This paper examines
how developing countries establish Customs Unions (CUs) under the Enabling
Clause, implementing internal trade liberalization and Common External Tariffs
(CETs). Although these CUs aim to create single markets, they often face
challenges such as incomplete CETs and unilateral deviations from agreed CETs
due to domestic policy considerations. While countries prefer the Enabling
Clause as a legal basis due to its greater flexibility compared to GATT Article
XXIV, legal inconsistencies arise when CETs exceed bound tariff commitments
under GATT Article II. The Enabling Clause does not provide legal justification
for such inconsistencies with GATT obligations. To address this gap, CUs formed
under the Enabling Clause adopt various strategies to establish an additional
legal basis: submitting new notifications under GATT Article XXIV, referencing
Article XXIV in founding treaties, or invoking GATT Article XXIV:6 to
renegotiate tariff concessions. These adaptations reflect developing countries’
efforts to preserve the flexibility afforded by the Enabling Clause while
conforming to broader GATT obligations.