WORLD TRADE
ORGANIZATIONWT/COMTD/W/114
13 May 2003
(03-2521)
Committee on Trade and Development
LEGAL NOTE ON REGIONAL TRADE ARRANGEMENTS
UNDER THE ENABLING CLAUSE
Note by the Secretariat1
Subjects discussed:
A. I NTRODUCTION ............................................................................................................................1
B. T HE ENABLING CLAUSE , AND THE MANDATES OF THE CTD AND THE CRTA ..........................2
C. P ROCEDURAL REQUIREMENTS ....................................................................................................5
1. Notifi cation ................................................................................................................. ...............5
(a) Relevant provisions of the Enabling Clause and the mandates of the CTD and the
CRTA........................................................................................................................... ...............5
(b) The practice................................................................................................................ .................5
(c) Conclu sion .................................................................................................................. ................7
2. Consultations/revie w/examination ..........................................................................................7
(a) Relevant provisions of  the Enabling Clause ...............................................................................7
(i) The CT D mandate............................................................................................................. ..........8
(ii) The CRTA mandate........................................................................................................... ..........9
(b) The practice................................................................................................................ ...............10
(c) Conclu sion .................................................................................................................. ..............11
D. S UBSTANTIVE REQUIREMENTS .................................................................................................11
E. C ONCLUSION .............................................................................................................................12
A. INTRODUCTION
1. This note aims to respond to a request2 made by the Committee on Trade and Development
(CTD) at its 44th regular Session for a legal analysis of the notification and other requirements for
regional trade agreements or arrangements (RTAs) among developing countries under the Decision on
Differential and More Favourable Treatment, Re ciprocity and Fuller Participation of Developing
                                                     
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to
the positions of Members and to their rights and obligations under the WTO.
2 See Document WT/COMTD/M/44.WT/COMTD/W/114
Page 2
Countries (hereinafter the  Enabling Clause).3  Thus, this note also examines the relationship between
the provisions of the Enabling Clause and the mandates of the CTD and the Committee on Regional
Trade Agreements (CRTA) relating to such RTAs.
2. The note begins with a discussion of the procedural requirements of the Enabling Clause
relating to RTAs among developing countries and how they are currently implemented in the WTO.In particular, the note addresses "where" and "when" notification of such RTAs is to be made, as well
as "where" and "when" consultations on, and reviews of , the notified RTAs are to take place.  In this
regard, the note discusses the mandates of the CTD and the CRTA, the WTO bodies with apparent
responsibilities for ensuring compliance with these procedural requirements, and how these bodies
have dealt with RTAs among developing countries.  The note then examines the substantive legal
requirements of the Enabling Clause for RTAs among developing countries.  The note concludes with
several general observations.
B. T
HE ENABLING CLAUSE , AND THE MANDATES OF THE CTD AND THE CRTA
3. The Enabling Clause contains a provision for the establishment of RTAs among developing
countries.  The preambular language begins with:  "N otwithstanding the provisions of Article I of the
General Agreement …".  The Enabling Clause therefore authorizes certain actions – such as theestablishment of RTAs among developing countries – that are otherwise contrary to Article I of
GATT.
4. It should be noted at the outset that the Enabling Clause only covers trade in goods;  thus it
provides legal justification only for the trade in goods aspects of RTAs among developing countries.
5. When invoked, the relevant provisions of the Enabling Clause could be viewed as
lex specialis  within WTO law , with respect to RTAs on goods between developing countries.  Hence,
it could be argued that, even if Article XXIV of  GATT 1994 (which authorizes customs unions and
free-trade areas under certain conditions) is not expressly mentioned or set aside in the first paragraph
of the Enabling Clause (whereas Article I explicitly is), compliance with the provisions of the
Enabling Clause would suffice to authorize RTAs among developing countries (otherwise inconsistentwith Article I), even if the requirements of Article XXIV are not totally satisfied.
6. Paragraphs 1 and 2(c) of the Enabling Clause provide that:
"1. Notwithstanding the provisions of Article I of the General Agreement,
contracting parties may accord differential and more favourable treatment to
developing countries, without according such treatment to other contracting parties.
2. The provisions of paragraph 1 apply, inter alia , to:  (…)
(c) Regional and global arrangements amongst less-developed countries for
mutual reduction or elimination of tariffs, and according to conditions set down by
CONTRACTING PARTIES, for the mutual reduction or elimination of non-tariff
measures, on products imported from each other ."
