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Written by:
Prachi Sethi
Published on

The core concept of the World Trade Organization is national treatment, which implies that foreigners and locals are treated equally, as imported commodities and local products, at least following the arrival of foreign goods on the market. The same applies to international and internal services, as well as to trademarks and other intellectual properties in foreign and local areas. The above explains that the basic purpose and objective of this principle is to provide protection against any kind of discrimination among the WTO members in relation to the locally produced goods and services and imported goods and services. Art 3 of GATT prohibits discrimination against imported goods.


Generally, it sets forth this concept by preventing WTO members, after imported goods are placed on the market, from treating imported items less favorably than local ones. Article 3 obliges WTO members in respect to domestic product, which has also been put down in the case of Japan Alcoholic beverages, to offer equal opportunities and competitive circumstances for the imported products. Korea has taxed items imported in a different way in Korea, and the difference in tax is higher than de minimis and is used to safeguard local manufacturing. In this situation, the tax disparity is more than minimis.

This case also laid down the objectives of this principle which are as follows:

• Avoid protective measures

• Requiring a competitive market as a level playing field.

• Equal competitive circumstances for fair competition.




In general, national treatment is deemed beneficial. It may not never be, however. In principle, the idea permits the state to take away any rights or property that the State also deprives its own citizens effectively. Suppose, for example, a state has a legislation to allow property to be expropriated. A foreign company would nevertheless be susceptible to the law of expropriation under national treatment technically.


Now, state laws stipulate that a married woman may not travel without her husband's consent, even though she does not require a permit from her woman in his place of origin, according to the idea of national treatment, an alien married woman travels to or lives in that state. There may nevertheless be additional restrictions which might limit national treatment to positive advantages depending on the country. Although governments have traditionally been using national treatment to legitimise expropriations, in particular those of developing nations, those concerns are often addressed in contracts or treaties.The idea of the minimum level of justice that gives foreigners access to judicial proceedings and fundamental safeguards on human rights is opposed to national treatment, whatever is permitted under the principle of national treatment.


The exemptions to this principle is as follows:

  • Art iii:8 a--Government procurement: This exemption is granted because WTO Members acknowledge the significance of government procurement in national policy. For example, there may be a security requirement to create and acquire items locally, or government procurement may, as is typically the case, be utilized to support smaller companies, local industries and sophisticated technology as a policy instrument.


  • Art iii:8 B– Domestic Subsidies – It provides for the distribution of subsidies exclusively to domestic producers in exception to the national treatment norm, provided that the subsidy and countervailing measures agreement does not violate other clauses set out in Article III and the Agreement. This derogation is because subsidies are regarded as an efficient policy instrument and are mostly recognized in the domestic policy authorities' discretion.