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World Trade
Organization

WT/DS34/AB/R
22 October 1999
(99-4546)
Original: English

Turkey � Restrictions on Imports of Textile
and Clothing Products

AB-1999-5

Report of the Appellate Body


Continuation

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    III. Arguments of Third Participants

    A. Hong Kong, China

  1. Hong Kong, China argues that Article XXIV is best characterized as a specific provision of the GATT 1994 under which WTO Members are permitted, subject to compliance with certain conditions, to form customs unions or free trade areas that may depart from certain other provisions of the WTO Agreement.

  2. In interpreting Article XXIV:5, Hong Kong, China notes that it is important to examine the context provided by Article XXIV:4. This paragraph states that the purpose of a customs union or free-trade area is "not to raise barriers to the trade of other contracting parties with such territories." Similarly, the Understanding on Article XXIV states that parties to regional trade agreements "should to the greatest possible extent avoid creating adverse effects on the trade of other Members."9 It would be contrary to the stated purpose of regional agreements set out in Article XXIV:4 to interpret the chapeau to Article XXIV:5 to permit the raising of barriers to trade in violation of Articles XI and XIII of the GATT 1994.

  3. Hong Kong, China also states that, under Article XXIV:8(a), a customs union need not result in a total alignment of the external trade regimes of the constituent territories. Furthermore, Turkey's claims about past GATT/WTO practice on this issue are inapposite. In particular, the circumstances in which Sweden introduced discriminatory quantitative restrictions on imports of textile and clothing products were completely different from those in the present case.


    B. Japan

  4. Japan states that a basic tenet of the WTO Agreement is the primacy of the multilateral trading system based on the core principle of the elimination of discriminatory treatment in international trade relations. Members must observe this principle whenever they exercise their rights and obligations under the WTO Agreement, including when they enter into regional trade agreements under  Article XXIV of the GATT 1994. Regional trade agreements are only allowed if they are complementary to the multilateral trading system and if they comply with the rules set out in Article XXIV of the GATT 1994.

  5. Japan does not believe that Article XXIV functions as a "waiver" which allows derogation from the basic tenets of the multilateral trading system. Furthermore, it should not be interpreted as a waiver of the obligation to eliminate quantitative restrictions, which is a central pillar of the WTO system. Hence, Japan disagrees that Article XXIV gives WTO Members the right to introduce quantitative restrictions in contravention of the WTO Agreement on the occasion of the formation of a customs union. 


    C. The Philippines

  6. The Philippines first notes that Turkey's invocation of Article XXIV is an affirmative defence to its acknowledged violation of Articles XI and XIII of the GATT 1994 and Article 2.4 of the ATC.

  7. The Philippines then argues that Turkey's quantitative restrictions are not justified by Article XXIV. First, the quantitative restrictions are not justified because they are on the whole more restrictive than the general incidence of regulations of commerce applicable in the constituent territories prior to the formation of the customs union, in contravention of Article XXIV:5(a). Second, the quantitative restrictions violate Article XXIV:4 because Turkey (and the European Communities) did not avoid creating adverse effects on the trade of other Members to the greatest possible extent. Third, the chapeau of Article XXIV:5 applies solely to the provisions of the GATT 1994 that, if enforced, would prohibit the formation of a customs union. It does not exempt Members from complying with other obligations under the WTO Agreement. Fourth, the grounds upon which measures are permitted under Articles XI, XII, XIII, XIV, XV and XX are, by their nature, specific to the Member concerned and, accordingly, cannot be grandfathered.

  8. The Philippines also argues that, in any case, Turkey and the European Communities have not formed a customs union. The arrangement between Turkey and the European Communities does not qualify as a customs union under Article XXIV:8 because, inter alia, all restrictive regulations of commerce have not been eliminated with respect to substantially all trade between Turkey and the European Communities. In addition, Turkey and the European Communities do not apply substantially the same duties and regulations of commerce to the trade with Members not included in the customs union.


    IV. Issue Raised in this Appeal

  9. This appeal relates to certain quantitative restrictions imposed by Turkey on 19 categories of textile and clothing products imported from India. Turkey adopted these quantitative restrictions upon the formation of a customs union with the European Communities. The Panel found these quantitative restrictions to be inconsistent with Articles XI and XIII of the GATT 1994 and Article 2.4 of the ATC10. The issue raised by Turkey in this appeal is whether these quantitative restrictions are nevertheless justified by Article XXIV of the GATT 1994.


    V. Article XXIV of the GATT 1994


  10. In examining Turkey's defence that Article XXIV of the GATT 1994 allowed Turkey to adopt the quantitative restrictions at issue in this appeal, the Panel looked, first, at Article XXIV:5(a) and, then, at Article XXIV:8(a) of the GATT 1994. The Panel examined the ordinary meaning of the terms of these provisions, in their context and in the light of the object and purpose of the WTO Agreement. The Panel reached the following conclusions:

    With regard to the specific relationship between, in the case before us, Article XXIV and Articles XI and XIII (and Article 2.4 of the ATC), we consider that the wording of Article XXIV does not authorize a departure from the obligations contained in Articles XI and XIII of GATT and Article 2.4 of the ATC.

    ...

    [Paragraphs 5 and 8 of Article XXIV] do not � address any specific measures that may or may not be adopted on the formation of a customs union and importantly they do not authorize violations of Articles XI and XIII, and Article 2.4 of the ATC. � We draw the conclusion that even on the occasion of the formation of a customs union, Members cannot impose otherwise incompatible quantitative restrictions.11 
    Consequently, the Panel rejected Turkey's defence that Article XXIV justifies the introduction of the quantitative restrictions at issue. Turkey appeals the Panel's interpretation of Article XXIV. 

  11. We note that, in its findings, the Panel referred to the chapeau of paragraph 5 of Article XXIV only in a passing and perfunctory way. The chapeau of paragraph 5 is not central to the Panel's analysis, which focuses instead primarily on paragraph 5(a) and paragraph 8(a). However, we believe that the chapeau of paragraph 5 of Article XXIV is the key provision for resolving the issue before us in this appeal. In relevant part, it reads:

    Accordingly, the provisions of this Agreement shall not prevent, as between the territories of contracting parties, the formation of a customs union �; Provided that: � (emphasis added)
  12. To determine the meaning and significance of the chapeau of paragraph 5, we must look at the text of the chapeau, and its context, which, for our purposes here, we consider to be paragraph 4 of Article XXIV. 

  13. First, in examining the text of the chapeau to establish its ordinary meaning, we note that the chapeau states that the provisions of the GATT 1994 "shall not prevent" the formation of a customs union. We read this to mean that the provisions of the GATT 1994 shall not make impossible the formation of a customs union.12 Thus, the chapeau makes it clear that Article XXIV may, under certain conditions, justify the adoption of a measure which is inconsistent with certain other GATT provisions, and may be invoked as a possible "defence" to a finding of inconsistency.13 

  14. Second, in examining the text of the chapeau, we observe also that it states that the provisions of the GATT 1994 shall not prevent "the formation of a customs union". This wording indicates that Article XXIV can justify the adoption of a measure which is inconsistent with certain other GATT provisions only if the measure is introduced upon the formation of a customs union, and only to the extent that the formation of the customs union would be prevented if the introduction of the measure were not allowed.

  15. It follows necessarily that the text of the chapeau of paragraph 5 of Article XXIV cannot be interpreted without reference to the definition of a "customs union". This definition is found in paragraph 8(a) of Article XXIV, which states, in relevant part:

    A customs union shall be understood to mean the substitution of a single customs territory for two or more customs territories, so that

    1. duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated with respect to substantially all the trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories, and,

    2. substantially the same duties and other regulations of commerce are applied by each of the members of the union to the trade of territories not included in the union. (emphasis added)
  16. Sub-paragraph 8(a)(i) of Article XXIV establishes the standard for the internal trade between constituent members in order to satisfy the definition of a "customs union". It requires the constituent members of a customs union to eliminate "duties and other restrictive regulations of commerce" with respect to "substantially all the trade" between them. Neither the GATT CONTRACTING PARTIES nor the WTO Members have ever reached an agreement on the interpretation of the term "substantially" in this provision.14  It is clear, though, that "substantially all the trade" is not the same as all the trade, and also that "substantially all the trade" is something considerably more than merely some of the trade. We note also that the terms of sub-paragraph 8(a)(i) provide that members of a customs union may maintain, where necessary, in their internal trade, certain restrictive regulations of commerce that are otherwise permitted under Articles XI through XV and under Article XX of the GATT 1994. Thus, we agree with the Panel that the terms of sub-paragraph 8(a)(i) offer "some flexibility" to the constituent members of a customs union when liberalizing their internal trade in accordance with this sub-paragraph.15 Yet we caution that the degree of "flexibility" that sub-paragraph 8(a)(i) allows is limited by the requirement that "duties and other restrictive regulations of commerce" be "eliminated with respect to substantially all" internal trade.

  17. Sub-paragraph 8(a)(ii) establishes the standard for the trade of constituent members with third countries in order to satisfy the definition of a "customs union". It requires the constituent members of a customs union to apply "substantially the same" duties and other regulations of commerce to external trade with third countries. The constituent members of a customs union are thus required to apply a common external trade regime, relating to both duties and other regulations of commerce. However, sub-paragraph 8(a)(ii) does not require each constituent member of a customs union to apply the same duties and other regulations of commerce as other constituent members with respect to trade with third countries; instead, it requires that substantially the same duties and other regulations of commerce shall be applied. We agree with the Panel that:

    [t]he ordinary meaning of the term "substantially" in the context of sub-paragraph 8(a) appears to provide for both qualitative and quantitative components. The expression "substantially the same duties and other regulations of commerce are applied by each of the Members of the [customs] union" would appear to encompass both quantitative and qualitative elements, the quantitative aspect more emphasized in relation to duties.16 
  18. We also believe that the Panel was correct in its statement that the terms of sub-paragraph 8(a)(ii), and, in particular, the phrase "substantially the same" offer a certain degree of "flexibility" to the constituent members of a customs union in "the creation of a common commercial policy."17 Here too we would caution that this "flexibility" is limited. It must not be forgotten that the word "substantially" qualifies the words "the same". Therefore, in our view, something closely approximating "sameness" is required by Article XXIV:8(a)(ii). We do not agree with the Panel that:

    ... as a general rule, a situation where constituent members have "comparable" trade regulations having similar effects with respect to the trade with third countries, would generally meet the qualitative dimension of the requirements of sub-paragraph 8(a)(ii).18 
    Sub-paragraph 8(a)(ii) requires the constituent members of a customs union to adopt "substantially the same" trade regulations. In our view, "comparable trade regulations having similar effects" do not meet this standard. A higher degree of "sameness" is required by the terms of sub-paragraph 8(a)(ii). 

  19. Third, in examining the text of the chapeau of Article XXIV:5, we note that the chapeau states that the provisions of the GATT 1994 shall not prevent the formation of a customs union "Provided that". The phrase "provided that" is an essential element of the text of the chapeau. In this respect, for purposes of a "customs union", the relevant proviso is set out immediately following the chapeau, in Article XXIV:5(a). It reads in relevant part:
    with respect to a customs union �, the duties and other regulations of commerce imposed at the institution of any such union � in respect of trade with contracting parties not parties to such union � shall not on the whole be higher or more restrictive than the general incidence of the duties and regulations of commerce applicable in the constituent territories prior to the formation of such union �; 
  20. Given this proviso, Article XXIV can, in our view, only be invoked as a defence to a finding that a measure is inconsistent with certain GATT provisions to the extent that the measure is introduced upon the formation of a customs union which meets the requirement in sub-paragraph 5(a) of Article XXIV relating to the "duties and other regulations of commerce" applied by the constituent members of the customs union to trade with third countries.

  21. With respect to "duties", Article XXIV:5(a) requires that the duties applied by the constituent members of the customs union after the formation of the customs union "shall not on the whole be higher � than the general incidence" of the duties that were applied by each of the constituent members before the formation of the customs union. Paragraph 2 of the Understanding on Article XXIV requires that the evaluation under Article XXIV:5(a) of the general incidence of the duties applied before and after the formation of a customs union "shall � be based upon an overall assessment of weighted average tariff rates and of customs duties collected."19  Before the agreement on this Understanding, there were different views among the GATT Contracting Parties as to whether one should consider, when applying the test of Article XXIV:5(a), the bound rates of duty or the applied rates of duty. This issue has been resolved by paragraph 2 of the Understanding on Article XXIV, which clearly states that the applied rate of duty must be used.

  22. With respect to "other regulations of commerce", Article XXIV:5(a) requires that those applied by the constituent members after the formation of the customs union "shall not on the whole be � more restrictive than the general incidence" of the regulations of commerce that were applied by each of the constituent members before the formation of the customs union. Paragraph 2 of the Understanding on Article XXIV explicitly recognizes that the quantification and aggregation of regulations of commerce other than duties may be difficult, and, therefore, states that "for the purpose of the overall assessment of the incidence of other regulations of commerce for which quantification and aggregation are difficult, the examination of individual measures, regulations, products covered and trade flows affected may be required."20 

  23. We agree with the Panel that the terms of Article XXIV:5(a), as elaborated and clarified by paragraph 2 of the Understanding on Article XXIV, provide:

    ... that the effects of the resulting trade measures and policies of the new regional agreement shall not be more trade restrictive, overall, than were the constituent countries' previous trade policies.21 
    and we also agree that this is:

    an "economic" test for assessing whether a specific customs union is compatible with Article XXIV.22
  24. The text of the chapeau of paragraph 5 must also be interpreted in its context. In our view, paragraph 4 of Article XXIV constitutes an important element of the context of the chapeau of paragraph 5. The chapeau of paragraph 5 of Article XXIV begins with the word "accordingly", which can only be read to refer to paragraph 4 of Article XXIV, which immediately precedes the chapeau. Paragraph 4 states:

    The contracting parties recognize the desirability of increasing freedom of trade by the development, through voluntary agreements, of closer integration between the economies of the countries parties to such agreements. They also recognize that the purpose of a customs union or of a free-trade area should be to facilitate trade between the constituent territories and not to raise barriers to the trade of other contracting parties with such territories.
  25. According to paragraph 4, the purpose of a customs union is "to facilitate trade" between the constituent members and "not to raise barriers to the trade" with third countries. This objective demands that a balance be struck by the constituent members of a customs union. A customs union should facilitate trade within the customs union, but it should not do so in a way that raises barriers to trade with third countries. We note that the Understanding on Article XXIV explicitly reaffirms this purpose of a customs union, and states that in the formation or enlargement of a customs union, the constituent members should "to the greatest possible extent avoid creating adverse affects on the trade of other Members".23 Paragraph 4 contains purposive, and not operative, language. It does not set forth a separate obligation itself but, rather, sets forth the overriding and pervasive purpose for Article XXIV which is manifested in operative language in the specific obligations that are found elsewhere in Article XXIV. Thus, the purpose set forth in paragraph 4 informs the other relevant paragraphs of Article XXIV, including the chapeau of paragraph 5. For this reason, the chapeau of paragraph 5, and the conditions set forth therein for establishing the availability of a defence under Article XXIV, must be interpreted in the light of the purpose of customs unions set forth in paragraph 4. The chapeau cannot be interpreted correctly without constant reference to this purpose.

  26. Accordingly, on the basis of this analysis of the text and the context of the chapeau of paragraph 5 of Article XXIV, we are of the view that Article XXIV may justify a measure which is inconsistent with certain other GATT provisions. However, in a case involving the formation of a customs union, this "defence" is available only when two conditions are fulfilled. First, the party claiming the benefit of this defence must demonstrate that the measure at issue is introduced upon the formation of a customs union that fully meets the requirements of sub-paragraphs 8(a) and 5(a) of Article XXIV. And, second, that party must demonstrate that the formation of that customs union would be prevented if it were not allowed to introduce the measure at issue. Again, both these conditions must be met to have the benefit of the defence under Article XXIV.

  27. We would expect a panel, when examining such a measure, to require a party to establish that both of these conditions have been fulfilled. It may not always be possible to determine whether the second of the two conditions has been fulfilled without initially determining whether the first condition has been fulfilled. In other words, it may not always be possible to determine whether not applying a measure would prevent the formation of a customs union without first determining whether there is a customs union. In this case, the Panel simply assumed, for the sake of argument, that the first of these two conditions was met and focused its attention on the second condition.

