This concept is the foundation of the two central principles of the World Trade Organisation (WTO) system as outlined in the General Agreement on Tariffs and Trade 1947 (GATT): Most Favoured Nation (Article I) and National Treatment (Article III).
[1] If two products cannot be differentiated under the WTO system/GATT then the non-discrimination principle stipulates that a WTO trading member shall not discriminate between like products from different trading partners (giving them equally “most favoured-nation” status) and shall not discriminate between its own and like foreign products (giving them “national treatment”).
The definition of ‘like product’ has given GATT and WTO's appellate body and panels many interpretive difficulties.
[3] The Japan – Custom Duties, Taxes and Labeling Practices on Imported Wines and Alcoholic Beverages panel and appellate body gave an apt metaphor in its final report: There are many criteria to define ‘likeness’; however, ‘likeness’ must be assessed on a case-by-case basis.
In Japan – Custom Duties, Taxes and Labeling Practices on Imported Wines and Alcoholic Beverages 1987 the panel offered up four criteria[5] (this list is not a strict guideline, neither is it exhaustive): Other relevant elements: Excluded criteria: