RESTRICTED  
  
G/C/W/775  
 
4 March 2020  
(20-1746) Page: 1/2 
Council for Trade in Goods  Original: English  
 
PROPOSAL FOR AN AUTH ORITATIVE INTERPRETA TION OF THE ENABLING  CLAUSE TO 
PROVIDE GREATER LEGA L CERTAINTY TO NON -RECIPROCAL PREFERENCE S 
GRANTED BY DEVELOPIN G COUNTRY WTO  MEMBERS  
TO LEAST DEVELOPED C OUNTRIES  
COMMUNICATION FROM T HE REPUBLIC OF KOREA  
The following communication, dated 2  March  2020, is being circulated at the request of the 
Delegation of the Republic of Korea . 
 
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1  BACKGROUND  
1.1.  The Republic of Korea is submitting this proposal with a view to providing greater legal cer tainty 
with respect to the legal basis for developing WTO  Members to grant non -reciprocal tariff preferences 
to Least  Developed Countries ( "LDCs") by clarifying the rights and obligations granted under the 
Decision of 28  November  1979 (L/4903)  (the "Enabli ng Clause "). Without the need to amend or 
create any regulations, it is possible to perpetuate the special treatment of developing countries 
towards LDCs via an authoritative interpretation of the Enabling Clause. Given the implementation 
of such a measure , it will no longer be necessary to renew the waiver for this purpose every 10  years. 
In submitting this proposal, Korea recognizes the vulnerability and particular structural difficulties 
of LDCs in the world economy, as well as the fact that non -reciproc al preferences for LDCs contribute 
to improving their participation in global trade.  
1.2.  In 1979, the GATT  Contracting Parties adopted the Enabling Clause to allow derogations to the 
most-favoured -nation treatment obligations in favour of developing countries.  The Comprehensive 
and Integrated WTO  Plan of Action for the Least  Developed Countries, adopted at the Singapore 
Ministerial Conference on 13  December  1996, and the Ministerial Declaration of 20  May 1998 further 
recognized the need for the integration of LDCs into the world trading system , alongside predictable 
and favourable market access conditions for products of LDCs. Accordingly, the General Council 
adopted a waiver in 1999, pursuant to Article  IX:3 of the Marrakesh Agreement Establishing the 
World Trade Organization ( "WTO Agreement "), "to provide an additional means for developing 
country Members to offer preferential tariff treatment to products of least -developed countries 
notwithstanding the o bligations of paragraph  1 of Article  I of the General Agreement ".1 Together,  
the Enabling Clause and the waivers permitted developed and developing Members to grant 
preferential treatment to LDCs notwithstanding their obligations under Article  I of the Gen eral 
Agreement.  
1.3.  The 1999  waiver was granted for a period of 10 years and has since been extended twice, in 
2009 and in 2019. In short, the Enabling Clause has established the legal basis for the preferential 
tariff treatment granted by developed countries,  while the renewal of the waiver every 10  years 
provides the legal basis for developing countries to offer preferential tariff treatment to LDCs.  
 
1 Preferential Tariff Treatment for Least -Developed Countries, Decision on Waiver adopted by the  
General Council on 15  June 1999 (WT/L/304). The fifth  recital of the Decision reads: "Desiring to provide an 
additional means for developing country Members to offer preferential tariff treatment to products of least-
developed countries notwithstanding the obligations of paragraph  1 of Article  I of the General Agreement ". G/C/W/775  
 
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  2  PROPOSAL FOR AN AUTH ORITATIVE INTERPRETA TION OF THE ENABLING  CLAUSE  
2.1.  The Republic of Korea would like to call i nto question whether this dual approach is really 
necessary. In Korea' s view, the Enabling Clause provides a sufficient legal basis for both developed 
and developing WTO  Members to provide non -reciprocal preferential tariff treatment to LDCs. In this 
regar d, paragraph  1 of the Enabling Clause provides that all WTO  Members, both developed and 
developing, may grant more favourable  treatment to developing countries. Moreover, the granting 
of further special treatment to LDCs is provided under paragraph  2(d) of  the Enabling Clause.  
2.2.  To ensure greater legal certainty with respect to this interpretation of the Enabling Clause, 
Korea proposes the adoption of an authoritative interpretation of paragraphs  1 and 2(d) of the 
Enabling Clause in accordance with Article  IX:2 of the WTO  Agreement.  
2.3.  Article  IX:2 of the WTO  Agreement provides a useful tool for Members to resolve issues of 
ambiguity and a lack of specificity in treaty terms. In this vein, the adoption of an "authoritative 
interpretation" in accordance with Artic le IX:2 would be effective in avoiding unnecessary disputes 
as well as ensuring all WTO  Agreements are aligned with the changing reality.  
 
(Paragraphs  1 and 2 of the Enabling Clause)  
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 to the following:  
(a) Preferential tariff tr eatment accorded by developed contracting parties to  
  products originating in developing countries in accordance with the  
  Generalized System of Preferences ; 
(b) … 
(c) … 
(d) Special treatment on the least developed among the developing countries in  
  the context of any general or specific measures in favour of developing  
  countries.  
 
2.4.  As is evident in the above, provision  1 clearly stipulates that all contracting parties, ra ther than 
just developed parties, may accord differential and more favourable  treatment to developing 
countries. Should the definition of developing countries be interpreted to incorporate least developed 
countries as well, it will no longer be necessary f or the WTO to extend the waiver every 10  years. 
For further clarification, provision  2(d) should be understood as applicable to WTO  contracting 
parties, including developing countries.  
2.5.  The Republic of Korea believes that, by providing greater legal certain ty, the proposed 
authoritative interpretation will encourage developing WTO  Members to expand non -reciprocal tariff 
preferences granted to LDCs, which in turn will spur greater use of these preferences. Korea looks 
forward to further discussing this propos al with other Members.  
2.6.  The Republic of Korea reserves the right to circulate a draft decision on the authoritative 
interpretation following the proposed discussions.  
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