  28. More specifically, with respect to the first condition, the Panel, in this case, did not address the question of whether the regional trade arrangement between Turkey and the European Communities is, in fact, a "customs union" which meets the requirements of paragraphs 8(a) and 5(a) of Article XXIV. The Panel maintained that "it is arguable" that panels do not have jurisdiction to assess the overall compatibility of a customs union with the requirements of Article XXIV.24 We are not called upon in this appeal to address this issue, but we note in this respect our ruling in India � Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products on the jurisdiction of panels to review the justification of balance-of-payments restrictions under Article XVIII:B of the GATT 1994.25 The Panel also considered that, on the basis of the principle of judicial economy, it was not necessary to assess the compatibility of the regional trade arrangement between Turkey and the European Communities with Article XXIV in order to address the claims of India.26 Based on this reasoning, the Panel assumed arguendo that the arrangement between Turkey and the European Communities is compatible with the requirements of Article XXIV:8(a) and 5(a) and limited its examination to the question of whether Turkey was permitted to introduce the quantitative restrictions at issue.27 The assumption by the Panel that the agreement between Turkey and the European Communities is a "customs union" within the meaning of Article XXIV was not appealed. Therefore, the issue of whether this arrangement meets the requirements of paragraphs 8(a) and 5(a) of Article XXIV is not before us.

  29. With respect to the second condition that must be met to have the benefit of the defence under Article XXIV, Turkey asserts that had it not introduced the quantitative restrictions on textile and clothing products from India that are at issue, the European Communities would have "exclud[ed] these products from free trade within the Turkey/EC customs union".28 According to Turkey, the European Communities would have done so in order to prevent trade diversion. Turkey's exports of these products accounted for 40 per cent of Turkey's total exports to the European Communities.29 Turkey expresses strong doubts about whether the requirement of Article XXIV:8(a)(i) that duties and other restrictive regulations of commerce be eliminated with respect to "substantially all trade" between Turkey and the European Communities could be met if 40 per cent of Turkey's total exports to the European Communities were excluded.30 In this way, Turkey argues that, unless it is allowed to introduce quantitative restrictions on textile and clothing products from India, it would be prevented from meeting the requirements of Article XXIV:8(a)(i) and, thus, would be prevented from forming a customs union with the European Communities.

  30. We agree with the Panel that had Turkey not adopted the same quantitative restrictions that are applied by the European Communities, this would not have prevented Turkey and the European Communities from meeting the requirements of sub-paragraph 8(a)(i) of Article XXIV, and consequently from forming a customs union. We recall our conclusion that the terms of sub-paragraph 8(a)(i) offer some � though limited � flexibility to the constituent members of a customs union when liberalizing their internal trade.31 As the Panel observed, there are other alternatives available to Turkey and the European Communities to prevent any possible diversion of trade, while at the same time meeting the requirements of sub-paragraph 8(a)(i).32 For example, Turkey could adopt rules of origin for textile and clothing products that would allow the European Communities to distinguish between those textile and clothing products originating in Turkey, which would enjoy free access to the European Communities under the terms of the customs union, and those textile and clothing products originating in third countries, including India. In fact, we note that Turkey and the European Communities themselves appear to have recognized that rules of origin could be applied to deal with any possible trade diversion. Article 12(3) of Decision 1/95 of the EC-Turkey Association Council, which sets out the rules for implementing the final phase of the customs union between Turkey and the European Communities, specifically provides for the possibility of applying a system of certificates of origin.33 A system of certificates of origin would have been a reasonable alternative until the quantitative restrictions applied by the European Communities are required to be terminated under the provisions of the ATC. Yet no use was made of this possibility to avoid trade diversion. Turkey preferred instead to introduce the quantitative restrictions at issue.

  31. For this reason, we conclude that Turkey was not, in fact, required to apply the quantitative restrictions at issue in this appeal in order to form a customs union with the European Communities. Therefore, Turkey has not fulfilled the second of the two necessary conditions that must be fulfilled to be entitled to the benefit of the defence under Article XXIV. Turkey has not demonstrated that the formation of a customs union between Turkey and the European Communities would be prevented if it were not allowed to adopt these quantitative restrictions. Thus, the defence afforded by Article XXIV under certain conditions is not available to Turkey in this case, and Article XXIV does not justify the adoption by Turkey of these quantitative restrictions.


    VI. Findings and Conclusions


  32. For the reasons set out in this report, the Appellate Body concludes that the Panel erred in its legal reasoning by focusing on sub-paragraphs 8(a) and 5(a) and by failing to recognize the crucial role of the chapeau of paragraph 5 in the interpretation of Article XXIV of the GATT 1994, but upholds the Panel's conclusion that Article XXIV does not allow Turkey to adopt, upon the formation of a customs union with the European Communities, quantitative restrictions on imports of 19 categories of textile and clothing products which were found to be inconsistent with Articles XI and XIII of the GATT 1994 and Article 2.4 of the ATC.


