International Economic Law and Policy Blog

From Dolphins to Turtles to Seals: The Next Trade and the Environment Dispute

Bloomberg reports:

Canada filed a complaint against Belgium at the World Trade Organization, in an effort to reverse the European Union country's ban on seal products.

...

``This government believes that the Belgian ban on the importation and marketing of seal products is a violation of Belgium's international trade obligations under the WTO,'' Canadian Trade Minister David Emerson said in a statement e- mailed by his ministry.

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Animal-rights activists complain that too many seals continue to be killed with so-called hakapik clubs, used for crushing the mammals' skulls.

While the Canadian government acknowledges that hunters in the country use the devices, it says sealers in areas "where 75 percent of the hunt occurs, primarily use rifles.''

Here's DFAIT's press release.  Among other things, it states:

"Sealing is an important way of life for many Canadians, including Inuit and other Aboriginal peoples,” said Minister Hearn. “It is important that we pursue these consultations to maintain access to markets for all those involved in the sealing industry.”

ADDED: This article has a good description of the different parties' views.  Some excerpts:

Inuit activists say the shrinking market for Canadian seal products in Europe is depriving communities in Newfoundland, Eastern Quebec and Nunavut, who depend on the seal hunt, a source of income.

...

[Filip Vandenbroeke, deputy head of mission at the Belgian Embassy in Ottawa,] described the dispute as a "highly emotional dossier on both sides of the ocean," but said the Belgian and Dutch laws include exceptions for the traditional Inuit hunt.

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[Mary Simon, president of the Inuit Tapiriit Kanatami], however, said when limits on the number of seals that could be killed were implemented in the 1980s, prices decreased, and she foresees the same thing happening with the new bans.

"The exemption does not work because when you affect a commodity like seal skins, and the price goes down, you are no longer able to sell it. It affects everybody. That's what happened in the 1980s."

The DS316 Aircraft Panel Hearing

Following-up on Roger Alford's post over at Opinio Juris and Tomer's post on this blog, the WTO panel hearing on one part of the Aircraft dispute (DS316, involving alleged subsides to Airbus) took place last week.  As Roger and Tomer noted, the hearing was transparent to a limited degree, in that a tape of parts of the hearing could be viewed afterwards at WTO headquarters.  Unfortunately, the most interesting part, the questions from the panel and the parties' answers, was not included in this viewing.

In an effort to improve transparency in a small way, we have in the past enlisted people to attend the viewings of these hearings and report about them on this blog.  This time the reporter was Valéria Guimarães de Lima e Silva, who is pursuing a Masters in International Law and Economics at the World Trade Institute in Bern, Switzerland (she also holds a PhD in International Law from the University of São Paulo (USP), Brazil).  If anyone wants to follow-up with her about the viewing, you can contact her at [email protected].  Her report follows.

The Doha’s Development: Within the United States

The House has just killed a reform version of the new Farm Bill and instead passed a highly protectionist bill, as had widely been expected. President Bush vowed to veto this version. Now, the ball has been passed to the Senate. (See NY Times, Still Waiting for Farm Reform, July 28, 2007, http://www.nytimes.com/2007/07/28/opinion/28sat3.html?th&emc=th)

Importantly, such protectionism mostly serves the interests of big agro-businesses, not necessarily mom and pop farmers. Half of all federal farm spending goes only to 22 congressional districts. (Remember Mr. Madison’s economic factions?) The situation is frustratingly the same across the Atlantic. While only 2% of all European workers are farmers, about 40% of EU’s budget (under the euphemistically labeled Common Agricultural Policy) is allocated to farming. Yet, 80% of farm support goes to the upper 20% of farmers.

The final shape of the new Farm Bill is likely to influence, if not decide, the destiny of the Doha Round. If the Senate and the White House should revive the original reform bill which aimed to reduce trade-distorting subsidies (such as counter-cyclical payments) and instead increase green-box subsidies (conservation subsidies), the USTR could find more to offer to the negotiation table. Of course, there could be yet another criticism that rich countries like the U.S. and the EU attempt to simply change the label of their subsidies while they do not actually cut the overall amount of money distributed to their farmers. (“box-shifting”)  Any way, if the final Farm Bill ends up with something similar to the current House version, it may be vulnerable to a litigation spree under the WTO.

