World Trade Organisation members' compliance with article XXIV of the General Agreement on Tariffs and Trade : The case of Tanzania

Abstract

WTO provides the bedrock of international trade law. Thus, it supports open and predictable trade. Regional trade arrangements have become an accepted channel for trade development, consequently, they are recognised by WTO under article XXIV of GATT and the Enabling Clause. Most RIs are brought about by regional trade arrangements. The most common forms of RI are CUs and FTAs. WTO legal framework on RTAs in CUs and FTAs with regards to trade in goods are governed by the Text of Article XXIV GATT.

Tanzania has three RTAs – EAC, SADC and AfCFTA. The focus of this study is on two – EAC and SADC. Tanzania is in a multilateral preferential trade arrangement that is inconsistent with WTO requirements on RTAs. That is to say, Tanzania as a member of EAC which is a CU implies that she has to comply with WTO requirements on RTAs as provided for under article XXIV of GATT. The major being to enter into trade agreements collectively with other members of CU and not individually, since they operate as a single customs territory with a common external trade regime. However, Tanzania is both a member of a CU – EAC and a member of an FTA – SADC to the exclusion of other members of CU.

WTO members are required to notify WTO upon the formation of RTAs so that the same can be examined by the Committee on RTAs. However, the Committee has enjoyed little success in assessing the consistency of the RTAs notified to WTO over the years. Therefore, functions of the Committee should be reviewed to serve as a forum for notification and provision of clarity on RTAs to WTO members on the basis of a factual presentations by WTO Secretariat.

Due to multiple memberships of member states in various RECs, both EAC and SADC use RoO to determine whether goods originate from partner states in order to qualify for community preferential treatment. The administration of EAC CET faces a number of challenges including the lack of a customs authority at the regional level that would ensure uniformity in the management of CU. Another setback in the implementation of the CET is multiple memberships of member states where preferential treatment is still extended to other RECs despite a restricting provision and existence of CU, thus, eroding the gains of such union. This is brought about by problems in drafting Treaties where partner states exploit loopholes, for instance, Protocol on EACCU does not prohibit EAC member states from maintaining trade arrangements they had prior to the formation of CU or signing individual agreements thereafter such as FTAs. This became evident in the ratification of AfCFTA Agreement.