consultations have included allegations of violations of the AILP. See WTO Website, www.wto.org.

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  2. See Chapter 6 of this book. The Appellate Body has ruled that import licensing procedures for TRQs are within the scope of the AILP. Report of the Appellate Body, European Communities—Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R (1997) (“EC—Bananas”) at ¶ 195.

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  3. John H. Jackson, World Trade and The Law of Gatt 306 (1969).

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  4. See Report of the GATT Panel (adopted), European Community Programme of Minimum Import Prices, Licences and Surety Deposits for Certain Processed Fruits and Vegetables, BISD 25th Supp. 68 (1978), ¶ 4.1.

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  5. See, e.g., Report of the GATT Panel (adopted), European Economic Community—Restrictions on Imports of Apples-Complaint by the United States, BISD 36th Supp. 135, ¶ 5.2 (1989). In that case the EC made no attempt to argue that the licensing system at issue was not an import restriction within the meaning of Article XI, but instead claimed that it fell within one of the Article XI exceptions. See also, Report of the GATT Panel (adopted), Thailand—Restrictions on Importation of and Internal Taxes on Cigarettes, BISD 37th Supp. 200, ¶ 67 (1990); Report of the GATT Panel (adopted), Japanese Measures on Imports of Leather, BISD 31st Supp. 94, at ¶ 44 (1984).

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  6. A GATT panel held that the allocation of back-dated quotas, i.e., “quotas declared to have been already filled at the time of their announcement”, violated this requirement. Report of the GATT Panel (adopted), EEC—Restrictions on Imports of Dessert Apples, BISD 36th Supp. 93, ¶ 12.26 (1989).

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  7. Analytic Index of The Gatt (WTO 1995), vol. 2, App. VI.

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  8. Proposal by the United States and Hong Kong with Respect to the Improvement of the Agreement on Import Licensing Procedures, GATT Doc. No. MTN.GNG/NG8/W/53 (Sept. 27, 1989).

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  9. EC-Bananas, supra note 3, at ¶ 197.

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  10. Id., at ¶ 198.

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  11. Many Members have failed to make the necessary notifications. As of October 2003, 27 Members had made no notifications whatever to the WTO Committee on Import Licensing, and only 94 including the EC as one Member had notified their laws and regulations pursuant to Article 1.4(a). Committee on Import Licensing, Report (2003) of the Committee on Import Licensing to the Council for Trade in Goods, G/L/652 (October 28, 2003), ¶¶ 5, 10. In EC—Poultry the Panel refused to accept the EC’s explanation for nonnotification that it was unclear until the Appellate Body’s decision in EC—Bananas that the AILP applied to TRQs. EC-Poultry, supra note 2, ¶ 244.

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  12. In EC—Poultry the Panel rejected Brazil’s claim that the EC system infringed this provision, noting that the fact that the licenses had been filled meant that they must have been issued in “economic” quantiti EC—Poultry, supra note 2, at ¶ 262. The fact that the licenses had been filled also led the Panel to reject Brazil’s claim that speculation in licenses had discouraged full utilization of the TRQ, in violation of Articles 3.5(h) and (j). Id. at 259.

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  13. In EC—Poultry Brazil claimed that the EC had violated this requirement by failing to provide the specified information. The Panel rejected the claim, observing that Brazil had not demonstrated that the EC had ever failed to provide information on request, and that this provision did not require Members to provide the information voluntarily, but only on request. EC-Poultry, supra note 2, at ¶ 265.

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  14. See note by the Secretariat, Summary of Meeting held on 14 November 2000, G/AG/R/25, at 14–17.

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  15. Proposal for Tariff Rate Quota Reform, Submission from the United States, G/AG/NG/W/58 (November 14, 2000). The proposal also recommends substantive changes with respect to TRQs that would not involve changes to the AILP, since, as explained above, the Agreement has been held to apply only to the administration of import licensing systems, and not to the rules themselves. These recommendations include: • Ensuring that imports are not limited to unprocessed bulk commodities to the disadvantage of processed products • Preventing end-use specifications that limit imports • Preventing mixing requirements or other domestic purchase criteria • Preventing restrictive re-export requirements

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  16. Council for Trade in Goods—Trade Facilitation—Trade Facilitation in Relation to Existing WTO Agreements-Communication From the European Communities, G/C/W/136, G/L/299, S/C/W/101, IP/C/W/131 (March 10, 1999).

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Macrory, P.F.J. (2005). The Agreement on Import Licensing Procedures. In: Macrory, P.F.J., Appleton, A.E., Plummer, M.G. (eds) The World Trade Organization: Legal, Economic and Political Analysis. Springer, Boston, MA. https://doi.org/10.1007/0-387-22688-5_14

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