The Burden of Proof in Trade Disputes and the Environment

The WTO leaves discretion over environmental policies to its members, but requests that a fundamental non-discrimination principle is respected: National Treatment (NT). The provision seeks to prevent protectionist use of domestic policy instruments, requesting that when an imported product is sufficiently similar to a domestic product, they are treated identically. WTO adjudicators will often face severe informational problems in environmental disputes. Important for the practical implementation of NT is therefore the allocation of the burden of proof (BoP). This paper highlights basic implications of the BoP for the occurrence of judicial errors, for the environment and for welfare, using a setting where NT serves its intended role of supporting negotiated tariff liberalization. The paper suggests that NT may indeed constrain environmental policies, but that this may be desirable from an efficiency point of view. Also, BoP rules that benefit the environment may not benefit global welfare, and conversely.