WTO disciplines on subsidies and countervailing measures : balancing policy space and legal constraints / Dominic Coppens.
2014
K3825 .C67 2014 (Map It)
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Details
Title
WTO disciplines on subsidies and countervailing measures : balancing policy space and legal constraints / Dominic Coppens.
Published
Cambridge, United Kingdom : Cambridge University Press, 2014.
Call Number
K3825 .C67 2014
ISBN
9781107014770
1107014778
1107014778
Description
xlviii, 646 pages : illustrations ; 24 cm.
System Control No.
(OCoLC)841228410
Bibliography, etc. Note
Includes bibliographical references (pages 614-633) and index.
Record Appears in
Variant Title
World Trade Organization disciplines on subsidies and countervailing measures
Table of Contents
List of figures
xx
List of tables
xxi
Acknowledgements
xxii
Foreword / Petros C. Mavroidis
xxv
Table of WTO and GATT dispute settlement reports
xxvii
List of abbreviations
xlvi
General introduction
1
1.
Rationales for offering subsidies
5
1.1.
The absence of a rationale for subsidization
6
1.2.
The market failure rationale for subsidization
8
1.3.
The profit-shifting rationale for subsidization
10
1.4.
The redistribution rationale for subsidization
12
1.5.
The political-economy rationale for subsidization
13
1.6.
Conclusion
16
pt. I
Legal disciplines on subsidization and the imposition of countervailing measures
19
2.
Historical overview
21
2.1.
GATT 1947
21
2.2.
The 1954--1955 Review Session and the 1960 Declaration
24
2.3.
The Tokyo Round: the Subsidies Code
27
2.4.
The Uruguay Round: the SCM Agreement and the Agreement on Agriculture
30
2.5.
The Doha Round negotiations
35
3.
The scope of the SCM Agreement
39
3.1.
Financial contribution by a government or income or price support
39
3.1.1.
Financial contribution
39
3.1.1.1.
The (potential) direct transfer of funds and liabilities
40
3.1.1.2.
The provision of goods or services or purchase of goods other than general infrastructure
42
3.1.1.3.
The government forgoes revenue which is otherwise due
45
3.1.2.
By a government
50
3.1.2.1.
Direct financial contribution: by a government in the narrow sense or a public body
50
3.1.2.2.
Indirect financial contribution: entrustment or direction of a private body
53
3.1.3.
Income or price support
57
3.2.
Benefit
59
3.2.1.
Determination of the relevant benchmark when private prices are distorted and when the government creates a market
63
3.2.1.1.
Determination of the relevant benchmark when private prices are distorted
65
3.2.1.1.1.
Alternative benchmarks in the case where the government provides goods or services
65
3.2.1.1.1.1.
When could alternative benchmarks be used?
68
3.2.1.1.1.2.
How should alternative benchmarks be constructed?
70
3.2.1.1.2.
Alternative benchmarks in the case where the government transfers (potential) direct funds
72
3.2.1.1.3.
Doha Round negotiations
74
3.2.1.2.
Determination of the benchmark when the government creates a market
75
3.2.1.2.1.
Introduction to the Canada -- Renewable Energy/Feed-in Tariff Program case
76
3.2.1.2.2.
When could an alternative benchmark be used?
79
3.2.1.2.3.
What is the alternative benchmark in a market created by the government?
82
3.2.1.2.4.
Through which types of financial contribution could a market be created?
85
3.2.1.2.5.
Conclusion
87
3.2.2.
Determination of the recipient
88
3.2.2.1.
Pass-through of benefit
90
3.2.2.1.1.
Countervailing duty cases
90
3.2.2.1.2.
Actionable subsidy cases
96
3.2.2.2.
Privatization of a subsidized enterprise
97
3.3.
Specificity
100
3.3.1.
Subsidies deemed to be specific
100
3.3.2.
Specificity de jure and de facto
101
3.3.2.1.
De jure specificity
103
3.3.2.2.
Non-specificity resulting from objective eligibility criteria
106
3.3.2.3.
