Conflicts Between Wto And Regional Trade Agreements

THE WTO agreements recognize that ATRs can benefit countries as long as their objective is to facilitate trade between their contracting parties. They also recognize that, in certain circumstances, these agreements could harm the commercial interests of other countries. Normally, the creation of a customs union or free trade area would be contrary to the principle of non-discrimination of all WTO members („the most favoured nation”). However, Article 24 of the General Agreement on Tariffs and Trade (GATT), Article 5 of the General Agreement on Trade in Services (GATS) and the Enabling Clause (paragraph 2, point c) allow WTO members to enter into ATRs as a specific exception, provided that certain strict criteria are met. These agreements have increased in number and complexity since the early 1990s. One of the most frequently asked questions is whether these regional groups support or hinder the multilateral trading system of WTOs. WTO members, who work on various committees, are working to address these concerns. This article describes the most common types of dispute resolution mechanisms in ATRs and the problems that may arise from the overlap or conflict between these dispute settlement rules and WTO dispute settlement. This article also addresses the most recent case of such a conflict – the report of the Tyrees appeals body in Brazil. With regard to Brazilian tyres, the appeal body examined Brazil`s ban on the import of used and retreaded tyres and the exemption of brazil`s ban to implement a negative judgment following a decision by an RTA dispute resolution tribunal.

Brazil argued that the WTO panel had rightly held that Brazil`s exception to the ban on certain retreaded tyres was allowed because it had been mandated by a court in Mercado Comen del Sur (MERCOSUR). The appeal body lifted the body and found that the steps taken to comply with a MERCOSUR dispute resolution body did not necessarily justify Brazil`s action. Brazil was still required to comply with the requirements of the General Agreement on Tariffs and Trade (GATT) and the WTO, including the application of Article XX. This article concludes that, because of the overlapping dispute settlement procedures between the WTO and the ATRs, there may be a number of problems that may arise – or have already arisen – and WTO members should take immediate steps, within the framework of the Doha Round mandate, to resolve these disputes and clarify the legal relationship between RTA and WTO dispute settlement rules. The subject of this article – the relationship between the dispute settlement mechanisms of various free trade agreements, customs unions or regional trade agreements (ATRs) and the WTO dispute settlement agreement – is already highly controversial among scientists. This debate will be more relevant and intense in light of the proliferation of free trade agreements and free trade AGREEMENTs. In particular, agreements should help to make trade between ATR countries freer without barriers to trade with the outside world. In other words, regional integration should complement, not threaten, the multilateral trading system. Whether it is bilateral trade pacts, major unions or continental trade agreements, all WTO members will have some kind of regional trade agreement in force from June 2016. Regional trade agreements (ATRs) appear to be in competition with the WTO, but they can often effectively support the WTO`s multilateral trading system.

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