ABSTRACT
The TTIP will – like other free trade agreements (FTAs) – violate one of the cornerstones of the WTO, i.e. the Most-Favoured-Nation (MFN) principle. However, the multilateral trading system has since 1947 permitted the formation of trading blocs and preferential bilateral trading partnerships. GATT Article XXIV, which was later supplemented by GATS Article V concerning trade in services and the Enabling Clause concerning trade between developing countries, exempts customs unions (CUs) and FTAs from the MFN principle provided that such arrangements are notified to the WTO, detailed information is made transparent and they qualify as trade liberalizing and not as trade discriminatory arrangements. This ‘permissibility test’ embedded in the WTO oversight mechanism appears to be a straightforward matter: FTAs must, on balance, further – and not obstruct – trade liberalization. Yet, prior to their approval, the WTO itself is not permitted to openly criticize or take action against any failure to comply with these provisions. Only WTO Members are entitled to react against any possible discrimination that results from the TTIP by filing a formal WTO complaint to the Dispute Settlement system.
