WORLD TRADE WT/TC/NOTIF/REG/1
9September 1996
ORGANIZATION(96-3464)
Original: English
TECHNICAL COOPERATION HANDBOOK ONNOTIFICATION REQUIREMENTS
Regional Trade Agreements
1. Thissection oftheHandbook onNotification Requirements covers thenotification obligations
related toRegional Trade Agreements (REG), including theUnderstanding ontheInterpretation of
Article XXIV ofGATT 1994. Itconsists ofthefollowing fiveparts:
PartI: Overview ofnotification requirements
PartII: Listing ofthenotification obligations
PartIII Document(s) concerning guidelines andformats
PartIV: "Mock" examples ofnotifications
PartV: Texts ofthelegalprovisions
2. Foracceding countries, thedeadlines forthesubmission oftheirnotifications willbegoverned
bytheirrespective Protocols ofAccession.
Note: TheHandbook onNotification Requirements doesnotconstitute alegalinterpretation of
thenotification obligations under therespective Agreement(s). Ithasbeen prepared bythe
Secretariat toassist Members incomplying withtheirnotification obligations.REG-I -Page1
REG-I
REGIONAL TRADE AGREEMENTS
OVERVIEW OFNOTIFICATION REQUIREMENTSREG-I -Page2
REGIONAL TRADING AGREEMENTS
Thecornerstone oftheWTO Agreement isnon-discrimination ininternational trade. This
principle, which finds expression inArticle IoftheGeneral Agreement 1994, obliges Members of
theWTO togrant unconditionally toeachother anybenefit, favour, privilege orimmunity affecting
customs duties, charges, rulesandprocedures thattheygivetoproducts originating inordestined for
anyother country. Onthefaceofthisrule,aMember oftheWTO would beinbreach ofitsWTO
obligations wereittogrant preferential treatment toproducts originating onlyinaselected group of
countries.
Theeffect ofthisruleis,however, mitigated byArticle XXIV oftheGeneral Agreement and
theDecision onDifferential andMore Favourable Treatment, Reciprocity andFuller Participation
ofDeveloping Countries ,otherwise known astheEnabling Clause. Under theterms oftheformer,
WTO Members could form customs unions andfree-trade areas, provided theysatisfy anumber of
conditions including inthecaseofcustoms unions, theelimination ofduties andother restrictive
regulations ofcommerce withrespect tosubstantially allthetrade between theconstituent members
andmaintenance ofsubstantially thesameduties andother regulations ofcommerce intheirtradewith
theoutside world.
TheEnablingClauseallowsdevelopingcountriestogranttradepreferencestoeachotherwithout
having toextend themtoother Members oftheWTO. TheClause, however, states inclearlanguage
thatthepurpose ofanypreferential trading arrangement should be"tofacilitate andpromote thetrade
ofdeveloping countries andnottoraisebarriers toorcreate undue difficulties fortrade ofanyother
contracting parties". Article XXIV laysdown asimilar condition.
Toensure transparency, bothArticle XXIV andtheEnabling Clause require parties toregional
trading arrangements topromptly notify theiragreements totheWTO. Thepurpose ofthisrequirement
istogivetheWTO theopportunity toexamine theconsistency oftheAgreements withthemultilateral
rules.
A. Notification Obligations under theEnabling Clause
TheEnabling Clause doesnotlaydown anyspecific format tobefollowed bydeveloping
countries wishing togrant preferences toeachother, except toprovide inParagraph 4that"any
contracting partytaking action tointroduce anarrangement...or subsequently taking action tointroduce
modification orwithdrawal ofthedifferential andmore favourable treatment soprovided shall: (a)
notify theCONTRACTING PARTIES andfurnish them withalltheinformation thattheydeem
appropriate relating tosuchaction" (seeBISD 26S/203 ).Inpractice, developing countries wishing
toformapreferential trading group areexpected intheircommunication totheWTO toname theparties
tothearrangement andthecoverage oftheagreement, i.e.,which sectors oftheireconomies aresubject
totheagreement. Acopy ofthedraft Treaty orAgreement between theparties tothetrading
arrangement should beannexed totheNotification.
B. Notifications under Article XXIV ofGATT 1994 --Customs Unions, Free-Trade Areas and
Interim Agreements fortheformation ofaCustoms Union oraFree-Trade Area
(i) Article XXIV:7 oftheGeneral Agreement 1994
Article XXIV doesnotlaydown anyspecific format tobefollowed bycountries wishing to
formaregional trading arrangement. Itjustprovides inparagraph 7(a)thatcontracting parties should
"promptly notify [their Agreement to]theCONTRACTING PARTIES andmake available tothem
suchinformation regarding theproposed union orareaaswillenable them tomake suchreports and
recommendations tocontracting parties astheydeem appropriate".REG-I -Page3
Inpractice, thenotification isexpected toindicate theparties tothearrangement, thecoverage
oftheagreement, whether itisafree-trade areaoracustoms union oraninterim agreement. Inthe
caseofaninterim agreement, thetransitional period mustbestated. AcopyoftheTreaty orAgreement
between theparties mustbeannexed totheNotification. Thenotification should beinscribed onthe
agenda oftheCouncil forTrade inGoods (CTG) atleasttendaysbefore itsfirstmeeting following
signature oftheagreement (seeBISD 18S/37 and19S/13 ).
(ii) Provisions oftheUnderstanding ontheInterpretation ofArticle XXIV ofGATT 1994
Paragraph 9oftheUnderstanding provides thatMembers parties toaninterim agreement shall
notify substantial changes intheplanandschedule included inthatagreement totheCTG and,ifso
requested, theCouncil shallexamine thechanges. Paragraph 11provides thatcustoms unions and
constituents offree-trade areas shallreport periodically totheCTG asenvisaged inBISD 18S/38, on
theoperation oftherelevant agreement. Anysignificant changes and/or developments intheagreement
should bereported astheyoccur.
Parties would havetonotify anymaterial change incircumstances suchastheinclusion of
newmembers, orinthecaseofaninterim agreement, themodification ofthetime-table forthe
establishment ofafree-trade areaoracustoms union. Similarly, iftheparties toafree-trade area
want toform acustoms union, theywould havetonotify thatfactandadvise theMembers ofthe
newapplicable ratesofduty onimports from thirdcountries.
(iii) TheCommittee onRegional Trade Agreements
Following extensive discussions, theGeneral Council agreed inFebruary 1996 toestablish
theCommittee onRegional Trade Agreements. Among theterms ofreference oftheCommittee are
theexaminationofregionaltradeagreements;toconsiderandmakerecommendationsontherequirement
forbiennial reporting ontheiroperation; thedevelopment ofprocedures tofacilitate andimprove the
examination process; andconsideration ofthesystemic implications ofsuchagreements andregional
initiatives forthemultilateral trading system andtherelationship between them.
TheestablishmentoftheCommitteedoesnothaveanyimplicationsforthenotificationobligations
ofMembers. Allnotifications would beexamined bytheappropriate body namely, theCouncil for
Trade inGoods, theCouncil forTrade inServices andtheCommittee onTrade andDevelopment.
TheCommittee would onlyexamine agreements referred toitbyanyofthese three bodies.
Tofacilitate theexamination process, theCommittee hasdeveloped astandard format tobe
usedbyMembers when notifying theirAgreements totheWTO (WTO/REG/W/6).REG-II -Page1
REG-II
REGIONAL TRADE AGREEMENTS
NOTIFICATION OBLIGATIONSREG-II -Page2
REGIONAL TRADE ARRANGEMENTS
NOTIFICATION OBLIGATIONS
Item Notification requirement Type ofmeasure Periodicity Format Members notifying ToWhom
1. Regional arrangements
GATT 1994, Art.XXIV:7(a) -freetrade
areasFormation ofacustoms union Adhoc NO WTO Members -
adhocCouncil for
Trade inGoods
2. Regional arrangements
GATT 1994, Art.XXIV:7(a) -interim
agreements (customs unions)Interim agreement leading to
customs unionAdhoc NO WTO Members -
adhocCouncil for
Trade inGoods
3. Regional arrangements
GATT 1994, Art.XXIV:7(a) -interim
agreement (free trade areas)Interim agreements leading to
freetrade areaAdhoc NO WTO Members -
AdhocCouncil for
Trade inGoods
4. Regional arrangements
GATT 1994, Art.XXIV:7(c)Substantial changes inplanor
schedules inanyinterim
agreement forcustoms union
orfree-trade area(para 5(c))Adhoc NO WTO Members -
adhocCouncil for
Trade inGoods
5. Regional arrangements
Understanding ontheinterpretation of
Article XXIV oftheGATT 1994,
paragraph 9Interim agreements (changes in
planandschedule)Adhoc NO WTO Members -
adhocCouncil for
Trade inGoodsREG-II -Page3
REGIONAL TRADE ARRANGEMENTS
NOTIFICATION OBLIGATIONS
6. Regional arrangements
Understanding ontheInterpretation of
Article XXIV oftheGATT 1994,
paragraph 11Customs Unions andFree
Trade AreasBiennial NO WTO Members -
adhocCouncil for
Trade inGoods
7. Regional arrangements
Decisions oftheCONTRACTING
PARTIES (BISD 18S/37, 38paragraph 4)Examination every twoyears
ofreports onthepreferential
agreementsBiennial NO WTO Members Council for
Trade inGoods
8. Regional arrangements
Decision ondifferential andmore
favourable treatment, reciprocity andfuller
participation ofdeveloping countries
(Enabling Clause), paragraph 4(seeBISD
26S/203Preferential trading
arrangements among
developing countriesAdhoc NO Developing countries
MembersCommittee on
Trade and
DevelopmentREG-III -Page 1
REG-III
REGIONAL TRADE AGREEMENTS
DOCUMENTS
BISD 18S/37 and38
BISD 19S/13
WT/REG/W/6REG-III -Page 2
PROGRAMME OFWORK OFTHE CONTRACTING PARTIES
SUMMING UPBYTHE CHAIRMAN
(L/3641)
A. Attheconcluding meeting ofthetwenty-seventh session, on26November 1971, theChairman
made thefollowing summing-up:
Trade negotiations among developing countries
1. TheCONTRACTING PARTIES havejustadopted aDecision relating tothetradenegotiations
among developing countries, authorizing thenecessary waiver fromtheprovisions ofArticle Iofthe
General Agreement.
Trade policy andexpert groups
2. TheproposalbySwedenfortheestablishmentofahigh-leveltradepolicygroupandtheproposal
byAustralia fortheestablishment ofasmall group ofindependent experts onagriculture received a
large measure ofsupport fromamong delegations. Thissupport, however, wasinsufficient toenable
theCONTRACTING PARTIES toadopt thetwoproposals, asitwasfeltbysome delegations that
theywere premature atthistime. Itwould beopen totheCouncil torevert tothematter atalater
stage, ifcontracting parties sowished.
Adoption ofreports
3. Following thediscussions wehavehad,weshould nowconsider thereports oftheCommittee
onTrade inIndustrial Products, theAgriculture Committee andtheCommittee onTrade and
Development tobeadopted.
4. There hasbeenaconsensus onthefollowing:
(a) Group ofThree
TheCONTRACTING PARTIES havedecided thattheGroup ofThree should beretained in
order toensure follow-up action onitsreport. Itshould explore withthecontracting parties concerned
thepossibilities fordealing withdifficulties connected withtheimplementation ofitsrecommendations
andtheprogress made inimplementing them. Inthelightofdiscussions heldintherelevant GATT
Groups andCommittees, theGroup ofThree mayalsomake recommendations orsuggestions aimed
atfacilitating theimplementation ofPartIVoftheGeneral Agreement. TheGroup should report, in
theordinarycourse,totheCommitteeonTradeandDevelopmentandtotheCONTRACTINGPARTIES.
(b) EECenlargement
(i) TheCONTRACTING PARTIES lookwithinterest totheconclusion ofnegotiations
inconnection withtheaccession ofanumber ofEuropean countries totheTreaty ofRome.
(ii) They request theDirector-General toconsult, attheappropriate time, withinterested
contracting parties forthepurpose offormulating andsubmitting totheCouncil terms ofreference
foraworking party. There wasawidespread desire thattheDirector-General initiate these
consultations immediately upon thesignature ofeachagreement.REG-III -Page 3
(c) Reports onregional agreements
TheCONTRACTING PARTIES instruct theCouncil toestablish acalendar fixing dates for
theexamination, every twoyears, ofthereports onthepreferential agreements.
(d) Statistical study onmost-favoured-nation andpreferential trade flows
TheCONTRACTING PARTIES decide toascertain asfaraspossible thestatistical facts
concerning theirtrade atmost-favoured-nation andatother rates. Accordingly, theDirector-General
isrequested todetermine foreachcontracting party thatisamember oftheGATT asofthetwenty
seventh session andforthecontracting parties asawhole, thetotalimports atmost-favoured-nation
ratesandtotalimports atpreferential ratesfromallsources bycountry, including imports fromother
parties tocustoms unions, free-trade areas, andspecial trading arrangements. Calculations should be
made forrepresentative years intheperiod 1955-1970 inclusive.
Initstask,thesecretariat willbeguided byaworking party which willprovide appropriate
directives.
TheDirector-General 'sfinding should bemade available within sixmonths totheCouncil,
which shallthenconsider whatfurther steps should betaken.
5. Committee onTrade inIndustrial Products
Withregard tofuture workoftheIndustrial Committee onnon-tariff barriers, therewasgeneral
agreement thatthemainemphasis should begiven energetically topursuing thework nowunder way
onstandards andlicensing totheendthatshortly, ashasalready beenthecaseforvaluation, texts
might besubmitted togovernments.
