This is from the White House fact sheet on the KORUS FTA:
Automotive Safety Standards: Safety standards have effectively operated as a non-tariff barrier to U.S. auto exports. The 2010 supplemental agreement announced today allows for 25,000 cars per U.S. automaker – or almost four times the number allowed in the 2007 agreement -- to be imported into Korea provided they meet U.S. federal safety standards, which are among the most stringent in the world.
As I understand it, this means that each U.S. automaker is allowed to export 25,000 cars per year to Korea without having to meet Korean safety standards, as long as the cars in question meet U.S. safety standards.
So here's my question. Presumably the Korean auto safety standards are a "technical regulation" covered by the TBT Agreement. And if cars from other countries -- say, Japan -- do not have their own quota of this type, the Korean measure implementing this FTA provision would likely violate the MFN obligation of TBT Agreement Article 2.1. But there's nothing in the TBT Agreement about an exception for FTAs. So does GATT Article XXIV provide an exemption for the TBT Article 2.1 violation?
Here are some general thoughts on the relationship of GATT Article XXIV and non-GATT WTO agreements, from Nic Lockhart and Andrew Mitchell:
On its face, the exception in Article XXIV:5 of GATT 1994 applies solely to inconsistencies with the provisions of ‘this Agreement’, that is GATT 1994 itself. The exception might not, therefore, justify RTA measures that are inconsistent with other WTO agreements. Remarking on this issue in a footnote in Turkey – Textiles, the Appellate Body observed that ‘legal scholars’ have taken the view that Article XXIV:5 provides an exception for inconsistencies with GATT provisions. It went on to note that the chapeau ‘refers only to the provisions of the GATT 1994’. Nonetheless, the Appellate Body considered that Article XXIV:5 could provide an exception for an inconsistency with Article 2.4 of the ATC because Article 2.4 itself permits restrictions introduced under ‘relevant GATT 1994 provisions’. The Appellate Body considered that this explicit reference to GATT 1994 in Article 2.4 means that the exception in Article XXIV is‘incorporated in the ATC’.
So which WTO provisions, in which other WTO agreements, are covered by the exception in Article XXIV:5? The Appellate Body’s reasoning in Turkey – Textiles suggests that the exception does not extend automatically to all WTO provisions. In Turkey – Textiles, the extension was based on an express reference, in another covered agreement, to GATT 1994. In all likelihood, other extensions will also depend on the wording and context of the relevant provisions. This approach is supported by the general interpretative note to the WTO goods agreements, found in Annex 1A of the WTO Agreement. The note states that ‘in the event of a conflict’ between provisions of GATT 1994 and provisions of one of the other goodsagreements, the latter prevails. If the exception in Article XXIV:5 permits an RTA measure that is inconsistent with another goods agreement, a conflict exists between GATT 1994 and the other agreement. If a panel automatically applied the GATT 1994 exception to the other agreement, without examining the specific context, this would be contrary to Annex 1A of the WTO Agreement.
...Similar questions could arise in relation to the effect of Article XXIV:5 of GATT 1994 on the provisions of other WTO agreements. For instance, a number of RTAs have adopted harmonised rules that differ from the WTO disciplines in the SPS Agreement and the TBT Agreement. Based on the existing jurisprudence on Article XXIV:5, the extension of the exception to provisions of these or other WTO agreements will depend on whether there is a ‘close interrelation’ between the provisions and GATT 1994. While the approaches of the panel and Appellate Body in US – Line Pipe are firmly rooted in the language of Article XXIV:5, it may be questioned whether that provision, dating from GATT 1947, remains appropriate for a legal framework that now comprises 12 separate agreements dealing with goods, in addition to GATT 1994. Article XXIV expresses a policy decision by WTO Members to accept the inevitable positive discrimination that RTAs create in favour of the RTA parties. If Members accept this discrimination for all of the obligations in GATT 1994, as well as for certain obligations in other WTO goods agreements that have a ‘close interrelation’ with GATT 1994, what reason could there be not to extend the exceptions to all obligations in the WTO goods agreements?
