National treatment

The purpose of the study is to propose interpretations of the National Treatment (NT) provision included in Art. III GATT, unbound by case-law interpretations of this provision. To make such proposals, we need to understand the role of the provision in the agreement. To this end, we first examine in Section 4.2the negotiating record relevant to the rationale for the enactment of this provision, as well as the manner in which case law has understood it. In the same Section, we also discuss the role of NT in the General Agreement on Tariffs and Trade (GATT) from the perspective of economic theory. Having established the purpose of NT, we discuss in Section 4.3the manner in which this provision has been implemented in case law: that is, here we focus on the understanding of the key terms implementing the purpose of NT by GATT and World Trade Organization (WTO) adjudicating bodies. At the end of this Section we provide a critical assessment of the case law. In light of our dissatisfaction with the case-law interpretations of some key terms, we present in Section 4.4 our preferred interpretation of NT. The main findings of this study could be summarized as follows: we believe that case law, economic theory, and the negotiating record point in the same direction concerning the purpose of the provision: NT is meant to outlaw protectionist use of domestic instruments. It is often unclear whether case-law interpretations of the key terms of this provision promote, if at all, the purpose of the provision. This seems to be largely explained by the absence of a coherent methodology, based on both legal and economic thinking. This is the gap that this study aims to fill.