Compliance to WTO Rules is a major requirement when dealing with regional trade integration agreements or econmic integration agreements. The Preamble to the WTO Agreement highlights “... the elimination of discriminatory treatment in international relations” as an objective of the Multilateral Trading System. The Most-Favoured-Nation (MFN) commitment by WTO Members is a fundamental instrument for achieving that aim. However the MFN treatment changes when dealing with regional economic integration.
When establishing a regional trade integration agreement(RTA), Members of WTO that are parties to the economic integration need some kind of derogation to avoid legal inconsistency with the MFN rule. The WTO Member has always the possibility of seeking a waiver. But, over time, the system itself has developed a series of conditional exceptions which Members can invoke when departing from their MFN commitment: These are in GATT Article XXIV, Enabling Clause, Understanding on GATT Article XXIV and GATS Article V.
Establishment of a regional trade integration requires that common principles of WTO be put into consideration. An economic integration or regional trade agreement should facilitate trade among the parties, provide for mutual/reciprocal trade concessions and must not result in barriers towards third parties higher than those existing before the formation of the economic integration agreement. Read more about Regional Trade Integration Agreements and Compliance to WTO Rules
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