Enabling Clause or Disabling Clause? Legal Problems of Making Regional Trade Agreements with Less-Developed Economies
Posted: 22 Jul 2008
Date Written: July 21, 2008
In making RTAs, WTO members need to justify its legal problem of MFN violation. Although the Enabling Clause provides important flexibility for the justification, RTAs concluded only among WTO member developing countries may claim this flexibility under the clause. As a consequence, any WTO member developed country in making RTAs with developing countries has to face the legal problem without giving any flexibility in favour of the developing country partners. This lack of flexibility has prevented less-developed countries from making RTA relationships with developed economies. Therefore, the Enabling Clause has fallen into the status of "disabling clause" in contradiction to its principle. Not only less-developed but also developed countries must be enabled to accord differential and more favourable treatment to developing countries when forming RTAs with each other. Any least developed country parties to such RTAs deserve more differential and favourable treatment. Having these points in regard, the Enabling Clause needs to be duly amended.
Keywords: WTO, World Trade Organization, RTA, Regional Trade Agreement, MFN, Most Favored Nation, Enabling Clause, Disabling clause, Less-developed, Least developed, Multi-lateral trading
JEL Classification: F02, F10, F13, F14, F15
Suggested Citation: Suggested Citation