Working Paper: CEPR ID: DP7316
Authors: Henrik Horn
Abstract: This paper examines the role of the burden of proof (BoP) in National Treatment (NT) disputes under trade agreements. In the situation under study, imports may cause environmental damage, in which case less favorable treatment of imported products may be globally desirable from an international efficiency point of view. But adjudicators do not with full certainty know the motives for policies that are allegedly pursued to protect the environment, but that also give commercial advantages to domestic products. The paper points to a tension between NT and environmental concerns, in that NT will primarily target countries exposed to environmental shocks. But contrary to what might be expected, this tension is not likely to arise when the environmental threats are very severe. The paper also shows why a shift of the BoP in environmental disputes toward complaining (exporting) countries will not necessarily reduce the environmental damage in importing countries.
Keywords: burden of proof; environment; national treatment; trade agreements; WTO
JEL Codes: F13; Q56
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| allocation of the BOP (F33) | expected outcomes of disputes involving environmental policies (Q58) |
| exporting countries having the burden to prove that environmental measures are protectionist (F18) | likelihood of such measures being upheld (K40) |
| likelihood of such measures being upheld (K40) | increased environmental damage (F64) |
| importing countries must prove that their measures are not protectionist (F13) | more protectionist policies to prevail (F13) |
| more protectionist policies to prevail (F13) | increased environmental harm (F64) |
| judicial errors (K40) | potential welfare costs and environmental damage (Q52) |
| shift of the BOP towards complaining exporting countries (F14) | reduced environmental damage (Q56) |
| shift of the BOP towards complaining exporting countries (F14) | lower negotiated tariffs (F13) |
| lower negotiated tariffs (F13) | increased imports and environmental harm (F64) |