Trade liberalization and regulatory diversity: Reconciling competitive markets with competitive politics

European Journal of Law and Economics

Volumn 6, Issue 1, 1998, Pages 5-37

  Trebilcock, Michael ^a   Howse, Robert ^a  

^a UNIVERSITY OF TORONTO   (Canada)

Author keywords

GATT National Treatment; Harmonization; Technical Barriers to Trade

Indexed keywords

EID: 54649084015     PISSN: 09291261     EISSN: None     Source Type: Journal    
DOI: 10.1023/A:1008691106306     Document Type: Article

References (97)

1. See Michael Trebilcock, Marsha Chandler and Robert Howse, Trade and Transitions: A Comparative Analysis of Adjustment Policies (London: Routledge, 1990) at 46-51.
2. See Sylvia Ostry, "Beyond the Border: The New International Policy Arena," in E. Kantzenbach, H. Sharrer and L. Waverman (eds.), Competition Policy in an Interdependent World Economy (Nomos, Baden-Baden, 1993) at 261.
3. Miles Kahler, "Trade and Domestic Differences" in Suzanne Berger and Ronald Dore (eds.), National Diversity and Global Capitalism (Cornell University, 1996) at 299.
4. David Vogel, Trading Up: Consumer and Environmental Regulation in a Global Economy (Cambridge, Mass.: Harvard University Press, 1995) at p.3.
5. David Vogel, Trading Up: Consumer and Environmental Regulation in a Global Economy Ibid., at 14, 15.
6. Alan O. Sykes, Product Standards for Internationally Integrated Goods Markets (Washington, D.C.: The Brookings Institution, 1995) at 117;
7. see also Sykes, "The (Limited) Role of Regulatory Harmonization in the International System," (unpublished manuscript, U. of Chicago Law School, 1997).
8. See Sykes, "The (Limited) Role of Regulatory Harmonization in the International System," op.cit. at p. 5;
9. see more generally Douglas Irwin, Against the Tide: An Intellectual History of Free Trade (Princeton University Press, 1996).
10. For insightful discussions of the welfare effects of harmonization, see Jagdish Bhagwati, "The Demands to Reduce Domestic Diversity Among Trading Nations," in Jagdish Bhagwati and Robert Hudec (eds.), Fair Trade and Harmonization: Pre-requisites for Free Trade? (Cambridge, Mass.: MIT Press, 1996), vol. I, chap. 1;
11. Bhagwati, "Fair Trade, Reciprocity and Harmonization: The Novel Challenge to the Theory and Policy of Free Trade," in Dominick Salvatore (ed.), Protectionism and World Welfare (N.Y: Cambridge University Press, 1993), chap. 2;
12. David Leebron, "Lying Down With Procrustes: An Analysis of Harmonization," in Bhagwati and Hudec op.cit., chap. 2;
13. Alan O. Sykes, "The (Limited) Role of Regulatory Harmonization in the International System," (unpublished manuscript, U. of Chicago Law School, 1997).
14. Albert Breton, Competitive Governments (Cambridge University Press, 1996).
15. Harold Demsetz, "Why Regulate Utilities?" (1968) 11 J. of L. & Economics.
16. See also Donald Wittman, The Myth of Democratic Failure: Why Political Institutions are Efficient (University of Chicago Press, 1995), chap.3.
17. One of us has been guilty of this tendency in the past: see Michael Trebilcock, Douglas Hartle, Robert Prichard and Donald Dewees, The Choice of Governing Instrument (Ottawa: Economic Council of Canada, 1982);
18. Michael Trebilcock and Douglas Hartle, "The Choice of Governing Instrument," (1982) 2 International Review of Law and Economics 29;
19. but see Trebilcock, The Limits of Freedom of Contract (Cambridge, Mass.: Harvard University Press, 1993), 261-268.
20. Breton, The Limits of Freedom of Contract op.cit. at 275.
21. See Willem Molle, The Economics of European Integration (Dartmouth, 2nd ed, 1994) at 18-23.
22. Breton, The Economics of European Integration op.cit. at 276.
23. See K. Nicolaides, "Mutual Recognition of Regulatory Regimes: Some Lessons and Prospects" in O.E.C.D., Regulatory Reform and International Market Openness (O.E.C.D.: Paris, 1996).
24. See Michael Trebilcock and Robert Howse, The Regulation of International Trade (London, New York: Routledge, 1995) p. 90-96.
25. R. Howse and M. J. Trebilcock, "FTA/NAFTA, Regulatory Diversity and the Problem of Harmonization," Conference on the Canada-US Free Trade Agreement: Eight Years Later, Centre for International Affairs, Harvard University, May 10 1996.
26. see e.g. Kalypso Nicolaides, "Comments," in Sykes (1995) op.cit. at 140-143.
27. See e.g. Michael Trebilcock and Robert Howse, The Regulation of International Trade (London: Routledge, 1995), chap. 5.
28. See Susan Hutton and Michael Trebilcock, "An Empirical Study of the Application of Canadian Anti-dumping Laws: A Search for Normative Rationales," (1990) 24 J. of World Trade 123;
29. OECD Anti-dumping Study (Robert Willig).
30. See Report of the American Bar Association, Special Committee on International Anti-trust (1991), chap. 3.
