Article Xxiv of the General Agreement on Tariffs and Trade

Article XXIV of the General Agreement on Tariffs and Trade (GATT) is a crucial provision that governs trade agreements between countries. The GATT was created in 1947 to promote free and fair trade between nations, and its provisions have since been updated and expanded upon by the World Trade Organization (WTO).

Under Article XXIV, countries are allowed to enter into customs unions or free trade areas with each other, in order to promote trade and economic growth. A customs union is a group of countries that agree to eliminate tariffs and other trade barriers between them, and to adopt a common external tariff on goods imported from outside the union. A free trade area, on the other hand, allows member countries to eliminate tariffs and other barriers to trade among themselves, while maintaining their own individual tariffs on goods imported from outside the area.

In order to enter into a customs union or free trade area under Article XXIV, countries must meet certain conditions. First, the agreement must cover “substantially all” trade between the participating countries – in other words, it cannot be limited to only a few products or industries. Second, the agreement must not raise overall tariff levels for non-members – in other words, it cannot create a “trade diversion” effect, where non-members are discouraged from trading with participating countries due to higher tariffs.

In addition to these conditions, Article XXIV requires that participating countries notify the WTO of their intentions to form a customs union or free trade area, and provide information on the agreement`s provisions and effects on trade. The WTO then conducts a review to ensure that the agreement meets the conditions and does not violate other provisions of the GATT or WTO agreements.

Article XXIV has been a key tool for promoting free and fair trade between countries, and has facilitated the creation of many regional trade agreements, including the European Union, NAFTA, and ASEAN. While there are often debates about the economic effects and fairness of these agreements, Article XXIV provides a framework for ensuring that they are consistent with the principles of free trade and non-discrimination.