7. However, in order for RTAs among developing countries to qualify under those provisions,
they must meet the notification and consultation requirements of paragraphs 4(a) and 4(b).  Accordingto paragraph 4:
                                                     
3 See GATT Document L/4903.WT/COMTD/W/114
Page 3
"Any contracting party taking action to introduce an arrangement… shall :
(a) notify  the CONTRACTING PARTIES and furnish  them with all the information
that they may deem appropriate relating to such action.
(b) afford adequate opportunity for prompt  consultations  a t  t h e  r e q u e s t  o f  a n y
interested party with respect to any difficulty or matter that may arise .  The
CONTRACTING PARTIES shall, if requested to do so by such contracting party,
consult with all contracting parties concerne d with respect to the matter with a view
to reaching solutions satisfactory to all such contracting parties." (emphasis added)
8. The decision on the Enabling Clause, adopted by the CONTRACTING PARTIES in 1979,
can be argued to be part of the GATT 1994, which, inter alia , includes "(iii) decisions on waivers
granted under Article XXV of GATT 1947 and still in force on the date of entry into force of the
WTO Agreement;  and (iv) other decisions of the CONTRACTING PARTIES to GATT 1947".45
9. Pursuant to Article 2 of the Explanatory Notes of the GATT 1994:
"The references to "contracting party" in the provisions of GATT 1994 shall be
deemed to read "Member".  The references to "less-developed contracting party" and
"developed contracting party" shall be deemed to read "developing country Member"
and "developed country Member"."
10. The Enabling Clause requires that notifications be made to the CONTRACTING PARTIES,
and that consultations be held by the CONTRACTING PARTIES when requested by a contracting
party.
11. Article 2 of the Explanatory Notes of the GATT 1994 also provides that when the WTO
Agreement itself does not specifically allocate functions to a WTO body, the Ministerial Conferenceshall do so:
"The references to the CONTRACTING PARTIES acting jointly in Articles XV:1,
XV:2, XV:8, XXXVIII and the Notes Ad Article XII and XVIII;  and in the
provisions on special exchange agreements in Articles XV:2, XV:3, XV:6, XV:7 and
XV:9 of GATT 1994 shall be deemed to be references to the WTO .  The other
functions that the provisions of GATT 1994 assign to the CONTRACTING
PARTIES acting jointly shall be allocated by the Ministerial Conference ."
(emphasis added)
12. Since the entry into force of the WTO in January 1995, the Ministerial Conference has not
formally allocated any of the competence and functi ons relating to the administration of the Enabling
Clause, including its provisions on RTAs, to any of the WTO bodies.  It is worth noting that, contrary
                                                     
4 Article 1(b) of the GATT 1994.
5 Article XXV:1 of the GATT 1947 read as follows:  "Representatives of the contracting parties shall
meet from time to time for the purpose of giving effect to those provisions of this Agreement which involvejoint action and, generally, with a view to facilitating the operation and furthering the objectives of thisAgreement.  Wherever reference is made in this Agre ement to the contracting parties acting jointly they are
designated as the CONTRACTING PARTIES".WT/COMTD/W/114
Page 4
to the CTD in the WTO, the GATT 1947 CTD had been instructed to have the primary responsibility
for supervising the implementation of the Enabling Clause.6
13. However, pursuant to Article IV:7 of the WTO Agreement, the Ministerial Conference
established the CTD, whose mandate is to carry out the functions assigned to it by the WTO
Agreement or by the Multilateral Trade Agreements, and any other functions assigned by the GeneralCouncil.  In this regard, paragraph 1 of the Decision of the General Council establishing the CTD
instructed the CTD:
"To serve as a focal point for consideration and coordination of work on development
in the WTO and its relationship to development related activities in other multilateral
agencies."
7
14. More directly relevant to the present Note, paragraph 3 mandates the CTD:
"To review periodically , in consultation as appropriate with the relevant bodies of the
WTO, the application of special provisions  in the Multilateral Trade Agreements and
related Ministerial Decisions in favour of developing country Members, and in
particular least-developed country Members, and report to the General Council for
appropriate action". (emphasis added)
15. Since the Enabling Clause contains provisions relating to preferential treatment among and in
favour of developing countries, it could be argued  that the General Council envisaged some role for
the CTD with respect to RTAs among developing countries.  Moreover, as further discussed, pursuant
to paragraph 4 of its terms of reference the CTD can also consider any questions  arising from the
application of any WTO provision in favour of developing countries.