Inaddition, therewasaconsensus thatthetimehascome toselect certain additional non-tariff
barriers forsimilar work asandwhen theschedules ofthevarious groups permit. Thefollowing items
commandedgeneralsupport.Group1toundertakeworkonexportssubsidies,coveredbyArticleXVI:4.
Group 2toconsider theproblem ofimport documentation, including consular formalities. Group 3
should consider theproblems ofpackaging andlabelling. There wasalsogeneral agreement thatthere
should becontinuous exploration ofthepossibilities ofadding other topics tothiswork programme.
Withregard totheTariff Study, theconsensus seems tobethatthework programme outlined
intheReport bytheCommittee onTrade inIndustrial Products should beendorsed.
6. Statement ontrade policy
TheCONTRACTING PARTIES areconscious ofthedangers ofinstability anddisorder in
trade relations.
They recognize thatprolonged debate andconfrontation overissues, which itisintheinterests
ofalltoresolve, would bedangerous botheconomically andpolitically.
However, theCONTRACTING PARTIES believe thatthecurrent situation,, despite theserious
risksitpresents, alsooffers opportunities forconstructive action. They recognize theimportance of
avoiding these risks andofseizing these opportunities through concrete action inthefieldoftrade
relations.
TheCONTRACTING PARTIES reaffirm theirintention tocontinue towork together inthe
framework oftheGATT toovercome tradeproblems anddifferences. Theyreaffirm theirdeterminationREG-III -Page 4
tocontinue togiveparticular attention tothetradeproblems ofdeveloping countries andtotheresolution
ofthese problems.
TheCONTRACTING PARTIES agree topursue, through theGATT Programme forTrade
Expansion, every opportunity ofmaking further progress toward trade liberalization withrespect to
individual measures, orgroups ofmeasures, bothintheindustrial andintheagricultural field.
They alsoagree totakesuchopportunities asmight ariseforthesettlement ofparticular trade
problems, especially those regarded asmostdangerous andirritating andtheremoval ofwhich would
lessen current frictions.
TheCONTRACTING PARTIES further agree that,looking tothelonger term, itistheir
intention, asaprincipal objective, topursue intheGATT anewmajor initiative fordealing withthe
longer-term trade problems assoonasthisisfeasible.
There wasalarge majority whofavoured including additional sentences asfollows:
Inpursuanceoftheirintentiontoworktogethertowardresolvingtradeproblemsanddifferences,
theCONTRACTING PARTIES withrespect totheshort term, direct theCouncil during thecoming
months tomake appropriate arrangements foridentifying those trade problems capable ofprompt
resolution andprocedures forthesettlement ofthese problems in1972. With respect tothelonger
term, theCONTRACTING PARTIES direct theCouncil tomake arrangements toanalyze andevaluate
alternative techniques andmodalities fordealing intheGATT withlonger-term problems affecting
world trade intheindustrial andagricultural sectors.
Therewere,however,someotherdelegationswhichwerenotpreparedtoagreetothesesentences
andwhich favoured including thefollowing:
Inpursuanceoftheirintentiontoworktogethertowardattainingtheabove-mentionedobjectives,
theCONTRACTING PARTIES confirm theterms ofreference given totheCouncil in1970anddirect
thecommitteesconcernedtoexaminevarioustechniquesandmodalitiesforgiving,whenthetimecomes,
thenecessaryimpetuswithaviewtonewmultilateralandgeneralactionwithintheGATTinthedirection
ofincreased liberalization ofinternational trade.
B. Earlier,atthemeetingon22November1971,theChairmanhadmadethefollowingsumming-up
onspecific points concerning thetrade ofdeveloping countries :
Inthelightoftherecommendations made bytheGroup ofThree andtheviews expressed by
delegates, thesecretariat should compile forindividual developing countries information which would
showthetariffandnon-tariffbarriersapplyingtoeachcountry'sexportsandthevolumeoftradecovered.
Asregards trade intropical products, theproposals forconsultations among allinterested
contracting parties, withaviewtoexploring thepossibility ofconcerted action toliberalize trade in
vegetable oilsandoilseeds onamultilateral basis, should bepursued andthenecessary initiative towards
thisendtaken intheappropriate GATT body.
Inpreparing formultilateral action todealwithspecific types ofnon-tariff barriers, the
Committee onTrade inIndustrial Products anditsvarious sub-groups should continue togiveparticular
attention tothespecial tradeproblems ofthedeveloping countries andtotheresolution oftheseproblems
within theframework ofthesolutions worked outinthese bodies.REG-III -Page 5
Contracting parties should continue topursue possibilities forsuchpriority action toremove
orreduce barriers affecting thetradeofdeveloping countries inbothagricultural andindustrial products
ascanbetaken outside theframework ofthemultilateral solutions being worked outinthemainGATT
Committees.REG-III -Page 6
CUSTOMS UNIONS AND FREE-TRADE AREAS
PROCEDURES
Council decision of25October 19721
TheCouncil notes thatArticle XXIV: 7(a)oftheGeneral Agreement requires thatany
contracting party deciding toenter intoacustoms union orfreetrade areaoraninterim agreement
leading totheformation ofsuchaunion orarea,shallpromptly notify theCONTRACTING PARTIES.
Without prejudice tothelegalobligations tonotify inpursuance ofArticle XXIV, theCouncil
decides toinvite contracting parties thatsignanagreement falling within theterms ofArticle XXIV,
paragraphs 5to8,toinscribe theitemontheagenda forthefirstmeeting oftheCouncil following
suchsignature, totheextent thattheadvance notice oftendaysprescribed forinclusion ofitems on
theagenda canbeobserved. Inclusion oftheitemshould allow theCouncil todetermine theprocedures
forexamination oftheagreement.
1C/M/81, page 16.RESTRICTED
WORLD TRADE WT/REG/W/6
15August 1996
ORGANIZATION(96-3224)
Committee onRegional Trade Agreements
STANDARD FORMAT FOR INFORMATION ON
REGIONAL TRADE AGREEMENTS1
Note bytheChairman
Theobjective oftheStandard Format forInformation onRegional Trade Agreements isto
facilitate andstandardize theprovision ofinitial information byparties toregional trade agreements.2
Parties mayadhere totherequirements oftheStandard Format onavoluntary basis; inthisrespect,
itshould beviewed asGuidelines bytheChairman astobasic information thatcould beprovided by
parties notifying regional trade agreements totheWTO.
Inlinewiththeterms ofreference adopted fortheexamination ofregional agreements (including
theaccompanying understandings)3,theStandard Format includes some relevant information forthe
transparency andtheconsistency aspects oftheexamination process. Theinformation requested in
thisStandard Format doesnotprejudge thescope andcoverage oftheconsistency aspect ofthe
examination process, nordoesitreplace therequirement forparties toregional trade agreements to
provide Members withallrelevant textsoflawsanddetailed trade andtariff data. Further, itdoes
notprecludeMembersfromposingquestionsinwritingandseekingadditionalinformationfromparties.4
Astheinformation sought intheStandard Format relates primarily totradedisciplines applied
inaccordance withtheregional trade agreement, itisunlikely thatthere would beaduplication of
theinformation submitted toother WTO Bodies.
