A Legal and Political View on Regional Trade Agreements in the GATT/WTO

Abstract

The issue of globalization and world trade liberalization has been vigorously debated over the past few years, culminating in the WTO-riots in Seattle 1999. Since then, various NGOs have claimed that WTO and its regulatory framework; GATT, is not a sincere attempt to bring prosperity to all members of WTO, i.e. including those in the third world. In contrast, the NGOs claims that WTO is just another “rich mans club” with the one and only intention to further exploit the weakest countries for the sake of expanding economical profits.

It is undisputed that the foundation and cornerstone of GATT/WTO, i.e. the MFN-principle is a rule of non-discrimination and justice; however, it is important to gain knowledge of how the MFN-principle is applied by the competent authorities within the WTO system to secure a fair and just view of the underlying intentions of the WTO. The rule of thumb saying that “the exception defines the rule” is striking concerning this matter, especially since the exception (Article XXIV GATT 1994) in this case has been used and abused over and over again, to the degree that the rule, i.e. MFN, runs the risk of being diluted to the point where it no longer qualifies as a general rule. This thesis treats the main exception from the rule of MFN, i.e. Article XXIV GATT 1994 because this is the exception that defines the MFN-principle and as such being extremely important.

This thesis covers the legal as well as the political and economical aspects of the XXIV dilemma. The purpose is to reveal the forces that have an impact on this subject, be it the lobbyists acting in Washington or Geneva, the rapidly changing global trade flows, economical incitements or the Appellate Body decisions regarding this matter. The main focus will however be on the legal aspects, including the ever so important issue of drafting history to render possible a deep understanding of this dilemma. This thesis is supposed to cover all the vital areas concerning Article XXIV, so as to provide an overall understanding of the subject, however without neglecting the highly important deep penetration of the legal aspects of the problem. The reason for an overall approach is that the subject matter is extremely complex, especially the legal aspects, and that this thesis may fill a void, i.e. to provide the reader with an easy to grasp, but nevertheless deep, understanding of the XXIV dilemma.