Judicial review of member-state regulation of trade within a federal or quasi-federal system: Protectionism and balancing, da capo

Michigan Law Review

Volumn 99, Issue 8, 2001, Pages 1853-1902

  Regan, Donald H ^a  

^a NONE

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EID: 0347236731     PISSN: 00262234     EISSN: None     Source Type: Journal    
DOI: 10.2307/1290488     Document Type: Review

References (77)

1. Hence neither pure "rationality review" nor pure "less restrictive alternative analysis" is a form of balancing as I use the term. Both these modes of review focus on whether there are any benefits, either from the regulation in itself, or from the regulation as opposed to some alternative. Neither requires the comparison of benefits and burdens. I shall discuss the role of such versions of means-ends scrutiny in Section II.B.3 and Part III, and I shall discuss the relation between the pure and impure forms of these tests in Appendix 2.
2. E.g., MIGUEL POIARES MADURO, WE, THE COURT: THE EUROPEAN COURT OF JUSTICE & THE EUROPEAN ECONOMIC CONSTITUTION (1998) (there is a great deal else in Maduro's very interesting and useful book, which I like much better than this particular argument); Joel P. Trachtman, Trade and . . . Problems, Cost-Benefit Analysis and Subsidiarity, 9 EUR. J. INT'L L. 32 (1998); Mark Tushnet, Rethinking the Dormant Commerce Clause, 1979 WIS. L. REV. 125.
3. E.g., MIGUEL POIARES MADURO, WE, THE COURT: THE EUROPEAN COURT OF JUSTICE & THE EUROPEAN ECONOMIC CONSTITUTION (1998) (there is a great deal else in Maduro's very interesting and useful book, which I like much better than this particular argument); Joel P. Trachtman, Trade and . . . Problems, Cost-Benefit Analysis and Subsidiarity, 9 EUR. J. INT'L L. 32 (1998); Mark Tushnet, Rethinking the Dormant Commerce Clause, 1979 WIS. L. REV. 125.
4. My present claim goes a step beyond my 1986 article. The Supreme Court and State Protectionism: Making Sense of the Dormant Commerce Clause, 84 MICH. L. REV. 1091. In that article I in effect conceded that the virtual representation argument did make a positive case for judicial balancing in trade regulation cases. I argued that there was a stronger case against balancing, based primarily on doubts about judicial competence and the value of state autonomy, but I did concede the virtual representation argument some force. My present view is that I conceded too much. The virtual representation argument has no force at all in this context. (Strangely, all the materials for my present understanding were there in 1986, dispersed through that article, Why I couldn't bring them together I do not know.)
5. This may be such strong evidence that it triggers a formal presumption of illegality, like the United States Supreme Court's "virtually per se" rule. Philadelphia v. New Jersey, 437 U.S. 617, 624 (1978). Similarly, if we leave aside the possibility of explicitly distinct treatment of foreign goods that is still not less favorable, explicit discrimination will violate Article III or Article XI of the General Agreement on Tariffs and Trade (GATT) (subject to justification under Article XX), or Article 30 or 34 of the Treaty of Rome (subject to justification under Article 36).
6. I intentionally do not use the phrase "de facto discrimination." "Disparate impact" has the virtue of referring to differential effect on locals and foreigners, while remaining neutral on the issue of whether that differential effect amounts to a violation. In contrast, "de facto discrimination" tends to be nonneutral on that issue, and nonneutral in different ways for the trade law community (for whom "de facto discrimination" seems to connote the presence of a violation) and the American constitutional law community (for whom "de facto discrimination," or its more often encountered analogue "de facto segregation," connotes precisely the absence of a violation).
7. The central argument of Part II, explaining the limits of the virtual representation argument in the trade regulation context, does not depend on any specific understanding of protectionism or balancing. If I occasionally refer to protectionism and balancing in Part II, I shall be assuming only the roughest understanding of them, for heuristic purposes only (except in Section II.B.3, where I will anticipate some of the arguments of Part III).
8. The point of the qualification "if what we are concerned about is efficiency" is to set aside cases such as, for example, where we are prepared to allow inefficient consumption of plastic widgets because plastic widgets are essential to the lives of plastic widget consumers who tend to be poor.
