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6 J. Legal Analysis 1 (2014)

handle is hein.journals/jlegan6 and id is 1 raw text is: 





AN ECONOMIC PERSPECTIVE ON AS SUCH/FACIAL
VERSUS AS APPLIED CHALLENGES IN THE WTO

AND U.S. CONSTITUTIONAL SYSTEMS




Alan 0. Sykes*




ABSTRACT

      Suppose that a government party to some treaty regime enacts a measure that author-
      izes an official to act contrary to the treaty. Suppose further, however, that no action in
      violation of the treaty has yet occurred. Should beneficiaries of the treaty obligation be
      allowed to invoke its dispute resolution process to challenge the measure in advance of
      such a violation? Or should they be required to wait until a violation has actually
      occurred? These and related questions raise important issues in the WTO and the U.S.
      Constitutional systems. This article employs an economic perspective to address these
      issues. Among the principal conclusions are that various WTO and U.S. rules to govern
      such matters are foolish from an economic standpoint. Interestingly, however, neither
      system actually follows its own rules consistently. Adjudicators in both systems have
      deviated significantly, and many of the reported decisions comport with factors that the
      economic analysis identifies as important.

Consider a government that is subject to the rules of some treaty regime, and
suppose that the government enacts a measure' that authorizes some official(s)
to act contrary to the treaty. Assume further, however, that no action in vio-
lation of the treaty regime has yet occurred. Should other members of the treaty
regime (or other actors with standing to enforce the rules) be allowed to invoke
its dispute resolution process to challenge the measure in advance of such a
violation? Or should they be required to wait until a violation has actually
occurred? These and related questions raise important issues in various legal
systems, including the two that are the focus of this essay: the World Trade
Organization (WTO) and the U.S. Constitutional system.


    Robert A. Kindler Professor of Law, NYU Law School, E mail: alan.sykes@nyu.edu. I thank Loic
    Coutelier for research assistance, and Helen Hershkoff, Michael McConnell, Adam Samaha, an
    anonymous referee, participants at the Stanford University Conference on the Future of the
    WTO in April, 2012, and the participants at the NYU School of Law faculty workshop for helpful
    comments.
1   The term measure should be understood broadly to encompass statutes, regulations, and admin
    istrative policies.
© The Author 2014. Published by Oxford University Press on behalf of The John M. Olin Center for Law, Economics and Business
at Harvard Law School.
This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License
(http://creativecommons.org/licenses/by-nc/3.0/), which permits non-commercial re-use, distribution, and reproduction in any
medium, provided the original work is properly cited. For commercial re-use, please contact journals.permissions@oup.com
doi:10.1093/jla/lau001                                 Advance Access published on March 5, 2014

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