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Consumer Labelling on Trial at the WTO: Misunderstanding the Behavioural Law and Economics of Consumer Information

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Chapter Summary

Governments may make it mandatory to disclose certain information on the label of a product. There can be several reasons for mandatory labelling. Voluntary labelling may generate a confusing variety of competing labels. In two recent cases WTO adjudicatory bodies have considered the consistency of government policies related to consumer labelling with the provisions of the TBT. Not only did the cool and Tuna/Dolphin panels make judgments about how various labelling requirements affect the behaviour of consumers without any empirical evidence, its judgments are based on common misconceptions (such as more information always means better informed consumer decisions) that have been effectively be put in doubt in the best literature on the behavioural law and economics of consumer protection. In the circumstances, both panels arguably violated their duty to make an "objective assessment" of the matter.

Keywords: behavioural law; consumer labelling; economics of consumer protection; Trade Agreement; Tuna/Dolphin panel; WTO



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