Enabling clause

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In 1979, as part of the Tokyo Round of the GATT, the enabling cause was adopted in order to provide a legal basis for extending the Generalized System of Preferences (GSP) beyond the original 10 years. In practice it gave a permanent validity to the GSP. The enabling clause permits developed countries to discriminate between different categories of trading partner (in particular, between developed, developing and least developed countries) which would otherwise violate Article I of the GATT which stipulates that no GATT contracting party must be treated worse than any other (this is known as Most Favoured Nation treatment). In effect, this allows developed countries to give preferential treatment to poorer countries, particularly to least developed countries.