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The Inherent Paradox - Regional Trade Agreements in International Trade Law

Krabbe, Niels LU (2012) JURM01 20121
Department of Law
Abstract (Swedish)
Regelverket för regionala avtal tillåter tullunioner och frihandelsavtal att göra avsteg från mest gynnade nations-principen förutsatt att ett antal villkor uppfylls; interna rekvisit som säkerställer liberalisering av den inre marknaden och externa rekvisit som syftar dels till harmonisering av yttre handelspolitik och dels till att förebygga att hinder reses mot tredje land. Genom undersökning av detta regelverk söker denna uppsats så långt möjligt fastställa giltiga tolkningar av nyckelelement och diskuterar möjliga lösningar på oklara kriterier. Därutöver undersöks omfånget för undantaget för regionala avtal och dess relation till andra GATT/WTO-skyldigheter.

Rörande de interna villkoren fastslår uppsatsen att villkoret om att... (More)
Regelverket för regionala avtal tillåter tullunioner och frihandelsavtal att göra avsteg från mest gynnade nations-principen förutsatt att ett antal villkor uppfylls; interna rekvisit som säkerställer liberalisering av den inre marknaden och externa rekvisit som syftar dels till harmonisering av yttre handelspolitik och dels till att förebygga att hinder reses mot tredje land. Genom undersökning av detta regelverk söker denna uppsats så långt möjligt fastställa giltiga tolkningar av nyckelelement och diskuterar möjliga lösningar på oklara kriterier. Därutöver undersöks omfånget för undantaget för regionala avtal och dess relation till andra GATT/WTO-skyldigheter.

Rörande de interna villkoren fastslår uppsatsen att villkoret om att liberalisera den inre marknaden förutom tullar också inkluderar gränsåtgärder. Interna åtgärder kan också ingå, beroende på deras effekt. Parterna har stort rörelseutrymme i valet av vilka produkter som skall omfattas av avtalet. I frånvaro av uttalanden i förarbeten, senare avtal och enhetlig tillämpningspraxis kan ingen giltig tolkning av villkoret om liberaliseringsgrad fastställas. En viss grad av reciprocitet verkar emellertid krävas. Det har presenterats såväl kvalitativa som kvantitativa förslag till att lösa detta problem; uppsatsen föreslår att de bör tillämpas i kombination.

Rörande de yttre villkoren fastslår uppsatsen att omfånget av dessa regler är bredare jämfört med de interna villkoren. En dynamisk tolkning föreslås, där reglernas omfång ställs i relation till avtalets omfattning. Vidare konstateras att flexibiliteten i villkoret om harmonisering av yttre handelspolitik för tullunioner är kraftigt begränsad. Förbudet mot att resa hinder mot tredje innebär ett ekonomiskt test. Det tidsmässiga villkoret för implementering av interimsavtal tillåter undantag, men skall som huvudregel tolkas som en bindande tioårsregel.

Rörande relationen mellan GATT Artikel XXIV och andra GATT/WTO-skyldigheter fastslår uppsatsen att regionala avtal kan göra legitima avsteg, inte bara från mest gynnade nations-principen men också från andra multilaterala åtaganden, förutsatt dels att åtgärden introducerats vid bildandet av det regionala avtalet och dels att bildandet hade omöjliggjorts om inte åtgärden tillåtits. Praxis sätter nivån för det senare villkoret förvånansvärt lågt. Praxis fastslår också att det är parten till det regionala avtalet som bär bördan för att visa att nödvändiga rekvisit är uppfyllda när klagande part prima facie etablerat en överträdelse av GATT/WTO-åtagande. (Less)
Abstract
The framework for regional trade agreements permits customs unions and free trade agreements to derogate from the Most Favoured Nation-principle provided that a number of conditions are fulfilled: internal requisites safeguarding internal market liberalization and external requisites, calling for harmonization of external trade policies and preventing the raising of barriers in relation to third countries. Investigating the framework, this thesis attempts to establish valid interpretations of key elements insofar possible and discusses possible solutions to the ambiguous criteria. Moreover, the extent of the regional trade agreement exception and its relation to other GATT/WTO-obligations is investigated.

Regarding the internal... (More)
The framework for regional trade agreements permits customs unions and free trade agreements to derogate from the Most Favoured Nation-principle provided that a number of conditions are fulfilled: internal requisites safeguarding internal market liberalization and external requisites, calling for harmonization of external trade policies and preventing the raising of barriers in relation to third countries. Investigating the framework, this thesis attempts to establish valid interpretations of key elements insofar possible and discusses possible solutions to the ambiguous criteria. Moreover, the extent of the regional trade agreement exception and its relation to other GATT/WTO-obligations is investigated.

