Implementing the No Harm Principle in International Economic Law: A Comparison Between Measure-Based Rules and Effect-Based Rules

The regulatory nature of measure-based rules is distinctively different from that of effect-based rules. While a breach of a measure-based rule is determined by the actual measure, in effect-based rules a breach is to be determined against the actual effects of the measure. Effect-based rules can be regarded as implementing the no harm principle that proscribes measures to cause adverse effects to other states, while seeking to reconcile colliding interests on a practical level and taking into account the detrimental effects created for others. Measure-based rules, being the norm in the jurisprudence of the World Trade Organisation (WTO) are to be examined by panels and the Appellate Body in light of the ‘architecture, structure and design’ of a measure: it is not necessary to demonstrate the occurrence of adverse effects. In contrast, the regulatory framework dealing with the harmful effect of measures is located, especially, in the rules governing non-violation complaints and within the rules on actionable subsidies. While most WTO obligations may clearly be categorized as either measure- or effect-based rules, certain rules or at least their interpretation seem to blur the line between these two categories. This article examines and discusses both regulatory types and ultimately argues that, while measure-based rules provide for more regulatory stringency, effect-based rules leave greater policy-space and can succeed in breaking deadlocks in negotiations under certain circumstances. In such circumstances, they may therefore support the further development of certain yet under-regulated areas of international economic law.