Any law that is rarely complied with is a bad law : an analysis of GATT article XXIV : selected issues from the EU and NAFTA

Abstract

This thesis examines and evaluates the current interpretation of GATT Article XXIV and the problematic concepts it comprises by focusing on two case studies, namely regulatory standards under the European Communities (EC) and safeguard measures under the North American Free Trade Agreement (NAFTA). One of the key questions it addresses is whether GATT Article XXIV applies only to the initial formation of a customs union or Free Trade Area or whether it regulates them in an ongoing way along with the covered agreements. Part I begins with an overview of trade regionalism including its historical background and rationale, and an introduction to specific regional integration models extant in the Multilateral Trading System (MTS). This part analyses the legal texts applicable to Regional Trade Agreements (RTAs) in order to shed light on the question of how to strike a balance between the requirement of liberalising substantially all trade and eliminating duties and other restrictive regulations of commerce (ORRC) among partners to an RTA while at the same time not raising existing trade barriers to trade against non-members. Part II then addresses the external trade requirement stipulated under GATT Article XXIV: 5 and 8, in light of the Appellate Body ruling in Turkey - Textiles. It begins with the provisions of paragraph 5 on the external effects of RTAs with a view to assessing the applicability and effect of the test set out in paragraph 5 in relation to non-tariff barriers, particularly regulatory standards. While harmonized regulatory standards may facilitate intra-RTA trade, they also have the effect of raising trade barriers against third parties by way of discriminating against outside commerce or regulating excessively strictly. Secondly, Part II addresses the problematic issue of whether safeguards are to be understood as 'ORRC' in the context of the bracketed list of exceptions. On the assumption that they do constitute ORRCs, this part then examines NAFTA Article 802 as well as the relationship between the Safeguards Agreement and GATT Article XXIV. In view of the proliferation of regional trade agreements (RTAs) and the challenges that they represent for the MTS and developing countries in particular, Part III tackles the question of how GATT Article XXIV disciplines might be improved, and provides an analysis of existing proposals arising from the Rules negotiations in the framework of the mandate stated in the Doha Ministerial Declaration.