De facto specificity
107
3.3.3.
Regional subsidies
111
4.
Disciplines on subsidies
115
4.1.
Prohibited subsidies
116
4.1.1.
Export subsidies
116
4.1.1.1.
Export subsidies in the meaning of Article 1 in conjunction with Article 3 of the SCM Agreement: subsidies `contingent' on exportation
119
4.1.1.2.
Export subsidies in the meaning of one of the items of the Illustrative List
124
4.1.1.2.1.
The provision of goods or services favourable to exporters
125
4.1.1.2.2.
Border tax adjustments and duty drawback systems
127
4.1.1.2.2.1.
Border tax adjustments
127
4.1.1.2.2.1.1.
Introduction
127
4.1.1.2.2.1.2.
Direct taxes
129
4.1.1.2.2.1.3.
Indirect taxes
130
4.1.1.2.2.2.
Duty drawback systems
132
4.1.1.2.3.
The (potential) direct transfer of funds: export credit support
135
4.1.1.3.
Export subsidies not prohibited under the Illustrative List
136
4.1.2.
Local content subsidies
140
4.2.
Actionable subsidies
143
4.2.1.
Injury to the domestic industry
144
4.2.2.
Nullification or impairment of benefits
146
4.2.3.
Serious prejudice
147
4.2.3.1.
The need to demonstrate present adverse effects
149
4.2.3.2.
The origin and likeness of products under a serious prejudice claim
151
4.2.3.3.
The delineation of the relevant product market under a serious prejudice claim
153
4.2.3.4.
Types of market phenomena
154
4.2.3.4.1.
Volume effects
154
4.2.3.4.1.1.
Displacement or impedance of exports to the market of the subsidizing member or a third country
154
4.2.3.4.1.1.1.
Contextual support to show displacement or impedance to third-country markets
156
4.2.3.4.1.1.2.
Circumstances in which no displacement or impedance of trade would arise
160
4.2.3.4.1.2.
Significant lost sales in the same market
161
4.2.3.4.1.3.
Increase in the world market share of primary product or commodity
161
4.2.3.4.2.
Price effects
163
4.2.3.4.2.1.
Significant price undercutting
163
4.2.3.4.2.2.
Significant price suppression or depression
164
4.2.3.5.
Causation
165
4.2.3.5.1.
Causation standard
165
4.2.3.5.2.
Methodology: unitary or bifurcated analysis
166
4.2.3.5.3.
The nature of the causation analysis: quantitative and/or qualitative?
169
4.2.3.5.4.
Collective assessment of subsidies and their effect
172
4.2.4.
Analysis of relevant case law
174
4.2.4.1.
Indonesia -- Autos
174
4.2.4.2.
US -- Upland Cotton
176
4.2.4.3.
EC -- Large Civil Aircraft
178
4.2.4.3.1.
Displacement and significant lost sales
179
4.2.4.3.2.
Causation
180
4.2.4.4.
US -- Large Civil Aircraft
182
4.2.4.4.1.
Serious prejudice resulting from product effects caused by R&D subsidies
183
4.2.4.4.2.
Serious prejudice resulting from price effects caused by tied tax subsidies
184
4.2.4.4.3.
Collective assessment of subsidies and their effects
186
4.3.
Non-actionable subsidies
187
4.4.
The applicability of the GATT with regard to subsidies
189
4.4.1.
The national treatment obligation stipulated in Article III of the GATT
189
4.4.2.
The general exceptions stipulated in Article XX of the GATT
192
5.
Remedies
196
5.1.
Multilateral remedies: the WTO dispute settlement system
197
5.1.1.
Timeframe
198
5.1.2.
Information gathering
199
5.1.3.
Implementation standards and remedies in case of non-implementation
200
5.1.3.1.
Prohibited subsidies
200
5.1.3.1.1.
Implementation
200
5.1.3.1.2.
Remedy in case of non-implementation
203
5.1.3.2.
Actionable subsidies
211
5.1.3.2.1.
