How Can International Trade Law Discipline Nudging Through Ecolabels?

Abstract

This essay focuses on government-administered voluntary ecolabels, which could act as a nudge by altering consumer preferences toward labelled products. Consequently, they de facto compel producers to join the ecolabel schemes familiar to local consumers or dominant in the individual market to avoid being disadvantaged vis-à-vis domestic producers. Given this background, nudging with ecolabels needs to be analysed mainly with respect to the national treatment principle under international trade law. This principle regulates voluntary ecolabels under Articles D and E of the TBT Agreement Annex 3 and Article III:4 of the GATT 1994. These articles ensure that products from any World Trade Organization (WTO) member are treated no less favourable than ‘like products’ of national origin. However, the ‘like products’ definition is unclear under these clauses. Within the scope of this paper, ‘likeness’ is defined as products in a close competitive relationship. This determination can primarily be made from the consumers’ perspective. The essay hence focuses on the de facto discrimination between domestic and imported products due to ecolabels. Following this, it argues that such discrimination does not violate the national treatment principle because ecolabels also affect the ‘like’ product analysis by altering consumer preferences. Ecolabelling, Voluntary Ecolabels, Informational Regulation, Nudge, Nudging, International Trade Law, National Treatment Principle, De facto Discrimination, Likeness Analysis, Consumer Preferences