Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 917: The Legal and Economic Principles of World Trade Law: National Treatment

Gene M. Grossman , Henrik Horn () and Petros C. Mavroidis
Additional contact information
Gene M. Grossman: Princeton University
Henrik Horn: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, 102 15 Stockholm, Sweden
Petros C. Mavroidis: Columbia Law School and University of Neuchatel

Abstract: The purpose of the study is to propose interpretations of the National Treatment (NT) provision included in Art. III GATT, unbound by case-law interpretations of this provision. To make such proposals, we need to understand the role of the provision in the agreement. To this end, we first examine in Chapter 2 the negotiating record relevant to the rationale for the enactment of this provision, as well as the manner in which case law has understood it. In the same Chapter, we also discuss the role of NT in the General Agreement on Tariffs and Trade (GATT) from the perspective of economic theory. Having established the purpose of NT, we discuss in Chapter 3 the manner in which this provision has been implemented in case law: that is, here we focus on the understanding of the key terms implementing the purpose of NT by GATT and World Trade Organization (WTO) adjudicating bodies. At the end of this Chapter we provide a critical assessment of the case law. In light of our dissatisfaction with the case-law interpretations of some key terms, we present in Chapter 4 our preferred interpretation of NT.

Keywords: National treatment; Trade agreement; WTO; GATT; Most favoured nation

JEL-codes: F13

172 pages, May 23, 2012

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