The ultimate political frontier surrounding Doha is of course the U.S.’ upcoming presidential election. The increasingly populist tone of major presidential candidates tends to bring enough doom and gloom for Doha. All these are happening when a number of U.S. farmers are enjoying high crop prices contributed partly by high international prices and partly by the ethanol fever. Could law (the U.S. Constitution and/or the WTO norms) change this distressing political dynamics?

Japan - DRAMS CVDs: When "allowing" does not Mean "allowing" or How WTO Panels Can Distort the most Ordinary Meaning of Words.

The recent panel report about Japan - DRAMS offers an interesting and somewhat irritating example of how a word could loose completely its ordinary meaning through a WTO panel’s interpretation. No wonder that we will hear once again the accusation of "judicial activism".

Article 12.9 of the SCM Agreement defines the term "interested parties" in a CVD investigation through a list, but adds that this " list shall not preclude Members from allowing domestic or foreign parties other than those mentioned above to be included as interested parties". Korea (contesting the  unilateral sending by Japan of Questionnaires to entities not involved directly in the CVD investigation) suggested reasonably that the use of the word "allowing" in this passage implies that there must be a request from a non-list party before it can be included as an "interested party".

The panel disagreed with Korea and said that " The term "allowing" in the second sentence of Article 12.9 could be understood as referring to a Member allowing, through national legislation or implementing regulations, certain parties to participate in investigations as interested parties".

I find this passage disturbing. It is clear for me that if the panel interpretation were correct the passage would have been drafted as "this list shall not preclude Members from including domestic or foreign parties other than those mentioned above as interested parties." To allow is a straightforward verb which means "to permit" and not "to include". It also implies that someone is asking permission to be included in a scenario in which he does not want apparently to be an actor. Everybody understands that it does not make sense to "allow" someone to do something that he does not want to do.In the European Union, the CVD legislation understood well this logic since it expects groups desiring to be considered as interested parties to "make themselves known."

I understand that there is a policy rationale behind the Japan- Drams panel interpretation. However, this is not a justification for distorting the most ordinary meaning of a term.  In case the policy rationale of the Japan-Drams panel is legitimate and was in fact what the negotiators intended, then someone was sleeping at the wheel while the SCM texts were drafted. 

If such obvious words are distorted by a panel, one can wonder what is left for more ambiguous terms!

Parental Guidance

I'm not sure yet what to make of this surefire box office hit. Should I let my students watch it? Are they mature enough?

I actually like Woody Harrelson (not to mention Charlize Theron). With all due respect to both, I like the other Woody much, much more. And graphically posing the "Battle in Seattle" as a replay, say, of the Ludlow Massacre seems crass and indeed harmful to the cause. Any cause, that is. No wonder the French aren't crazy about Hollywood. But wait, scratch that, it is a sort of LA-Canadian-European coproduction. I guess I'll have to actually watch it to see what they are saying.

T.

 

Dance of the Seven Veils

The second meeting of the Airbus dispute panel (DS316), scheduled to conclude today, I believe, will be aired to the "public" through "an opportunity to view a videotape, at a date to be announced" (see USTR announcement)(hat tip: Roger Alford at Opiniojuris).

To an uninformed bystander like myself, there seem to be a number of anomalies in this procedure. First, the main concern apears to be "business confidential information" (BCI"). Yet representatives of the only parties seriously involved as producers of large civil aircraft will be in the room during the hearings themselves. So if a party chooses to include BCI in its opening statement, comments or questions, most of the potential damage would already have been done. Unless they are concerned about downstream suppliers and consumers - but I doubt that BCI should be relevant in this respect. Second, if the hearing will be canned and edited before the public is exposed to it, why in this digital era of podcasts, is it truly necessary to physically attend the viewing? Perhaps Geneva is in search of shows and attractions to draw in crowds of tourists (those flying in specially to view the Airbus videotape might be interested in the July schedule of cultural events...), but I doubt this would be it. Third, why is the viewing only open to "those individuals who apply and are accepted to the WTO"? And what are the criteria for approval (the USTR statement only requires information relating to identity of applicants)? Why are they not made available in advance? For example, would journalists be acceptable? or only people who have a personal interest in the case or represent unions or corporations who do?

I don't know much about the public-private political economy in this case, but my hunch is that it is the driving force behind the procedure of this "public viewing", which seems more tailored to exclusiveness than openess. More generally, however, it sets a bad model for other more obviously socially sensitive cases.