1TheCommittee onRegional Trade Agreements, atitsmeeting of31July1996, tooknoteofthe
Standard Format forInformation onRegional Trade Agreements.
2Information relating totrade inservices maybeintegrated intotherequest forinformation inthelight of
theexperience gained intheexamination ofagreements ontrade inservices.
3StartingwiththetermsofreferencefortheEnlargementoftheEuropeanCommunitiesadoptedinthemeeting
oftheCouncil forTrade inGoods heldon20February 1995 (WT/REG3/1), allterms ofreference areadopted
together withanunderstanding bytheChairman which states that"although theWorking Party would conduct
itsexaminationinlightoftherelevantprovisionsoftheAgreemen tscontainedinAnnex1AoftheWTOAgreemen t,
theconclusions oftheReport oftheWorking Party would beconfined toreporting onconsistency withthe
provisions ofArticle XXIV."
4"Any contracting party deciding toenter intoacustoms union orfree-trade area, oraninterim agreement
leading totheformation ofsuchaunion orarea, shallpromptly notify theCONTRACTING PARTIES andshall
make available tothem suchinformation regarding theproposed union orareaaswillenable them tomake such
reports andrecommendations tocontracting parties asthey may deem appropriate." (paragraph 7(a) of
Article XXIV).WT/REG/W/6
Page2
STANDARD FORMAT FOR INFORMATION ON
REGIONAL TRADE AGREEMENTS
Chairman 'sGuidelines
I. Background Information ontheAgreement
1. Membership anddates ofsignature, ratification andentry intoforce.
2. Type ofagreement
Customs union, free-trade area, preferential agreement among developing countries, interim
agreement. Planandschedule.
3. Scope
Products covered by,andexcluded from, theAgreement, including dataontrade coverage.
Products tobecovered bytheAgreement atalaterstage.
4. Trade data
Data onintraandextra-trade forthemost recent period forwhich statistics areavailable,
according tomajor products andpartners. Totheextent possible, available estimates ontrade-
creating andtrade-diverting effects.
II. Trade Provisions
1. Import restrictions
Intra-trade restrictions currently inplace andthetradeaffected bytherestrictions. Time-table
foreseen intheAgreement fordismantling therestrictions. Intra-trade restrictions thatwill
remain ineffect aftertheAgreement isfullyimplemented.
1.1 Duties andcharges
Customs duties, tariff quotas, charges having anequivalent effect tocustoms duties
andfiscal duties onthetrade ofproducts covered bytheAgreement: restrictions in
place andtrade affected, calendar fortheirdismantling, andresidual restrictions.
1.2 Quantitative restrictions
Quantitative restrictions (QRs) andmeasures having anequivalent effect toQRson
thetradeofproducts covered bytheAgreement: restrictions inplaceandtradeaffected,
calendar fortheirdismantling, andresidual restrictions.
1.3 Common External Tariff
Methodology forestablishing theCommon External Tariff (CET). Stage of
implementation oftheCET. Information onnegotiations under Article XXIV:6.
2. Export restrictions
Intra-trade restrictions currently inplace andthetradeaffected bytherestrictions. Time-table
foreseen intheAgreement fordismantling therestrictions. Intra-trade restrictions thatwill
remain ineffect aftertheAgreement isfullyimplemented.WT/REG/W/6
Page3
2.1 Duties andcharges
Customs duties, tariff quotas, charges having anequivalent effect tocustoms duties
andfiscal duties onthetrade ofproducts covered bytheAgreement: restrictions in
place andtrade affected, calendar fortheirdismantling, andresidual restrictions.
2.2 Quantitative restrictions
Quantitative restrictions andmeasures having equivalent effect toQRsonthetrade
ofproducts covered bytheAgreement: restrictions inplaceandtradeaffected, calendar
fortheirdismantling, andresidual restrictions.
3. Rules oforigin
General criteria usedforthepurpose ofdetermining theorigin ofproducts towhich the
Agreement applies; inparticular, thecriterion ofsubstantial transformation (i.e.change in
tariff classification, ad-valorem percentages and/or manufacturing orprocessing operations).
Information onwhether therulesoforigin provide foranytypeofcumulation. Specific criteria
towhich certain sectors/products maybesubjected.
4. Standards
Main elements ofanyprovisions relating tostandards tobeapplied onintra-trade; inparticular,
whether theyprovide forcommon standards ormutual recognition ofcertificates. Inthecase
ofcustoms unions, orinterim agreements leading toacustoms union, information onwhether
theparties intend toapply common standards forimports from thirdparties.
4.1 Technical barriers totrade
4.2 Sanitary andphytosanitary measures
5. Safeguards
Descriptionoftheemergencymeasuresandothersafeguardmechanismsapplicabletointra-trade
(e.g.balance-of-paymentsdifficulties,developmentalmatters,specialsafeguardsforagriculture),
incases where theydiffer fromthose applied onaMFN basis. Inthecaseofcustoms unions,
orinterim agreements leading toacustoms union, information onwhether theparties intend
toapply acommon safeguard regime toimports from thirdparties. Information onwhether
theAgreement provides fortheexclusion ofparties totheAgreement fromsafeguard measures
applied onimports from thirdparties.
6. Anti-dumping andcountervailing measures
Description oftheanti-dumping andcountervailing measures applicable onintra-trade, incases
where theydiffer fromthose applied onaMFN basis. Inthecaseofcustoms unions, orinterim
agreements leading toacustoms union, information onwhether theparties intend toapply
acommon regime onanti-dumping andcountervailing measures toimports fromthirdparties.
7. Subsidies andState-aid
Description ofthetreatment provided forintheAgreement relating tosubsidies andState-aid,
andanindication oftheremedies available under theAgreement tocounter theireffects on
intra-trade.WT/REG/W/6
Page4
8. Sector-specific provisions
Specific provisions applicable tointra-trade inindividual sectors (e.g.agriculture, fisheries,
textiles andclothing, automotive sector). Inthecaseofcustoms unions, orinterim agreements
leading toacustoms union, information onwhether theparties intend toapply anycommon
sector-specific regime onimports from thirdparties.
9. Other
Information onprovisions relating to,forexample, cooperation incustoms administration,
import licensing andcustoms valuation, incases where theydiffer from those applied ona
MFN basis. Intra-trade treatment ofproducts fromfree-trade zones established inanyofthe
parties totheAgreement.
III. General Provisions oftheAgreement
1. Exceptions andreservations
General andsecurity exceptions provided forintheAgreement. Reservations entered into
byanyoftheparties totheAgreement.
2. Accession
Information onanyprovision thatallowing other countries toaccede totheAgreement.
