13 December 2013

Quantitative Restrictions – An Overview

by Tarun Bhati


Article XI of GATT contains one of the cornerstones of the disciplines regarding multilateral trade regime established under the WTO i.e. general elimination of quantitative restrictions. Article XI is applicable to all the measures prohibiting or restricting importation, exportation and sale for export of products other than duties taxes or other charges. For instance, export quotas, tariff values, licensing requirements, etc., are all measures covered by Article XI. It is needless to say that Article XI is very broad in its application.          

In order to appreciate the true scope of Article XI it is necessary to understand three key concepts viz., prohibitions, restrictions and measures. It is also necessary to remember that the term ‘quantitative restriction’, besides the general title, is not used anywhere in Article XI.              

However, this fact is not determinative of the correct interpretation of Article XI [see end note 1] which must be broadly interpreted.


Meaning of the terms ‘prohibition’ and ‘restriction’ used in Article XI    

The word ‘prohibition’ is used in a very broad manner and is understood to mean as a "legal ban on the trade or importation of a specified commodity"[see end note 2]. For instance prohibition on importation of foreign products would be inconsistent with Article XI:1. The scope of the term ‘restriction’ is also broad and in terms of its ordinary meaning covers a limitation on action, a limiting condition or regulation[see end note 3]. The term cannot be equated with prohibition [see end note 4] and the previous panels have suggested that a restriction need not be a blanket prohibition or a precise numerical limit [see end note 5]. A survey of previous jurisprudence would suggest the following:

  • "bond requirements" are not restrictions inconsistent with Article XI:1[see end note 6].
  • "automatic import licensing" does not constitute restrictions inconsistent with Article XI:1[see end note 7].
  • non-automatic export licensing is inconsistent with Article XI [see end note 8].
  • measures, which affect the opportunities for importation itself are covered by Article XI [see end note 9].
  • Fines, imposed an enforcement measure of import prohibition, notwithstanding that they are not border  measures, are covered under Article XI:1[see end note 10].          

While it is true that quantitative restrictions such as import quota which may not actually restrict or impede trade are prohibited under Article XI [see end note 11], Article XI extends to de facto restrictions [see end note 12] as well and the very potential to limit trade is sufficient to constitute a restriction [see end note 13]. Further, the jurisprudence provides that "measures which involve no formal restriction but rather a network of strong suggestions can fall within the scope of Article XI:1"[see end note 14]. In other words Article XI encompasses "import limitations made effective through disincentives to importation, without a formal numerical limit on imports"[see end note 15].


Meaning of the term ‘Other measures’ used in Article XI

Article XI, besides quotas and licenses, also covers ‘other measures’. In terms of the previous jurisprudence, the term ‘measures’ not only covers laws and regulations, but irrespective of the legal status, applies to a measure instituted by a member, which restricts imports or exports [see end note 16].  In fact, the term ‘other measures’ is meant to encompass a broad ‘residual’ category and is meant to underscore the broad nature of measures under Article XI,[see end note 17] in keeping with the mandate of Article XI to cover any measure that results in any form of limitation imposed on, or in relation to importation [see end note 18]. Indeed, the significance of the phrase ‘other measures’ is contained in the fact that Article XI would have included only those restrictions and prohibitions that are specifically listed in Article XI, if the words ‘other measures’ had not been included [see end note 19].



Thus, Article XI is broadly worded and includes de jure as well as de facto restrictions on imported goods. The application of the tests detailed above will involve an assessment of how regulations affect the competitive conditions relating to imported goods.  The tests to be applied with regard to a claim under Article XI are, therefore, governed by its own disciplines, which have been developed by way of interpretations by panels and the Appellate Body. Hence, an analysis of a claim under Article XI will involve the application of the principles outlined above on a case-by-case basis, as well as a thorough understanding of the regulatory regime and its effects on imported goods.            

[ The author is an Associate, International Trade Practice, Lakshmikumaran & Sridharan, New Delhi ]  

End Notes

  1. Panel Report, Colombia - Ports of Entry, para. 7.243. 
  2. Appellate Body Report, China –Raw Materials, para 319. 
  3. Panel Report, India - Quantitative Restrictions, para. 5.142. See also Appellate Body Report, China – Measures Related to the Exportation of Various Raw Materials, para 319. 
  4. Panel Report, Colombia - Ports of Entry, para. 7.234 
  5. Panel Report, India - Quantitative Restrictions, paras. 7.269 - 7.270. 
  6. Panel Report, Dominican Republic - Import and Sale of Cigarettes, para 7.265. 
  7. GATT Panel Report, EEC – Minimum Import Prices (1978), para 4.1 
  8. GATT Panel Report, Japan – Semi Conductors (1988), para 118. 
  9. Panel Report, Dominican Republic - Import and Sale of Cigarettes, para 7.261 
  10. Panel Report, Brazil – Retreaded Tyres, para. 7.372. 
  11. Van den Bossche, Peter and Zdouc, Werner, The Law and Policy of World Trade Organisation, citing GATT Panel Report, Japan – Leather (US II)(1984), para. 55. 
  12. Panel Report, Argentina – Hides and Leather,  para 11.17. Per Contra, Panel Report, Columbia – Ports of Entry, para 7.252. 
  13. Panel Reports, China - Raw Materials, para 7.1081. 
  14. Panel Report, India - Autos, para 7.272. 
  15. Ibid. 
  16. GATT Panel Report, Japan – Semi Conductors (1988), para. 106. In the said case, even non-mandatory measures were considered as restrictions. 
  17. Panel Report, Colombia - Ports of Entry, para. 7.227. 
  18. Panel Report, India- Autos, paras 7.254-7.263. 
  19. Panel Report, US- Gambling, para 6.324.


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