9. In case the reader is wondering, "Efficient in what sense?", the answer is, efficient in any sense we might care about. In some contexts, an arrangement might be Pareto-efficient with respect to the set of accessible alternative arrangements, without being Kaldor-Hicks efficient: there might be a Kaldor-Hicks superior alternative from which we cannot generate a Pareto-superior alternative because transaction costs prevent the payment of the necessary compensation to the losers. But with a functioning market, even subject to the green tax, there is no possibility of getting stuck in a situation where consumers buy too few plastic widgets (in the Kaldor-Hicks sense) but transaction costs prevent an appropriate bribe to get them to buy more. The producers can offer the required "bribe" just by lowering the price. This example is developed in slightly more arithmetical detail in Section II.C.2 below.
10. This is true even in the first example, somewhat trivially. The legislature's nonintervention is a decision, and it is a decision that could be mistaken if, for example, there is some externality the legislature overlooks or does not respond to. But if nonintervention is right for the local interests, it will be efficient overall. Notice that although I have sometimes included in the text a qualification like "provided the legislation is not protectionist," that qualification is not strictly necessary here. It is already implicit. Protectionist legislation does not optimize over local interests (except perhaps in special cases we ignore, see infra note 10); hence, conversely, legislation that optimizes over local interests is necessarily not protectionist. I shall have more to say about protectionism and local welfare below.
11. Where this is not true - where protectionism in the short run might be efficient, on infant industry grounds, for example - it is not clear in principle that protectionism should be suppressed. If we enforce an absolute prohibition on protectionism, that reflects a plausible choice of prophylactic rule.
12. This seems as good a time as any to insert the general point that, just as I use "court" to include other quasi-judicial dispute-settlement organs, so I use "legislature" to include administrative agencies in their rule-making capacity. Administrative agencies are subject to somewhat different political forces than legislatures, but even so they have much more in common with legislatures than courts do. And we think courts should normally defer to administrative agencies in their rule-making capacity for approximately the same reasons of expertise and political responsiveness that call for deference to legislatures - in addition to the fact that the legislature created the agency and retains supervisory control.
13. It is important that in our examples all significantly affected foreign interests are in a market relationship (direct or indirect) with the local actors. If, for example, the consumption of plastic widgets in Calivada has negative external effects in the neighboring state of Washegon, then the Calivada legislature's optimizing over local interests does not guarantee global efficiency. But this does not save the virtual representation argument as it is standardly deployed in discussions of trade regulation. Virtual representation theorists argue that we need judicial protection (over and above the protectionism inquiry) for the interests of the foreign plastic widget producers. That is just what our examples show is not needed.
14. It should also be clear why there is no need to balance the "value of trade" against the value of local regulatory autonomy. Provided the member-state is not engaged in protectionism, there is no conflict. As we have seen, member-states as regulators have an essential role to play in fine-tuning the trading system to achieve efficiency - that is, in guaranteeing that trade is in fact valuable. Local regulatory autonomy, absent protectionism, supports the value of trade. For similar observations in a different context, see Robert L. Howse & Donald H. Regan, The Product/Process Distinction - An Illusory Basis for Disciplining 'Unilateralism' in Trade Policy, 11 EUR. J. INT'L LAW 249, 285 (2000).
15. It is a fair question to ask of me, "And where would the European Union be if the Court of Justice had taken your view?" A fair question, but not a fair rhetorical question. The answer is not obvious, especially since a great deal of what the Court did could have been done under the rubric of anti-protectionism.
16. By this I mean a collective decision about what shall be consumed in Calivada, not a collective decision made only on behalf of consumers, since the whole point was to reflect nonconsumer interests as well.
17. Talking about a collective consumption decision may raise worries about whether this collective decision is an exercise of market power. The short answer is, not if the legislature is just protecting the environment. Even if Calivada is big enough to have market power, and even if its decision has a significant impact on Nefornia producers, it does not follow that Calivada is exercising market power in any standard sense. It is not doing anything which interferes with efficiency (as genuinely monopsonistic behavior would). It may help to see this if we reflect that the result brought about by the Calivada green tax or taxmimicking ban is exactly the same result we would get without any regulatory intervention at all (hence, no hint of a collective decision) if it was the consumers who cared about the environment instead of a separate group of environmentalists.
18. Once again, we assume that all external effects are in-state. Cf. supra note 12.
19. Remember the distinction I drew a few pages back between weighing their interests and hearing their voice on relevant empirical questions. Also, if the legislature is considering a ban, it needs to make some empirical prediction about possible price reductions in the face of an efficient tax; but as we have seen, if consumer interests are properly accounted for, they provide an adequate incentive for not biasing this prediction against the producers. And the interests of the producers need not be otherwise considered.