3. Dispute settlement procedures
Description ofthemechanisms provided forresolving disputes among parties totheAgreement,
anditsrelationship withintergovernmental dispute settlement instruments entered intobythe
parties under other bilateral, plurilateral and/or multilateral agreements.
4. Relation withother trade agreements
Information relating towhether ornottheAgreement establishes anyspecific relation with
other bilateral, plurilateral and/or multilateral trade agreements.
5. Institutional framework
Structure andfunctions ofintergovernmental and/or supranational institutions created tooperate
theAgreement. Responsibilities ofnational entities forformulating andimplementing policies
relating totheAgreement.
IV. Other
Fortransparency purposes, anyother relevant information related totheprovisions ofthe
Agreement.REG-IV
REGIONAL TRADE AGREEMENTS
EXAMPLESREG-IV -Page2
SAMPLES OFNOTIFICATIONS
A. Article XXIV NOTIFICATIONS
Customs Unions
[Country X]hasthehonour toinform Members oftheWTO thatanAgreement Establishing
aCustoms Union hasbeenconcluded between [Country Y]and[Country X]hasbeenconcluded.
TheAgreement isexpected toenter intoforce on[date].
TheAgreement Establishing theCustoms Union contains provisions relating totradeingoods
thatareofrelevance totheMembers oftheWTO. TheAgreement establishes acustoms union between
[Country XandCountry Y]inthesense ofArticle XXIV oftheGATT 1994 andtheUnderstanding
ontheInterpretation ofArticle XXIV. Duties andother restrictive regulations ofcommerce havebeen
eliminated onsubstantially alltrade between thesignatories, andauniform external tariff hasbeen
adopted bytheparties totheagreement.
AcopyoftheTreaty isannexed tothisnotification.
FreeTrade Areas
[Country X]hasthehonour toinform Members oftheWTO thataFreeTrade Agreement
between [Country Y]and[Country X]hasbeenconcluded. TheAgreement isexpected toenter into
force on[date].
TheFreeTrade Agreement contains provisions relating totradeingoods thatareofrelevance
totheMembers oftheWTO. TheAgreement establishes afree-trade areabetween [Country Xand
Country Y]inthesense ofArticle XXIV oftheGATT 1994andtheUnderstanding ontheInterpretation
ofArticle XXIV. Duties andother restrictive regulations ofcommerce have been eliminated on
substantially alltrade between thesignatories.
AcopyoftheTreaty isannexed tothisnotification.
Interim Agreement fortheestablishment ofaCustoms Union
[Country X]hasthehonour toinform Members oftheWTO thataninterim Agreement for
theEstablishment ofaCustoms Union hasbeenconcluded between [Country Y]and[Country X].
TheAgreement isexpected toenterintoforce on[date].Thetransitional period fortheestablishment
ofthecustoms union is.... years.
TheInterim Agreement contains provisions relating totrade ingoods thatareofrelevance
totheMembers oftheWTO. TheAgreement aimsatestablishing acustoms union between [Country
XandCountry Y]inthesense ofArticle XXIV oftheGATT 1994 andtheUnderstanding onthe
Interpretation ofArticle XXIV. Duties andotherrestrictive regulations ofcommerce willbeeliminated
onsubstantially alltrade between thesignatories, andtheparties intend toadopt auniform external
tariff.
AcopyoftheTreaty isannexed tothisnotification. Alsoannexed isaplanandschedule as
required bytheprovisions ofArticle XXIV ofGATT 1994.REG-IV -Page3
Interim Agreement fortheestablishment ofaFree-Trade Area
[Country X]hasthehonour toinform Members oftheWTO thataninterim Agreement for
theEstablishment ofaFreeTrade Area hasbeenconcluded between [Country Y]and[Country X].
TheAgreement isexpected toenterintoforce on[date].Thetransitional period fortheestablishment
ofthefree-trade areais.... years.
TheInterim Agreement contains provisions relating totrade ingoods thatareofrelevance
totheMembers oftheWTO. TheAgreement aimsatestablishing afree-trade areabetween [Country
XandCountry Y]inthesense ofArticle XXIV oftheGATT 1994 andtheUnderstanding onthe
Interpretation ofArticle XXIV. Duties andotherrestrictive regulations ofcommerce willbeeliminated
onsubstantially alltrade between thesignatories.
AcopyoftheTreaty isannexed tothisnotification. Alsoannexed isaplanandschedule as
required bytheprovisions ofArticle XXIV ofGATT 1994.
B. Enabling Clause NOTIFICATIONS
[Country X]hasthehonour toinform Members oftheWTO thataPreferential Trading
Arrangement[CountryY]and[CountryX]hasbeenconcludedpursuanttotheprovisionsoftheDecision
oftheCONTRACTING PARTIES onDifferential andMore Favourable Treatment, Reciprocity and
Fuller Participation ofDeveloping Countries ,otherwise known astheEnabling Clause. TheAgreement
isexpected toenter intoforce on[date].
ThePreferential Trade Agreement contains provisions relating totrade ingoods thatareof
relevance totheMembers oftheWTO. TheAgreement establishes afree-trade area(oracustoms
union between [Country XandCountry Y]inthesense oftherelevant provisions oftheWTO. Duties
andother restrictive regulations ofcommerce havebeeneliminated onasignificant proportion ofthe
trade between thesignatories.
AcopyoftheTreaty isannexed tothisnotification.REG-V -Page1
REG-V
REGIONAL TRADE AGREEMENTS
TEXTS OFTHE LEGAL PROVISIONS
ARTICLE XXIV OFGATT 1994
UNDERSTANDING ONTHE INTERPRETATION OF
ARTICLE XXIV OFGATT 1994
DECISION ONDIFFERENTIAL AND MORE
FAVOURABLE TREATMENT, RECIPROCITY AND
FULLER PARTICIPATION OFDEVELOPING
COUNTRIES (ENABLING CLAUSE)REG-V -Page2
Article XXIV
Territorial Application Frontier Traffic Customs Unions
andFree-trade Areas
1. Theprovisions ofthisAgreement shallapply tothemetropolitan customs territories
ofthecontracting parties andtoanyother customs territories inrespect ofwhich thisAgreement has
beenaccepted under Article XXVI orisbeing applied under Article XXXIII orpursuant totheProtocol
ofProvisional Application. Each suchcustoms territory shall, exclusively forthepurposes ofthe
territorial application ofthisAgreement, betreated asthough itwere acontracting party; Provided
thattheprovisions ofthisparagraph shallnotbeconstrued tocreate anyrights orobligations asbetween
twoormore customs territories inrespect ofwhich thisAgreement hasbeen accepted under
Article XXVI orisbeing applied under Article XXXIII orpursuant totheProtocol ofProvisional
Application byasingle contracting party.
2. Forthepurposes ofthisAgreement acustoms territory shallbeunderstood tomean
anyterritory withrespect towhich separate tariffs orother regulations ofcommerce aremaintained
forasubstantial partofthetrade ofsuchterritory withother territories.