  33. We wish to point out that we make no finding on the issue of whether quantitative restrictions found to be inconsistent with Article XI and Article XIII of the GATT 1994 will ever be justified by Article XXIV. We find only that the quantitative restrictions at issue in the appeal in this case were not so justified. Likewise, we make no finding either on many other issues that may arise under Article XXIV. The resolution of those other issues must await another day. We do not believe it necessary to find more than we have found here to fulfill our responsibilities under the DSU in deciding this case.


  34. The Appellate Body recommends that the DSB request that Turkey bring its measures which the Panel found to be inconsistent with Articles XI and XIII of the GATT 1994 and Article 2.4 of the ATC into conformity with its obligations under these agreements.


Signed in the original at Geneva this 23rd day of September 1999 by:




_________________________
Christopher Beeby
Presiding Member


 _________________________
James Bacchus
Member


 _________________________
Said El-Naggar
Member



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9 Understanding on Article XXIV, Preamble.

10 Panel Report, para. 9.86.

11 Ibid., paras. 9.188 and 9.189.

12 "Prevent" is defined as "make impracticable or impossible by anticipatory action; stop from happening." The New Shorter Oxford English Dictionary (Clarendon Press, 1993), Vol. II, at 2348.

13 We note that legal scholars have long considered Article XXIV to be an "exception" or a possible "defence" to claims of violation of GATT provisions. An early treatise on GATT law stated: "[Article XXIV] establishes an exception to GATT obligations for regional arrangements that meet a series of detailed and complex criteria." (emphasis added) J. Jackson, World Trade and the Law of GATT (The Bobbs-Merrill Company, 1969), p. 576. See also J. Allen, The European Common Market and the GATT (The University Press of Washington, D.C., 1960), p. 2; K. Dam, "Regional Economic Arrangements and the GATT: The Legacy of Misconception", University of Chicago Law Review, 1963, p. 616; and J. Huber, "The Practice of GATT in Examining Regional Arrangements under Article XXIV", Journal of Common Market Studies, 1981, p. 281. We note also the following statement in the unadopted panel report in EEC � Member States' Import Regimes for Bananas, DS32/R, 3 June 1993, para. 358: "The Panel noted that Article XXIV:5 to 8 permitted the contracting parties to deviate from their obligations under other provisions of the General Agreement for the purpose of forming a customs union �". (emphasis added)
The chapeau of paragraph 5 refers only to the provisions of the GATT 1994. It does not refer to the provisions of the ATC. However, Article 2.4 of the ATC provides that "[n]o new restrictions � shall be introduced except under the provisions of this Agreement or relevant GATT 1994 provisions." (emphasis added) In this way, Article XXIV of the GATT 1994 is incorporated in the ATC and may be invoked as a defence to a claim of inconsistency with Article 2.4 of the ATC, provided that the conditions set forth in Article XXIV for the availability of this defence are met.

14 Panel Report, para. 9.148.

15 Ibid., para. 9.146.

16 Panel Report, para. 9.148.

17 Ibid.

18 Ibid., para. 9.151.

19 Paragraph 2 of the Understanding on Article XXIV further states that "this assessment shall be based on import statistics for a previous representative period to be supplied by the customs union, on a tariff-line basis and in values and quantities, broken down by WTO country of origin."

20 In paragraph 43 of its appellant's submission, Turkey argues that this provision must be interpreted as allowing the constituent members of a customs union to introduce GATT/WTO inconsistent quantitative restrictions upon the formation of the customs union. We see no basis for such an interpretation.

21 Panel Report, para. 9.121.

22 Ibid., para. 9.120.

23 Understanding on Article XXIV, Preamble.

24 Panel Report, para. 9.53.

25 Adopted 22 September 1999, WT/DS90/AB/R, paras. 80 � 109.

26 Panel Report, para. 9.54.

27 Ibid., para. 9.55.

28 Turkey's appellant's submission, para. 56.

29 Panel Report, para. 9.153.

30 Turkey's appellant's submission, para. 56

31 Supra, para. 48

32 Panel Report, para. 9.152.

33 Article 12(3) reads as follows:

Until Turkey has concluded these arrangements, the present system of certificates of origin for the exports of textile and clothing from Turkey into the Community will remain in force and such products not originating from Turkey will remain subject to the application of the Communities Commercial Policy in relation to the third countries in question. (emphasis added)

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