Implementation
211
5.1.3.2.2.
Remedy in case of non-implementation
211
5.1.3.3.
Non-actionable subsidies
219
5.2.
Unilateral remedies: countervailing measures
220
5.2.1.
Procedural requirements
220
5.2.1.1.
Initiation and duration
221
5.2.1.2.
Consultation of alleged subsidizing member
222
5.2.1.3.
Gathering of evidence
223
5.2.1.3.1.
Due process rights in the gathering of evidence
223
5.2.1.3.2.
The evidentiary standard
225
5.2.2.
Substantive requirements
227
5.2.2.1.
Specific subsidy
227
5.2.2.2.
Injury or threat of injury
228
5.2.2.2.1.
Positive evidence and objective examination
229
5.2.2.2.2.
Volume and/or price effect
232
5.2.2.2.3.
The impact of volume and/or price effect on the state of the domestic industry
233
5.2.2.2.4.
Definition of domestic industry
234
5.2.2.2.5.
Threat of injury
236
5.2.2.3.
Causation
237
5.2.3.
The prohibition on double remedies
242
5.2.4.
Imposition of countervailing measures
245
5.2.5.
Duration of countervailing measures
247
5.2.5.1.
Administrative review
248
5.2.5.2.
Sunset review
249
5.2.6.
The standard of review
250
6.
Differential treatment
253
6.1.
Ratione personae: special and differential treatment for developing countries
253
6.1.1.
Special and differential treatment for prohibited subsidies
254
6.1.1.1.
Export subsidies
254
6.1.1.1.1.
Annex VII developing countries: least-developed countries and low-income countries listed in Annex VII(B)
254
6.1.1.1.2.
Small trading developing countries
256
6.1.1.1.3.
Export competitiveness
260
6.1.1.2.
Local content subsidies
266
6.1.2.
Special and differential treatment for actionable subsidies
267
6.1.3.
Special and differentia] treatment for countervailing duties
273
6.1.4.
Conclusion
277
6.2.
Ratione materiae: the Agreement on Agriculture
279
6.2.1.
Export competition
280
6.2.1.1.
Order of analysis
280
6.2.1.2.
Disciplines on agricultural export subsidies
281
6.2.1.2.1.
Listed types of export subsidy
282
6.2.1.2.1.1.
Scope
282
6.2.1.2.1.1.1.
Direct subsidies to agricultural producers contingent on export performance
283
6.2.1.2.1.1.2.
Payments on the export of an agricultural product financed by virtue of government action
285
6.2.1.2.1.1.3.
Subsidies to reduce the costs of marketing exports of agricultural products
289
6.2.1.2.1.2.
Disciplines
290
6.2.1.2.1.3.
Conclusion and Doha Round negotiations
296
6.2.1.2.2.
Non-listed types of export subsidy
297
6.2.1.2.2.1.
Scope
297
6.2.1.2.2.2.
Disciplines
299
6.2.1.2.2.2.1.
Actual circumvention
299
6.2.1.2.2.2.2.
Threat of circumvention
301
6.2.1.2.2.2.3.
Conclusion
302
6.2.1.2.3.
Non-commercial transactions: international food aid
304
6.2.1.2.3.1.
Disciplines on international food aid
304
6.2.1.2.3.2.
The need to preserve genuine international food aid
309
6.2.1.3.
The burden of proof
311
6.2.2.
Domestic support
314
6.2.2.1.
Green box domestic support
314
6.2.2.2.
Blue box domestic support
316
6.2.2.3.
Special and differential box domestic support
317
6.2.2.4.
Amber box domestic support
318
6.2.2.5.
Conclusion and Doha Round negotiations
321
6.2.3.
The relationship between the SCM Agreement and the Agreement on Agriculture
323
6.2.3.1.
Are agricultural export subsidies and local content subsidies prohibited under the SCM Agreement?
324
6.2.3.2.
Are agricultural subsidies actionable under the SCM Agreement?
329
6.2.3.2.1.