3. Theprovisions ofthisAgreement shallnotbeconstrued toprevent:
(a) Advantages accorded byanycontracting partytoadjacent countries inorder tofacilitate
frontier traffic;
(b) Advantages accorded tothetrade withtheFreeTerritory ofTrieste bycountries
contiguous tothatterritory, provided thatsuchadvantages arenotinconflict withthe
Treaties ofPeace arising outoftheSecond World War.
4. Thecontracting parties recognize thedesirability ofincreasing freedom oftrade by
thedevelopment, through voluntary agreements, ofcloser integration between theeconomies ofthe
countries parties tosuchagreements. They alsorecognize thatthepurpose ofacustoms union orof
afree-trade areashould betofacilitate tradebetween theconstituent territories andnottoraisebarriers
tothetrade ofother contracting parties withsuchterritories.
5. Accordingly,theprovisionsofthisAgreementshallnotprevent,asbetweentheterritories
ofcontracting parties, theformation ofacustoms union orofafree-trade areaortheadoption ofan
interim agreement necessary fortheformation ofacustoms union orofafree-trade area; Provided
that:
(a) withrespect toacustoms union, oraninterim agreement leading toaformation of
acustoms union, theduties andotherregulations ofcommerce imposed attheinstitution
ofanysuchunion orinterim agreement inrespect oftrade withcontracting parties
notparties tosuchunion oragreement shall notonthewhole behigher ormore
restrictive thanthegeneral incidence oftheduties andregulations ofcommerce
applicable intheconstituent territories prior totheformation ofsuchunion orthe
adoption ofsuchinterim agreement, asthecasemaybe;
(b) withrespect toafree-trade area,oraninterim agreement leading totheformation of
afree-trade area, theduties andother regulations ofcommerce maintained ineachif
theconstituent territories andapplicable attheformation ofsuchfree-trade areaor
theadoption ofsuchinterim agreement tothetradeofcontracting parties notincluded
insuchareaornotparties tosuchagreement shallnotbehigher ormore restrictive
thanthecorresponding duties andother regulations ofcommerce existing inthesame
constituent territories priortotheformation ofthefree-trade area,orinterim agreement
asthecasemaybe;andREG-V -Page3
(c) anyinterim agreement referred toinsub-paragraphs (a)and(b)shallinclude aplan
andschedule fortheformation ofsuchacustoms union orofsuchafree-trade area
within areasonable length oftime.
6. If,infulfilling therequirements ofsub-paragraph 5(a),acontracting party proposes
toincrease anyrateofdutyinconsistently withtheprovisions ofArticle II,theprocedure setforth
inArticle XXVIII shallapply. Inproviding forcompensatory adjustment, dueaccount shallbetaken
ofthecompensation already afforded bythereduction brought about inthecorresponding dutyofthe
other constituents oftheunion.
7. (a) Anycontracting partydeciding toenterintoacustoms union orfree-trade area,
oraninterim agreement leading totheformation ofsuchaunion orarea, shallpromptly notify the
CONTRACTING PARTIES andshallmake available tothemsuchinformation regarding theproposed union
orareaaswillenable them tomake suchreports andrecommendations tocontracting parties asthey
maydeem appropriate.
(b) If,afterhaving studied theplanandschedule included inaninterim agreement
referred toinparagraph 5inconsultation withtheparties tothatagreement andtaking dueaccount
oftheinformationmadeavailableinaccordancewiththeprovisionsofsub-paragraph(a),theCONTRACTING
PARTIES findthatsuchagreement isnotlikely toresult intheformation ofacustoms union orofafree-
trade areawithin theperiod contemplated bytheparties totheagreement orthatsuchperiod isnot
areasonableone,theCONTRACTINGPARTIESshallmakerecommendationstothepartiestotheagreement.
Theparties shallnotmaintain orputintoforce, asthecasemaybe,suchagreement iftheyarenot
prepared tomodify itinaccordance withthese recommendations.
(c) Anysubstantial change intheplanorschedule referred toinparagraph 5(c)
shallbecommunicatedtotheCONTRACTINGPARTIES,whichmayrequestthecontractingpartiesconcerned
toconsult withthemifthechange seems likely tojeopardize ordelay unduly theformation ofthecustoms
union orofthefree-trade area.
8. Forthepurposes ofthisAgreement:
(a) Acustoms union shall beunderstood tomean thesubstitution ofasingle customs
territory fortwoormore customs territories, sothat
(i) duties andother restrictive regulations ofcommerce (except, where necessary,
those permitted under Articles XI,XII,XIII,XIV, XVandXX)areeliminated
withrespect tosubstantially allthetrade between theconstituent territories
oftheunion oratleastwithrespect tosubstantially allthetrade inproducts
originating insuchterritories, and,
(ii) subject totheprovisions ofparagraph 9,substantially thesameduties andother
regulations ofcommerce areapplied byeachofthemembers oftheunion to
thetrade ofterritories notincluded intheunion;
(b) Afree-trade areashallbeunderstood tomean agroup oftwoormorecustoms territories
inwhich theduties andother restrictive regulations ofcommerce (except, where
necessary, those permitted under Articles XI,XII,XIII, XIV, XVandXX)are
eliminated onsubstantially allthetradebetween theconstituent territories inproducts
originating insuchterritories.
9. Thepreferences referred toinparagraph 2ofArticle Ishallnotbeaffected bythe
formation ofacustoms union orofafree-trade areabutmaybeeliminated oradjusted bymeans of
negotiations withcontracting parties affected.* Thisprocedure ofnegotiations withaffected contracting
partiesshall,inparticular,applytotheeliminationofpreferencesrequiredtoconformwiththeprovisions
ofparagraph 8(a)(i)andparagraph 8(b).REG-V -Page4
10. TheCONTRACTINGPARTIESmaybyatwo-thirdsmajorityapproveproposalswhichdonot
fullycomply withtherequirements ofparagraphs 5to9inclusive, provided thatsuchproposals lead
totheformation ofacustoms union orafree-trade areainthesense ofthisArticle.
