Just Between You and Me: Mutual Recognition Agreements and the Most-Favoured Nation Principle

Abstract

AbstractMutual recognition agreements present unique legal issues in the application of the most-favoured nation obligations flowing from Article I:1 of GATT 1994 and Articles 2.1 and 5.1.1 of the TBT Agreement. Mutual recognition agreements come in two types – those recognizing the equivalence of technical regulations, and those recognizing the equivalence of conformity assessment procedures. Both carry potential trade advantages for state parties, but both also carry the potential to create unintended trade consequences for state parties if combined with a broad application of the most-favoured nation principle. The WTO Appellate Body has touched on a number of the relevant legal issues in a series of reports culminating in the May 2014 EC–Seals decision, but many questions remain. This article seeks to provide states and practitioners with a guide to the issues and the way in which the Appellate Body would most likely address the remaining questions, based on the existing jurisprudence.