During the last two decades, Preferential Trade Agreements (PTAs) have increased in quantity and broadened in scope. Far from merely reducing tariffs, they now set out a detailed discipline also on behind-the-border measures. Due to their trade-restrictive potential, technical barriers to trade (TBTs) are now systematically regulated in PTAs. Since PTAs discriminate by definition, it is pivotal to understand whether their regulation of TBTs may be reconciled with the multilateral non-discrimination obligation. Against this backdrop, this article aims to assess whether WTO-incompatible TBT provisions in PTAs may benefit from the GATT 1994 ‘Regional Exception’, that is, Article XXIV. I will argue that, by virtue of the lex specialis principle, Article XXIV may not shield violations of the TBT Agreement. The impact of this study is two-fold. First, it shows that Members of the World Trade Organization (WTO) must respect the Most-Favoured Nation (MFN) clause when integrating their domestic policies. Second, using TBTs as a case study, it proposes some crucial adjustments to WTO case law, that should be considered also when deciding on the interplay between the GATT 1994 and WTO Agreements other than the TBT Agreement.
Policy Implications
- Since the GATT Regional Exception (Article XXIV) does not justify infringements of the TBT Agreement, WTO Members must respect the MFN clause when regulating these measures at the preferential level. Hence, the WTO still offers effective legal tools to counteract trade diversion stemming from PTAs.
- WTO panelists should give a central role to the lex specialis principles when deciding on the interplay between the GATT 1994 and other Annex 1A Agreements.
- Further research is needed to understand whether Article XXIV GATT may apply to other Annex 1A Agreements other than the TBT Agreement.
Photo by Frans van Heerden