11. Taking intoaccount theexceptional circumstances arising outoftheestablishment of
India andPakistan asindependent States andrecognizing thefactthattheyhavelongconstituted an
economic unit,thecontracting parties agree thattheprovisions ofthisAgreement shallnotprevent
thetwocountriesfromenteringintospecialarrangementswithrespecttothetradebetweenthem,pending
theestablishment oftheirmutual trade relations onadefinitive basis.*
12. Each contracting party shalltakesuchreasonable measures asmaybeavailable toit
toensure observance oftheprovisions ofthisAgreement bytheregional andlocalgovernments and
authorities within itsterritories.REG-V -Page5
UNDERSTANDING ONTHE INTERPRETATION OFARTICLE XXIV
OFTHE GENERAL AGREEMENT ONTARIFFS AND TRADE 1994
Members,
Having regard totheprovisions ofArticle XXIV ofGATT 1994;
Recognizing thatcustoms unions andfreetrade areas havegreatly increased innumber and
importance since theestablishment ofGATT 1947 andtoday cover asignificant proportion ofworld
trade;
Recognizing thecontribution totheexpansion ofworld trade thatmaybemade bycloser
integration between theeconomies oftheparties tosuchagreements;
Recognizing alsothatsuchcontribution isincreased iftheelimination between theconstituent
territories ofduties andother restrictive regulations ofcommerce extends toalltrade, anddiminished
ifanymajor sector oftrade isexcluded;
Reaffirming thatthepurpose ofsuchagreements should betofacilitate trade between the
constituent territories andnottoraisebarriers tothetrade ofother Members withsuchterritories;
andthatintheirformation orenlargement theparties tothem should tothegreatest possible extent
avoid creating adverse effects onthetrade ofother Members;
Convinced alsooftheneedtoreinforce theeffectiveness oftheroleoftheCouncil forTrade
inGoods inreviewing agreements notified under Article XXIV, byclarifying thecriteria andprocedures
fortheassessment ofneworenlarged agreements, andimproving thetransparency ofallArticle XXIV
agreements;
Recognizing theneed foracommon understanding oftheobligations ofMembers under
paragraph 12ofArticle XXIV;
Hereby agree asfollows:
1. Customs unions, free-trade areas, andinterim agreements leading totheformation ofacustoms
union orfree-trade area, tobeconsistent withArticle XXIV, mustsatisfy, interalia,theprovisions
ofparagraphs 5,6,7and8ofthatArticle.
Article XXIV:5
2. Theevaluation under paragraph 5(a)ofArticle XXIV ofthegeneral incidence oftheduties
andother regulations ofcommerce applicable before andaftertheformation ofacustoms union shall
inrespect ofduties andcharges bebased upon anoverall assessment ofweighted average tariff rates
andofcustoms duties collected. Thisassessment shallbebased onimport statistics foraprevious
representative period tobesupplied bythecustoms union, onatariff-line basis andinvalues and
quantities, broken down byWTO country oforigin. TheSecretariat shallcompute theweighted average
tariff ratesandcustoms duties collected inaccordance withthemethodology usedintheassessment
oftariff offers intheUruguay Round ofMultilateral Trade Negotiations. Forthispurpose, theduties
andcharges tobetaken intoconsideration shallbetheapplied ratesofduty. Itisrecognized thatfor
thepurpose oftheoverall assessment oftheincidence ofother regulations ofcommerce forwhich
quantificationandaggregationaredifficult,theexaminationofindividualmeasures,regulations,products
covered andtrade flows affected mayberequired.
3. The"reasonable length oftime" referred toinparagraph 5(c)ofArticle XXIV should exceed
10years onlyinexceptional cases. Incases where Members parties toaninterim agreement believeREG-V -Page6
that10years would beinsufficient theyshallprovide afullexplanation totheCouncil forTrade in
Goods oftheneedforalonger period.
Article XXIV:6
4. Paragraph 6ofArticle XXIV establishes theprocedure tobefollowed when aMember forming
acustoms union proposes toincrease abound rateofduty. Inthisregard Members reaffirm thatthe
procedure setforthinArticle XXVIII, aselaborated intheguidelines adopted on10November 1980
(BISD 27S/26-28) andintheUnderstanding ontheInterpretation ofArticle XXVIII ofGATT 1994,
mustbecommencedbeforetariffconcessionsaremodifiedorwithdrawnupontheformationofacustoms
union oraninterim agreement leading totheformation ofacustoms union.
5. These negotiations willbeentered intoingood faithwithaview toachieving mutually
satisfactorycompensatoryadjustment.Insuchnegotiations,asrequiredbyparagraph6ofArticleXXIV,
dueaccount shallbetaken ofreductions ofduties onthesame tariff linemade byother constituents
ofthecustoms union upon itsformation. Should suchreductions notbesufficient toprovide the
necessary compensatory adjustment, thecustoms union would offer compensation, which maytake
theformofreductions ofduties onother tariff lines. Suchanoffershallbetaken intoconsideration
bytheMembers having negotiating rights inthebinding being modified orwithdrawn. Should the
compensatory adjustment remain unacceptable, negotiations should becontinued. Where, despite such
efforts, agreement innegotiations oncompensatory adjustment under Article XXVIII aselaborated
bytheUnderstanding ontheInterpretation ofArticle XXVIII ofGATT 1994cannot bereached within
areasonable period fromtheinitiation ofnegotiations, thecustoms union shall, nevertheless, befree
tomodify orwithdraw theconcessions; affected Members shallthenbefreetowithdraw substantially
equivalent concessions inaccordance withArticle XXVIII.
6. GATT1994imposesnoobligationonMembersbenefitingfromareductionofdutiesconsequent
upontheformation ofacustoms union, oraninterim agreement leading totheformation ofacustoms
union, toprovide compensatory adjustment toitsconstituents.
Review ofCustoms Unions andFree-Trade Areas
7. Allnotifications made under paragraph 7(a)ofArticle XXIV shallbeexamined byaworking
party inthelightoftherelevant provisions ofGATT 1994andofparagraph 1ofthisUnderstanding.
Theworking party shallsubmit areport totheCouncil forTrade inGoods onitsfindings inthisregard.
TheCouncil forTrade inGoods maymake suchrecommendations toMembers asitdeems appropriate.
8. Inregard tointerim agreements, theworking party mayinitsreport make appropriate
recommendations ontheproposed time-frame andonmeasures required tocomplete theformation
ofthecustoms union orfree-trade area. Itmayifnecessary provide forfurther review oftheagreement.
9. Memberspartiestoaninterimagreementshallnotifysubstantialchangesintheplanandschedule
included inthatagreement totheCouncil forTrade inGoods and,ifsorequested, theCouncil shall
examine thechanges.
10. Should aninterim agreement notified under paragraph 7(a)ofArticle XXIV notinclude aplan
andschedule, contrary toparagraph 5(c)ofArticle XXIV, theworking party shall initsreport
recommend suchaplanandschedule. Theparties shallnotmaintain orputintoforce, asthecase
maybe,suchagreement iftheyarenotprepared tomodify itinaccordance withtheserecommendations.
Provision shallbemade forsubsequent review oftheimplementation oftherecommendations.
11. Customs unions andconstituents offree-trade areas shallreport periodically totheCouncil
forTrade inGoods, asenvisaged bytheCONTRACTING PARTIES toGATT 1947intheirinstruction
totheGATT 1947Council concerning reports onregional agreements (BISD 18S/38), ontheoperation
oftherelevant agreement. Anysignificant changes and/or developments intheagreements should
bereported astheyoccur.REG-V -Page7
Dispute Settlement
12. Theprovisions ofArticles XXII andXXIII ofGATT 1994 aselaborated andapplied bythe
DisputeSettlementUnderstandingmaybeinvokedwithrespecttoanymattersarisingfromtheapplication
ofthose provisions ofArticle XXIV relating tocustoms unions, free-trade areas orinterim agreements
leading totheformation ofacustoms union orfree-trade area.
