Among the many difficulties with reconciling bilateral/regional trade agreements and the WTO Agreement is which "branch" of the WTO, the Dispute Settlement Body or the Committee on Regional Trade Agreements, should judge the overall consistency of these agreements with WTO rules. A recent article by Youri Devust and Asja Serdarevic argues that it should be the CRTA, and that the Appellate Body erred when it stated otherwise:
Following the logic of the Panel Report in the Turkey-Textiles case, this article proposes that, during the enforcement exercise, a distinction should be made between, on the one hand, the legality of the regional arrangement as such and, on the other hand, the legality of concrete trade policy measures adopted by the RTA. The latter should be subject of strict surveillance and sanctioning, notably via WTO dispute settlement. In contrast to the line taken by the WTO’s Appellate Body, it would, however, not be advisable for the WTO dispute settlement system to get into questions of the overall legality of specific regional arrangements. The overall compatibility of regional arrangements with WTO rules is better suited for diplomatic transparency and peer review exercises in the CRTA on the basis of the clarified benchmarks, ...
See http://www.worldtradelaw.net/articles/devuystwtorta.pdf
For reference, in the Turkey - Textiles case mentioned, the Appellate Body had said the following:
58. Accordingly, on the basis of this analysis of the text and the context of the chapeau of paragraph 5 of Article XXIV, we are of the view that Article XXIV may justify a measure which is inconsistent with certain other GATT provisions. However, in a case involving the formation of a customs union, this "defence" is available only when two conditions are fulfilled. First, the party claiming the benefit of this defence must demonstrate that the measure at issue is introduced upon the formation of a customs union that fully meets the requirements of sub-paragraphs 8(a) and 5(a) of Article XXIV. And, second, that party must demonstrate that the formation of that customs union would be prevented if it were not allowed to introduce the measure at issue. Again, both these conditions must be met to have the benefit of the defence under Article XXIV.
(emphasis added)
