WTO legality of discriminatory liberalization of internal regulations: role of RTA national treatment

Jong Bum Kim

World Trade Review, 2011, vol. 10, issue 4, 473-495

Abstract: In this paper, we study the interaction between regionalism and multilateralism by examining the role of national treatment clauses in regional trade agreements (RTAs). We ask whether discriminatory liberalization of internal regulations under RTAs can fulfill the requirements of the GATT Article XXIV defense. In the presence of pre-existing RTAs with RTA national treatment clauses, the GATT Article XXIV defenses for violations of GATT Article I and GATT Article III resulting from preferential liberalization of internal regulations may not succeed because the ‘necessity’ requirement under the Turkey–Textiles Appellate Body test is not likely to be met. The necessity requirement would fail because the RTA party may adopt ‘a reasonable alternative’ of applying the measure non-discriminatorily to all WTO members. RTA national treatment clauses in the pre-existing RTAs may have the effect of binding the RTA parties to liberalize trade-restrictive internal regulations on a non-discriminatory basis.

Date: 2011
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