The WTO Law of Subsidies: A Comprehensive Approach
About this book:
The WTO Law of Subsidies provides a comprehensive analysis of the law of subsidies under the WTO regime. Subsidies are arguably the dominant theme in International Economic Law and a prolific case law has been elaborated by WTO Panels and Appellate Body in response to the multitude of complaints lodged in the past two decades (Softwood Lumber, Airbus, Boeing, etc.). The case law and norms disciplining subsidies under the WTO legal regime are of utmost importance first for international trade ministries, parliaments, and international institutions (OECD, CNUCED, FAO, etc.). However, non-governmental organizations (World Wide Fund, etc.) are also directly concerned by this topic regarding, for example, fisheries subsidies and their impact on overexploitation of marine resources. The private sector (fishing fleets, fishermen, extractive industries, etc.) is also affected by this topic particularly regarding future investments.
Unfortunately, it is possible to be overwhelmed by the complexity of this case law. Going through this complexity, this book offers highly strategic information to both complaining and defending parties on how to advance legally their interests. Actually, one of the major characteristics of this book is to address all legal subtleties without ever trying to avoid them.
What’s in this book:
This book is structured into three Parts, as follows:
- Part I adopts the perspective of a WTO member seeking to counter an alleged subsidy granted by another Member. To this end, this Part scans all WTO Agreements containing cumulative disciplines and remedies relating to the granting of subsidies. Therefore, not only the SCM Agreement, but also the Agreement on Agriculture (AoA), GATT 1994, and even the 1980 Agreement on Trade in Civil Aircraft (ATCA) are scanned and analyzed in detail.
- Part II adopts the perspective of a WTO Member accused of granting subsidies violating subsidies disciplines. To this end, an original classification is offered of the various strategies that can be used by such a Member. For this purpose, a distinction is made between the “threshold strategy” where the existence of a challengeable subsidy is recused from the outset by the accused Member, the “denying violation of disciplines strategy,” the “exemption or exception strategy,” the “procedural and evidentiary strategy,” and finally the “implementing strategy.”
- Part III of this book, which could turn out to be the most useful for the community of agents concerned by subsidies, offers an original examination of pending legal issues. To this end, a relevant distinction is established between pending legal issues partially answered by present case law and pending legal issues not still answered by present case law.
How this will help you:
As the title of this book indicates, one of its notable aspects is that it is “comprehensive.” First, it avoids unnecessary legal jargon, making it accessible to a large public. Second, it adopts a progressive approach where legal subtleties are not avoided but presented at the right moment and the right place, thereby not overwhelming the reader. This peerless book is thus a source of strategic knowledge for practitioners, academics, students, policy makers in governments and international organizations. Law firms involved in subsidies cases are naturally at the forefront of the community of agents concerned by this topic.
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List of Abbreviations
Scanning WTO Agreements for Cumulative Disciplines and Remedies to Counter an Alleged Subsidy Granted by Another Member (The Perspective of the Accusing Member)
Defining the Set of Measures Subject to SCM Disciplines (So-Called “Specific Subsidies”)
Various Subtleties Relating to the Three Criteria Defining a Specific Subsidy (i.e., Financial Contribution, Benefit, and Specificity)
Satisfying Ex Ante, the Anti-distortion “Object and Purpose” of the SCM: Determining the Subset of Subsidies Subject to per se Disciplines (So-Called “Prohibited Subsidies”)
Alternative Remedies under the SCM Agreement for a Violation of Obligations Relating to Prohibited Subsidies
Satisfying Ex-Post, the Anti-distortion “Object and Purpose” in the SCM: Defining the Subset of “Actionable Subsidies” Based on Their Adverse Trade Effects
Alternative Remedies under the SCM Agreement for a Violation of Obligations Relating to Actionable Subsidies
Recourse to Countervailing Duties (CVDs) in the Domestic Forum of the Importing Country on the Basis That the Actionable Subsidies Are
“Countervailable” and Not Because They Are Actionable
Subtleties Relating to Actionable Subsidies
How to Know If a Measure Is a “Subsidy” or an “Export Subsidy” under GATT 1994?
GATT 1994 Per Se Disciplines
GATT 1994 Effects-Based Disciplines
Alternative Remedies under an (Unlikely) Exclusive GATT 1994 Claim Relating to a Non-agricultural Subsidy
How a TRIMs Measure Could Involve a Subsidy
Remedy under TRIMs for the Measure at Issue and Consequence for the Involved Subsidy
Principal Subsidies Disciplines of the ATCA
Remedies under the ATCA and Why the ATCA Is Not Invoked as a Basis of a Complaint About Civil Aircraft Subsidies
What Is Behind the Expression “Export Subsidy” in the AoA?
