Frequent commenter Jalal Alavi sends the following:
There has been a request submitted by GCC Customs Union ( Bahrain, the United Arab Emirates, Saudi Arabia, Oman, Qatar and Kuwait) to the WTO Committee on Trade and Development to change the status of its notification under article XXIV GATT to a notification under Enabling Clause. The European Communities and the United States have opposed it contending, among others, that: - paragraph 2(c) of Enabling Clause does not cover customs unions. (EC, WT/COMTD/66/Add.2) - Enabling Clause is an exception to GATT article I (MFN) only, and as long as a regional arrangement results in inconsistencies with other GATT provisions, such as article II on tariff bindings, these inconsistencies can only be justified under GATT article XXIV. (US, WT/COMTD/66/Add.1) - Enabling Clause provides no legal basis for justification of preferential non-tariff measures among members of a trade arrangement. (EC, WT/COMTD/66/Add.2) - GCC Customs Union should be exclusively reviewed by Committee on Regional Trade Agreements rather than Committee on Trade and Development. (EC and US) Paragraph 2(c) of the Enabling Clause allows MFN-inconsistency of "Regional or global arrangements entered into amongst less-developed contracting parties for the mutual reduction or elimination of tariffs and, in accordance with criteria or conditions which may be prescribed by the CONTRACTING PARTIES, for the mutual reduction or elimination of non-tariff measures, on products imported from one another;". According to the EC, this paragraph can only be invoked to justify preferential non-tariff measures in a regional arrangement among developing countries if criteria or conditions specified therein are established by the membership. For this is not the case yet, EC argues, the GCC Customs Union (because of its non-tariff provisions) is not justifiable under Enabling Clause. According to US, GCC Customs Union has resulted in a common external tariff which is above the tariff bindings of some of its members and this inconsistency with the GATT article II can only be justified, and shall be compensated accordingly, under GATT article XXIV. If we accept these arguments, does that mean in practice that article XXIV prevails over Enabling Clause para 2(c) in almost all cases today? What is left if we exclude Customs Unions and regional arrangements with non-tariff provisions from Enabling Clause? What was the very intention of the drafters of para 2(c) of the Enabling Clause? Any thoughts and comments are appreciated.
