“Legitimate Expectation” in the World Trade Organization

Abstract

Legitimate expectations protect the negotiated tariff concessions from being adversely modified. The principle of legitimate expectations considered as a ‘well-established’ principle specific to WTO is implicitly stated in Article III of General Agreement on Tariffs and Trade (GATT). It is also explicitly codified in paragraph 3 of Article XVII of General Agreement on Trade in Services (GATS) which considers the modification of conditions of competition as a violation of the non-discrimination obligation. The dispute settlement body in the WTO recognizes the legitimate expectations as a “conditions of competition” where foreign markets trust domestic markets based on the negotiated tariff concessions. So, any actions inconsistent with the overall level of negotiated commitments which have not become enforceable and predictable may constitute the violation of legitimate expectations. In conclusion, the principle of good faith is a tool to accommodate under the protection of legitimate expectations that “impaired benefits” could be claimed under a non-violation type complaint. Furthermore, this article demonstrates how the principle of legitimate expectations, in addition to protecting tariff consolidation, works effectively to fill the void and guarantee competitive opportunities.

Keywords

• legitimate expectations
• wto
• good faith
• conditions of competition
• dispute settlement body