


Law is necessary to maintain the socioeconomic equilibrium in the society.
To know the effects of law on social goals,
law makers must have a method of evaluating
the impact of law on social values.
Economics does not predict the impact of
law, but merely describes and explains it with
an economic angle.

Economic development results in rapid
industrialization leading to increase in
urbanization. People move to the urban areas
and there arises more need for the social
goods rather than the private goods. The
social goods are costly and not profitable to
private enterprises, thus, the state has to
provide these goods.

Most important questions are:
◦ How much it will cost?
◦ Who pays for it?
◦ Who will decide how much it will cost and who will
pay for it?



Thus, economics is concerned with efficiency,
i.e., rational allocation of resources with least
cost and maximum satisfaction.
Law is concerned with justice only and not
about its cost.
Hence, in case there is a conflict between
efficiency and justice, economic analysis can
be used to provide information on the costs
of justice.


There is another angle to justice here, i.e.,
the resources if not utilized properly or are
being misused or wasted, it is considered as
immoral and good law can prevent this to
achieve efficiency and justice.
Economics, in itself, may not be able to give
precise answers, but it can draw attention to
some important questions.

Ronald Coase in his Paper in 1961. suggested
that the institution of legal liability has better
economic advantages than the earlier view of
classical economists of imposing tax on each
unit of output of the polluting firm equal in
size to the damage generated.

The main thesis of Coase, known as Coase
Theorem is, “A fundamental economic
principle of liability is that where informed
and costless bargaining is possible between
the injurer and victim, the cost justified level
of accidents will result without the need for
judicial intervention. The gains from trade
inherent in an inefficient level of safety will
encourage the parties to voluntarily negotiate
a mutually advantageous accident bargain
that minimize their joint costs/losses…”


Generally, it is observed that people do not
respond positively to the law, nor mindlessly
obey it, but they adopt to the changed costs
and benefits of it.
Depending on the costs incurred and the
benefits to be obtained, the people decide to
follow the formality of law or the informality
of law.


When transaction costs are zero, an efficient
use of resources results from private
bargaining, regardless of the legal
assignment of property rights.
When transaction costs are high enough to
prevent bargaining, the efficient use of
resources will depend on how property rights
are assigned.
LOWER TRANSACTION COSTS
HIGHER TRANSACTION COSTS
1. Standardized good or service
1.Unique good or service
2. Clear, simple rights
2. Uncertain, complex rights
3. Few parties
3. Many parties
4. Friendly parties
4. Hostile parties
5. Familiar parties
5. Unfamiliar parties
6. Reasonable behavior
6. Unreasonable behavior
7. Instantaneous exchange
7. Delayed exchange
8. No contingencies
8. Numerous contingencies
9. Low costs of monitoring
9. High costs of monitoring
10. Cheap punishments
10. Costly punishments
threshold
Bargaining succeeds Bargaining fails
Legal rights do not matter to
Legal rights matter to efficiency
efficiency
low
Transaction costs
high

Nothing Works. This is Coase's critique of Pigou: An
externality is typically a cost that results from decisions
by both parties - A's decision to play loud music plus
his roommate B's decision to try to sleep or study at the
same time. We do not, in the general case, know which
party can eliminate the cost more easily - and the best
solution might involve adjustment by both parties - A
can play loud music except during exam week. So a
legal rule of the sort proposed by Pigou, which makes
one party liable (to the other or to the state) for the
cost, will only give the right result if the best solution
happens to consist of only that party adjusting.



Named after English economist Arthur Cecil Pigou
(1877-1959), Pigou effect was firmly rooted in the
classical school of economics and was subsequently
overshadowed by the work of English economist John
Maynard Keynes (1883-1946).
The term may be defined as the impact of a change in
the money supply on consumption.
Pigou maintained lower prices would encourage
consumption, thereby boosting total income and
employment. Implicit in the Pigou effect (also known
as the real balance effect) was the belief that an
improved employment situation was achievable
through lower wages.

Everything Works (aka the Coase Theorem): In
a world of zero transaction costs, any initial
assignment of rights will lead to an efficient
outcome. The reason is that if the outcome
were inefficient, there would be some bargain
to change it that would benefit all concerned
- and in a world of zero transaction costs,
such a bargain will get made.