What Is Behind the Expression “Domestic Support” in the AoA?
Per Se Disciplines in the Agreement on Agriculture
GATT 1994 Disciplines Based on the Avoidance of Adverse Trade Effects
Per Se Disciplines under Article XVI:4 of GATT 1994: A Discord Between Article XVI:4 of GATT 1994 and the AoA?
The Appellate Body’s Clarification in US – Upland Cotton of the Meaning of the Expressions “Subject to” and “Except as Provided in the AoA”
“EC Sugar”: Confirmation by the Appellate Body of the “Specific Provisions Dealing Specifically with the Same Matter” Doctrine
Scanning WTO Case Law for Strategies to Refute Violation of Subsidies Disciplines (The Perspective of the Accused Subsidizing Member)
Invoking a Missing “Financial Contribution”
The Threshold Strategy Through the Benefit Criterion (I)
The Threshold Strategy Through the Benefit Criterion (II): “Pass-Through” of Benefit
The Threshold Strategy Through the Contestation of the Specificity of the Measure at Issue
Some Examples of the Threshold Strategy in the Context of a Complaint Invoking the Agreement on Agriculture
Denying Violation of the Prohibition of “Contingency upon Export Performance”
Denying Violation of the Prohibition of “Contingency upon the Use of Domestic over Imported Products”
Contesting (in the CVD Context) That the Causal Link Between Subsidized Imports and Injury to A Domestic Industry Is Adequately Established
Contesting (in a Non-CVD Context) That a Causal Relationship Has Been Demonstrated Between a Subsidy and Adverse Effects to the Interests of Other Members: The Paradox of a More Sophisticated Causality Analysis Than in a CVD Context
Countering Successfully That There Was Not an Appropriate Matching by the CVD Authorities Between the Elements in the Numerator and The
Elements in the Denominator When Calculating the Per-unit Subsidy Ratio
Invoking Explicit Exemptions for Developing Countries (SCM Based Complaint)
Invoking Implicit Exemptions (SCM Based Complaint)
Arguing Successfully in EU – PET (Pakistan) That There Is No Exception to the Excess Remissions Principle When Determining How Remissions
under Duty Drawback Schemes Are to Be Identified as Subsidies
Invoking Unsuccessfully the Exception Strategy in the AoA: Does Article 10.2 of the AoA Exempts Agricultural Export Credits from the
Export Subsidy Disciplines of the AoA?
Rejecting Successfully That a Certain Measure Is Not a “Measure Taken to Comply” and Therefore Does Not Fall Within Article 21.5 Proceedings: The “Inextricable Link” or “Clear Connection” Test
Arguing Unsuccessfully That the Original Recommendations and Rulings Do Not Remain Operative Through Compliance Panels Proceedings Unless New Recommendations Are Issued by These Panels: The Case of FSC Subsidies
Arguing Unsuccessfully That Similar Payments Made after the Original Proceedings Are Beyond the Scope of Article 21.5
Arguing Unsuccessfully Before an Article 21.5 Panel That, When an Article Covers Multiple Obligations, the Mere Listing of This Article in the Panel Request Is Sufficient for the Panel Request to Cover All These Obligations
Attempting Unsuccessfully to Introduce in Compliance Proceedings a New Claim Relating to Unchanged Aspects of the Original Measure
Arguing Successfully That If the Underlying Subsidy Has Ceased to Exist (And Therefore Has Been “Withdrawn” in a Passive Way), There Is No
Additional Requirement, under Article 7.8 of the SCM, to Remove Any Lingering Effects That May Flow from That Subsidy
Scanning Pending Legal Issues in the Context of Present Norms
Confirming a Narrow Interpretation of the Concept of “Price or Income Support”
GATT Article XX Exceptions Carried Forward to Violations of the SCM and the AoA?