16. Nevertheless, the CRTA, which was created after the entry into force of the WTO (in
February 1996) and thus after the establishment of the CTD, has been given a broad mandate to
examine RTAs.  Specifically, paragraph 1(a) of the decision establishing the CRTA instructs it:
"To carry out the examination of agreements in accordance with the procedures and
terms of reference adopted by the Council  for Trade in Goods, the Council for Trade
in Services or the Committee on Trade and Development, as the case may be, and
thereafter present its report to the relevant body for appropriate action."8
17. In light of the above, the WTO's procedural and substantive requirements for RTAs among
developing country Members are discussed below on the basis of the wording of the Enabling Clause
and the mandates of the CTD and CRTA.  The purpose of this analysis is to explain and clarify the
requirements, and to examine which WTO body has, or might have, responsibility for ensuring that
such requirements are met by the developing country Members entering into such RTAs.
                                                     
6 See BISD 26S/219-220, para. 1.2 and BISD 27S/48-49, paras. 2 and 4.  Point 5.1.2 of the GATT
Work programme gave the CTD the primary responsibility for the supervision of the Enabling Clause (seeCOM.TD/W/305).
7 See Document WT/L/46.
8 See Document WT/L/127.WT/COMTD/W/114
Page 5
C. PROCEDURAL REQUIREMENTS
1. Notification
(a) Relevant provisions of the Enabling Clause and the mandates of the CTD and the CRTA
18. It is clear that RTAs among developing countries must be notified to WTO Members.
Paragraph 4(a) of the Enabling Clause provides that developing countries taking action to introducean arrangement shall  notify it to WTO members and furnish all the information deemed appropriate
(see paragraph 7 above).  This is also confirmed by the Preamble of the CRTA terms of reference
(TORs) which refers to " Having regard  to agreements which are required to be notified  … under …
the 1979 Decision on Differential and More Favourable Treatment, Reciprocity and Fuller
Participation of Developing Countries; (…)" (emphasis added).
9
19. The first question is when  a notification is to be made.  Paragraph 4 of the Enabling Clause
refers only to the time when "[a]ny contracting party [is] taking action to introduce an arrangement".In the present context, this would seem to refer at  the latest to the point in time when a developing
country Member "takes action", and would therefore mean that an RTA among developing countries
for which the Enabling Clause may be invoked, should be notified to the WTO Members by no later
than its entry into force.  There is no other refere nce in the Enabling Clause or in the mandates of the
CTD or the CRTA as to when the notification to the WTO must take place.
10
20. The Enabling Clause does not specify where  the notification is to be made.  The only
requirement is that the RTA must be notified to the CONTRACTING PARTIES, i.e. to WTO
Members (in either the General Council, the CTD, the CRTA or some other WTO body).
21. The fact that the CTD is mandated to serve as a focal point for consideration and coordination
of work on development in the WTO would suggest that it should receive and consider allnotifications relating to actions by developing country Members under the Enabling Clause, as has
been the practice.  However nothing would prevent a notification to the CRTA, although the mandate
of the CRTA seems to imply that RTAs to be exam ined by the CRTA would have been notified to a
relevant WTO body prior to the CRTA's examination.
11
(b) The practice
22. As to when  an RTA should be notified, it should be recalled that the CRTA, within point 1(c)
of its TORs,12 took note at its meeting of 2 May 1997 of a non-binding, voluntary Chairman's
document on Guidelines on Procedures to Facilitate and Improve the Examination Process .13  Th e
following extracts, while not defining clearly the appropriate time for notification, are relevant as they
relate to all RTAs notified to the WTO, independently of whether or not they will be examined in the
CRTA:
"1. With the aim of enhancing transparency and assisting the Committee in its
work, WTO Members engaged in the process of establishing a RTA are invited to
share with the Committee relevant inform ation in the early stages of such a
process, prior to making the formal notification.
                                                     
9 See Document WT/L/127.
10 The reference to "periodic" review is directed to the work of the CTD, and not the countries making
the notification.
11 That point is currently being addressed in the context of the Negotiating Group on Rules.
12 "(c) to develop, as appropriate, procedures to facilitate and improve the examination process;".
