The Permissible Reach of National Environmental Policies

Henrik Horn and Petros C. Mavroidis
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Petros C. Mavroidis: Columbia Law School, New York

No 739, Working Paper Series from Research Institute of Industrial Economics

Abstract: Trading nations exchange tariff concessions in the context of trade liberalizing rounds. Tariffs, nonetheless, are not the only instrument affecting the value of a concession. Domestic instruments affect it as well, but public order is not negotiable, and, consequently, is not scheduled. Public order is unilaterally defined, but must respect the default rules concerning allocation of jurisdiction which are common to all WTO Members and bind them by virtue of their appurtenance to the international community. In this paper, we focus on the interaction between trade and environment. The purpose of this study is to highlight how these rules and the GATT/WTO jointly determine the scope for unilateral environmental policies for WTO Members. In the study we examine the relevant multilateral framework dealing with this issue, as well as the relevant GATT and WTO case-law. We also briefly present the jurisdictional default rules in Public International Law. As a means of focusing the discussion, we consider a series of scenarios, partly building on factual aspects of cases that have already been brought before the WTO. These scenarios are intended to isolate issues of specific interest from a policy point of view. For each scenario we then seek to determine what would the outcome be, in case WTO adjudicating bodies were to explicitly take account of the default rules concerning allocation of jurisdiction, something which has not been done to date. Our main conclusions are two-fold: on occasion, the outcome would be different, had WTO panels observed the default rules concerning allocation of jurisdiction; more generally, the default rules can help us understand the limits of some key obligations assumed under the WTO. Crucially, absent recourse to the default rules concerning allocation of jurisdiction, one risks understanding non-discrimination (the key GATT-obligation) as an instrument aimed to harmonize conditions of competition across markets, and not within markets, as the intent of negotiators has always been.

Keywords: Trade and Environment; WTO (search for similar items in EconPapers)
JEL-codes: F13 F18 F53 (search for similar items in EconPapers)
Pages: 133 pages
Date: 2008-04-02, Revised 2008-06-20
New Economics Papers: this item is included in nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published in Journal of World Trade, 2009, pages 1108-1178.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0739

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