It All Depends (on transaction costs): Getting from some
initial assignments of rights (for example, the factory may
pollute the lake) to some final outcomes (for example, the
factory stops polluting) requires a transaction (the resort
owners pay the factory to stop polluting). Such transactions
may be costly - in the example, if there are many resort
owners they face a public good problem in organizing to pay
the factory to stop polluting. So in choosing an initial
assignment, one should consider not only how likely it is to
lead directly to the efficient outcome (in the example, if the
efficient outcome were for the factory to pollute and the
resorts to adjust) but also how hard it will be to get to other
outcomes (no pollution, for example) if they turn out to be
the efficient ones, and how likely that is.



The law of property supplies the legal framework
for allocating resources and distributing wealth.
People and societies disagree sharply about how to
allocate resources and distribute wealth.
Property law creates a bundle of rights that the
owners of property are free to exercise as they see
fit, without interference by the state or private
persons. Consistent with this freedom is a system
of allocation by voluntary exchange.

Property law fosters voluntary exchange by
removing the obstacles to bargaining. When
the obstacles to bargaining are low, resources
will be allocated efficiently. Following four
questions must be addressed by a theory of
property law:
1.
2.
3.
4.
What can be privately owned?
How are ownership rights established?
What may owners do with their property?
What are the remedies for the violation of
property rights?

Contract Law helps the people to cooperate
with each other by enforcing, interpreting and
regulating promises. Contracts facilitate trade
and economize the costs of making
transactions. It lays out guidelines for
information that must be revealed and that
maybe kept secret in a contractual
relationship.


Rational planning of the transaction with
careful provision for as many future
contingencies as can be foreseen; and
The existence or use of the actual or potential
legal sanctions to induce performance or
exchange or to compensate for nonperformance.

People continually make promises. The law
becomes involved when someone seeks to
have a promise enforced. Here are some
examples:
1. The Rich Uncle – The rich uncle of a struggling
college student learns at the graduation party that
his nephew graduated with honors. Swept away by
good feeling, the uncle promises the nephew a
trip around the world. Later the uncle reneges on
his promise. The student sues his uncle, asking
the court to compel the uncle to pay for a trip
around the world.
2. The Rusty Chevy – One neighbor offers to sell a
used car to another for $ 1000. The buyer gives
the money to the seller, and the seller gives the
car keys to the buyer. To her great surprise, the
buyer discovers that the keys fit the rusting
Chevrolet in the back yard, not the shiny Cadillac
in the driveway. The seller is equally surprised to
learn that the buyer expected the Cadillac. The
buyer asks the court to order the seller to turn
over the Cadillac.
3.
The Grasshopper Killer – A farmer, in response to a
magazine advertisement for “a sure means to kill
grasshoppers”, mails $ 25 and receives in the mail
two wooden block with the instructions, “Place
grasshopper on Block A and smash with Block B.”
The buyer asks the court to require the seller to
return the $ 25 and to pay $ 500 in punitive
damages.


A promise is enforceable if the courts offer a
remedy to the victim of the broken promise.
Traditionally, courts have been cautious
about enforcing promises that are not given
in exchange for something.
In example 1., the promise of a trip around
the world is a gift to the nephew. The rich
uncle does not receive anything in exchange,
so, according to the traditional analysis, the
courts should not enforce the uncle’s
promise.


In example 2., money exchanges for a
promise, but the seller thought that he gave a
different promise than the buyer thought she
received. Courts often refuse to enforce
confused promises. The courts would
probably require the seller to return the
money and the buyer to return the car keys.
Example 3. involves deception, not confusion.
A “sure method to kill grasshoppers” means
something more that what the seller
delivered. The courts ordinarily offer a
remedy to the victims of deceptive promises.

If an enforceable promise was broken, what
should be the remedy? One remedy requires
the promise-breaker to keep the promise. For
example, if the court decided that the seller
in example 2. broke his promise, then the
court might order the seller to deliver the
Cadillac to the buyer. This kind of remedy is
unavailable in example 3. because the seller
cannot exterminate grasshoppers as
promised. Instead, the remedy in example 3.
must involve the payment of money damages
as compensation for the failure to provide an
effective grasshopper killer.

Examples illustrate the two fundamental
questions in contract law:
◦ What promises should be enforced?
◦ What should be the remedy for breaking
enforceable promises?


