Another However, Cassis de Dijon introduced restrictions to this.[11]

Another GATT exception includes treating parties better
within Customs Unions or Free Trade Areas as opposed to those outside (Art.
XXIV GATT).1

As Netherlands and the UK are within the same customs
union, Go-Faster should get preferential treatment from Netherlands.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

 Go-Faster could also rely on the
free-trade, Comprehensive Economic and Trade Agreement (CETA) between the EU
and Canada, which provisionally entered into force in 2017, to get preferential
treatment from Canada.2 The
agreement facilitates trade and
investment between EU and Canada, making it easier for Go-Faster to export
manufactured goods, by abolishing 98% of
the customs duties they pay at Canadian customs.3

 

EU law can also provide
protection for Go-Faster if they choose to set up the subsidiary in Netherlands.
Under Art.28(1) TFEU, the Union
shall comprise a customs union which prohibits customs duties on imports and
exports and of all charges having equivalent effect (Art.30 TFEU)4, discriminatory
internal taxation (Art.110 TFEU)5, and the
prohibition of quantitative restrictions and measures having equivalent effect on
imports, between member states (MS’s) (Art.34 TFEU).6 Article 34 prohibits measures that are both distinctly
and indistinctly applicable i.e. measures that discriminate directly between domestic
and foreign products and those that despite being equally applied to both, favour
the former against the latter.7

However, Netherlands can overcome these rules
using exceptions, under Art. 36 TFEU which include public policy, protection of
human, animals and plant health and protection of industrial and commercial
property.8

 

Judges held in Dassonville that even a measure potentially hindering trade, even
indirectly, are considered as measures having an equivalent effect to
quantitative restrictions.9 As
a discriminatory intent does not need to be identified,10
the ‘Dassonville formula’ is considered much wider than WTO rules.

 

However,
Cassis de Dijon introduced
restrictions to this.11 European
Court of Justice (ECJ) aimed to create a balance between allowing the free
movement of goods, through the principle of mutual recognition where a product
lawfully marketable in one MS should be freely marketable in another, even if
the product infringed national rules, whilst also providing MS sufficient discretion to ensure their
national interests were considered by allowing restrictions on imports if it was justified by satisfying
mandatory requirements. These related to the effectiveness of fiscal
supervision, the protection of public health, fairness of commercial
transactions and the defence of the consumer.

The German government attempted to use such
justifications, when they refused to permit the import of French ‘cassis de dijon’ liquor into
Germany, arguing that requiring a minimum alcohol volume of 25% leads to
standardized products on the market and fairer commercial transactions. However,
this was held to be excessive as fair transactions can be ensured by requiring
the alcohol content to be displayed on the product’s packaging instead. Hence, the
fixing minimum alcohol content breached Article 34 as an obstacle to the free
movement of goods.

 

The difficulty in proving a mandatory requirement exists to justify
discrimination shows the Court’s interpretation of Article 34 restricts MS’
abilities to regulate their own markets,12
exemplified by Commission v Germany.13

German
beer purity laws argued the addition of additives to beer was prohibited under
the mandatory requirement exceptions for public health and protection. France and Italy, which produced beers with additional ingredients, argued the laws were “measures having
an equivalent effect” under Art. 34 TFEU. ECJ held that noting the potential dangers of consuming additives and the
fact that the German public consume
large quantities of beer does not warrant the burden of stricter rules on beer
imports. It also declared Germany’s policy as contradictory as the additives that
other MS use in beer are also permitted by German rules to be used in almost
all other German beverages. Therefore, Germany’s unlawful restriction
on imports under Article 34
TFEU was not saved by any statutory exceptions. ingesting

Discriminatory measures must
also be proportionate to their desired objective and be implemented in a manner
that minimizes obstructions to trade.14 ECJ
held Article 95 of the EEC treaty “supplements the provisions prohibiting
customs duties and charges having equivalent effect”, by preventing the protection of domestic products occurring
through internal taxation that discriminates products from other MS.15 The
Court held in Commission v United Kingdom, MS laws must not “crystallize consumer habits for national
industries to consolidate an advantage.”16 It held
the UK could not discriminate wine due it having different alcoholic strength to
beer as consumers’ are more influenced by their general characteristics and end-consumption
instead in which wine and beer were similar. Therefore, UK breached article 95,
by taxing wines imported from other MS at a higher rate than beer to provide
protection to domestic beer production.

Investment law

 

As Go-Faster’s subsidiary is classed as an “investment”
in the form of an enterprise or an asset they own/control, directly or indirectly in
an enterprise, they can be protected by investment law.

Go-faster can be
protected through customary international law in which states are accountable for
mistreatment of alien property17
or via Treaty Law using International Investment Agreements (IIAs) in the form
of Multilateral Free Trade (MFN) Agreements (for example, CETA) or Bilateral
Investment Treaties (BIT)).

 

IIAs can reduce political/legal risks and increase security for
foreign investors by putting controls on domestic laws. Under IIA’s, host states must ensure
foreign protection from inequitable and unreasonable treatment including the
prevention of foreign investors being refused access to national legal channels.18
Under ‘national treatment’ in BIT and MFT’s, contracting
states must treat all foreign investors no less favourably than domestic
investors.19 S.4 of the CETA agreement guarantees “fair and equitable treatment”,
providing full protection to foreign investors.20 S.3
of CETA allows foreign companies to sue states through a dispute settlement
tribunal if a state has breached its non-discriminatory treatment responsibilities
and caused the company to suffer
losses.

However,
CETA cannot officially be enforced until the ECJ deems it is compatible with EU
law.21

 

However, protection
by IIAs is
conditional on the investment being foreign, determined by the location of the investor’s/company’s
main seat.22 Although
the subsidiary is classed as wholly independent, the main seat of Go-Faster is
in Warwick. Also, in the
context of investment arbitration, subsidiaries in the host state are classed
as possessing the parent company’s nationality23
so Go-Faster would be considered a foreign investor and could rely on IIAs. Consequently,
Go-Faster’s subsidiary can be protected in Netherlands by a Netherlands BIT or
in Canada by the MFN agreement CETA.