The Legal Complications of Tariff Circumvention Towards International Trade Principles

Abstract

This study analyzes the impacts of tariff circumvention on WTO principles and seeks to identify an effective legal response. It examines how greenwashing and transshipment interact with core WTO norms and identifies root causes for why current rules and agreements inadequately address this phenomenon. Employing a doctrinal method grounded in the WTO framework and related jurisprudence, the research finds that the misapplication of the rules of origin, most-favoured-nation (MFN) treatment, and substantial transformation enables circumvention of tariff regimes by reducing or avoiding duties. This misuse undermines the foundational purpose of these principles and creates a precedent for their exploitation. To formulate an effective response to tariff circumvention, the study argues for clear and robust clarification of product identity and the substantial transformation threshold. It also highlights the importance of harmonized categorization and precise definitions within legal instruments to support current and future policy objectives.