Courts face these questions when deciding
contract disputes and legislatures face these
questions when making statues to regulate
contracts.
A theory of contract law must guide courts,
legislatures, and private parties (and their
lawyers) who make contracts.

Like contracts, the officials who regulate
them are imperfect. The officials who
regulate contracts need information and
motivation to correct market failure. In
reality, courts have limited information and
some judges lack motivation. Contract law
should take the imperfection of officials into
account by discouraging them from
exceeding their own limitations in attempting
to correct imperfect contracts.
1)
2)
3)
4)
5)
6)
To enable people to cooperate by converting
games with noncooperative solutions into games
with cooperative solutions.
To encourage the efficient disclosure of
information within the contractual relationship.
To secure optimal commitment to performing.
To secure optimal reliance.
To minimize transaction costs of negotiating
contracts by supplying efficient default terms and
regulations.
To foster enduring relationships, which solve the
problem of cooperation with less reliance on the
courts to enforce contracts.



tort law creates and provides remedies for
civil wrongs.
Generally speaking, it defines what
constitutes a legal injury and establishes the
circumstances under which one person
maybe held liable for another’s injury.
Deliberate torts causing bodily harm,
property harm etc. is ruled as crimes in the
court system.

For example, if X throws a ball and
accidentally hits another person Y in the eye.
Now Y may sue the ball thrower for losses
occasioned by the accident like the cost of
medical treatment or loss of income during
the time he is off from work. In this case,
whether Y will win or not will depend upon
whether he can prove that X engaged in
tortious conduct in injuring him. The main
substance of tort law is determining the
“standard of care”, i.e., distinguishing
between when conduct is or is not tortious.


Tort law may also be used to compensate
injuries that are intangible, such as an
interest in freedom from emotional distress,
privacy interests and reputation.
These are protected by a number of torts
such as infliction, privacy torts and
defamation.

For example, defamation and privacy torts
may allow a celebrity to sue a newspaper for
publishing an untrue and harmful statement
about him. Economic torts are torts that
provide the common law rules on liability for
the infliction of economic loss, such as
interference with economic or business
relationships. These protect people from
interference with their trade or business.

Basically, there are three elements in torts:
◦ Breach of duty owned to the plaintiff by the
defendant;
◦ Harm suffered by the plaintiff; and
◦ The breach being the immediate or proximate
cause of the harm.

We impose risks upon each other in our daily
lives. Norms have been developed to
prescribe the standards of behavior to limit
these risks. When people do not follow these
standards of behavior, they cause harm and
the cost of harm must fall upon someone.
Liability is assigned either to the party at fault
or to the party which cause the harm.


Before developing our economic analysis of
tort law we need to make some assumptions.
Firstly, in economic theory, we consider the
“rational man”. It implies that a person, who
takes reasonable care, is stable and tries to
maximize his satisfaction. Here it also implies
that he can calculate the cost and benefits of
the alternatives available to him and can
minimize his liability by taking precautionary
actions.

Secondly, we assume that there are no
regulations designed to reduce external
costs. If we compare liability regulation
sometimes one is more efficient than the
other and sometimes both together are more
efficient than either one by itself. Regulation
is ex-ante enforcement by administrators and
liability is ex-post enforcement by victims.

For instance, if a store is required to have a
fire extinguisher, the inspectors will check it
from time to time that the store complies
with the regulation. But suppose, if the store
complies with the regulation, and a fire
injures a customer, then the store maybe held
liable. In this case, the store is subject to
regulation and liability.

Thirdly, we assume that there is no insurance.
Insurance transfers the risk from the insured
party to the insurer, i.e., it externalizes . This
gives the insured an incentive to reduce
precaution, which is known as moral hazard.

For example, a person who insures his bike
against theft may not be so careful about
locking it every time. Lawyers do not agree
that insurance interferers with the goals of
tort law but rather they favor insurance for
accidents and liability. But there maybe some
cases where this is not so, such as in case of
punitive damages . Insurance allocates the
cost of accidents according to private
contracts and it also regulates.

For instance, under fire regulations, the
insured may be required to maintain
sprinklers and submit to inspections. In this
case, insurance privatizes liability and
regulates precaution. A change in tort law
may increase or decrease the costs of
insurance against accidents and liability.
Thus, tort law provides the restrictions within
which the private insurers operate.



