The World Trade Organization (WTO) regulatory context relevant in this case goes back to the Generalized System of Preferences as established under the Enabling clause of the GATT, allowing for the preferential treatment of the developing countries over their developed counterparts in matters of trade relationships (EC, 2004). The relevant legal issue is whether the recent change in the Generalized System of Preferences (GSP) as developed by Solia are in violation of Article I and Article III of the GATT of 1994.
The most relevant legal issue in this case, however, is the existing inconsistency between the provisions of Article I: 1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994), as required to apply to all the members of the World Trade Organization, and the Enabling Clause as implemented by the member states of the GATT. The provisions of Article I: 1 of GATT 1994 requires that any preferential treatment in relation to tariffs that is offered to one of the member states should “immediately and unconditionally” be accorded to all the other members in relation to similar products and other associated trade measures (GATT, 1979). On the other hand, the Enabling clause of the GATT provides for preferential treatment of some nations over the others in relation to similar products and associated trade measures, based on certain considerations and requirements for fulfillment of assigned conditions under their specified Generalized System of Preferences (Mckenzie, 2005). Nevertheless, the applicability of the Generalized System of Preferences as provided under the Enabling clause of the GATT should be subject to authorization, and subsequent WTO waiver of Article I: 1 of GATT for a specified period of time (Gowa & Hicks, 2012).