20. Notice I am not saying the location of the plastic widget producers is totally irrelevant. I am saying only that it is irrelevant to the question of whether there is any need for a substantive weighing of their interests by a legislature motivated to promote efficiency. The location of the plastic widget producers may be highly relevant to how the legislature is in fact motivated. If the plastic widget producers are out-of-state, that creates an opportunity for the local cardboard widget producers to secure protectionist legislation, exploiting consumers in a way that they would be unable to do if the plastic widget producers were in-state. In sum, it may indeed matter that the plastic widget producers are out-of-state, but it matters only by providing a possible occasion for protectionism review.
21. The second example, involving a tax, is formally different, but not substantively.
22. Of course, the court should be circumspect in deciding that there is no value disagreement. Divergent standards are evidence, even if not conclusive evidence, of just such disagreement.
23. For the reader who is troubled by the reference to the legislature's "beliefs," such references can be cashed out in terms of legislative process in the same way I explain in Part III for references to legislative purpose.
24. Sometimes, of course, the adoption of existing consumer preferences or habits makes sense. There may be good reason for not trying to get consumers to change. The legislature is likely to be much better informed than the court about consumers' ability to understand labels, or to resist advertising, or the like. Where these are important considerations, the case for upholding the legislature is much strengthened.
25. I explain in Section III.B why this would be enough to make the legislative decision count as protectionist.
26. There is more discussion of pure and impure versions of these tests in Appendix 2.
27. Remember that I speak in generalities. Of course it could be that in some system the foundational texts require the court to decide the substantive issue for itself, and to substitute its judgment for the legislature's in case of disagreement. For example, the central question in the interpretation of the Agreement on Technical Barriers to Trade (TBT) and the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) under the WTO is whether or to what extent they require such substantive review, as opposed to requiring only review of aspects of the legislative process. Although a literal reading, especially of the TBT, might seem to require substantive review. I think it is fair to say neither text is completely clear. I shall say no more about them in this Essay.
28. Remember there is a fuller discussion of the meaning and ascertainment of legislative purpose in Part III.
29. Nonbinding international standards may also be relevant to the issue of the nonrecognizing legislature's actual purpose. But it seems obvious that if the legislature has not agreed to be bound by the standards, it should not be bound indirectly by the court's treating divergence from such standards as dispositive of the case, under either the less restrictive alternative rubric or the protectionism inquiry.
30. 453 U.S. 609 (1981).
31. 317 U.S. 341 (1943).
32. 340 U.S. 179 (1950).
33. 306 U.S. 346 (1939).
34. The Court of Justice has limited Article 34 to discriminatory measures. Case 15/79, Groenveld [1979] ECR 3409. Incidentally, specialized provisions or agreements relating to agriculture might be relevant to Parker and Eisenberg, but those are by definition not the basic general rules about trade.
35. I ignore Eisenberg, since Pennsylvania seems not to have significant market power in milk.
36. Thinking about cases involving exports does draw our attention to a fiction embedded in both the virtual representation argument and my refutation. Consumers are natural persons, and they are normally represented in the legislature of the territory where they consume. Some producers are also natural persons, but many producers are corporations or other business organizations. (For convenience, I shall speak simply of "corporations.") Now, corporations are not formally represented in any legislature I am familiar with, not even local corporations. And yet the virtual representation theorist does not argue that we should have judicial balancing review of all laws that burden corporations. He still wants to distinguish between local and foreign corporations. I agree that this makes sense (where the virtual representation argument itself makes sense, as I concede it does in some kinds of cases). Corporations can exert political influence even without formal representation, and some will have more influence than others. With regard to local corporations, we tend to worry more about their having excessive influence than about their interests being slighted. But if the virtual representation theorist is going to distinguish between local corporations, who do not need balancing protection, and foreign corporations, who do, the criterion for distinguishing cannot be formal representation. Nor can we plausibly suggest that the court should examine particular corporations' political influence in particular legislatures case by case. Some proxy is needed. The obvious proxy is the territorial location of the activity that represents the particular interest of the corporation on which we are focusing. That proxy seems to be implicit in the virtual representation theorist's claim, for example, that we should balance to protect "foreign" plastic widget producers but not "local." There is obviously much more to be said about this issue, but it is not my project to develop the best version of the virtual representation argument. I can say for now that whatever criterion the virtual representation theorist uses to distinguish between local and foreign corporations, it is accompanied by the assumption that local corporations' interests are effectively accounted for by the political process, and I can therefore rely on the same criterion in my response to the virtual representation argument.