In the dance of transparency, for every veil removed, there appears another one instead. If they will ever be removed entirely, the truth is that what will be revealed is not so exciting to non-specialists. Maybe it is better to just lay back and watch the dance.

T.

      

Trade and Development

Ha-Joon Chang of the University of Cambridge writes the following in the Independent (based on a book he has coming out):

Both the history of rich countries and the recent records of developing countries point to the same conclusion. Economic development requires tariffs, regulation of foreign investment, permissive intellectual property laws, and other policies that help their producers accumulate productive capabilities. Given this, the international economic playing field should be tilted in favour of the poorer countries by giving them greater freedom to use these policies.

I'm not sure I agree with the assertion about what economic development requires, but regardless, isn't the current trading system tilted in favor of poor countries already?  I know it's hard to balance out all the rules on either side of the equation, but overall the poorest countries have not committed to much (relative to what rich countries have committed to anyway).  If they want to keep out foreign trade and investment, don't they have plenty of tools at their disposal? 

(Hat tip to Eyes on Trade)

It's Getting COOL In Here

In addition to the obviously controversial subsidies in the U.S. farm bill currently under debate in Congress, there's another potentially contentious trade issue in the bill:  country of origin labeling (COOL) requirements for certain meat products.  The Palm Beach Post reports:

Last week, the U.S. House Agriculture Committee approved a compromise provision that implements mandatory country-of-origin labeling, also known as COOL, for beef, pork, lamb and goat.

The expansion of COOL, already in place for seafood, would take effect Sept. 30, 2008, if the provision survives current farm bill negotiations.

With the various imported food scares in recent months, it is understandable that consumers are concerned with the origin of their food.  On the other hand, a spokesman for U.S. beef producers noted:  "We are frustrated by the idea that COOL is a way to address safety problems in imported products, because it is not."  Furthermore, as my local congressman Tim Mahoney notes in the article, "producers' costs, and thus consumer prices, could rise."  Finally, some aspects of the implementation might raise concerns.  For example, as it stands now, the article reports, the law will not include beef and other meats sold at restaurants, or at institutions such as schools and hospitals; and poultry is not covered.  It's difficult to reach any definitive conclusions on WTO-consistency until the final law is drafted, but there does seem to be potential for concern.

Public International Law and Economics

Blog readers might be interested in the papers from the recent Max Planck symposium on public international law and economics.  See here (the International Law Reports blog) for summaries of the papers, and links to their SSRN locations.

Dis-moi ce que tu manges...

I just finished teaching a group of bright Canadian law students a basic course on multilateral and regional trade law. At one point I couldn't resist asking them if they had ever eaten a genetically modified food product. Of course they had no idea. So much for consumer preferences.

A casual count will show that almost half of WTO disputes initiated relate to edible products, and this trend is likely to continue: see IHT's write ups on food safety here and here. Not to mention Brazil's new challenge to US farm subsidies. At the same time, the India - Alcoholic Beverages dispute is out of the way, for now.

Tell me what you eat, I will tell you what your your trade disputes are.

T.

 

Are We Witnessing the Decline of Multilateralism?

A paper by Daniel Drache and Marc D. Froese suggests just that.  From the abstract:

Deadlock in the Doha Round: The Long Decline of Trade Multilateralism

This paper argues that deadlock in the Doha Round of trade negotiations is due to the increasing complexity of economic globalization. It represents a transformative shift on the part of Member nations away from the current model of trade multilateralism and towards smaller negotiating platforms. We examine two main reasons for this changing pattern in international economic relations. First, with the rise of new global trading powers such as India, China and Brazil, the geopolitical playing field is in flux and the steady accumulation of political and market power in the global South has sapped the WTO’s forward momentum. The second factor in the decline of trade multilateralism is a cocktail of rigid rules, non-tariff protectionism, and a crisis of representation that throws sand in the institutional gears of multilateral trade. The paper concludes with a discussion of trade multilateralism in historical context. This is not the first time the world has been faced with systemic changes in international economic relations. In the 19th and the early 20th centuries, global trade broke down – first with the end of the British free trade system, and shortly thereafter with the catastrophic collapse of the interwar trading order. Nevertheless, this qualitative shift in the negotiating strategies of states need not be seen as a return to protectionism. The explosion of preferential trade agreements represents a compelling political and economic logic of mutual advantage, and may be a more effective way of addressing the social and political dimensions of economic integration.

