G e n e r a L a g r e e m e n t o n

Changing a binding

Article XXVIII

 of the GATT governs the negotiations that are required when a member wishes to

withdraw or modify a past concession. Under the rules, the right to compensation for loss of the benefits of

a tariff binding for a particular product is largely reserved to countries that have a recognized status as the

initial negotiators

 or 

principal suppliers

.

The initial negotiator is the government which obtained the tariff binding as a result of bilateral

negotiations. Principal suppliers are countries which in recent years have become larger exporters of that

product, to the market concerned, than the initial negotiator.

Lesser rights are given to suppliers with a 

substantial interest

 in the market. The Uruguay Round

understanding on Article XXVIII

17

 has modified these rules to recognize that, for some supplying

countries, a small share in the market for the product concerned may in fact be of great economic

importance. The change should benefit the smaller WTO members, and particularly developing countries.

The new rule establishes that the WTO member whose exports are proportionately most vulnerable to a

change in a tariff binding will be recognized as having an 

additional principal supplying interest

, and

therefore the right to negotiate for compensation, if it does not already have the benefit of being the initial

negotiator or principal supplier. This status will be established on the basis of evidence that the supplying

member concerned has the highest ratio of exports affected by the concession (that is, exports of the

product to the market of the member modifying or withdrawing the binding) to its total exports.

Experience of the new rule will be reviewed after five years, and if it has not worked satisfactorily in giving

greater negotiating rights to smaller suppliers, improvements may be made (

Understanding para. 1

).

                                                

16

GATT 1994: Understanding in Respect of Waivers of Obligations under the General Agreement on Tariffs and

Trade 1994

.

17

GATT 1994: Understanding on the Interpretation of Article XXVIII of the General Agreement on Tariffs and

Trade 1994.

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INTRODUCTION TO GATT 1994 & 1947    11

The understanding also clarifies several technical points on Article XXVIII negotiations, such as how to

establish negotiating rights when new products are affected by withdrawals of tariff bindings, or when an

unlimited concession is replaced by a tariff quota.

The Marrakesh Protocol

The Marrakesh Protocol is the legal instrument by which each WTO member’s commitments in the

Uruguay Round to eliminate or reduce tariff rates and non-tariff measures applicable to trade in goods

became an integral part of the GATT 1994.

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All of the thousands of pages of national schedules, representing the detailed results of the market access

negotiations, including specific commitments under the agricultural agreements, were attached to the

Protocol. Under the terms of the Protocol’s first paragraph, each individual schedule then became a

schedule to GATT 1994 on the date that the country concerned became a WTO member.

The schedules are divided into four parts:

Part I

Section I-A

Agricultural products: Tariff concessions on an MFN basis

Section I-B

Agricultural products: Tariff quotas

Section II

Tariff concessions on an MFN basis on other products

Part II

Preferential tariff — (if applicable)

Part III

Concessions on non-tariff measures (generally on non-agricultural products)

Part IV

Agricultural products: Commitments limiting subsidization