Legal Problems of Making Regional Trade Agreements with Non-WTO-Member States

In pursuing regional economic integration with non-WTO-membereconomies, a WTO member must be aware that WTO compliance isunder question. An exchange of preferential treatment betweenthe WTO-member party and non-WTO-member parties gives rise toa violation by the WTO member of the MFN treatment obligationof the WTO Agreement. In the case of integration in the servicesector, consistency with WTO jurisprudence is guaranteed, whereasin integrating the goods sector, WTO consistency can only beguaranteed when the non-WTO-member parties are least-developedcountries. Furthermore in the TRIPs sector, the WTO complianceis not questionable only when the RTA reconfirms original rightsand duties arising under the TRIPs Agreement. Thus, in orderto be consistent with WTO jurisprudence, regional integrationagreements in the area of trade in goods need to be approvedby a two-thirds majority of the WTO members, before they comeinto force. Or, the WTO member could encourage the non-WTO-memberstate to join the WTO before their RTA comes into force. Onthe other hand, in the case of economic integration in the servicesector, as non-WTO-member status of any counterpart economiesdoes not act as a legal impediment, the WTO members may pursuemore active negotiations, while remaining consistent with WTOjurisprudence. In drafting and negotiating on IPR chapters underRTAs, WTO members must be vigilant not to mutually exchangea higher level of IPR protection than that stipulated underthe TRIPs Agreement.