13  See Document WT/REG/W/15.WT/COMTD/W/114
Page 6
2. Opportunity will be provided at meetings of the Committee, separately from
the process of examination, for Members to seek information on RTAs that have not
yet been notified. (…)
I. Notification by the Parties"(…) 4. The Parties to a RTA should supply the relevant treaties or agreements to the
Secretariat together with the text of the notification for circulation to Members as
official WTO documents.  After consideration by the relevant WTO body,
14 the terms
of reference for the examination of a notified RTA, if any, are adopted by that body
and the examination is referred to the Committee (…)"  (emphasis added)
23. A number of RTAs currently in force have not yet been notified to the WTO despite
improvements in the willingness of Members to do so in the recent past.  In particular, preferential
arrangements between developing countries tend to be more rarely notified than agreements between
developed countries.  A total of 19 RTAs notified under the Enabling Clause are currently in force,
and the large majority of them were notified after their entry into force.
24. As to the issue of where  RTAs justifiable under the Enabling Clause should be notified, in the
absence of any decision by the Ministerial Conference to do otherwise, the WTO practice was
inherited from the GATT 1947 system.  The issue of notifications relating to Part IV had been
discussed on several occasions within the GATT.15  Although Part IV does not explicitly refer to
RTAs among developing countries, but rather deals with preferential treatment granted by developed
countries, at least one delegation notified preferential tariff treatment within the framework of the
Latin American Free-Trade Association in accordance with the general principles of Part IV.16  At its
meeting of 17 March 1976, the issue of "Certain proposals relating to the formation of regional
economic arrangements which were not eventually embodied in Part IV" was put forward in the work
of the Committee on the Legal and Institutional Fr amework of GATT on the drafting of Part IV.17
After 1971, the practice was that RTAs notified under the Enabling Clause be considered jointly with
all other notifications (e.g. GSP) received during the year at the last meeting of the year of the CTD.18
25. In November 1995, in parallel to the work of the Working Group on Notification Obligations
and Procedures (WGN), the Chairman of the CTD "recalled that the CTD was responsible for the
notification requirements of Article XVIII:A, C and D, Part IV and the Enabling Clause. (…)
Suggesting that the CTD address the notification requirements at its first meeting in 1996, he hoped
the discussion would clarify which notification obligations were relevant to the CTD, and whetherthere was the need to have standard formats for notifications."
19  Although the consideration of
"notification obligations" was tentatively scheduled for early 1996, the work programme had to be
significantly adjusted in the light of Members' priorities in relation to the Singapore Ministerial
Conference, and the issue was not discussed again by the CTD until its 44th Session on 7 March 2003.
                                                     
14 The Council for Trade in Goods, the Council for Trade in Services or the Committee on Trade and
Development, as the case may be.
15 In 1965, the Committee adopted certain "reporti ng procedures" designed to elicit information on
action taken by contracting parities in the context of Part IV. BISD, 13S/79.
16 Such notification, distributed as COMT.TD/W/223, was made in the framework of the Latin
American Free-Trade Association.  See also COM.TD/227, paragraph 29.
17 COM.TD/W/239 paragraphs 47 and 48.
18 See also paragraph 45 of this Note.
19 WT/COMTD/M/4, paragraph 55.WT/COMTD/W/114
Page 7
26. Despite that, two issues merit to be noted here.  First, the section on RTAs of the Technical
Cooperation Handbook on Notification Requirements20 identifies the CTD as the body receiving
notifications of RTAs under the Enabling Clause.  However, the Handbook  also states that it "does not
constitute a legal interpretation of the notification ob ligations under the respective Agreement(s).  It has
been prepared by the Secretariat to assist Member s in complying with their notification obligations".
Second, at its meeting of 2 November 1998, the CTD adopted, as general guidelines, the procedures
recommended by the CRTA for submission of information on RTAs under the Enabling Clause.21
27. Finally, in light of the above, all RTAs among developing countries notified under the
Enabling Clause since the entry into force of the WTO have been circulated as CTD documents, in the
document series WT/COMTD/N/-.
(c) Conclusion
28. Pursuant to the Enabling Clause, all RTAs between WTO developing countries must be
notified to WTO Members, by no later than when they enter into force.  In practice, the CTD has been
the WTO body to receive and consider such notifications.
2. Consultations/review/examination
(a) Relevant provisions of the Enabling Clause
29. Paragraph 4(b) of the Enabling Clause requires that other Members be given " adequate
opportunity for prompt consultations  on issues they deem appropriate on any difficulties that may
arise" (emphasis added).  If requested by any Member, parties to the RTA notified under the Enabling
Clause must therefore consult with other Members on any matter raised in relation to their RTA.  As
to the issue of when  such consultations are to take place, paragraph 4(b) of the Enabling Clause
requires "promptness" in such consultations.