Here's a bit more from the conclusion:

Trade multilateralism cannot be sustained by clever legalistic juggling and ambitious bureaucrats trained in the dark arts of public relations. Multilateralism is in for a rough ride as the US, EU and other regional powers look for new frames within which to pursue their strategic interests. The golden era of postwar trade multilateralism is over. A new configuration of collective economic regulation is on the rise. Perhaps the clearest indication of this regime shift is the slow death of the Doha Round.

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There are two predictions for the future of the trading system. Optimists predict a soft landing for the round; after a pause in negotiations, members will finally agree to a comprehensive deal although it might be smaller than what was hoped for in 2001. Pessimists predict a hard landing for the WTO; deadlock at Doha will drive deal making towards a ‘spaghetti bowl’ of many different bilateral and regional arrangements. According to neoliberal economists, this weakens the multilateral system because many small regional arrangements undermine the most-favoured nation principle enshrined in the GATT. We think that the latter regime shift towards a more regional approach to integration is the more realist outcome because the regionalization process is well underway and has accelerated throughout the past six years of Doha negotiations. This hard landing is not necessarily a bad thing for the world trading system. As we have argued above, open borders and moderate protectionism can coexist. As we look ahead we have to ask ourselves the most significant question – what role will the WTO’s governance model play in the upcoming era of new priorities and evolving alliances? Will it even survive these seismic shifts in power?

More papers from Professor Drache are available on his web page here.

Cato Event on the Gambling Dispute

For those who haven't had enough discussion of the WTO Gambling case here on this blog, the Cato Institute in Washington, DC will be holding a policy forum on the dispute on July 25:

America's High-Stakes Response to the WTO Internet Gambling Dispute
POLICY FORUM
Wednesday, July 25, 2007
11:00 AM (Luncheon to Follow)

Featuring Mark Mendel, Lead Counsel for Antigua and Barbuda in US-Gambling, John H. Jackson, Georgetown University Law Center, and Sallie James, Trade Policy Analyst, Cato Institute.

For anyone not in DC, you can probably watch the event on the Cato site afterwards.

More on the Washington State Gambling Case

The complaint filed in Washington state related to the internet gambling ban is available here.  I'm a little unclear on the facts, but the basic point in the complaint seems to be that Washington has legal gambling, including poker, and legal internet gambling, such as on horse-racing, but internet poker is banned.  I have not looked at the actual statute to confirm whether that is the right interpretation of the law, however.  There are a couple interesting bits of note in the complaint.

First, one of the claims reads almost like one of Antigua's WTO claims:

The IGB violates the U.S. CONST. art. I, §8, cl.3, The Commerce Clause, because it is a protectionist measure designed to discriminate against otherwise legal out-of-state businesses and in favor of in-state businesses. Gambling, internet gambling, and poker are all legal in Washington. Therefore, the obvious purpose of the IGB as it applies to internet poker is to force internet poker players to patronize in-state brick-and-mortar casinos rather than internet poker rooms, which are legal where domiciled and not illegal under federal law, or to switch their internet gambling from poker to horse racing. Such a discriminatory law is virtually per se invalid as a violation of the Commerce Clause. Granholm v. Heald, 544 U.S. 460, 467 (2005)

And there was also this: "a scheme that allows some internet gambling but bars others for protectionist reasons violates federal obligations under the General Agreement on Trade & Tariffs (“GATT Treaty”) as administered by the World Trade Organization."  He meant the GATS, of course, but nonetheless it was nice to see a brief reference to the WTO.

The Gambling Dispute: Another Front Opens

In addition to the DSU Article 22 proceedings, the GATS Article XXI compensation issues and the U.S. legislative issues, there is now another aspect to the Gambling dispute:  a constitutional challenge.  According to the Seattle Post-Intelligencer, an attorney in Washington state, Lee Rousso, "sued the state of Washington in an effort to overturn its 2006 ban on Internet poker, ... [c]alling it a direct violation of the U.S. Constitution's commerce clause."

The article explains that the ban, which took effect last spring, "specifically prohibited the type of Internet-based card games such as Texas Hold 'Em that poker players in Washington -- Rousso among them -- have used to qualify for the annual [World Series of Poker]" and also notes that "[l]awmakers said it was an effort to put the state in compliance with the Interstate Wire Act" (one of the measures at issue in the WTO dispute).

