GATT/WTO Constraints on National Regulation: Requiem for an GATT/WTO Constraints on National Regulation: Requiem for an Aim and Effects Test Aim and Effects Test GATT/WTO Constraints on National Regulation: Requiem for an "Aim and Effects" Test

This article examines the role of the WTO dispute settlement process in policing domestic regulatory measures enacted by its member governments. "Domestic regulatory measures" are measures that a government characterizes as an exercise of its authority to regulate its domestic affairs. In any federal regime dedicated to maintaining open markets-whether it is the GATT/WTO regime to liberalize trade between WTO member states, or the European Community (EC) regime to create free trade between EC member states, or the United States regime to maintain an open market among its fifty U.S. states-experience teaches that domestic regulations sometimes have a negative impact on trade. In some cases the negative trade effects are unintended, but on other occasions it has been clear that member governments are using domestic regulations to give local producers a competitive advantage. This tendency to misuse domestic regulatory measures for protectionist purposes is inevitable in a world where the commercial interests of foreign states have little or no representation in the political life of the state enacting the measure. As a consequence, all such federal systems have found it essential to police member-state regulatory measures in order to prevent governments from imposing trade-restricting regulatory measures that are inconsistent with their trade objectives.