30. However, there is no provision in the Enabling Clause as to where  such consultations are to
be held.
31. Paragraph 9 of the Enabling Clause provides that:
"The contracting parties will collaborate in  arrangements for review of the operation
of these provisions, bearing in mind the need for individual and joint efforts bycontracting parties to meet the development needs of developing countries and the
objectives of the General Agreement."
32. No decision has ever been adopted, either in the GATT, or in the WTO, regarding the review
of arrangements under the Enabling Clause.
33. The issue again is whether such "consultations" should take place in the CTD or in the CRTA.
One of the difficulties is that the mandate of the CTD does not refer to any type of "consultations" but
provides that Members may " review periodically " the application or the use of special and differential
treatment provisions in favour of developing country provisions.
22  In the CTD WTO Members are
also entitled to " consider any questions " relating to the application or the use of special and
differential treatment provisions in favour of developing countries.
                                                     
20 Published in 1996, the Handbook was based on a Note by the Secretariat entitled Notifications
required from WTO Members under Agreements in Annex 1A of the WTO Agreement  (G/NOP/W/2/Rev.1),
prepared to assist the work of the WGN.
21 See WT/COMTD/16.
22 Paras 3 and 4 of the CTD TORs at WT/L/46.WT/COMTD/W/114
Page 8
34. At the same time, the mandate of the CRTA does not refer to consultations per se  but
provides for the " examination " by the CRTA (i.e. by WTO Members) of all RTAs among WTO
Members transmitted to it by the relevant body, including those notified under the Enabling Clause.
35. As discussed below, both the CTD and the CRTA have somewhat similar powers with respect
to RTAs notified under the Enabling Clause.  Both bodies appear to have the power to undertakereviews/questions/examinations of such RTAs, and thus to hold consultations on the application of
those RTAs.  Both bodies would thus have the competence to hold the "consultations" referred to in
the Enabling Clause.  The power to "review" RTAs or to "consider" any questions on the application
of RTAs, provided for in the TORs of the CTD, could be considered similar to the power "to
examine" RTAs, provided for in the CRTA TORs.
23
(i) The CTD mandate
36. Two provisions of the CTD mandate would seem to allow that body to hold consultations and
review of an RTA among developing count ries notified under the Enabling Clause.
37. The CTD's TORs include a "periodic review" clause (paragraph 3) which could be used to
carry out the consultation requirement of the Enabling Clause.  Paragraph 3 specifies that this
"periodic review" be performed in consultation with the other relevant bodies:
"To review periodically , in consultation as appropriate with the relevant bodies of
the WTO,  the application of special provisions in the Multilateral Trade Agreements
and related Ministerial Decisions in favour of developing country Members, and in
particular least-developed country Members, and report to the General Council for
appropriate action." (emphasis added)
38. The reference to a "periodic" review could be read to mean "as and when the need arises".24
To the extent that the CRTA is recognized as the specialized WTO body responsible to "consider the
systemic implications of RTAs" (Paragraph 1(d) of  the CRTA's TORs), it would appear to be the
"appropriate body" of the WTO on reviews of RTAs.25  If the CTD were to review RTA matters, it
should do so in consultation with the CRTA.  If the consultations concerning an RTA among
developing countries are to be performed pursuant to its "periodic review" power, the CTD could doso in consultation with the CRTA.
39. It could also be argued that paragraph 4 of the CTD's TORs authorises consultations and
review of any RTA among developing c ountries to be held in the CTD alone.
"To consider any questions  which may arise with regard to either the application or
the use of special provisions  in the Multilateral Trade Agreements and related
Ministerial Decisions in favour of developing country Members and report to the
General Council for appropriate action." (emphasis added)
40. Thus, the wording of paragraph 4 allows the CTD to consider any question that any Member
may have on a specific RTA notified under the Enabling Clause.  It can therefore be argued that
                                                     
23 This seems to be confirmed by the fact that, for instance, the GATT 1994 Understanding on the
Interpretation of Article XXIV (which is part of GATT 1994 and thus of the WTO Agreement) is entitled
"Review  of Customs Union and Free-trade areas" while the terms of reference of the CRTA (implementing part
of the said GATT Understanding on Article XXIV) refers to procedures for the " examination of RTAs".  Both
terms review/examination would thus appear to have the same meaning.
24 The word "periodic" may however also be understood to refer to discussions/reviews of an
exclusively systemic nature.