31. See Trebilcock and Howse, The Regulation of International Trade op.cit. chapter 6.
32. See Alan O. Sykes, "Countervailing Duty Law: An Economic Perspective" (1989) Columbia L.R. 199.
33. See Vogel, Columbia L.R. op.cit.;
34. Kym Anderson, "Environmental Standards and International Trade," in Michael Bruno and Bruno Pleskovic (eds.), Annual World Bank Conference on Development Economics 1996 (Washington, D.C.: World Bank 1997) 317;
35. Trebilcock & Howse, The Regulation of International Trade, op.cit., chap. 13.
36. United States - Restrictions on Imports of Tuna 30, I.L.M. 1594 (1991); United States-Restrictions on Imports of Tuna DS 29/R. June, 1994; In these cases, GATT Panels held that at a U.S. embargo on tuna imports from countries adopting less dolphin-friendly fishing techniques than those which U.S. fishermen were required to adopt violated Article XI of the GATT and was not saved by Article XX (b) or (g), holding in the first panel decision that the latter could only be invoked with respect to environmental threats within the importing country's own territorial jurisdiction and in the second panel decision that the exceptions could not be invoked where the efficacy of the measures was predicated on changing another country's domestic polices; See further Robert Howse and Michael Trebilcock, "The Fair Trade-Free Trade Debate: Trade, Labour and the Environment" (1996) 16 International Review of Law and Economics 61.
37. See Howse and Trebilcock, International Review of Law and Economics ibid.
38. See Vogel, International Review of Law and Economics op.cit.
39. See Trebilcock and Howse, The Regulation of International Trade op.cit. pp. 2-6.
40. For a review, see Alan B. Krueger, "International Labor Standards and Trade," in Michael Bruno and Boris Pleskovic (eds.), Annual World Bank Conference on Development Economics 1996 (Washington, D.C.: World Bank, 1997) 281.
41. See Richard Freeman, "Are Your Wages Set in Beijing?" (1995) 9 J. of Economic Perspectives 15;
42. J. David Richardson, "Income Inequality and Trade: How to Think, What to Conclude?" (1995) 9 J. of Economic Perspectives 33;
43. Adrian Wood, "How Trade Hurt Unskilled Workers," (1995) J. of Economic Perspectives 57.
44. See International Labour Office, "The ILO, Standard Setting and Globalization" (Geneva: ILO, 1997).
45. OECD, Trade, Employment and Labour Standards: A Study of Core Workers' Rights and International Trade (Paris: OECD, 1996).
46. See Brian Langille, "Eight Ways to Think About International Labour Standards," (1997) 31 J. of World Trade 27.
47. See Vogel, J. of World Trade op.cit. chapter 6.
48. See FTA Binational Panel Decision in the Canada-U.S. Softwood Lumber Case, May 6, 1993 and subsequent Extraordinary Challenge Committee decision therein.
49. "European Community: Payment and Subsidies on Oilseeds and Animal-Feed Protein" BISD, 37th Supp. (1989) 86.
50. For essays covering many of the issues noted below, see Leonard Waverman, William S. Comanor and Akira Goto (eds.), Competition Policy in the Global Economy: Modalities for Cooperation (London: Routledge, 1997).
51. See Michael Trebilcock, "Competition Policy and Trade Policy: Mediating the Interface," (1996) 30 J. of World Trade 71.
52. (1993) 1621 ATRR 30.
53. United States v. Pilkington plc, and Pilkington Holdings Inc., (IV No. 94-345 JVC CD Ariz. 1994).
54. Both the United States Foreign Trade Antitrust Improvements Act of 1982 and the recently released Antitrust Enforcement Guidelines for International Operations of the United States Department of Justice and Federal Trade Commission (April, 1995) contemplate substantial United States extraterritorial jurisdiction over foreign restrictions on outbound United States trade.
55. See Neil Campbell, William Rowley and Michael Trebilcock, 'The Role of Monopoly Law in the International Trading System,' (1995) 1 International Trade Law and Regulation 167.
56. See Ostry, International Trade Law and Regulation op. cit.
57. See Michael Gerlach, The Keiretsu: A Primer (The Japan Society, New York, 1992);
58. Gerlach, Alliance Capitalism: The Social Organization of Japanese Business (1992);
59. Ronald Gilson and Mark Roe, 'Understanding the Japanese Keiretsu: Overlaps Between Corporate Governance and Industrial Organization,' Columbia University Law School, Working Paper No. 83, September 14, 1992.
60. See Trebilcock and Howse, The Regulation of International Trade op.cit. at 251-254.
61. See Alan Deardorff, "Should Patent Protection be Extended to all Developing Countries?," (1990) 13 World Economy 497.
62. United States - Section 337 of the Tariff Act of 1930 BISD (1989) 345.
63. See M. J. Trebilcock and R. Howse, The Regulation of International Trade, pp. 248-249.