Fourthly, it is assumed that all the injurers
are solvent and pay the damages in full.
Lastly, it is assumed that there are no
litigation costs. But in real life, litigation is
expensive and it has different effects on
potential victims and potential injurers.
For instance, it may induce the potential
victims not to file actions or induce potential
injurers to take more care.

Economic efficiency is not concerned with
morality or social purpose; rather it requires
the minimization of the three costs:
◦ Losses due to accidents;
◦ Cost of preventing the accidents; and
◦ Costs of administering a system of accident law.

The main points of this theorem are:
◦ If between the injurer and victim, costless
bargaining is possible, then the cost justified level
of accidents will result without the need for judicial
intervention. The gains from trade inherent in an
inefficient level of safety will encourage the parties
to voluntarily negotiate a mutually advantageous
accident bargain that minimizes their joint costs or
losses.

Due to the existence of transaction costs like the
costs of search, negotiation, contract specification,
policing and enforcement, the tort liability arises. If
these costs could be avoided, then the contractual
bargains would provide market deterrence that would
be adequate for economic efficiency.

Transaction costs can be divided into two
categories:
◦ Physical Transaction costs: These costs are
associated with actually locating, negotiating with
and consummating bargains between cost bearers.
If these costs are imposed they would generally be
prohibitive in nature. For example, costs involved in
environmental pollution and road accidents.
◦ Information Transaction costs: In these cases, the
terms of the accident bargains do not properly
reflect the social cost savings because one or both
the parties are ill-informed.

The tort liability system plays a significant
role in reducing the frequency with which we
accidentally lose our property, health and
lives. By allocating the cost of accidents, the
tort liability system provides incentives for
precaution, much as markets allocate costs
and provide incentives for production.
Improving the efficiency of the tort liability
system can make the world safer at no more
cost.


Observers note various signs of inefficiency in
tort liability law, such as significant
differences in the level of compensatory
damages for the same injury in different
countries of similar wealth, unpredictable
decisions about liability and damages from
one case to another (“liability disparity”),
defensive medicine, and vaccine shortages.
Moving beyond anecdotes requires careful
statistical studies that remain in short supply.

Under a property rule someone who wants to
use someone else's property must first get
the owner's permission. If he doesn't, he
suffers a penalty designed to get him to do
so - which might be much more than the
actual cost he imposes on the owner. If you
take my car for the weekend without my
permission and get caught you get punished
severely - even if I didn't actually plan to use
the car that weekend.

Under a liability rule someone who wants to
use someone else's property does so, and is
then liable to the owner for the cost the user
inflicts on the owner by using the property.
Under a liability rule, if you take my car (or,
more plausibly, run into it) you are liable to
me for the cost - the loss to me from not
having my car available (or the repair bill if
you ran into it).

A liability rule makes more sense the higher
the transaction costs of allocating something
by voluntary transactions. For instance, it
would be impractical to get everyone else in
*** County to agree to let him drive, even
though he imposes some small risk on them
by doing so, before I left my driveway. A
liability rule makes less sense the more
difficult it is for a court to measure the cost
that someone's use of something imposes on
the owner.

In order to have property rights, one must
define, enforce, and assign them; in order to
have property used by someone other than
the owner, one requires transactions. All of
these activities may be costly, and if their
costs are greater than the benefits of having
property we are better off with a commons.

For example, it would be very costly, when hunting large
animals, to have to stop each time you reached a property
boundary and go get the owner's permission; that is a
transaction cost, and a reason why primitive people who are
using their land to hunt large animals across typically do not
have property rights in the land -although they may have
property rights in the animal, and in land at other times of
the year. Such societies do not have property rights in live
wild animals that are not being chased, because it would be
too costly to define and defend them -to keep track of what
animal belonged to whom. And the benefit would be small,
since there isn't much primitive people can do that affects the
availability of wild animals - not much elasticity on the supply
side of the problem.

The Cost-benefit analysis is the an economic
tool to aid social decision-making, which aim
is to gauge the efficiency of the intervention
relative to the status quo by placing be a
monetary value of the effect on the target
parties it has on their welfare as it would be
valued by them. The concept is based on the
Kaldor-Hicks efficiency and works through
concepts of the willingness-to-pay and the
willingness-to-accept.

The benefits are calculated as sum of the
willingness to pay for gain WTP changes and
the WTA for losses restoration changes. Costs
comprise of the sum of the losses changes
WTA and the foregone gains WTP.