Regarding the internal requirements, the thesis finds that in addition to tariff duties also border measures ought to be included in the internal market liberalization requirement. Internal measures may also qualify, depending on their effect. The parties have a wide margin of discretion in deciding to the trade of what products the agreement is applicable. No valid interpretation of the criterion for degree of market liberalization can be established in lack of preparatory work and subsequent agreements addressing the issue as well as consistent practice in application. However, a certain degree of reciprocity in this regard appears to be required. Qualitative as well as quantitative approaches have been proposed as solutions to this dilemma. The thesis suggests that they should be applied in combination.

Regarding the external requirements, the thesis finds that the extent of these rules is wider compared to the internal requirements, and suggests a dynamic interpretation, essentially setting the extent of these rules in relation to the coverage of the agreement. Moreover, the thesis establishes that the flexibility in the requirement for harmonization of common external trade regimes of customs union is severely limited. The prohibition on raising barriers in relation to third countries should be interpreted as entailing an economic test. The temporal requirement for implementation of interim agreements allows for exceptions, but should as a main rule be interpreted as a binding 10-year requisite.

Regarding the relation between GATT Article XXIV and other GATT/WTO obligation the thesis affirms that regional trade agreements legitimately can derogate not merely from the Most Favoured Nation-principle but also from other multilateral undertakings provided that the measure was introduced at the formation of the agreement and that the formation would be prevented if the measure was not allowed. Case law sets the threshold for the latter requisite remarkably low. It also affirms that the regional trade agreement party bears the burden for showing that these requisites are fulfilled, once the complaining party has established a prima facie violation of a GATT/WTO obligation. (Less)
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author
Krabbe, Niels LU
supervisor
organization
course
JURM01 20121
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
public international law, international trade law, folkrätt, utrikeshandelsrätt
language
English
id
2427452
date added to LUP
2012-05-29 15:25:33
date last changed
2012-05-29 15:25:33
@misc{2427452,
  abstract     = {The framework for regional trade agreements permits customs unions and free trade agreements to derogate from the Most Favoured Nation-principle provided that a number of conditions are fulfilled: internal requisites safeguarding internal market liberalization and external requisites, calling for harmonization of external trade policies and preventing the raising of barriers in relation to third countries. Investigating the framework, this thesis attempts to establish valid interpretations of key elements insofar possible and discusses possible solutions to the ambiguous criteria. Moreover, the extent of the regional trade agreement exception and its relation to other GATT/WTO-obligations is investigated.

Regarding the internal requirements, the thesis finds that in addition to tariff duties also border measures ought to be included in the internal market liberalization requirement. Internal measures may also qualify, depending on their effect. The parties have a wide margin of discretion in deciding to the trade of what products the agreement is applicable. No valid interpretation of the criterion for degree of market liberalization can be established in lack of preparatory work and subsequent agreements addressing the issue as well as consistent practice in application. However, a certain degree of reciprocity in this regard appears to be required. Qualitative as well as quantitative approaches have been proposed as solutions to this dilemma. The thesis suggests that they should be applied in combination.

Regarding the external requirements, the thesis finds that the extent of these rules is wider compared to the internal requirements, and suggests a dynamic interpretation, essentially setting the extent of these rules in relation to the coverage of the agreement. Moreover, the thesis establishes that the flexibility in the requirement for harmonization of common external trade regimes of customs union is severely limited. The prohibition on raising barriers in relation to third countries should be interpreted as entailing an economic test. The temporal requirement for implementation of interim agreements allows for exceptions, but should as a main rule be interpreted as a binding 10-year requisite.

Regarding the relation between GATT Article XXIV and other GATT/WTO obligation the thesis affirms that regional trade agreements legitimately can derogate not merely from the Most Favoured Nation-principle but also from other multilateral undertakings provided that the measure was introduced at the formation of the agreement and that the formation would be prevented if the measure was not allowed. Case law sets the threshold for the latter requisite remarkably low. It also affirms that the regional trade agreement party bears the burden for showing that these requisites are fulfilled, once the complaining party has established a prima facie violation of a GATT/WTO obligation.},
  author       = {Krabbe, Niels},
  keyword      = {public international law,international trade law,folkrätt,utrikeshandelsrätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Inherent Paradox - Regional Trade Agreements in International Trade Law},
  year         = {2012},
}