ADDED: More here from Lorand Bartels:
C. Relationship between the TBT Agreement and GATT 1994
Even if Article XX or Article XXIV could justify the EC mutual recognition clause, at most they could excuse a violation of Article I:1 GATT. It is highly unlikely that these provisions would be able to justify violations of the TBT Agreement. This follows from the General Interpretive Note to Annex IA ofthe WTO Agreement, which states that the TBT Agreement prevails over GATT 1994 to the extent of any conflict.85 Prima facie, in a situation in which a measure is prohibited under the TBT Agreement but permitted under GATT 1994, the prohibition under the TBT Agreement will prevail.86 Thereis an exception, however, where another agreement incorporates by reference a right in GATT 1994. Thus, the Article XXIV defence has been applied to violations of obligations in other WTO agreements where there has been an express87 or implied88 reference to rights under the GATT. However, there are no such references in the TBT Agreement, and so it is difficult to escape the conclusion that a measure prohibited under the TBT Agreement cannot be saved under Article XXIV GATT.89 At most, Article XXIV has the potential, in this set of circumstances, to justify a violation of Article I:1 GATT.
The corollary of the priority granted to the TBT Agreement is that where a measure involving technical regulations, technical standards or conformity assessment procedures is permitted under the TBT Agreement but prohibited under the GATT 1994, the implied ‘right’ to take the measure under the TBT Agreement prevails. This is a difficult argument, because the right is atmost implied, based on the fact that the TBT Agreement purports to ‘cover the field’ with respect to the regulation of technical regulations, standards and conformity assessment procedures. Nonetheless, if this is correct, then it might be concluded that, even if it violates Article I:1 GATT, the discriminatory EC mutual recognition clause may be justified if the affected WTO Member has not made an application for recognition of the equivalence of itstechnical regulations (under Article 2.7) or its conformity assessment procedures (under Article 6.1), which – according to the above analysis – are requirements for any violation to be found under the TBT Agreement.
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85 This Note states that ‘[i]n the event of a conflict between the provisions of the General Agreementon Tariffs and Trade 1994 and a provision of another agreement in Annex 1A to the AgreementEstablishing the World Trade Organization [including the TBT agreement] . . . the provision of theother agreement shall prevail to the extent of the conflict.’
86 See Pauwelyn, above n 82, at 129–30. Trachtman, above n 61, at 472, takes the view that the GeneralInterpretative Note does not apply to this situation, on the grounds that there can be no ‘conflict’between a right (as in Article XXIV) and a prohibition (as in the TBT Agreement). For the reasonsgiven in J. Pauwelyn, Conflict of Norms in Public International Law: How WTO Law Relates to OtherRules of International Law (Cambridge: Cambridge University Press, 2003), 170–71, this is not persuasive.See also Appellate Body Report, EC – Tariff Preferences, above n 54, at paras 101–02, wherethe Appellate Body held that exceptions (containing rights) prevail over prohibitions to the extent ofany conflict.
87 WTO Appellate Body Report, Turkey – Textiles, above n 76, at para 45 n 13 (applying the ArticleXXIV defence to the Agreement on Textiles and Clothing, based on a statement in that agreementthat ‘[n]o new restrictions . . . shall be introduced except under the provisions of this Agreement orrelevant GATT 1994 provisions’); referred to in the context of the Safeguards Agreement in WTO Panel Report, United States – Definitive Safeguard Measures on Imports of Wheat Gluten from theEuropean Communities, WT/DS166/R, adopted as modified by the Appellate Body Report on 21January 2001, para 8.180.
88 WTO Panel Report, US – Line Pipe, above n 79, at para 7.150; see Pauwelyn, above n 82, at 128.
89 Trachtman, above n 61, at 473, comes to the opposite conclusion, on the basis of an ‘effective’ interpretation.
The cite is Journal of International Economic Law 8(3), 691–720
Also, additional thoughts here from Joel: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=317858 See pages 12-15.