The CBA is aimed for facilitating the decisionmaking. It is an important part of the process,
which reallocates the resources to more costeffective programs and helps to kill many
inefficient projects (Jonn Graham 1995). CBA
leaves decision itself to the law and helping it to
conform to the psychological reference points. It
helps the law to ensure the maximum efficiency
in the decision making process and conform to
the psychological reference points (psychological
issues of reference ) .

The most controversial CBA issues are the
environmental ones, where property rights
are difficult to define. Public debate,
discussion and political leadership can help
to fix it.

In situations involving wrongful deaths, a
monetary figure has to be put on the welfare
loss caused by death. In the US, two parallel
systems to value life have developed under:
(i) tort law; and (ii) regulation. The
methodology adopted by both systems differs
in key respects.

Under tort law (which in theory aims for both
deterrence and compensatory goals), valuation of
death is focused on compensation. Thus,
damages are awarded for the dependents loss of
the decedent’s future income (pecuniary loss),
pain and suffering, distress and loss of
companionship (nonpecuniary losses). No
account is taken of the welfare loss to the
decedent of losing his life (hedonic loss). As tort
awards are made on a case by case basis, the
approach is highly individuated and there is a
large variance in the amount of damages.

In contrast, regulation is focused on
providing the right deterrence signal.
Regulation focuses solely on the hedonic loss
in valuing life and uses a fixed value of
statistical life (VSL) to determine the value of
hedonic loss. No account is taken of lost
income or losses to dependents. Partly due to
costs and pragmatic reasons, the approach
ignores individual differences and results in a
uniform number.
L&E of European Integration


1. On the Theory of Customs Unions
According to art. 23 of the EC Treaty the Community is based
on a Customs Union, i. e . all tariffs and quotas on trade
between Member States are abolished and common external
tariffs are imposed on imports from outside.
Usually it is assumed that
 production factors are perfectly mobile within the
country, yet perfectly immobile between countries
 transport costs are not relevant
 tariffs are the only effective barriers to trade;
particularly those trade barriers relating to differing
currencies are disregarded
 all resources are fully employed
 all markets are in equilibrium.
In the simplest basic model it is furthermore assumed that
there is perfect competition in all goods and factor markets
 the countries united in the customs union are so small that they
are unable, either individually or collectively, to palpably
influence the world market price through their exports and
imports (no ‘terms-of-trade’ effect).

We consider a homogeneous good X that is produced in three
regions: the home country (H), the partner country (P), and the
rest of the world (W).
Before analysing the Customs Union I will give a short
introduction into the welfare effects of a tariff on imports.
SH
DH
Price
I
K
S‘W
p‘W
T
pW
N
Q2
R
Q4
V
Q3
L
SW
Q1 quantity of
importables
Welfare effects of tariffs:



loss in consumer surplus: pWp’WKL
gain in producer surplus: pWp’WJN
gain in tariff revenue: JKVR
Total efficiency loss: IRN
+
The additional
cost of
obtaining the
extra output
KLV
Loss of
consumer
surplus due to
reduction in
consumption
Let us now discuss the effects of a Customs Union on the welfare
in the home country.
Case 1: Perfectly elastic supply function of the partner country
The analysis is based on the following additional assumptions:
 The supply curves of the partner country and of the rest of the
world are assumed to be perfectly elastic.
 The partner country supplies the good at lower prices than the
home country, but at higher prices than the world market.
SH
DH
price
B
C
S‘W
p2
p3
F
x
y
E
Sp
z
SW
p1
A
Q2 Q6
Q4
Welfare analysis:
Gain in consumer surplus: p2CEp3
Loss in producer surplus:
p2BFp3
Loss in tariff revenue:
ABCD
Net effect:
x+y-z
D
Q3
Q5
Q1
quantity of
importables
To summarize, the Customs Union has two types of effects on the
reallocation of resources – the positive effect of trade creation and
the negative effect of trade diversion.
Let us explain both effects:
1) Trade creation
i. e. the Customs Union induces a shift of consumption from the
more expensive home production to the cheaper products of the
partner country.
a) production effect
i. e. the saving of real production costs by shifting production
from home to partner country (area x).
b) consumption effect
i. e. the increase in consumer surplus resulting from increased
consumption (area y).
2) trade diversion
As a consequence of the customs union domestic consumers are
induced to buy imported products from the expensive partner
country instead from the cheaper world market (area z).
Recall, that the net effect of a Customs Union corresponds to x +
y - z.
Thus, without additional assumptions, it is not clear whether the
net effect will be positive or negative for the home country.
How has the specialization of European member states
changed as a consequence of trade creation?
Various studies show that the share of intra-industry
trade did not only rise in the period between 1964 and
1974, but that it also experienced a significant increase
afterwards until the mid 1990s.