37. For related observations, see Howse & Regan, supra note 13, at 277-78 282-83, 287-88.
38. I have said that protectionism review can be justified as a way of preventing failures of the political process in the treatment of local interests, and that is true. But it is also true both that foreign producers are indirect beneficiaries of protectionism review so justified, and that it is precisely their being foreign and unrepresented that invites exploitation of consumers by local producers. It is also the international dimension of protectionism that makes it possible to discourage protectionism by international agreements, which seem to be more effective against it than local politics. In this context, local consumers are largely indirect beneficiaries of the political efforts of local producers-for-export.
39. For my response to one suggestion about why mistakes against foreigners might be specially problematic, see the discussion in Section III.B of the "appearance of protectionism" test.
40. We might wonder whether we can bias the balancing inquiry itself in such a way that it will (statistically) improve on legislative results. I suggest in Section III.C that the standard attempts to bias the balancing inquiry in this way turn it into purpose review.]
41. Examples of other reasons for suppressing protectionism: (1) One might object to protectionism on the ground that it involves discrimination against non-nationals or nonresidents. But it is clear that there is no general principle forbidding countries to favor their own citizens or residents. So we need a special explanation of why such discrimination is objectionable in the context of market regulation, to which the obvious answer is the interference with efficient allocation. (2) Another reason to oppose protectionism is that it may undermine attempts to increase political integration. That is relevant only in systems where political integration is a goal. (3) Anti-protectionism can also be part of the broader project that Miguel Maduro usefully calls "market-building" in his very interesting study, WE THE COURT: THE EUROPEAN COURT OF JUSTICE & THE EUROPEAN ECONOMIC CONSTITUTION 88-102 (1998).
42. The first situation is a special case of the second. If a law achieves no benefit, then the "same benefit" could be achieved by the less restrictive alternative of having no law at all.
43. Of course, evidence about the aptness of the means to the ends is highly relevant -as I have said before and will say again - because it is relevant to the purpose inquiry. But the question for the court is not the ultimate question about means and ends; it is what the legislature thought.
44. Notice I have implicitly excluded constituents' preferences from the "economic circumstances¶ of the law. Of course in a sense they are the crucial circumstances for determining efficiency, as the text makes clear, but they are not normally among the circumstances that judges who are trying to avoid a purpose analysis talk about as relevant to whether a regulation is protectionist. The WTO Appellate Body took a step in the right direction in European Communities - Measures Affecting Asbestos and Asbestos-Containing Products, AB-2000-11. WT/DS135/AB/R (Mar. 12, 2000), when it said consumer preferences about health risk are relevant to a determination of what are "like" products under Article III:4. ¶122. (It also said the health risk was relevant to the "physical properties" criterion of likeness, but perhaps only because of the effect on "competitive relationship".
45. I ignore the point that a discriminatory purpose may have direct bad effects of its own - as when a venture into protectionism poisons other diplomatic relations, or when discrimination by a legislature between its own citizens on grounds of race, or sex, or religion creates feelings of second-class citizenship.
46. A number of central doctrines of American constitutional law are explicitly formulated in terms of legislative purpose. E.g., Church of the Lukumi Babalu Aye, Inc. v. Hialeah, 508 U.S. 520 (1993) (free exercise of religion); Wallace v. Jaffree, 472 U.S. 38 (1985) (establishment of religion); Personnel Adm'r of Mass. v. Feeney, 442 U.S. 256 (1979) (sex discrimination); Washington v. Davis, 426 U.S. 229 (1976) (race discrimination). For two centuries American Supreme Court justices have denied their concern with legislative motive, when it suited their purposes to do so, at the same time that they have built up a constitutional jurisprudence in which questions about legislative motive play a central, explicit role. I suspect every individual justice who sat for any length of time could be quoted on both sides of the issue. The proof of the pudding, however, is in the actual purpose-based doctrines.
47. It is possible of course that the ban would be adopted just to advantage cardboard widget producers vis-à-vis (in-state) plastic widget producers, but that is relatively unlikely - certainly not sufficiently likely that the court should worry about it, especially since any distortion is likely to be corrected by the further political activities of similar parties.
48. And what if both environmental forces and protectionist forces are at work? I discuss that in the next paragraph but one.
49. Or who does indirectly: if the legislator is doing a favor for a friend, and the friend is trying to please his constituents, then our legislator is pleasing those constituents at one remove.
50. The but-for test is adopted, without this explanation, in Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252 (1977).
51. In practice, of course, the court may rely partly on presumptions and per se rules, but for now we are trying to identify the ultimate question for which the presumpuons and per se rules should be designed as heuristics.
