After reading the previous post by Simon and the comment by Srikar, I am wondering what WTO provisions could be invoked by a complainant if supermarkets in France set up shelves with purely French products.
First, following the relevant comment by Srikar, it is useful to emphasize that if Montebourg’s words are only a case of political rhetoric or opinion, there is nothing much anyone can do. This is in conformity with the Brazil Aircraft 21.5 panel position that " when the executive branch of a Member is not required to act inconsistently with requirements of WTO law, it should be entitled to a presumption of good faith compliance with those requirements”.
Let us suppose nevertheless that the French executive branch goes farther and establishes a mandatory regulation for that purpose. What are then the WTO provisions that could be invoked by a complainant considering that its exportations of like products towards France are adversely affected.
1) The most likely scenario is an invocation of Article III of the 1994 General Agreement (“GATT 1994") relating to national treatment. This Article provides that:
The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use.
In fact, this scenario already happened in 2008 when the WTO questioned Barbados’ 100% Bajan buy local campaign which urged Barbadians to buy locally produced products first. As expected concerns were raised by other Members at a WTO meeting over whether this country was in violation of Article III of GATT 1994. The campaign stopped after a while.
Following MeMe comment, it is useful to signal that in WTO case law, the most relevant precedent is the Korea Beef case. The contested measure in that case was the Korean mandatory dual retail system where a supermarket could sell both imported and domestic beef but only as long as the imported beef and domestic beef were sold in separate sales areas. The Appellate Body upheld in that case the Panel's ultimate conclusion that Korea's dual retail system for beef was inconsistent with Article III:4 of GATT 1994. However, the Appellate Body emphasized that the crucial aspect was not the separation of the areas but the fact that the dual retail system for beef modified the conditions of competition in the Korean beef market to the disadvantage of the imported product. It is probable that Montebourg's separate shelves would modify the conditions of competition to the disadvantage of imported products by, among other things, singling out visually French products.
2) There is however a second scenario which is less likely but nevertheless worth considering. It would consist in invoking Article 1 of the SCM Agreement on the basis that France is providing a “form of income or price support, which operates directly or indirectly to... reduce imports... into its territory”. The idea here is that following the measure, there is a demand shift in favor of french products which translates in a price or income support for french producers. However, this vision seems inconsistent with the intuitive idea of “support” which implies apparently an explicit price or income “target” that must be reached. In our case, there is no guarantee that any price or income support would materialize, nor any target reached. However, it is worth noting that WTO case law relating to “price or income support” is somewhat hazy at the moment since the texts speak of “any” form of price or income support without mentioning any explicit target . Therefore, this second scenario is still worth considering.