Agricultural domestic subsidies
329
6.2.3.2.2.
Agricultural export subsidies
331
6.2.3.3.
Are agricultural subsidies countervailable?
332
6.2.3.4.
Conclusion
333
pt. II
Case study: WTO disciplines on export credit support
335
7.
Export credit support
337
7.1.
Definition
337
7.2.
Rationales for and provision of export credit support to non-agricultural products
339
7.3.
Rationales for and provision of export credit support to agricultural products
345
8.
Rationale for disciplining export credit support: historical context
349
8.1.
Export credit support for non-agricultural products
349
8.2.
Export credit support for agricultural products
356
9.
Main elements of the OECD arrangement
358
10.
Disciplines on export credit support for non-agricultural products
361
10.1.
Is export credit support a specific subsidy under the SCM Agreement?
361
10.1.1.
Financial contribution by the government
361
10.1.2.
The benefit element
363
10.2.
Is subsidized export credit support a prohibited export subsidy under the SCM Agreement?
367
10.2.1.
Article 3.1(a) of the SCM Agreement
367
10.2.2.
Export credit support as an export subsidy pursuant to items (j) and (k) of the Illustrative List of Export Subsidies
368
10.2.2.1.
Item (j) of the Illustrative List
368
10.2.2.2.
Item (k), paragraph 1 of the Illustrative List
369
10.2.3.
The relationship between Article 3.1(a) of the SCM Agreement and the Illustrative List of Export Subsidies
372
10.2.3.1.
Could item (j) and paragraph 1 of item (k) be used a contrario?
373
10.2.3.2.
The relevance of item (j) and paragraph 1 of item (k) as export subsidies per se
375
10.2.4.
Export credit practices which are not prohibited: the OECD Arrangement safe haven
378
10.2.4.1.
The potential and actual scope of the safe haven
379
10.2.4.2.
Conformity with the safe haven
381
10.3.
How safe is the safe haven? Is non-prohibited subsidized export credit support countervailable and/or actionable?
386
10.4.
An exception to the export subsidy prohibition for some developing countries
391
10.5.
Export credit support as local content subsidy
392
11.
Disciplines on export credit support for agricultural products
398
11.1.
Export credit support for agricultural products under the Agreement on Agriculture
398
11.1.1.
Scope: export subsidies not listed in paragraph 1 of Article 9 of the Agreement on Agriculture
399
11.1.1.1.
Is subsidized export credit support covered by Article 10.1 of the Agreement on Agriculture?
399
11.1.1.2.
When is export credit support considered an export subsidy within the meaning of Article 10.1 of the Agreement on Agriculture?
404
11.1.1.2.1.
Export subsidies as defined by item (j) of the Illustrative List
405
11.1.1.2.2.
Export subsidies as defined by Article 1 in conjunction with Article 3 of the SCM Agreement
408
11.1.2.
Disciplines: circumvention or threat of circumvention
410
11.2.
Export credit support for agricultural products under the SCM Agreement
413
12.
Export credit support in the light of the GATS
417
13.
Negotiations on export credit support disciplines in the Doha Round
423
13.1.
Negotiations on export credit support for non-agricultural products in the Doha Round
423
13.1.1.
Redrafting the export subsidy standard under items (j) and (k)
423
13.1.2.
Redrafting the safe haven in paragraph 2 of item (k)
425
13.2.
Negotiations on export credit support for agricultural products in the Doha Round
427
13.2.1.
Overview of the negotiation process
427
13.2.2.
The latest draft on disciplines for agricultural export credit support
432
13.2.2.1.
The scope of new disciplines on export credit support
433
13.2.2.2.
The substance of new disciplines on export credit support
433
13.2.2.3.
Evaluation of new disciplines on export credit support
435
14.
Conclusion: normative analysis of disciplines on export credit support
438
14.1.
Overview and normative analysis of disciplines on export credit support for non-agricultural products
438
14.2.
Overview and normative analysis of disciplines on export credit support for agricultural products
441
pt. III
Normative analysis of disciplines on subsidization and the imposition of countervailing measures
445
15.