64. "Bottom-up" organizational networks that include working-level officials have been identified as critical to successful regulatory rapprochement: see J. Braithwaite, "Lessons for Regulatory Cooperaton" in O.E.C.D., Regulatory Cooperation for an Interdependent World (Paris: OECD (Public Management Service, 1984).
65. Sykes, Regulatory Cooperation for an Interdependent World op.cit. (1995) at 67, 68.
66. Cassis de Dijon E.C.J. 120/78.
67. This proportionality principle is similar to that adopted in the GATT Panel decision in relation to U.S. Intellectual Property laws disproportionately affecting imports: United States - Section 337 of the Tariff Act of 1930 op.cit.
68. Case 178/84 (1988) 1 CMLR 780.
69. Vogel, op.cit. at 83-88.
70. EC Complaint Against Canada, GATT Panel Decision, February 5, 1988; U.S. Complaint Against Canada, GATT Panel Decision, October 16, 1991.
71. See Michael Hare and Don Dewees, "Packaging Waste Reduction in Canada: An Assessment of Policies, Markets and Myths," Working Paper, Centre for the Study of State and Market, University of Toronto Faculty of Law, December 17, 1996.
72. Lobster from Canada Final Report of Panel, May 25, 1990, 3 T.C.T. 8182.
73. In the Matter of Canada's Landing Requirement for Pacific Coast Salmon and Herring, Final Report of Panel October 16, 1989;
74. see also GATT Panel decisions in Canada - Measures Affecting Exports of Unprocessed Herring and Salmon BISD 355 (1988) 98;
75. and Thailand: Restrictions on Importation of and Internal Taxes on Cigarettes BISD 37th, Supp (1990) 200-208, for adoption of a similar least trade-restrictive means test.
76. FTA Binational Panel Decision, June 3, 1993.
77. Similar provisions to those contained in the Uruguay Round TBT and SPM Agreements appear in NAFTA, chaps. 7 & 9.
78. See A. Dick, "The EC Hormone Ban Dispute and the Application of the Dispute Settlement Provisions of the Standards Code," (1989) 10 Michigan J. of International Law 872;
79. Vogel Michigan J. of International Law op.cit. 154-171.
80. WTO Panel Decision, September, 1997; affirmed by the Appellate Body, WT/DS26/AB/R (16 Jan 1998).
81. For an argument in favour of these approaches, see A. O. Sykes, "The Economics of Regulatory Protectionism and Its Implications for Trade Regulation: The WTO and Other Systems," (unpublished manuscript, U. of Chicago Law School, 1997).
82. See Ostry, "The Economics of Regulatory Protectionism and Its Implications for Trade Regulation: The WTO and Other Systems op.cit.
83. An excellent overview of the issues and approaches of importance in consensual harmonization is to be found in O.E.C.D., Regulatory Co-operation for an Interdependent World (Paris: OECD (Public Management Service), 1994).
84. An example is the is the OECD test guidelines program, which seeks to establish guidelines with respect to the collection of data on the basis of which regulations are made and enforced.
85. See, for instance the OECD Guidelines for Regulatory Decisionmaking, adopted 9 May 1995, requiring inter alia that regulation be based upon accurate analysis of the problem and that the distributive effects of the regulation be considered.
86. J. Braithwaite, "Lessons for Regulatory Cooperation" in Regulatory Cooperation for an Interdependent World, p. 232. As Braithwaite observes more generally, certain minimum levels of harmonization may be needed to support regulatory competition (p. 235).
87. The ILO, Standard-Setting and Globalization, pp. 30-31.
88. Sykes (1995) The ILO, Standard-Setting and Globalization, op.cit. at 110-117.
89. See Trebilcock and Howse, The Regulation of International Trade op.cit. chap. 9.
90. Trebilcock and Howse, The Regulation of International Trade Ibid. chap 1.
91. Kahler, The Regulation of International Trade op.cit. at 301.
92. See Kalypso Nicolaides, "Comments," in Sykes The Regulation of International Trade op.cit. (1995) 139-153.
93. See Kalypso Nicolaidis, "Mutual Recognition of Regulatory Regimes: Some Lessons and Prospects" in OECD Proceedings Regulatory Reform and International Market Openness (Paris, OECD, 1996) at 181.
94. For a similar perspective, see Frieder Roessler, "Increasing Market Access Under Regulatory Heterogeneity: The Strategies of the World Trade Organization," OECD, OECD Proceedings Regulatory Reform and International Market Openness (ibid., chap. 10.
95. See the Canada - U.S. Softwood Lumber Case, op.cit.
96. Thailand: Restrictions on Importations of and Internal Taxes on Cigarettes. BISD 37th. Supp. (1990).
97. This observation is based upon interviews by one of the authors with officials of ISO, FAO, and the WTO in the summer of 1996. Significantly, while officials of the specialized organizations saw the need to develop such links as important, WTO staff did not express particular interest in this objective.