GATT Article XV:4 states in part:
[WTO Members] shall not, by exchange action, frustrate* the intent of the provisions of this Agreement ...
Thus, Article XV:4 refers to the "intent of the provisions of this Agreement." One provision of "this Agrement" (that is, the GATT) is Article II, which is titled "Schedules of Concessions" and requires Members to abide by their scheduled tariff concessions. Here's a question I have: What is the intent of Article II and how does that impact on the Article XV:4 obligation?
A narrow view of the purpose of Article II might be that it obligates Members not to impose duties/charges in excess of the scheduled duties/charges (i.e., the amounts they have promised). That is, its purpose is simply to enforce the concessions.
But it may also be possible to justify a broader characterization and suggest that the underlying purpose of enforcing the concessions is to provide greater "market access" for imports. That is, the true goals of scheduling the concessions are to (1) reduce duties/charges and (2) provide certainty by establishing an upper limit on them. This helps open the domestic market to imports.
So breaking down my original question, the first part is, which of these two purposes (keeping tariffs at or below the bound rates vs. greater market access) is a better description of the objectives of Article II? Then, if the purpose is market access, the second part is, can an exchange rate peg which keeps a currency undervalued be said to frustrate the intent of Article II by keeping prices of imports artificially high, and thus undermining the market access achieved by the tariff concessions?
Any thoughts?