25 Although at the time of the adoption of the CTD TORs, the CRTA had not yet been created.WT/COMTD/W/114
Page 9
Members could use the CTD to ask questions of and consult with developing country Members
forming a given RTA on any difficulty they may have , whether procedural or substantive, with the
application of the RTA.
41. Therefore, it can be argued that when a Member asks questions or requests consultations in
the CTD on any RTA among developing countries notified under the Enabling Clause, the notifyingMembers must proceed to consultations on the application of that RTA.  Such consultations could
include the consideration of questions relating to the information provided, or requested, on such
RTA, as well as any other matter related thereto.
(ii) The CRTA mandate
42. The TORs of the CRTA, which also give it broad mandate to examine RTAs in general,
(including any systemic issues relating to them), are set out below:
Having regard  to agreements which are required to be notified, as the case may be,
under Article XXIV of the General Agreement on Tariffs and Trade (GATT) 1994,
Article V of the General Agreement on Trade in Services or the 1979 Decision on
Differential and More Favourable Treatment, Reciprocity and Fuller Participation
of Developing Countries ; (…)
The General Council hereby decides :
To establish a Committee on Regional Trade Agreements, open to all Members of the
WTO, with the following terms of reference:
(a) to carry out the examination of agreements  in accordance with the procedures
and terms of reference adopted by the Council for Trade in Goods, the Council for
Trade in Services or the Committee on Trade and Development , as the case may be,
and thereafter present its report to the relevant body for appropriate action;
(b) to develop, as appropriate, procedures to facilitate and improve the examination
process;  (…)
(d) to consider the systemic implications of such agreements and regional initiatives
for the multilateral trading system and the relationship between them, and makeappropriate recommendations to the General Council;  (…)". (emphasis added,
footnotes omitted)
43. Thus, the CRTA can be reckoned as a specialized body to which WTO Members have
delegated their power to examine, question, consult on and review RTAs pursuant to GATT
Article XXIV, GATS Article V and the Enabling Clause.
44. At the same time, while consultations regardin g the review and/or the examination of RTAs
among developing countries can be held in the CRTA, it would seem that the CRTA should do so in
accordance with the procedures and the TORs adopted by the CTD for that purpose.  Such specific
TORs could impose, for example, conditions, restrictions and time prescriptions for such an
examination by the CRTA.  The CTD TORs could, for example, also clearly specify that theexamination by the CRTA is to be pursued with reference to the Enabling Clause only.WT/COMTD/W/114
Page 10
(b) The practice
45. We recall the practice of the Contracting Parties under GATT 1947 (within the CTD) with
regard to RTAs under the Enabling Clause:
"a representative of the Secretariat said that the Committee has not established detailed
procedures for the examination of arrangements which were notified under theEnabling Clause.  The Committee was given from the C
ONTRACTING PARTIES  in 1980
the responsibility for supervising the opera tion of the Enabling Clause.  Under this
mandate the Committee had so far received a limited number of notifications on
arrangements concluded in accordance with paragraph 2(c) of the Enabling Clause.
The practice of the Committee so far had been to take note of these arrangements after
having duly examined them and completed such examination.  On that basis the
Committee reported statements made in regard to such arrangements and any actiontaken in relation to them in its annual reports to the C
ONTRACTING PARTIES ".26
46. On 2 November 1998, the WTO CTD adopted the recommendations by the CRTA to the
CTD regarding the reporting on RTAs.27  The practice of reviewing the implementation of Part IV and
the Enabling Clause at specific meetings of the CTD was then discontinued.  Notifications regarding
RTAs justifiable under the Enabling Clause have since been put on the agenda of the meeting of theCTD following the date of the notification.  Parties to such RTAs have made short and oral
presentations of their RTAs, and other Members have, on occasions, asked questions.  The parties
have either responded immediately or at the foll owing meeting of the Committee.  The CTD has then
proceeded to take note of the notification and the statements made by Members.
