Sorting Out Mixed Messages under the WTO National Treatment Principle: A Proposed Approach

When establishing whether a disputed regulation is protectionist under the WTO National Treatment Principle, there are two key elements: its effect on the market for competitive products, and its intent or policy rationale. Yet the Appellate Body has formally rejected both elements, and in the surprising 2014 outcome of EC–Seal Products, under the key provision GATT Article III(4), the latter was simply denied. This obfuscation leads to implicit and explicit conflation of these elements. In some disputes, qualitative findings about the existence and nature of competitive relationships are presented using the language of quantitative market analysis. In others, compelling policy objectives shape the outcome of a supposedly market-based analysis. This article proposes an approach that synthesizes two strands of scholarship, advocating more rigorous use of market-based evidence and stronger analysis of policy rationale. Separating these elements will achieve the appropriate balance between them and lead to greater transparency in dispute outcomes.