Double Counting Hypothesis for Non-market Economies: Recent Recognition by the Appellate Body of Its Possibility When Concurrent Countervailing Duties and Antidumping Duties Are Levied (The Case of Domestic Subsidies)
Confirming the Prospective Nature of WTO Remedies
Calculating the Ratio of Per Unit Subsidization in CVD Proceedings: Could the Denominator Include the Subsidy Recipient’s Production
Overseas? The US Washing Machines Jurisprudence
Dual Pricing (Gas, Oil, Etc.): Not a Challengeable Subsidy Because the Specificity Criterion Is Probably Not Satisfied
Final Clarification on Why Article III:8(b) of GATT 1994 Does Not Shield Discriminatory Internal Taxes on Imported Products from the National
Treatment Disciplines of Article III of GATT 1994
Is an Undervalued Exchange Rate System a De Facto Export Subsidy?
Open Legal Questions Relating to Fisheries Subsidies under Present Norms
Carbon Dioxide Emissions
The Adequate Legal Approach to “Transnational Subsidies” (Also Called “Extended Subsidies”)
Fisheries Subsidies in the New Draft SCM: At Last a Recognition of the Concept of Environmentally Harmful Subsidies?
The Paradox of the Absence of Complaints in the WTO Against Measures Taken in Export Processing Zones, Special Industrial Zones, or Free Trade Zones
Would the US “Destination-Based Cash-Flow Tax” Be WTO Consistent?
Is a Carbon Tax Eligible to BTA?
In Connection with the Panel Request
In Relation with Collection of Information
Attempting Unsuccessfully to Produce Evidence Based on the Practice of Other Members
Arguing Successfully That the Fact, That a Measure Induces the Exercise of Rights That Are WTO Consistent, Is Not a Valid Consideration in Deciding Whether Such Measure Is a Specific Action “Against” a Subsidy under Article 32.1 of the SCM
Arguing Successfully That the SCM Leaves to Individual Members How to Determine in Their Internal Regime What Constitutes the Date of Initiation of a CVD Investigation
Arguing Unsuccessfully There Is a Requirement in Article 13.1 of the SCM to Allow Sufficient Time for Consultations to Be Held Before Initiation of
Invoking Successfully That a System of Limited Disclosure Provides a Derogation from, or Replaces, the Obligations of an Investigating Authority
under (This) Article to Require Justification for Treatment of Information as Confidential and, If Such Treatment Is Justified, to Require Non-confidential Summaries of the Confidential Information, or, Alternatively, to Require Justification for the Non-summarization of Certain Information (Article 12.4.1 of the SCM)
Invoking the Failure by the Investigative Authorities to Inform the Interested Members and Interested Parties of the “Essential Facts under Consideration Which Form the Basis for the Decision Whether to Apply Definitive Measures”
Arguing Unsuccessfully That an Enterprise or Group of Enterprises (Fortuny in This Case) May Not Be Considered to Constitute a Domestic
Industry If, at the Time the Application Is Filed or During the Subsidy POI, It or They Were Not Actually Producing Output
Contesting Unsuccessfully the CVD Application Is “by or on Behalf of the Domestic Industry,” Namely That Economía’s Examination of the Degree of Support for the Application Was Inadequate
Invoking Successfully a Bad Selection of the Injury Period of Analysis in the CVD Context
Arguing Successfully That the Panel Failed to Apply the Proper Standard of Review
Claiming Unsuccessfully That a Panel Is Justified to Exclude During Its Proceedings Evidence That, Although Contained in the Record of the CVD
Investigation, Had Not Been Cited in the CVD’s Decision
Issues Relating to the Use of Adverse Facts Available
Claiming Unsuccessfully That the Investigative Authorities Should Have Made a Factual Inference from Evidence on the Record That Would Not
Reasonably Have Suggested Such an Inference
Arguing Successfully That the Panel Did Not Use the Expression “Probative and Compelling” in the Sense of a New Evidentiary Standard for Examining Evidence on the Record of a CVD Investigative Authority
Failing to Counter US’ Allegation That the Panel Appeared Not to Have Considered Seriously Any Evidence That Did Not Amount to a “Smoking
Gun” (for Showing Entrustment or Direction)
Arguing Successfully That in the Case of Non-recurring Subsidies, If the POI Used for Determining the Existence of a Subsidy Indicates That the
Subsidy Benefit Will No Longer Exist at a Future Time When a CVD Is Imposed, Then This CVD Is Inconsistent with the SCM
Requesting Successfully That the Panel Make Findings Regarding Expired Measures Which Ceased to Have Legal Effect
Arguing Successfully That the Investigative Authorities Failed to Provide the “Results” of a Verification Visit in Violation of Article 12.6 of the SCM
WTO Dispute Settlement Reports and Arbitration Awards as at 1 March 2019