WORLD TRADE  
ORGANIZATION  WT/COMTD/66* 
18 July 2008 
 (08-3482) 
Committee on Trade and Development Original:   English 
  
 
 
GULF COOPERATION COUNCIL CUSTOMS UNION -  
SAUDI ARABIA'S NOTIFICATION (WT/COMTD/N/25) 
 
Communication from Saudi Arabia
 
 
  The following communication, dated 16 July 2008, is being circulated at the request of the Delegation of Saudi Arabia.  
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REPLIES BY SAUDI ARABIA TO QUESTIONS RAISED BY A NUMBER OF MEMBERS 
  
 On behalf of the Gulf Cooperation Council (GCC) countries (United Arab Emirates, Bahrain, 
Saudi Arabia, Oman, Qatar and Kuwait), Saudi Ar abia would like to thank Members for their 
questions regarding the GCC Customs Union and th e Enabling Clause.  Saudi Arabia is pleased to 
respond to each of the three points
 that were raised. 
 
1. Reason for the change in notification  
 The European Communities ("EC") asked to el aborate on the reason for the change in the 
GCC notification from GATT Article XXIV to the Enabling Clause.    The Economic Agreement between the GCC Stat es ("the GCC Agreement") could have been 
notified to the WTO under either
 Article XXIV or the Enabling Clause, as it qualifies under both  
provisions.     As Members are aware, the GCC Agreement est ablishes a customs union that eliminates "all 
tariff and non-tariff barriers, while taking into cons ideration laws of agricultural and veterinarian 
quarantine, as well as rules regarding prohibited an d restricted goods."  In other words, the GCC 
Agreement covers "substantially all trade" within  the meaning of GATT Article XXIV:8(a)(i).  The 
Agreement is thus fully cons istent with Article XXIV. 
  At the same time, all of the Parties to th e GCC Agreement are developing countries.  This 
means that the GCC Agreement is a regional agre ement among developing countries for the "mutual 
reduction or elimination of tariffs" within the mean ing of paragraph 2(c) of the Enabling Clause.  The 
GCC Agreement thus is fully cons istent with the Enabling Clause. 
  Although the GCC Agreement was initially no tified under GATT Article XXIV, upon further 
reflection the GCC decided that it would be more appropriate to notify it under the Enabling Clause, a 
                                                     
 
* This document relates to document WT/COMTD/N/25. WT/COMTD/66 
Page 2  
 
  provision that is designed to facilitate trade among developing countries.  In other words, while the 
Agreement qualifies under both the general provision of Article XXIV and the specific provision of the 
Enabling Clause, the GCC members determined that it would be logical to change the notification to the 
more specific provision.    
 As the Appellate Body stated in EC – Tariff Preferences , the Enabling Clause has become "an 
integral part of the GATT 1994".  The Appellate Bo dy also noted that "[t]he relationship between 
trade and development, and in particular the role  of the Enabling Clause, remain prominent on the 
agenda of the WTO…."  The Enabling Clause, by  its own terms, seeks to promote the "fuller 
participation" of developing countries in the world trading system.  It is therefore appropriate for a 
customs union among developing countries to be based on this provision. 
 
2. Basis for the GCC under paragraph 2(c) of the Enabling Clause 
 
 The EC asked to "explain under what basis th ey (meaning GCC) consider that the Customs 
Union falls within Paragraph 2(c) of the Enabling Clause". 
  Paragraph 2(c) of the Enabling Clause provid es for the establishment of regional or global 
agreements among developing countries (i) for "the mutual reduction or elimination of tariffs";  and 
(ii) "in accordance with criteria or conditions  which may be prescribed by the CONTRACTING 
PARTIES, for the mutual reduction or e limination of non-ta riff measures…." 
  The first criterion has clearly been met.  As noted above, the GCC Agreement provides for the elimination of all
 tariffs, taking into consideration agricultural and veterinarian laws, as well as rules 
regarding prohibited and restricted goods.  Thus, the GCC Agreement clearly provides for the "mutual 
reduction or elimination of tariffs".     The second criterion is inapplicable, as the WTO Members did not prescribe any "criteria or conditions… for the mutual reduction or eliminati on of non-tariff measures".  However, we would 
note that the GCC Agreement does, in fact, prov ide for the elimination of non-tariff barriers 
("NTBs").   Thus, the conditions set forth in paragraph 2(c) of the Enabling Clause have been fully met.  3. Temporal issues 
 
 Australia raised the point that the "right [to notif y] exists at the time of the first notification", 
and that "[o]nce that has been notified the first ti me, a subsequent change - and that is what we 
(meaning Australia) are interested in systemically here". 
 
 Saudi Arabia would simply note that nothin g in GATT Article XXIV, the Understanding on 
Article XXIV, or the Enabling Clause prohibits a cha nge in notification.  Mo reover, paragraph 14 of 
the Transparency Mechanism for Regional Trade Agreements  provides in part that: 
 
The required notification of changes affecting th e implementation of an RTA, or the operation 
of an already implemented RTA, shall take pl ace as soon as possible after the changes occur.  
Changes to be notified include, inter alia , modifications to the preferential treatment between 
the parties and to the RTA's disciplines. 
  This is very general language , and the list of changes to be notified is illustrative, not 
exhaustive.  In our view, the GCC decision to ch ange the basis for the notification is a "change 
affecting the implementation of an RTA" within the meaning of this provision.  Moreover, the review  WT/COMTD/66 
 Page 3 
 
 
  of the GCC had not yet commenced under GATT Article  XXIV, and thus the ch ange of venue of the 
review to the CTD should be of little consequence to any other Member. 
 This concludes Saudi Arabia's reflections in addressing the three points raised by Members on 
the change in the notification status of th e GCC Customs Union to the Enabling Clause. 
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