4 - Concluding summary: reconciling the three elements

Summary

Part I analysed how each of the legal elements – ‘less favourable treatment’, ‘likeness’ and ‘regulatory purpose’ – can be interpreted differently and how each interpretation affects the scope and intrusiveness of the non-discrimination principle. It would thus be wrong to assume that non-discrimination in international economic law has a firmly defined meaning. Depending on how each element is interpreted and combined with the respective interpretation of another element, the de facto non-discrimination obligation turns out to be extremely intrusive or very lenient. Table 4.1 attempts to illustrate the different combinations and to develop seven indicative levels of non-discrimination:

1. – Level 7: The diagonal test captures any situation in which an imported product or service receives less favourable treatment than any ‘like’ domestic product or service. At the same time, ‘likeness’ is defined on the basis of market factors, meaning that all products and services that are in a competitive relationship are covered. The broad definition of ‘likeness’ in combination with the diagonal test results in an extremely intrusive interpretation of national or MFN treatment. Almost any differential treatment of products or services that are in a competitive relationship results in a violation of the non-discrimination obligation. Such an interpretation of non-discrimination is close to the EU principle of non-restriction, which, however, also incorporates the regulatory purpose and proportionality.

2. – Level 6: The very broad standard of ‘less favourable treatment’ combined with a very narrow definition of ‘likeness’ is still intrusive. In contrast to level 7, however, only differential treatment among products that share most physical characteristics or among very similar services results in a violation of the non-discrimination obligation.

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