Article V of General Agreement on Tariffs and Trade 1994: From the Perspective of Ensuring Freedom of Transit to Landlocked Countries

Business Law Journal, Vol. 15, 2010

17 Pages Posted: 10 Jun 2010

Date Written: May 5, 2010

Abstract

Landlocked countries depend on the transit countries to provide access to sea ports and international markets. There are a number of international conventions that give surety of freedom of transit to the landlocked countries and on WTO regime, Article V of GATT 1994 provides for the national transit scheme for all members without explicitly mentioning landlocked countries. However there are some differences in their definition of transit.

Article V of GATT specifies the conditions a Member may impose on goods transported through its territory by another Member to a foreign destination, with the objective to allow for freedom of transit through the territory of each Member for transports to or from the territory of other Members. Thus it mandates not to impose unnecessary delays or restrictions or impose unreasonable charges to the traffic in transit and to accord Most-Favored- Nation (MFN) treatment to transiting goods of all Members. It was only on 27 April 2009 that a Panel established by the WTO's Dispute Settlement Body issued its Report on the case Colombia - Indicative Prices and Restrictions on Ports of Entry, where Article V:2 and V:6 were interpreted for the first time.

Nepal initiated to become the member of the then GATT following the Indo-Nepal trade dispute of 1989, which could have been a subject of dispute under Article V of GATT 1994. India is the sole feasible transit provider for Nepal at present. Being a WTO member both countries are obliged to respect provisions laid in Article V of GATT.

Keywords: Article V of GATT 1994, Freedom of Transit, Landlocked Countries, Colombia-Ports of Entry

JEL Classification: K19, K33

Suggested Citation

Thapa, Rojina, Article V of General Agreement on Tariffs and Trade 1994: From the Perspective of Ensuring Freedom of Transit to Landlocked Countries (May 5, 2010). Business Law Journal, Vol. 15, 2010, Available at SSRN: https://ssrn.com/abstract=1622679

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