47. The practice of the CRTA in dealing with RTAs notified under the Enabling Clause has been
limited to the case of the Common Market of the South (MERCOSUR), which originated before the
establishment of the WTO.  The MERCOSUR was notified in 1992 to the GATT 1947
CONTRACTING PARTIES under the Enabling Clause, and remains under that legal cover in the
WTO.  However, following informal consultations, GATT CONTRACTING PARTIES reached a
compromise according to which MERCOSUR would be  subject to an in-depth examination with sui
generis  TORs, as follows:  "To examine the Southern Common Market Agreement (MERCOSUR) in
the light of the relevant provisions of the Enabling Clause and of the GATT 1994, including
Article XXIV, and to transmit a report and recommendations to the Committee on Trade and
Development for submission to the General Council, with a copy of the report transmitted as well to
the Council for Trade in Goods.  The examination in the Working Party will be based on a complete
                                                     
26L/6605, adopted 4 December 1989, 36S/49, 57, para . 25.  It is worth recalling that at the 37th Session
of the Committee, held on 20 April 1979, delegations discussed the role of the CTD vis-à-vis the Enabling
Clause.  The Secretariat had prepared on note of the Future Work of the Committee for its 38th Session on
20 September 1979.  This note contains a section on the Enabling Clause which states that:  "It will be necessaryfor the CONTRACTING PARTIES to take action both with respect to the legal form of the Enabling Clause andwith respect to the procedures contained therein for ensu ring its effective implementation.  In this connexion, it
has been suggested that the Committee on Trade and Development would be the appropriate body for
undertaking the review and consultation functions foreseen in certain parts of the text and that it examine
appropriate arrangements for notification, consultation and review, including the establishment of subsidiarybodies as necessary." COM.TD/W/295, para. 4.
27 See Document WT/COMTD/16.WT/COMTD/W/114
Page 11
notification and on written questions and answers."28  Three rounds of examination of MERCOSUR
have taken place in the CRTA up to now29.
(c) Conclusion
48. If requested, WTO Members, parties to an RTA among developing countries to which the
Enabling Clause might apply, are required to consult with other interested Members on the applicationof the RTA in question.
49. These consultations could cover any matter relating to the application of the RTA and could
also include discussions on the statistical data to be provided by the parties to the RTA pursuant to the
CTD Decision adopting the CRTA Guidelines.
50. The CTD could hold such consultations either under its "periodic review" power or its power
to "consider any question relating to the application of special provisions for developing countries" ,
including the application of paragraph 2(c) of the Enabling Clause allowing, under certain conditions,
the formation of RTAs among developing countries.  If the CTD carries out such consultations within
the framework of its " periodic review " power, it would seem appropriate for the CTD to conduct such
a review in collaboration with the CRTA.  If the CTD holds these consultations under its power to
consider any questions  relating to RTAs to which the Enabling Clause might apply, it could do
without consulting other WTO bodies.  We note that the CTD currently does not have any procedurewith respect to how consultations on RTAs among developing countries are to be conducted.
51. At the same time, the mandate of the CRTA suggests that RTAs under the Enabling Clause
notified and considered by the CTD should subsequently be examined by the CRTA, if the CTD's
consultations/review/examination have not already been done.  The CRTA would then have to carry
out the examination according to substantive and/or procedural TORs established by the CTD.  TheCRTA should report on its examination to the CTD, as the relevant body generally responsible for the
supervision of the Enabling Clause.
D. S
UBSTANTIVE REQUIREMENTS
52. Paragraphs 2(c) and 3(a) of the Enabling Clause set forth the substantive requirements that
must be met by RTAs among developing countries in order to be WTO consistent.  Paragraph 2(c)
reads as follows:
"Regional or global arrangements entered into amongst less-developed contracting
parties for the mutual reduction  or elimination  of tariffs and, in accordance with
criteria or conditions which may be prescribed by the CONTRACTING PARTIES,
for the mutual reduction or elimination of non-tariff measures , on products
imported from one another".  (emphasis added)
Paragraph 3(a) adds that such RTAs
"shall be designed to facilitate and promote the trade of developing countries and not
to raise barriers to or create undue difficulties for the trade of any other contracting
parties". (emphasis added)
                                                     
28 The original TORs referred to the relevant GATT 1947 bodies, and the examination was originally to
be carried out in the context of a Working Party (WP).  The WP met only once, in September 1995;  the nextround of examination of  MERCOSUR, held in September 1996, was already carried out in the CRTA context.
29 See documents WT/COMTD/1/Add.9, Add.10 and Add.12.WT/COMTD/W/114
Page 12
53. Pursuant to these requirements, a few legal comments can be offered on RTAs under the
Enabling Clause.  It would seem that :
(a) Such RTAs could provide merely for the "reduction" of tariffs between the parties
and need not to lead to the "elimination" of trade restrictions, as is otherwise called
for by Article XXIV:8 of GATT 1994.
(b) WTO Members have not to date adopted or prescribed any criteria or conditions for
the reduction or elimination of non-tariff measures, foreseen in the Enabling Clause.