Interestingly, there seems to be some overlap between the kinds of issues raised here and those in the WTO dispute.  In his complaint, Rousso argued that "the state measure was passed not to put the state in compliance with the federal wire act -- something it does not do anyway, he said -- but instead to protect the in-state gambling industry, including card rooms and casinos."  This, he said, "puts Washington in clear conflict with the Constitution's commerce clause, which forbids individual states from passing protectionist laws against other states' business."

Brazil Tyres: The WTO as environmental watchdog

I want to come back to this most interesting Brazil – Tyres case that Joel and Julia already referred to. Three things struck me:

1. Brazil essentially lost the case because it should have been MORE trade restrictive.

The Panel basically found (under the chapeau of Art. XX) that if Brazil is serious about the risks of waste tyres, it should not only ban imports of retreaded tyres but also imports of used tyres (if not: the ban on retreaded imports simply means that the retreading of EC used tyres shifts from EC factories to Brazilian factories ; the problem of the EC exporting its « waste » to Brazil, rather than Brazilian factories retreading Brazilian used tyres, then remains).

This makes a lot of sense. But it underscores how WTO dispute settlement can lead to less (rather than more) trade and, more importantly, how the Art. XX necessity and chapeau tests force WTO members to engage in sound environmental policies. In that sense, the WTO has truly become an environmental treaty with Art. XX as a catch-all obligation to engage in sound and reasonable environmental policies.

This case is, therefore, so much more than the WTO letting Brazil protect the environment. In this case (as, to a lesser extent, in Shrimp and others) the WTO is pointing out flaws not in trade policy, but in environmental policy (if you are serious about waste tyres, this is what you should be doing …).

Environmentalists may applaud this. But they may also get nervous about how WTO dispute settlement is becoming what is perhaps the most powerful worldwide environmental institution …

2. For «unjustifiable discrimination» under the chapeau of XX, the panel requires that the objective of the import ban be « significantly undermined » which, in turn, requires that sufficient quantities of MERCOSUR imports or used tyres are imported into Brazil (Julia's earlier point).

Simplified, the panel only finds discrimination « unjustifiable » if there is enough of it … I wonder whether the AB would uphold this «effects» test, or whether it would find that the very fact of banning retreaded tyres and permitting used tyres is sufficient to have «unjustifiable discrimination», irrespective of the number of used tyres coming in. The chapeau is, indeed, about the application of the measure (not the measure as such), but does that require an analysis of actual trade flows ?

3. The panel cleverly ducked the carve-out for MERCOSUR retreaded tyres. The panel only dealt with MERCOSUR under the chapeau of XX when it examined the violation of XI. But the EC’s core claim in this respect was that the carve-out violates MFN (for which the panel exercised judicial economy). And there Art. XX(b) can hardly offer an excuse. Brazil invoked XXIV instead. Now, if one follows the AB test in Turkey – Textiles for XXIV justification, then surely the carve-out for MERCOSUR retreaded tyres is not « necessary » for MERCOSUR to conform to Art. XXIV. XXIV:8(a)(i) explicitly permits health restrictions between regional partners. Thus, Brazil could have expanded the ban to MERCOSUR imports AND still comply with XXIV. But, in my view, this shows not so much that Brazil should lose under XXIV, but rather that the AB « necessity » test under XXIV goes too far and is wrong…

Once Brazil bans also imports of used tyres, the EC could well bring a 21.5 case further pursuing this MFN claim … Indeed, if both retreaded and used tyres from the EC are banned, there is a good chance that EC exporters will export used tyres to, say, Uruguay for those used tyres to be retreaded there and then to be allowed into Brazil as MERCOSUR tyres. This could drive up the numbers of MEROSUR imports and even take away the Art. XX justification for the MERCOSUR carve-out.

Finally, who is the likely winner in this case ?

*The EC tyre industry is worse off : the ban on retreaded tyres stays and on top of that the panel asks for a ban on imports of used tyres.

*The Brazilian "retreading" industry sees the ban on retreaded imports maintained (good for them), but a ban on imports of used tyres means that they will have to source more expensive Brazilian used tyres rather than the cheaper imports (bad for them).

