Fifteen Eighty Four

Academic perspectives from Cambridge University Press


The Cement of the Universe

Catherine Gascoigne

David Hume famously called causation ‘the cement of the universe’. Indeed, causation is central to many disciplines, not least, the law. Like all legal disciplines, the Law of the World Trade Organization (WTO) requires that a determination of causation be made at several points. The book, Causation in the Law of the World Trade Organization: An Econometric Approach (Cambridge University Press, 2023) examines the causal questions raised by the Law of the WTO and puts forward a methodology for interrogating them. Some of the central questions raised by the book include:

Can one Member of the WTO legally bring trade remedies against another Member? If so, how does that Member demonstrate that the other Member caused it economic harm?

Has one Member of the WTO brought about serious prejudice to the industry of another Member?

Can a Member’s domestic legislation be exempted from the trade disciplines on account of the contribution that it makes to public policy?

Has one Member’s failure to bring its measure into conformity with a Dispute Settlement Body ruling caused nullification or impairment to another Member’s industry?

These questions and others like them are challenging because causation is a very technical and philosophically complex concept. David Hume himself once said that: ‘[t]here is no question, which on account of its importance, as well as difficulty, has caus’d more disputes both among antient [sic] and modern philosophers, than this concerning the efficacy of causes, or that quality which makes them be follow’d by their effects’. Certainly, answering the above questions and others like them requires a detailed knowledge of legal philosophy as well as statistical analysis. Accordingly, the first chapter of the book lays out the knowledge of causal theory and statistical analysis required for understanding the chapters that follow. As such, no prior knowledge of causal theory or statistics is needed to appreciate the book.

The book critiques the current approach to determining causation in four central areas of WTO law. The first is concerning trade remedies—that is, those remedies or actions that are taken in response to subsidies (countervailing duties), sales at less than fair value (antidumping) and import surges (safeguards). In particular, the chapter considers the question: How might a WTO Member show that a trade remedy has been legally implemented? In other words, how might it be shown that one WTO Member’s imports caused injury to the domestic market of another Member, such that a trade remedy might be applied? To this end, the chapter looks at the current approach used by domestic competent authorities to this question—namely, the ‘breaking the causal link’ approach. The chapter critiques this approach and then proposes an alternative methodology based on econometric methods.

The second area of WTO law that is examined in the book is serious prejudice. Serious prejudice arises as a result of adverse effects in the market of the subsidising Member or a third country market. The chapter concerned with serious prejudice considers the question: How can one Member show that another Member caused serious prejudice to its industry? Again, the chapter examines the current approach to addressing this question and considers some drawbacks to it. The chapter then proposes how an alternative methodology could remedy these defects, subject to the usual disclaimers about the limitations of econometric analysis.

The third causal question with which the book grapples is concerned with whether a Member’s domestic legislation could be exempted from the trade disciplines on account of the contribution that they make to public policy. First, the book makes a case for why this relationship between a piece of domestic legislation and its policy objective should be considered causal. The idea of categorising this relationship as causal has been put forward before, both by Members of the WTO and by other scholars. The book takes the idea further and extrapolates what must logically follow from conceiving the relationship as causal and explains how an alternative methodology could be used to interrogate the relationship.

Finally, the book turns to consider the question: How does a WTO Member demonstrate a causal link between another Member’s failure to bring its measure into conformity with a DSB ruling and the level of nullification or impairment inflicted on its industry? To put it differently, how can a Member calculate a proportionate amount of retaliation that ought to be brought in response to another Member’s failure to bring its measure into conformity with a DSB ruling? The book looks at the current approach to answering these questions and points out some problems before turning to consider how the methodology could be applied here.

In sum, Causation in the Law of the World Trade Organization: An Econometric Approach examines some causal questions that the Law of the WTO raises. In particular, the book calls into question the Appellate Body’s tendency to make a priori determinations about effects based on the nature of the cause in question. Instead, the book makes a case for collecting empirical data about the effects of a cause wherever possible. The book then develops a methodology that uses econometric methods to make causal determinations that can be applied to many different parts of WTO law. The book acknowledges that a methodology that draws on econometrics is not a panacea to the difficulties of analysing causation in the law of the WTO. That is, it acknowledges that econometric analysis brings with it a host of difficulties, like determining the rigour of an econometric model and collecting sufficient data. Nonetheless, if these difficulties can be judiciously managed, the book proposes that an approach to analysing these causal questions that draws on econometrics may be a viable alternative to the status quo.

Causation in the Law of the World Trade Organization by Catherine Gascoigne

About The Author

Catherine Gascoigne

After completing degrees at the universities of Sydney and Oxford, Dr Catherine Gascoigne earned a Ph.D. in Law from the University of Cambridge, where she studied as both a Gates ...

View profile >

Latest Comments

Have your say!