The scope of the SCM Agreement: specific subsidies
447
15.1.
Financial contribution element
448
15.1.1.
Closed list of government interventions
448
15.1.2.
Subsidization by forgoing revenue otherwise due
451
15.2.
The benefit element
454
15.2.1.
The market benchmark
454
15.2.1.1.
The Canada -- Renewable Energy/Feed-in Tariff Program case: feeding legitimate policy objectives into the benefit analysis?
454
15.2.1.1.1.
The Appellate Body's new approach to the benefit analysis
455
15.2.1.1.2.
The relevance of the pursued policy objective under the Appellate Body's new benefit analysis
458
15.2.1.1.3.
Limiting the implications of the Appellate Body's new approach to the benefit analysis
463
15.2.1.1.4.
Was the Appellate Body's new approach to the benefit analysis warranted?
465
15.2.1.2.
The disregard of the broader regulatory framework for the benefit analysis
468
15.2.2.
The impact of privatization and the distortive effect on competition
469
15.2.2.1.
The impact of privatization
471
15.2.2.2.
The distortive effect on competition
478
15.3.
The specificity element
480
15.3.1.
The rationale for the specificity test
480
15.3.2.
The application of the specificity test
483
16.
Disciplines on subsidization by developed countries
485
16.1.
Disciplines on domestic subsidies
485
16.1.1.
Substantive considerations: subsidies as a legitimate policy tool
486
16.1.1.1.
Research and development subsidies
488
16.1.1.2.
Environmental subsidies
492
16.1.1.2.1.
Technical requirements
493
16.1.1.2.2.
Support for climate-friendly goods
495
16.1.1.2.2.1.
Incentives for the development of the renewable energy sector
495
16.1.1.2.2.1.1.
Incentives for renewable energy production
496
16.1.1.2.2.1.2.
Incentives for biofuel production
500
16.1.1.2.2.2.
Normative analysis of policy space for the development of climate-friendly goods
502
16.1.1.2.2.2.1.
Local content subsidies
504
16.1.1.2.2.2.2.
Producer subsidies
505
16.1.1.2.2.2.3.
Consumer subsidies
512
16.1.1.2.2.2.4.
Conclusion
514
16.1.1.2.3.
Government interventions internalizing the cost of greenhouse gas emissions
515
16.1.1.2.3.1.
Border tax adjustment on carbon tax
516
16.1.1.2.3.2.
Emission trading schemes
518
16.1.1.3.
Assistance to disadvantaged regions
526
16.1.1.4.
Multifunctionality in agriculture
527
16.1.2.
Systemic considerations: the chilling effect on tariff negotiations
529
16.2.
Disciplines on export subsidies
537
17.
Disciplines on subsidization by developing countries
553
17.1.
The rationale for policy space on subsidization
553
17.2.
Disciplines on domestic subsidies
557
17.2.1.
The prohibition on local content subsidies
557
17.2.2.
Disciplines on all other domestic subsidies
558
17.3.
Disciplines on export subsidies
563
17.3.1.
The rationale for policy space to subsidize exports
563
17.3.2.
Policy space given to some developing countries to offer export subsidies
566
17.3.3.
The prohibition on export subsidies imposed on other developing countries
571
17.3.4.
Exchange rate policies under the SCM Agreement
578
17.3.4.1.
Financial contribution analysis
580
17.3.4.2.
Benefit analysis
583
17.3.4.3.
Specificity analysis
584
17.3.4.4.
Conclusion
585
18.
Disciplines on countervailing measures
588
18.1.
The rationale for imposing and restricting CVD action
588
18.2.
The rationale for allowing CVD action under a multilateral trading system
591
18.2.1.
The deterrence justification
593
18.2.2.
The systemic justification
595
18.2.3.
The absence of any justification
599
19.
Disciplines on subsidies in the light of policy responses to the economic crisis
601
Overall conclusion
608
Bibliography
614
Index
634