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3 Law & Dev. Rev. 1 (2010)

handle is hein.journals/ldevr3 and id is 1 raw text is: Kelly: EU and U.S. Non-Reciprocal Preferences I. INTRODUCTION Non-discrimination is a foundational concept of the World Trade Organisation (WTO) covered agreements. In the context of trade in goods, this concept finds its first and most obvious expression in Article 1.1 GATT, which requires WTO members to provide the same tariff conditions to all other WTO members, that is, to accord them the Most Favoured Nation (MFN) status. However, there are numerous exceptions to the MFN principle, notably the Enabling Clause, which allows developed WTO members to extend non-reciprocal trade preferences to developing countries. Under this clause, developed countries, including the EU and US, have established unilateral trade preference schemes, known as Generalised System of Preferences (GSP) schemes, granting better than MFN tariff rates to certain developing countries. In addition to their GSP schemes, the EU and the US have granted more advantageous non-reciprocal preferences to certain developing countries, henceforth special preferences, which require a waiver of Article 1:1 GATT in order to be compatible with WTO rules. The EU scheme provides special preferences to African, Caribbean and Pacific group (ACP) countries.' The most recent incarnation of these preferences was under the Cotonou Agreement2, which expired in 2008, along with the WTO waiver. The US has four special preference schemes: the African Growth and Opportunity Act (AGOA); the Andean Trade Promotion and Drug Eradication Act (ATPDEA); the US Caribbean Basin Economic Recovery Act (CBERA); and Title Two Article IV of the US Compact of Free Associated States (FAS) with the Marshall Islands, the Federated States of Micronesia and Palau.3 While CBERA, AGOA, FAS or ATPDEA are now covered by waivers, the US had considerable difficulty obtaining the latter three waivers due to Paraguayan opposition. Waivers are becoming more and more difficult to obtain and it is increasingly unlikely that new waivers will be granted for special preferences. Without a waiver, these preferences are open to legal challenge.6 1 Excluding Cuba. 2 For a history of the EU-ACP relationship see L. Bartels, The Trade and Development Policy of the European Union, 18 European Journal of International Law 4 (2007), 715-756; and J. Ravenhill, Back to the Nest? Europe's Relations with the African, Caribbean and Pacific Group of Countries, in VK. Aggarwal and E.A. Fogarty (eds.), EU Trade Strategies Between Regionalism and Globalism (Basingstoke, Palgrave Macmillan, 2004), pp. 118-147. For information on the beneficiaries of these schemes, see Appendix. CARICOM trade gets five year WTO Waiver for US Market, The Barbados Advocate, 14 April 2009, WT/L/754, WT/L/753 and WT/L/755. 5 See further A. Bassilekin, New ACP-EC Waiver at the WTO, Discussion Paper No. 71 (Maastricht: ECDPM, 2008), available at: <http://spidenan.ecdpm.org/WebECDPMIWeb/Content/Download.nsf/0/584D23CA8A3330D 1

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