Article XXIV:12
13. Each Member isfullyresponsible under GATT 1994 fortheobservance ofallprovisions of
GATT 1994, andshalltakesuchreasonable measures asmaybeavailable toittoensure suchobservance
byregional andlocalgovernments andauthorities within itsterritory.
14. Theprovisions ofArticles XXII andXXIII ofGATT 1994 aselaborated andapplied bythe
Dispute Settlement Understanding maybeinvoked inrespect ofmeasures affecting itsobservance taken
byregional orlocalgovernments orauthorities within theterritory ofaMember. When theDispute
SettlementBodyhasruledthataprovisionofGATT1994hasnotbeenobserved,theresponsibleMember
shalltakesuchreasonable measures asmaybeavailable toittoensure itsobservance. Theprovisions
relating tocompensation andsuspension ofconcessions orother obligations apply incases where it
hasnotbeenpossible tosecure suchobservance.
15. EachMemberundertakestoaccordsympatheticconsiderationtoandaffordadequateopportunity
forconsultation regarding anyrepresentations made byanother Member concerning measures affecting
theoperation ofGATT 1994 taken within theterritory oftheformer.REG-V -Page8
DIFFERENTIAL AND MORE FAVOURABLE TREATMENT
RECIPROCITY AND FULLER PARTICIPATION
OFDEVELOPING COUNTRIES
Decision of28November 1979
(L/4903)
Following negotiations within theframework oftheMultilateral Trade
Negotiations, theCONTRACTING PARTIES decide asfollows:
1. Notwithstanding theprovisions ofArticle IoftheGeneral Agreement, contracting parties may
accord differential andmore favourable treatment todeveloping countries1,without according such
treatment toother contracting parties.
2. Theprovisions ofparagraph 1apply tothefollowing:2
(a) Preferential tariff treatment accorded bydeveloped contracting parties toproducts
originating indeveloping countries inaccordance withtheGeneralized System ofPreferences,3
(b) Differential andmorefavourable treatment withrespect totheprovisions oftheGeneral
Agreement concerning non-tariff measures governed bytheprovisions ofinstruments multilaterally
negotiated under theauspices oftheGATT;
(c) Regionalorglobalarrangementsenteredintoamongstless-developedcontractingparties
forthemutual reduction orelimination oftariffs and,inaccordance withcriteria orconditions which
maybeprescribed bytheCONTRACTING PARTIES, forthemutual reduction orelimination ofnon-
tariff measures, onproducts imported from oneanother
(d) Special treatment oftheleastdeveloped among thedeveloping countries inthecontext
ofanygeneral orspecific measures infavour ofdeveloping countries.
3. Anydifferential andmore favourable treatment provided under thisclause:
1Thewords "developing countries" asusedinthistextaretobeunderstood torefer alsotodeveloping
territories.
2Itwould remain open fortheCONTRACTING PARTIES toconsider onanadhocbasis under the
GATT provisions forjointaction anyproposals fordifferential andmore favourable treatment notfalling within
thescope ofthisparagraph.
3Asdescribed intheDecision oftheCONTRACTING PARTIES of25June 1971, relating tothe
establishment of"generalized, non-reciprocal andnondiscriminatory preferences beneficial tothedeveloping
countries" (BISD 18S/24).REG-V -Page9
(a) shallbedesigned tofacilitate andpromote thetrade ofdeveloping countries andnot
toraisebarriers toorcreate undue difficulties forthetrade ofanyother contracting parties;
(b) shallnotconstitute animpediment tothereduction orelimination oftariffs andother
restrictions totrade onamost-favoured-nation basis;
(c) shallinthecaseofsuchtreatmentaccordedbydevelopedcontractingpartiestodeveloping
countries bedesigned and,ifnecessary, modified, torespond positively tothedevelopment, financial
andtrade needs ofdeveloping countries.
4. Anycontracting party taking action tointroduce anarrangement pursuant toparagraphs 1,
2and3above orsubsequently taking action tointroduce modification orwithdrawal ofthedifferential
andmore favourable treatment soprovided shall:1
(a) notify theCONTRACTING PARTIES andfurnish themwithalltheinformation they
maydeem appropriate relating tosuchaction;
(b) afford adequate opportunity forprompt consultations attherequest ofanyinterested
contractingpartywithrespecttoanydifficultyormatterthatmayarise.TheCONTRACTINGPARTIES
shall, ifrequested todosobysuchcontracting party, consult withallcontracting parties concerned
withrespect tothematter withaviewtoreaching solutions satisfactory toallsuchcontracting parties.
5. Thedeveloped countries donotexpect reciprocity forcommitments made bythem intrade
negotiations toreduce orremove tariffs andother barriers tothetrade ofdeveloping countries, i.e.,
thedeveloped countries donotexpect thedeveloping countries, inthecourse oftrade negotiations,
tomake contributions which areinconsistent withtheirindividual development, financial andtrade
needs. Developed contracting parties shalltherefore notseek, neither shallless-developed contracting
parties berequired tomake, concessions thatareinconsistent withthelatters 'development, financial
andtrade needs.
6. Having regard tothespecial economic difficulties andtheparticular development, financial
andtrade needs oftheleast-developed countries. thedeveloped countries shallexercise theutmost
restraintinseekinganyconcessionsorcontributionsforcommitmentsmadebythemtoreduceorremove
tariffs andother barriers tothetrade ofsuchcountries, andtheleast-developed countries shallnotbe
expectedtomakeconcessionsorcontributionsthatareinconsistentwiththerecognitionoftheirparticular
situation andproblems.
1Nothing inthese provisions shallaffect therights ofcontracting parties under theGeneral Agreement.REG-V -Page10
7. Theconcessions andcontributions made andtheobligations assumed bydeveloped andless-
developed contracting parties under theprovisions oftheGeneral Agreement should promote thebasic
objectives oftheAgreement, including those embodied inthePreamble andinArticle XXXVI. Less-
developed contracting parties expect thattheircapacity tomake contributions ornegotiated concessions
ortakeother mutually agreed action under theprovisions andprocedures oftheGeneral Agreement
would improve withtheprogressive development oftheireconomies andimprovement intheirtrade
situation andtheywould accordingly expect toparticipate more fullyintheframework ofrights and
obligations under theGeneral Agreement.
8. Particular account shallbetaken oftheserious difficulty oftheleast-developed countries in
making concessions andcontributions inviewoftheirspecial economic situation andtheirdevelopment,
financial andtrade needs.
9. Thecontracting parties willcollaborate inarrangements forreview oftheoperation ofthese
provisions, bearing inmind theneedforindividual andjointefforts bycontracting parties tomeetthe
development needs ofdeveloping countries andtheobjectives oftheGeneral Agreement.