*Thus, I would invest my money in: the Brazilian "new tyre" industry : no competition from retreaded imports remains ; plus domestic competition from retreaded Brazilian tyres is reduced as such retreaded Brazilian tyres become more expensive thanks to the ban on imports of used tyres called for by the panel.

What Aspect of a Measure Should be Considered under the GATT Article XX Sub-Paragraphs?

In its first decision, U.S. - Gasoline, the Appellate Body famously (relatively speaking) said:

One problem with the [panel's] reasoning ... is that the Panel asked itself whether the "less favourable treatment" of imported gasoline was "primarily aimed at" the conservation of natural resources, rather than whether the "measure", i.e. the baseline establishment rules, were "primarily aimed at" conservation of clean air. In our view, the Panel here was in error in referring to its legal conclusion on Article III:4 instead of the measure in issue. The result of this analysis is to turn Article XX on its head. Obviously, there had to be a finding that the measure provided "less favourable treatment" under Article III:4 before the Panel examined the "General Exceptions" contained in Article XX. That, however, is a conclusion of law. The chapeau of Article XX makes it clear that it is the "measures" which are to be examined under Article XX(g), and not the legal finding of "less favourable treatment."

Thus, according to the AB, it's the measure as a whole that must be examined for the "relating to" aspect of Article XX(g).  Applying this standard, the AB held:

The baseline establishment rules, taken as a whole (that is, the provisions relating to establishment of baselines for domestic refiners, along with the provisions relating to baselines for blenders and importers of gasoline), need to be related to the "non-degradation" requirements set out elsewhere in the Gasoline Rule. Those provisions can scarcely be understood if scrutinized strictly by themselves, totally divorced from other sections of the Gasoline Rule which certainly constitute part of the context of these provisions. The baseline establishment rules whether individual or statutory, were designed to permit scrutiny and monitoring of the level of compliance of refiners, importers and blenders with the "non-degradation" requirements. Without baselines of some kind, such scrutiny would not be possible and the Gasoline Rule's objective of stabilizing and preventing further deterioration of the level of air pollution prevailing in 1990, would be substantially frustrated. The relationship between the baseline establishment rules and the "non-degradation" requirements of the Gasoline Rule is not negated by the inconsistency, found by the Panel, of the baseline establishment rules with the terms of Article III:4. We consider that, given that substantial relationship, the baseline establishment rules cannot be regarded as merely incidentally or inadvertently aimed at the conservation of clean air in the United States for the purposes of Article XX(g).

But reading the old GATT U.S. - Section 337 case recently, I came across the very different approach taken by the panel there in the context of "necessity" under Article XX(d), along with what I thought was a pretty good rationale:

5.27  Bearing in mind the foregoing and that it is up to the contracting party seeking to justify measures under Article XX(d) to demonstrate that those measures are "necessary" within the meaning of that provision, the Panel considered whether the inconsistencies that it had found with Article III:4 can be justified as "necessary" in terms of Article XX(d). The Panel first examined the argument of the United States that the Panel should consider not whether the individual elements of Section 337 are "necessary" but rather whether Section 337 as a system is "necessary" for the enforcement of United States patent laws (paragraphs 3.57-3.58). The Panel did not accept this contention since it would permit contracting parties to introduce GATT inconsistencies that are not necessary simply by making them part of a scheme which contained elements that are necessary. In the view of the Panel, what has to be justified as "necessary" under Article XX(d) is each of the inconsistencies with another GATT Article found to exist, i.e. in this case, whether the differences between Section 337 and federal district court procedures that result in less favourable treatment of imported products within the meaning of Article III:4, as outlined above (paragraph 5.20), are necessary.

So, the Panel said it would consider whether "the inconsistencies that it had found" could be justified as "necessary."  In doing so, the Panel rejected the U.S. argument for examining "Section 337 as a whole," on the basis that this approach "would permit contracting parties to introduce GATT inconsistencies that are not necessary simply by making them part of a scheme which contained elements that are necessary."  This seems fairly convincing to me.  In essence, if panels look at the measure as a whole, Members can bury any sort of violation they want as part of a broader measure and they will still be able to get past the "necessary" / "relating to" prong.  Of course, they still have to satisfy the chapeau, but nevertheless doesn't this approach make it easier to slip through discrimination and other trade barriers as part of non-trade policies?