Third Party Trade Relations with Members of a Free Trade Agreement

Third Party Trade Relations with Members of a Free Trade Agreement



1. Clearly write your name, student number, and tutorial day, time, and tutor’s name on the first or cover page of your assignment.
2. You are expected to write 2000 words maximum. You must show word count on the first or cover page of your assignment. Total mark 40%.
3. Footnotes, references, and bibliography, if any, must be complete and consistent with Australian Guide to Legal Citation (AGLC).

Third Party Trade Relations with Members of a Free Trade Agreement
The North American Free Trade Agreement (NAFTA) has three members – the US, Canada, and Mexico which trade among themselves duty-free in wide ranging goods, services, and investment. Ausland, an Asian country is not a member of NAFTA but in December 2014 has concluded a separate bilateral preferential free trading agreement (FTA) with Mexico. Under the Ausland-Mexico FTA, which has come into effect on 1 July 2015, both countries have reduced their tariff to zero in all but agricultural and farm products. Some products classified as “sensitive” in their product schedules are also exempt from the tariff reduction regime.
Lotus Manufacturing Co Ltd, an Ausland private company specialising in the production and export of electrical goods and spare parts, has been exporting its products to all NAFTA countries under ordinary tariff duties required by their respective domestic customs law at entry into the NAFTA market. Following the Ausland-Mexico FTA, the Managing Director of Lotus Manufacturing Co Ltd has received a letter from the Ausland Ministry of Foreign Affairs and Trade that from 1 July 2015 Lotus Manufacturing can export its products to the Mexican market duty-free. The Managing Director of Lotus Manufacturing Co Ltd knows it very well that products in the Mexican market can enter into the US and Canadian markets duty-free under NAFTA and wants to explore the possibility of exporting its products to the US and Canadian markets duty-free.
The Managing Director of Lotus Manufacturing Co Ltd has appointed you as an international trade law expert to prepare a legal opinion paper for the company. In formulating your legal opinion, you are expected to read and rely on relevant NAFTA provisions and applicable international trade law and policy in support of your opinion. You are required to address the following four issues in your opinion (max 500 words and 10 mark for each):
1. Explain the legal basis of the Ausland-Mexico preferential FTA. Has it complied with the requirements of such FTA under the WTO Agreement?
2. Can the Lotus Manufacturing products be exported to Mexico duty-free can also enter into the US and Canadian markets duty-free?
3. Can the US and Canada invoke the NAFTA Rules of Origin to prevent Lotus Manufacturing products transiting through Mexico to enter duty-free through the US and Canadian customs?
4. Is there any viable business option available for Lotus Manufacturing to trade its product in the US and Canadian markets duty-free?

Note: You are expected to study the WTO Agreement, particularly the provision on preferential free trading arrangements and NAFTA rules in formulating your opinion.

Legal opinion worth 40% mark

A. Substantive requirements: This assignment will assess the on basis of discipline specific knowledge, understanding and identification of the relevant legal issues, and their application to a given (real or hypothetical) fact situation/problem of contemporary trading relations. Students may be required to take their research beyond the prescribed books and course materials (the supplementary books and journals provide a starting point for further research). Clarity of expression, presentation of argument, responsiveness to question, and correct and consistent reference style will also be taken into account. Students are encouraged to consider a theoretical as well as applied dimension to the issues under consideration for a legal opinion subsumable in international trade law.

B. Marking criteria/rubrics: (4 x10 = 40)

1 Theoretical discipline specific knowledge relevant and applicable to the problem;
2 Applied aspect: application of discipline specific knowledge to given facts;
3 Depth of legal research and critical analytical skill with innovative and interdisciplinary approach; and
4 Coherence of presentation, clarity of expression, responsiveness to the problem; and correct citation.

• Assignment must be typed with 12 point font in the text and 10 point font in foot/end notes. Bibliography/reference must also be 12 point font.

• No assignment can exceed their respective word limit. There is absolutely NO LEEWAY. The word limit does not include the footnotes and bibliography, although footnotes must not include any substantive content. The actual word length of your assignment must be stated on the cover sheet.

• Footnotes, bibliography and other referencing must be consistent with the Australian Guide to Legal Citations, which can be downloaded at

• Inconsistent, incomplete, and hybrid style of footnotes/endnotes and bibliography/references will cost mark as they are integral parts of your work.

• In-text referencing is NOT permissible in this unit.

• Substantive and procedural requirements referred to are important and should be followed in assignment. Non-compliance may affect your marks.

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