221–222(WT/DS396/AB/R, WT/DS403/AB/R), … we do not agree with the Philippines that Article III:2, second sentence, requires that competition be assessed in relation to the market segment that is most representative of the “market as a whole”. N.1.11.16 Thailand — Cigarettes (Philippines), para. 142–143(WT/DS75/AB/R, WT/DS84/AB/R), … Some grouping is almost always necessary in cases arising under Article III:2, second sentence, since generic categories commonly include products with some variation in composition, quality, function and price, and thus commonly give rise to sub-categories. The implications of the contested measure for the equality of competitive conditions are, first and foremost, those that are discernible from the design, structure, and expected operation of the measure. Accordingly, the term “governmental purposes” may refer either to the intentions or aims of a government, or it may refer to government as the end to which the product purchased is directed. Article XX(b) allows a Member to “adopt and enforce” a measure, inter alia, necessary to protect human life or health, even though that measure is inconsistent with another provision of the GATT 1994. See also National Treatment, Article III:4 of the GATT 1994 — Regulatory discrimination (N.1.9); Textiles and Clothing Agreement, Article 6.2 — “like products” (T.7.5); TBT Agreement, Article 2.1 — MFN and national treatment obligations, “like products” (T.4.2A.4)
This should assist a panel in understanding the relationship among these fundamental GATT provisions. … The requisite degree of competition is met where the imported and domestic products are characterized by a high, but imperfect, degree of substitutability. The Appellate Body indicated in Korea — Various Measures on Beef that imported products are treated less favourably than like products if a measure modifies the conditions of competition in the relevant market to the detriment of imported products. What is important, however, is that the obligation to pay a charge must accrue due to an internal event, such as the distribution, sale, use or transportation of the imported product. …, N.1.6 Article III:2 of the GATT 1994, second sentence — “directly competitive or substitutable” products. The determination of “likeness” under Article III:2, first sentence, of the GATT 1994 should be made on a case-by-case basis. We acknowledge that, under the challenged measures, a connection is articulated between the procurement of electricity and the Minimum Required Domestic Content Levels regarding generation equipment. … While consumer perception of products is highly relevant to the overall determination of “likeness” under Article III:2, we believe that this element may reach beyond the products’ properties, nature, and qualities, which concern the objective physical characteristics of the products. You may need to download version 2.0 now from the Chrome Web Store. At the same time the Sub-Committee recorded its view that nothing in this sub-paragraph or elsewhere in Article 18 would override the provisions of Section C of Chapter IV.73. N.1.3.2.2 Japan — Alcoholic Beverages II, p. 22, DSR 1996:I, p. 97 at 114–115(WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R), Uniform classification in tariff nomenclatures based on the Harmonized System (the “HS”) was recognized in GATT 1947 practice as providing a useful basis for confirming “likeness” in products. Most often, there will be other factors to be considered as well. N.1.3.2.7 Philippines — Distilled Spirits, paras. In Article III:8(a), the word “purpose” is used in conjunction with the word “governmental”. … tariff classification can be a helpful sign of similarity only if it is sufficiently detailed. See also National Treatment, Article III:4 of the GATT 1994 — “less favourable treatment” (N.1.11), N.1.1 Article III:1 of the GATT 1994 — General principle back to top, N.1.1.1 Japan — Alcoholic Beverages II, pp. … These rules go far beyond the mere import licence requirements needed to administer the tariff quota for third-country and non-traditional ACP bananas or Lomé Convention requirements for the importation of bananas. Thus, evidence about the extent to which products can serve the same end-uses, and the extent to which consumers are — or would be — willing to choose one product instead of another to perform those end-uses, is highly relevant evidence in assessing the “likeness” of those products under Article III:4 of the GATT 1994. If this notion were accepted, it would entitle a contracting party to derogate from the no less favourable treatment obligation in one case, or indeed in respect of one contracting party, on the ground that it accords more favourable treatment in some other case, or to another contracting party. See also MFN Treatment, Article II of the GATS (M.2.2); National Treatment, Article III:4 of the GATT 1994 — “less favourable treatment” (N.1.11)
However, in our view, the concepts of “procurement” and “purchase” are not to be equated. N.1.8.4 Philippines — Distilled Spirits, para. We emphasize that this situation exists under the statute on its face, and that, therefore, unlike the situation with respect to the granting of a special licence to United States successors-in-interest by OFAC, this situation assumes no action by OFAC or by any other agency of the United States Government. A panel examines these criteria in order to make a determination about the nature and extent of a competitive relationship between and among the products. Moreover, … a finding that a tax measure affords protection to domestic production does not depend upon showing “some identifiable trade effect”. 94–95(WT/DS135/AB/R), … we observe that, although the obligations in Articles III:2 and III:4 both apply to “like products”, the text of Article III:2 differs in one important respect from the text of Article III:4. Article III:4 and Article XX(b) are distinct and independent provisions of the GATT 1994 each to be interpreted on its own. In the context of Article III:2, the national treatment obligation applies also to the treatment of imported products that are directly competitive to or substitutable with domestic products. … As the Panel recognized, the proper test is that a determination of “like products” for the purposes of Article III:2, first sentence, must be construed narrowly, on a case-by-case basis, by examining relevant factors including: (i) the product’s end-uses in a given market; (iii) the product’s properties, nature and quality. If the answer to one question is negative, there is a need to examine further whether the measure is consistent with Article III:2, second sentence. …. 128(WT/DS396/AB/R, WT/DS403/AB/R). We turn next to the term “products purchased” within the meaning of Article III:8(a). With respect to Article III:2, first sentence, we noted that it does not refer specifically to Article III:1. The analysis of whether imported products are accorded less favourable treatment requires a careful examination “grounded in close scrutiny of the ‘fundamental thrust and effect of the measure itself’”, including of the implications of the measure for the conditions of competition between imported and like domestic products. Article III:8(a) thus requires an articulated connection between the laws, regulations, or requirements and the procurement, in the sense that the act of procurement is undertaken within a binding structure of laws, regulations, or requirements. … Where products have a wide range of end-uses, only some of which overlap, we do not believe that it is sufficient to rely solely on evidence regarding the overlapping end-uses, without also examining evidence of the nature and importance of these end-uses in relation to all of the other possible end-uses for the products. Both the terms “for governmental purposes” and “not with a view to commercial resale” further qualify and limit the scope of “products purchased”. N.1.9.4.5 EC — Asbestos, para. Article XX(b) would only be deprived of effet utile if that provision could not serve to allow a Member to “adopt and enforce” measures “necessary to protect human … life or health”.