Distinct differences exist, however, amongst the
member countries.

The free movement of goods put into practice
The prohibition of customs duties and charges having equivalent
effect



Art. 25 EC declares an absolute prohibition of customs duties and
charges having equivalent effect.
By July 1968, all internal tariffs have been removed.
Since then, the ECJ had to examine in several cases the question as
to whether certain fees were to be seen as charges having
equivalent effect to customs duties.

Examples: Statistical levies, unloading charges,
necessary charges for health and veterinary
examinations of goods, charges for undertaking of
quality controls, or storage charges which are raised at
customs for goods from other member states.
Legal practice in the EU:



Until the early 1990s: principle of destination.
Problem since January 1st, 1993: abolishment of border
controls within the Community makes application of
principle of destination more difficult.
Therefore: Transition ruling, originally meant to be valid
until December 31st, 1996, but still in force.
Legal practice in the EU (ctd.):
Transition ruling from January 1st,1993:
 For the intra-communal commercial trade of goods the principle of
destination has remained in place. Border controls have been replaced
by an electronically supported VAT-detection system.


For intra-communal tourist travel, i. e. direct purchases made by
consumers abroad, the principle of origin holds.
For intra-communal mail order services and the sale of new vehicles
(including ships and airplanes) the principle of destination holds also
for non-commercial sales to private persons.
The Dassonville case (1974)
In 1974 the ECJ in the Dassonville case delivered a very broad
definition of the term “Measures having equivalent effect”:
“All trading rules enacted by the Member States which are capable
of hindering, directly or indirectly, actually or potentially, intraCommunity trade are to be considered as measures having an effect
equivalent to quantitative restrictions”.
Consequence: national legal norms that formally treat domestic
producers and importers alike, but on the facts lead to a disguised
discrimination against foreign competitors, amount to measures
having equivalent effect.
The Cassis de Dijon case (1979)
In its judgment the ECJ confirmed the broad interpretation of Art.
28 EC according to the Dassonville formula and declared that every
product lawfully produced and marketed in a member state should,
in principle, be permitted entry to the markets of the other member
states (principle of origin, principle of mutual recognition).
Furthermore, the ECJ provided an open-ended list of “mandatory
requirements” with additional justifications for “measures having
equivalent effect”.
The Cassis de Dijon case (1979)(ctd.)
The Cassis formula:
“Obstacles to movement in the Community resulting from
disparities between the national laws relating to the marketing of
the products in question must be accepted insofar as those
provisions may be recognised as being necessary in order to satisfy
mandatory requirements relating in particular to the effectiveness
of fiscal supervision, the protection of public health, the fairness of
commercial transactions and the defence of the consumer”.
This open-ended list of “mandatory requirements has been
completed in a series of subsequent decisions.
On the grounds of the “Cassis formula” the ECJ has in a series of
cases classified national regulations as unlawful quantitative import
restrictions and thus enforced the free movement of goods.
The Keck and Mithouard case (1993)
In its judgment the ECJ stated that the time had come to clarify that
Art. 28 EC could not be used at will as a weapon against unpopular
national laws:
“…contrary to what has previously been decided, the applications to
products from other Member States of national provisions restricting
or prohibiting certain selling arrangements is not such as to hinder
directly or indirectly, actually or potentially, trade between Member
States within the meaning of the Dassonville judgement…provided
those provisions apply to all affected traders operating within the
national territory and provided that they affect in the same manner, in
law and in fact, the marketing of domestic products and those from
other Member States”.
The Keck and Mithouard case (1993)(ctd.)
The Keck-formula introduced a distinction between
 certain selling arrangements which are not caught by Art. 28 EC,
insofar as they apply equally to domestic and imported products and
insofar as they affect all domestic economic actors equally
 product characteristics which remain to be caught by Art. 28 EC.