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4 - The Limits of PTAs

WTO Legal Restrictions on the Use of WTO-Plus Standards Regulation in PTAs

Published online by Cambridge University Press:  03 May 2011

Kyle W. Bagwell
Affiliation:
Stanford University, California
Petros C. Mavroidis
Affiliation:
Columbia University School of Law
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Summary

Introduction

This chapter provides a legal analysis of the significance of standards, technical regulations, and sanitary and phytosanitary provisions (collectively, TBTSPS provisions) in regional or other preferential trade agreements (PTAs) in relation to the multilateral trading system. This issue is increasingly important with the growth of PTAs, raising the question of whether and to what extent PTA internal integration is inconsistent with World Trade Organization (WTO) law. There are two main concerns. First, PTAs may engage in internal integration of TPTSPS measures in a way that disadvantages suppliers from third states. Second, PTAs may establish internal disciplines on TBTSPS measures by member-states that strike down these member-state measures as applied to suppliers from PTA partners, but not as applied to suppliers from third states. Thus internal integration might require the nonapplication of a regulatory measure to a PTA partner, while allowing the application of the measure to third countries. For example, in the 2007 Brazil–Tyres case, one of the interesting questions was whether Brazil's Mercosur obligations provide it with an exception from its most-favored-nation (MFN) obligations under the General Agreement on Tariffs and Trade (GATT), allowing Brazil to discriminate in favor of Mercosur-origin retreaded tires.

This chapter first examines the ways in which PTA regulation of national TBTSPS measures may contribute to or detract from liberalization goals. It then describes how GATT Article XXIV and the Understanding on the Interpretation of Article XXIV (the “Understanding”), as presently understood, regulate PTA regulation of national TBTSPS measures.

Type
Chapter
Information
Preferential Trade Agreements
A Law and Economics Analysis
, pp. 115 - 149
Publisher: Cambridge University Press
Print publication year: 2011

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