International Trade Meaning and Definition of National Treatment

A country accords no less favorable treatment to imported goods than it does to domestic goods.

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National Treatment in Historical Law

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National treatment in Global Commerce Policy

In this regard, a definition of this issue is as follows: the principle of giving others the same treatment as one ™s own nationals. GATT Article III requires that imports be treated no less favourably than the same or similar domestically-produced goods once they have passed customs. GATS Article XVII and TRIPS Article 3 also deal with national treatment for services and intellectual property protection. The entries on trade policy are here. In the older literature, this principle is sometimes called “inland parity”. The entries on trade policy are here. It is a simple proposition, but it has been the cause of many disputes, partly because a strict interpretation of national treatment may in fact disadvantage foreign suppliers. The classic example of this possibility is the wine gallon assessment. For this reason, the national treatment principle has been refined over the years to allow for different or formally better treatment of foreign products if that is the only way to guarantee that foreign products are not disadvantaged. Sometimes countries deliberately give foreign investors better than national treatment to attract suitable firms. The entries on trade policy are here. In other cases, it is difficult to distinguish between measures aimed at imported and domestic products and quantitative restrictions aimed at foreign products alone. The basic principle underlying Article III of the GATT, which deals with national treatment for goods, is that of equality of competitive opportunity. The Article starts with the general statement that GATT members recognize that internal taxes and other charges, laws and regulations affecting the internal sale, transport and distribution, and internal quantitative regulations should not be applied to imported or domestic products to give protection to domestic production. The entries on trade policy are here. It then says that imported products must not be subject to internal taxes or other internal charges above those applied to domestic products. The Article also requires that all laws, regulations, etc., must apply equally to imported and domestic products. The entries on trade policy are here. Additionally, internal quantitative restrictions must be applied in a non-discriminatory way. The entries on trade policy are here. In intellectual property, under the Agreement on Trade-Related Aspects of Intellectual Property Rights a WTO member must, in terms of Article 3, accord to the nationals of other members treatment no less favourable that it accords to its own nationals. There may be some exceptions to this because of pre-existing rights under the Paris Convention, the Berne Convention or the Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits. For services, national treatment, as described in Article XVII of the GATS, is the obligation to guarantee foreign service providers and their services equivalent treatment to that given to domestic service providers and the services they supply. Treatment for foreign suppliers may be formally different if that is required to achieve equality of opportunity. See also economic impact criterion, implicit discrimination, minimum standard of treatment, most- favoured-nation treatment and non-discrimination.[1]

National treatmentin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “National treatment” entry (OAS)

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