52. See for example, Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 352 (1977), where Chief Justice Burger makes a point of quoting subjective evidence of protectionist purpose from the record even as he denies the necessity of find ing protectoinist purpose and Canada - Certain Measures Concerning Periodicals, Report of the Appellate Body, AB-1997-2, WT/DS31/AB/R, at Part II.B.3 (June 30, 1997). As I pointed out in note 45 supra, courts that claim not to be interested in legislative motive or in subjective evidence cannot be taken at their word.
53. Philadelphia v. New Jersey, 437 U.S. 617, 624 (1978). With regard to the WTO and the European Union, see supra note 4.
54. As Justice Souter explains in his dissent in C & A Carbone, Inc., v. Town of Clarkstown, 511 U.S. 383, 422 (1994) (Souter, J., dissenting), it makes sense to presume that explicit discrimination has a protectionist purpose for the simple reason that nonprotectionist purposes can normally be achieved without explicit discrimination.
55. E.g., Robert A. Sedler, The Negative Commerce Clause 25 v. Restriction on State Regulation and Taxation: An Analysis in Terms of Constitutional Structure, 31 WAYNE L. REV. 885 (1985); Michael E. Smith, State Discriminations Against Interstate Commerce, 74 CAL. L. REV. 1203 (1986).
56. E.g., Robert A. Sedler, The Negative Commerce Clause 25 v. Restriction on State Regulation and Taxation: An Analysis in Terms of Constitutional Structure, 31 WAYNE L. REV. 885 (1985); Michael E. Smith, State Discriminations Against Interstate Commerce, 74 CAL. L. REV. 1203 (1986).
57. In any particular case, of course, the evidence about actual legislative process or purpose may be so thin as to leave us with little more than a guess about what most legislatures would have been doing in such circumstances. But even that is different from the question of what an ideal legislature would have been doing, and it is simply our best approach to the question of what the actual legislature was actually doing.
58. I say judges should decide "what the intent was." There is a sense, of course, in which all the judges can decide is how it appears to them. Consider: There is a clear difference in principle between the statements "Verdi composed Oberto" and "I believe Verdi composed Oberto"; even I can see that logically either might be true while the other is false. But in practice, I am never in a position to actually recognize a divergence of truth value between these statements. In the same way. judges cannot distinguish in application between the "subjective intent" test and what we might call the "appearance of protectionism to judges" test. But there is still a difference between the "subjective intent" test and the original "appearance of protectionism" test, which was not about the appearance to judges, but about the appearance to foreigners disadvantaged by the regulation. Judges applying the original "appearance of protectionism" test could recognize and give some weight to a difference between their own perspective on the law and the perspective of parties negatively affected by the law. This is just what they will not do if they apply the "subjective intent" test for themselves, as I have argued in the text they should.
59. Consideration of such evidence does not mean the inquiry into purpose has collapsed into balancing, as I shall explain further below.
60. See supra note 55.
61. It is perhaps worth emphasizing that although I recast the question of purpose in terms of the political process, and although I have argued that judges are likely to be good critics of the political process in the legislature, I am not suggesting that the court should engage in "free-form" process review, looking for distortions of the political process behind just any law. Rather, judicial inquiry into the possibility of distortion should be triggered by certain phenomena that make the presence of such distortion especially likely and especially problematic - such as explicitly discriminatory legislation or significant disparate impact on a disfavored group.
62. Except where circumstances have changed significantly since the adoption of the law. See the latter part of Section II.B.3.
63. Lest we forget: there is no justification for a balancing inquiry here, as my refutation of the virtual representation argument has shown. If it is good for Michigan consumers to ban cigarettes, there is no need to worry about the interests of the tobacco farmers and cigarette manufacturers, at least in the context of deciding whether or not Michigan can have its law (that is to say, setting aside issues about transitional aid or welfare redistribution). But my point for the moment is how the protectionism inquiry differs from a balancing inquiry, however unjustified the latter would be.
64. It could have been a totally misguided attempt at protectionism, in which case it hardly matters whether we strike it down or not, but such cases we can ignore.
65. I have argued elsewhere that in the practice of the United States Supreme Court, balancing "collapses" into the purpose inquiry in trade regulation cases - that the language of balancing disguises a concern with purpose and nothing more. Regan, supra note 3; Donald H. Regan. Siamese Essay: (I) CTS Corp. v. Dynamics Corp. of America and Dormant Commerce Clause Doctrine: (II) Extraterritorial State Legation, 85 MICH. L. REV. 1865 (1987). Sometime I will publish an update, arguing that the jurisprudence from 1987 to 2001 confirms - indeed strengthens - my claim.