It is thus an open question whether such RTAs may introduce discrimination on non-
tariff measures (possibly contrary to the situation under Article XXIV, which,
according to the Appellate Body in  Turkey – Textiles30 may authorize, at least
conceptually, inconsistency with Article XI of GATT 1994).
(c) The Enabling Clause does not contain a specific requirement regarding the trade
coverage of RTAs among developing countries, contrary to Article XXIV:8 of
GATT 1994,  which requires that RTAs cover "substantially all the trade".
(d) The use of the word "shall" in paragraph 3(a) of the Enabling Clause - " Shall  be
designed to facilitate and promote the trade of developing countries and not to raise
barriers to or create undue difficulties for the trade of any other Members" - seems tomake it more stringent than paragraph 4 of Article XXIV of GATT 1994, which
provides that Members "recognize that th e purpose of a customs union or of a free-
trade area should  be to facilitate trade between the constituent territories and not to
raise barriers to the trade of other contracting parties with such territories."  (emphasis
added)
E. C
ONCLUSION
54. It is clear that any RTA among developing c ountry Members to which the provisions of the
Enabling Clause might apply must be notified to all other WTO Members.  The WTO practice to date
has been for such notifications to be made to and considered by the CTD.
55. Such RTAs must be notified no later than the date of their entry into force (and more
precisely in all cases when developing country Members "take action to introduce" such an RTA). 
56. The Enabling Clause sets forth both procedural and substantive requirements for such RTAs.
These requirements must be fulfilled in order to ensure that the developing country Members parties
to that RTA are in compliance with their WTO obligations, regardless of whether consultations or
review or examination of a particular RTA are carried out in the CTD or the CRTA.
57. It would appear that the CTD is able to hold such consultations either under "its periodic
review" power or its power to "consider any questions relating to the application of special provisions
for developing countries".  If the CTD carries out such consultations within the framework of its
periodic review power, it would seem appropriate for the CTD to conduct such a review in
collaboration with the CRTA.  If the CTD holds these consultations under its power to consider any
questions relating to RTAs to which the Enabling Clause might apply, it could do so without
consulting other WTO bodies.  Such consultations could take place on any matter relating to the
application of the RTA in question, including on all information supplied to facilitate the
                                                     
30 Appellate Body Report Turkey – Textiles  (WT/DS34/AB/R) at paras. 64-65.WT/COMTD/W/114
Page 13
consultations.  However, no procedure currently exists in the CTD with respect to how consultations
on RTAs to which the Enabling Clause might apply, are to be conducted.
58. If consultations of an RTA am ong developing countries to which the Enabling Clause might
apply are to be conducted by the CRTA,  they should be carried out according to the procedures and
TORs provided to the CRTA by the CTD.  More over, the CRTA should report to the CTD on the
results of any work it carries out on a particular RTA notified under the Enabling Clause or to which
the Enabling Clause might apply.
59. In practice, an increasing number of RTAs, including those among developing countries,
contain preferential trade concessions in the area of services.  Since the Enabling Clause only covers
trade in goods, it would seem that the services aspects of an RTA among developing country
Members should be notified to the Council on Trade in Services, pursuant to Article V of the GATS.
The services aspects of the RTAs notified to the GATS Council would be referred to the CRTA for
examination.  Such examination may include, pursuan t to Article V:2 of GATS, consideration of the
relationship between the RTA and "a wider process of economic integration", which in turn may
include consideration of the status of the integrat ion process of trade in goods, as well as other
institutional questions also relevant to the trade in goods aspects of an RTA among WTO developing
countries Members.
60. This could suggest that it might be institutionally more efficient and legally more coherent for
the CRTA to conduct the primary examination of all RTAs, without impairing Members' rights and
obligations. 
61. It is clear that any review of an RTA, wherev er it occurs, must be performed according to the
relevant applicable WTO law - Enabling Clause , GATT 1994 Article XXIV, or GATS Article V - that
has been invoked to justify the WTO consistency of the RTA in question.  Moreover, any review of
an RTA notified under the Enabling Clause must be carried out in accordance with TORs and the
procedures provided by the CTD.
62. As the CTD has overall responsibility for the operation of the Enabling Clause, the results of
any examination of an RTA under the Enabling Clause that occurs in the CRTA would have to bereported to the CTD for appropriate action.  The CTD has ultimate responsibility for reporting the
results of any review, wherever it occurs, to the General Council, as and when necessary.
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