Abstract:

Regional arrangements or so-called free trade areas and customs unions have proliferated among states. Today, most of the Contracting Parties to the GATT are simultaneously members of a customs union or of a free-trade area. One may argue why such regional groupings are allowed to be established under the GATT system, notwithstanding the cornerstone of the GAIT's commitment to non-discrimination toward third countries and the most favoured nation principle as laid down in Article I. As is clear form its wording, Article l(l) GATT requires that" ... any advantage, favor, privilege and immunity granted by any contracting party to any product ... shall be accorded immediately and unconditionally to the like product of all contracting parties". However, Article XXIV, as far as free trade areas and customs unions are concerned, allows an exception to the very basic principle of the General Agreement.

Keywords: