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Cornell International Law Journal




One of the goals of Article III of GATT is to invalidate domestic regulatory measures, including taxes and non-fiscal policies that amount to non-tariff barriers to trade (NTB) and therefore violate the principles of national treatment. While internal policies that directly discriminate between products based on nationality or origin are clearly in violation of national treatment principles, it is the facially neutral regulatory measures with protectionist and discriminatory effects that are more difficult to assess, even within transparent regulatory processes. However, with their emphasis on the likeness of the products in question, WTO panels run the risk of alienating member states from the GATT multilateral regime in favor of regionalism. In dealing with domestic regulatory policies, the WTO panels can use Article III as a means toward building bridges with its member states as well as the regional agreements that also form part of the WTO multilateral trade regime. This paper asserts that a better approach for the WTO in adjudicating internal regulatory policy should be one that incorporates a procedural mechanism for assessing questions of legitimacy regarding regulatory measures. Unlike the regulatory approach, this mechanism would allow WTO panels to deal with questionable measures by deferring to domestic internal structures that implement legitimate regulatory policy. In such deference, WTO would place the burden on the domestic institutions closest to the implementation of those measures to prove no alternative means more aligned with commitments under GATT for furthering legitimate domestic policy. This mechanism recognizes that regional tribunals also look to WTO adjudication in deciding similar issues at the domestic level. In addition, domestic regulatory institutions of member states are bound by their commitments under the GATT agreements. In proposing a reciprocal deference approach, I will draw from parallel debates in U.S. constitutional law as well as decisions from the NAFTA tribunals.

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Cornell Law School

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