Simon Lester in this post in the Cato blog discusses two disputes - the Canadian Seal dispute and the Australian Tobacco Plain packaging dispute in the context of the impact of multilateral trade rules on domestic policy making. In both these cases, domestic policy measures have been challenged at the international fora. They are also measures that are equally applicable to domestic products as well as imported products. Thus, seemingly non-discriminatory policies that are an exposition of domestic policy/will have been challenged at the WTO dispute settlement as being discriminatory and too trade restrictive. Moreover, intellectual property rights (trademarks) also come into play the Tobacco case. Simon has brought out an important issue of what impact this has on domestic policy space without going into the merits of the measures at hand.
"I thought it was worth mentioning these cases here for the following reason. If international trade rules can be used to challenge any government law or regulation that affects trade, even if the measure is facially non-discriminatory, these international rules are going to be quite broad, and could have an impact on much, if not all, domestic governing. It may be worth thinking about these issues to make sure we properly balance international governance and domestic policymaking, and these cases provide a good opportunity to do so. (I wrote more about this in an op-ed for The Jurist on the plain packaging case.) The cases are at an early stage, and it’s not clear how they will turn out. But the mere fact that they are being tried in an international court is noteworthy."
These cases are at an early stage of the dispute settlement process and will take their course. There will be Panel decisions and appeals. Amicus curiae briefs will be filed. There may well be a continuation of the dispute on what constitutes compliance. Ultimately it may lead to non-compliance resulting in retaliation. Whatever may be the result, it will bring to the fore the limits of domestic policy regulation space. I have often argued on this blog that domestic policy space is seriously questioned in the context of multilateral trade rules. This is not to imply that they need for multilateral rules is invasive of national sovereignty. The only issue is where the line is to be drawn and who draws the line. Where is the middle path? what kinds of domestic policy are blatantly in violation of international trade rules? Is there a danger of being "judicially active" and be overtly intrusive in domestic policy space? I don't have the answers - but it is a fascinating area of the interplay of international economic regulation, democratic, domestic will and interpretation of international law.