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The burden of proof in trade disputes and the environment

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  • Horn, Henrik

Abstract

The WTO leaves discretion over environmental policies to its members, but requests that a fundamental non-discrimination principle is respected: National Treatment (NT). The provision seeks to prevent protectionist use of domestic policy instruments, requesting that when an imported product is sufficiently similar to a domestic product, they are treated identically. WTO adjudicators will often face severe informational problems in environmental disputes. Important for the practical implementation of NT is therefore the allocation of the burden of proof (BoP). This paper highlights basic implications of the BoP for the occurrence of judicial errors, for the environment and for welfare, using a setting where NT serves its intended role of supporting negotiated tariff liberalization. The paper suggests that NT may indeed constrain environmental policies, but that this may be desirable from an efficiency point of view. Also, BoP rules that benefit the environment may not benefit global welfare, and conversely.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 62 (2011)
Issue (Month): 1 (July)
Pages: 15-29

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Handle: RePEc:eee:jeeman:v:62:y:2011:i:1:p:15-29

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Web page: http://www.elsevier.com/locate/inca/622870

Related research

Keywords: National Treatment Burden of proof Environment GATT WTO Trade agreements;

References

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  1. Beshkar, Mostafa, 2010. "Trade skirmishes safeguards: A theory of the WTO dispute settlement process," Journal of International Economics, Elsevier, vol. 82(1), pages 35-48, September.
  2. Baksi, S. & Ray Chaudhuri, A., 2008. "Transboundary Pollution, Trade Liberalization, and Environmental Taxes," Discussion Paper 2008-78, Tilburg University, Center for Economic Research.
  3. Ferrara, Ida & Missios, Paul & Murat Yildiz, Halis, 2009. "Trading rules and the environment: Does equal treatment lead to a cleaner world?," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 206-225, September.
  4. Hyun Song Shin, 1998. "Adversarial and Inquisitorial Procedures in Arbitration," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 378-405, Summer.
  5. Henrik Horn, 2006. "National Treatment in the GATT," American Economic Review, American Economic Association, vol. 96(1), pages 394-404, March.
  6. Horn, Henrik & Mavroidis, Petros C., 2008. "The Permissible Reach of National Environmental Policies," Working Paper Series 739, Research Institute of Industrial Economics, revised 20 Jun 2008.
  7. Kyle Bagwell & Robert W. Staiger, 1997. "An Economic Theory of GATT," NBER Working Papers 6049, National Bureau of Economic Research, Inc.
  8. Chris William Sanchirico, 2008. "A Primary-Activity Approach to Proof Burdens," The Journal of Legal Studies, University of Chicago Press, vol. 37(1), pages 273-313, 01.
  9. Martin, Alberto & Vergote, Wouter, 2008. "On the role of retaliation in trade agreements," Journal of International Economics, Elsevier, vol. 76(1), pages 61-77, September.
  10. Horn, Henrik & Mavroidis, Petros C., 2009. "Burden of Proof in Environmental Disputes in the WTO: Legal Aspects," Working Paper Series 793, Research Institute of Industrial Economics.
  11. Kamal Saggi & Nese Sara, 2008. "National Treatment At The Wto: The Roles Of Product And Country Heterogeneity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1365-1394, November.
  12. Sumeet Gulati & Devesh Roy, 2008. "National Treatment and the optimal regulation of environmental externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 41(4), pages 1445-1471, November.
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