66. 397 U.S. 137 (1970).
67. Id. at 142.
68. E.g., Charles R. Lawrence III, The Id, the Ego, and Equal Protection: Reckoning with Unconscious Racism, 39 STAN. L. REV. 317 (1987).
69. 451 U.S. 100 (1981).
70. E.g., Jersey Chen et al., Racial Differences in the Use of Cardiac Catheterization After Acute Myocardial Infarction, 344 NEW ENG. J. MED. 1443 (2001).
71. It should be noted that the Court in Memphis v. Greene specifically said that "there is no reason to believe that [the city] would refuse to confer a comparable benefit on black property owners." 451 U.S. at 119.
72. Another way to see that unconscious racist motivation does not entail inefficiency (racial feelings aside) is this: given our definition of unconscious racism, if the road closure for the benefit of white homeowners is unconsciously racist, so also is the hypothesized non-closure for the benefit of white commuters. But on our assumption that everything else is held constant as the race of the parties is changed, those decisions cannot both be inefficient. So one of them must be efficient despite being unconsciously racist.
73. Of course we do not assume in the race context that the legislature does right by all local interests; we make that assumption only in the absence of some specific reason for doubting it, such as the social and political significance of race. In the race case, what corresponds pragmatically to the assumption (in the trade context) that the legislature does right by all local interests is the assumption that the legislature does right by all white (or majority) interests. Now the difference between the contexts, as I explain in the next paragraph of the text, is that in the trade context getting it right for the favored (i.e. local) interests entails getting it right for disfavored (foreign) interests as well, whereas in the road-closure case, getting it right for the favored (white) interests does not entail getting it right for the disfavored blacks as well.
74. I am not aware of any trade case that discusses unconscious protectionism, but the Panel in In the Matter of Canada's Landing Requirement for Pacific Coast Salmon and Herring, Final Report of the Panel (Oct. 16, 1989), decided under the Free Trade Agreement between Canada and the United States, does discuss the sort of hypothetical party-reversal that we have used to define unconscious favoritism. The Panel uses the party-reversal idea as the tertium quid in a logical maneuver that appears to convert what begins as a purpose inquiry (¶ 7.04) into what is ultimately stated as a balancing inquiry (¶¶ 7.10, 7.14), by way of the party-reversal idea (¶ 7.09). But a plausible reading of the Panel report is that the "balancing" inquiry is really just a heuristic for the party-reversal inquiry, and the party-reversal inquiry in turn is just a heuristic for a (logically distinct) inquiry into whether Canada would have adopted the 100% landing requirement independently of its protectionist effect. This last is the very question of actual protectionist motivation. I do not assert that this heuristic cascade is what was going on, but the entire present Essay is an argument about why it should have been. (I am prepared to believe the Panel got the right result, but I do wonder: If the landing requirement was Kaldor-Hicks inefficient (and non-party-reversible, and protectionist), why were the Canadian fishermen or exporter-middlemen who wanted to sell to United States processors, and who were hurt along with the United States processors, unable to block it?)
75. See the latter part of Section II.B.3.
76. One "less trade-restrictive alternative" is of course the "no legislative action" alternative specified by rationality review itself, so strict LRA analysis includes rationality review as a special case.
77. For completeness, notice that at each of the second and third stages, we have two possible interpretations of the test (loose or strict LRA analysis and marginal effects or total effects balancing/proportionality review). So there are four possible sequences (at the last two staces) in all. Three are discussed in the text: , rejected because these are equivalent; , rejected because the latter is less restrictive than the former: and , which is what I recommend. The remaining possibility is . As the reader can easily verify, these two tests are not comparable in terms of our ordering; each invalidates some laws not invalidated by the other. And this sequence never includes in any form what balancers should regard as the best all-round test, loose LRA = marginal effects review. For completeness in a different direction, notice that an alternative nested sequence, but one not suggested at all by the standard terminology, would be . In effect, this sequence moves from the same starting point to the same end point as the nested sequence in the text (), but by a different route. The sequence in the text goes from "rationality as compared to no legislative action" via "rationality as compared to any alternative" to "acceptable balance/proportionality as compared to any alternative," whereas the new sequence goes from "rationality as compared to no legislative action" via "acceptable balance/proportionality as compared to no legislative action" to "acceptable balance/proportionality as compared to any alternative." The two dimensions of the test are changed in different orders.