States have a fundamental right to form regional trade agreements

Historically, States have always formed closer links with some other States for, inter alia, cultural, trade and security reasons. When they created the General Agreement of Tariffs and Trade (GATT) in 1947, States could not ignore this economic and political reality; hence the inclusion of Article XXIV, which recognizes the right (albeit conditional) of States to form preferential regional trade agreements (RTAs). The philosophy of the GATT/World Trade Organization (WTO) disciplines with respect to RTAs is to ensure that the formation and evolution of such preferential arrangements support the multilateral trading system. Since multilateral trade is about greater trade opening, RTAs have to be supportive of this principle: RTAs should facilitate trade between the constituent territories and not raise barriers to the trade of non-RTA States. This principle is reflected in paragraph 4 of Article XXIV:

As stated by the Appellate Body in the context of its discussion of the general exceptions in Article XX of the GATT 1994, WTO market access obligations must be balanced against the right of WTO Members to invoke exception provisions.