Anjali Bhatt, Assistant Professor (Senior- Scale), School of Law, University of Petroleum and Energy Studies, Dehradun
INTRODUCTION
There exists a propensity on the part of the member states to impose domestic taxes with the objective of providing protection to the domestic industries from the competition with foreign products. To keep a check on these tendencies, National Treatment Principle and the Most Favoured Nations Treatment are cornerstone to the General Agreement on Tariffs and Trade (GATT). They have also been the focus of much judicial activity.
In the present case of US Malt Beverages, the arguments of the parties centered around the national treatment principle and broadly on the question of when there can be said to be discrimination against the imported goods in comparison of like domestic products.
FACTS OF THE CASE
The complainant state in this case is Canada that has alleged various laws and regulations of the United States (US) to be in violation of the provisions of General Agreement on Tariffs and Trade (GATT) in general and majorly Article III. The measures that have been complained against by Canada include taxation laws at the federal and the state level that have the consequence of lower tax rate on domestically produced beer and wine over their imported counterparts.
The other pertinent measures challenged included a plethora of incidental issues such as elevated licensing fees in certain states of the US for imported beer and wine, fixing of price of imported beer and wine in accordance with their price in the neighboring states; laws requiring the supply of beer and wine only through wholesalers and not the retailers, though the same was not applicable to domestic products; requirement in some states that the beer and wine had to be transported only via a common carrier, which again did not apply to domestic products.
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