The EU has introduced a Carbon Border Adjustment Mechanism (CBAM), which extends its carbon prices to imported products in some sectors. Increasingly considered by other countries, such border carbon adjustments (BCAs) are facing a global backlash against the lack of consideration of the adverse impacts on developing countries and particularly, least developed countries (LDCs). This article first argues that small overall import volumes support the conclusion that exempting or lessening BCA requirements from LDCs would not undermine developed countries' climate-related objectives in practical terms. An economic analysis of EU and UK trade in relation to a CBAM supports this assertion. However, legally, such an exemption or development-based preferential treatment is difficult under existing multilateral trade rules and jurisprudence, owing to the legal characterization and objectives of BCAs; their interaction with existing special and differential treatment (SDT) provisions; and complexity of available policy options. We thus highlight the gap between normative aims of SDT provisions to support development, and current WTO law and jurisprudence which expose WTO members providing preferential treatment to allegations of discrimination. With increasing unilateral climate action, an inability to integrate SDT more meaningfully into WTO non-discrimination frameworks risks further weakening of international cooperation on climate and trade.

This paper examines the legal ramifications of using tariff flexibility arising from GATT unbound tariff lines or tariff overhangs under both WTO and preferential trade agreement (PTA) law when flexibility is exercised preferentially for PTA partners. Under WTO law, a WTO member that is a party to a PTA under GATT Article XXIV is required to use tariff flexibility on a non-discriminatory basis. However, PTA obligations including tariff elimination commitments and a standstill clause prohibit the WTO member from raising applied tariffs on imports from the PTA parties, thereby preventing the use of tariff flexibility on a non-discriminatory manner. In contrast, a WTO member entering into a PTA under the Enabling Clause may use tariff flexibility discriminatorily without violating WTO law. A WTO member has greater legal latitude in utilizing tariff flexibility if it forms a PTA under the Enabling Clause rather than under GATT Article XXIV. The discriminatory exercise of tariff flexibility by some WTO members in conformity with PTA obligations, but in violation of WTO law, is further evidence of the fragmentation of the world trading system, where WTO law is facing its limits.

This article examines conditionalities in the Generalized System of Preferences (GSP) in light of the European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries (EC – Tariff Preferences) case at the World Trade Organization (WTO). The article largely undertakes this examination from the point of view of developing countries. It mainly examines the issue of discrimination in conditionalities since this was the principal question raised in the EC – Tariff Preferences case and makes suggestions regarding the regulation of conditionalities. In doing so, the article follows two trajectories: first, it makes suggestions for the WTO panels and Appellate Body, and, second, it makes suggestions for GSP donors, by analyzing the new European GSP + Scheme and by drawing inspiration from conditionalities in the loans granted by the World Bank.

Despite being contradictory to the World Trade Organisation's (WTO) core objective of freer trade, its rules permits execution of preferential trade agreements (PTAs) provided certain conditions are complied with. WTO mechanism to oversee compliance of these conditions on PTAs is continuously evolving from somewhat tentative approach of earlier General Agreement on Tariffs and Trade (GATT) Panels to more willingness of active judicial interpretation by WTO Dispute Settlement Body (DSB). This article critically analyses the WTO provisions on PTAs taking into account the reports of GATT panels and WTO. It also sheds light on WTO member states views on controversial and hazy issues of the GATT/WTO jurisprudence on PTAs. The article in its concluding part suggests several recommendations designed to ensure greater compliance of the PTAs with rules of the WTO.