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Yardsticks for "Trade and Environment":
Economic Analysis of the WTO Panel and the Appellate Body Reports
regarding Environment-oriented Trade Measures

Kohei Saito ^*

• Abstract
• I. Introduction
• II. Recent Cases Regarding "Trade and Environment"
  • A. Article XX of the GATT
    • 1. Paragraph (b): Measures Necessary to Protect Human, Animal, or Plant Life or Health
    • 2. Paragraph (g): Measures Relating to the Conservation of Exhaustible Natural Resources.
    • 3. Chapeau of Article XX: Unjustifiable or Arbitrary Discrimination or Disguised Restriction to Trade
    • 4. Burden of Proof
  • B. SPS Agreement
    • 1. Introduction
    • 2. Article 5.5: Arbitrary or Unjustifiable Distinctions
    • 3. Article 5.6: LTRA Test
    • 4. Burden of Proof
  • C. TBT Agreement
• III. Economic Analysis of Judicial Tests
  • A. Potential Pareto Efficiency (PPE)
  • B. Costs and Benefits of ETMs
  • C. Analysis of the LTRA and "Means and Ends" Tests
  • D. Evaluation of AB&P's Use of the LTRA and "Means and Ends" Tests
    • 1. Critiques of PPE
    • 2. The LTRA Test
    • 3. The "Means and Ends" Test
    • 4. Conclusion
• IV. The Essence/Application Dichotomy
• V. Allocation of the Burden of Proof
  • A. Burden of Proof
  • B. Burden of Pleading
• VI. Conclusion
• Bibliography

* Third Secretary, Embassy of Japan in the United States; LL.M., Harvard Law School (2001). A draft of this paper was presented to the Jean Monnet Seminar on the European Union, NAFTA and the WTO: Advanced Issues in Law and Policy, at Harvard Law School, in March 2001. This author thanks Professor Joseph. H.H.Weiler and the participants to the Seminar for their very useful criticism and comments. This author also expresses appreciation to Professor Bruce L. Hay, Harvard Law School, for his comments from economic viewpoints. The views expressed in this Article are the author's and do not represent the official position of the Government of Japan. Comments on this paper should be sent to kohei.saito@mofa.go.jp

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© Kohei Saito 2001