Subsidies in International Trade from the WTO Perspective. A Legal and Economic Analysis

Transcription

1 Subsidies in International Trade from the WTO Perspective A Legal and Economic Analysis

2 XI Table of contents Acknowledgments and thanks giving...v Table of contents...xi List of Abbreviations... XVII Subsidies in International Trade from the WTO Perspective Introduction The background discussion Dogmatic debates on Law and Economics from the view point of a number of theorists Law and Economics debate: from the perspective of the WTO objectives Law and Economics for this research The political economy dimension Need for international financial coordination; The relationship between the IMF and the WTO Nations are divided as Developing, Developed and Less-Developed countries The Less-Developed countries The Developing countries The issues for research Research hypothesis and objectives Objectives Methodology and the style Regarding the Chapters The critical perspective of the regulation of subsidies...36 Chapter 1: The WTO Trading System Introduction to the WTO trading system General discussion on trading activity from the historical and modern perspective Previous trade regulating institutions before the WTO, the ITO and GATT What is the WTO?... 42

3 XII Table of contents 2 International Law norms and the WTO The WTO and the domestic legal system Flexibility at the normative level, an economic necessity Free trade and Fair trade; a brief discussion MFN clause and exceptions Profit and welfare approach; brief discussion Subsidies from the WTO perspective Chapter 2: Subsidies in International Trade from the WTO Perspective Introduction New trends in international trade (a) Practices versus obligations Subsidy and state aid, general discussion. The WTO and EU as an instance (a) State aid and Subsidy, the EU approach (general comparison) Economic aspects, for checking subsidies Subsidies in relation to production function Between efficiency and welfare Subsidies under GATT/WTO Subsidies from GATT onwards, a brief discussion Party to SCM agreement and Subsidies in relations to the WTO (a) The Key features of the WTO Subsidy Agreement (a) (i) Financial contribution (a) (ii) Benefit (a) (iii) The recipients of benefits or the question of Specificity Classification of subsidies Prohibited subsidies (a) Export promoting subsidies (a) (i) Explaining briefly the Illustrative list of Export Subsidies under Annex I of the SCM Agreement (b) Subsidies contingent upon the use of domestic over imported goods Actionable Subsidies Serious-prejudice Article Non-actionable Subsidies Subsidies for development Commitments of the Industrialized Economies under the GSP Special and Differential treatment, Article 27 of the SCM Agreement (a) Other opinion (critical of the approach adopted by the Appellate Body) (b) Subsidy in global mergers and acquisitions: new trends The North South divides on subsidies The practices followed by the Developed countries The WTO Ministerial Conferences (a) The Doha Conference (b) The Hong Kong Conference in

4 XIII 8.2 (c) Bali Conference The Airbus-Boeing dispute (raising new-milestones) Case (i): European Communities and Certain Member States-Measures Affecting Trade in Large Civil Aircraft (WT/DS316/R) Case (ii): United States-Measures Affecting Trade in Large Civil Aircraft (WT/DS353/R) Conclusions Chapter 3: Discussing Agriculture Subsidies; from the WTO perspective Free trade versus subsidies for the agricultural sector Subsidies for Agriculture; A crucial issue for the Member States (a) Price volatility (b) Food Security The Agreement on Agriculture and the WTO Subsidies Agreement Need for the classification of agricultural subsidies in the form of Amber, Blue and Green boxes Agriculture subsidies can be classified in three categories Amber, Blue and Green boxes: A general discussion (a) Amber box (b) Blue box (c) Green box The Agreement on Agriculture with lex specialis status Farm Subsidies as a tug of war between Developed and Developing economies Developed countries Developing countries Less-Developed countries (a) Taking the case of Africa specifically Discussion on agricultural subsidies under the Doha Development Agenda and further consultations during the Bali Bali conference Critical evaluation of the impact of Free trade policies on the farmers: The Indian perspective as, a Developing country Market Socialism as an alternative for the Developing and Less-Developed countries The relationship between subsidies for Biofuels and agricultural subsidies Downsides of biofuels cropping (a) Example of Biofuels in Malaysia (b) As an instance of developed country the US is taken here as an example (c) The effect of bio-fuel in Africa Conclusions Chapter 4: Subsidies for Dumping Subsidies for dumping: a market domination strategy in the free trade system Trade practice of Dumping and its type When dumping really affects the market position Types of dumping as revealed in practice

5 XIV Table of contents 2.2 Subsidies for predatory pricing, beyond the scope of justifiable limits Adoption of competition policy as an alternative to restrict unfair trade practices Subsidies for the promotion of export by the Developing countries: Does this constitute dumping? Subsidies for Dumping agricultural products Conclusions Chapter 5: Unfolding the intricacies of trade subsidies through the WTO Rules of Origin General explanation about Free Trade and Rules of Origin Rules of Origin and free trade objectives, an interface The classification of Rules of Origin Free trade between Developed and Developing countries and the Rules of Origin Need for the Rules of Origin The trade relationship between Developed and Developing countries and the new forms of cost advantages Rules of Origin and the trade subsidy relationship Trading through Preferential Trade Agreements in the multilateral trading system (a) The question of trade subsidies. An example from NAFTA Applying the rules of origin in two dimensions; between legality and trade benefits Ascertaining subsidies for dumping, through the rules of origin Conclusions Chapter 6: The impact of trade subsidies on the environment: A problem for the WTO trading system Free trade and sustainable development, a hard choice Tax, Subsidy and Environment: a matter of economic choices NAFTA Trade subsidies affecting the environment The Paper Industry Concerning trade-benefits and the environment; a choice of values and standards Dismantling of ships: Environment standards a hard choice for the nations The choice between free trade and sustainable development Trade restriction for environmental protection The north-south divide on environment issues Balancing trade and environment: a complex issue for the WTO A critique of free trade policy, the case of subsidies for fisheries Conclusions Chapter 7: Remedies: The Procedural Measures Introduction Aims and purpose The parties, amicus curiae and third party...364

6 XV 3 The DSU as the dispute resolving system The dispute resolution by the DSB (a) Panel body after consultations (b) Establishment of the Appellate Body Constructive remedies Compliance Procedure for remedies in the case of trade subsidies Procedural steps in the case of obtaining remedies for prohibited subsidies Procedural steps in the case of obtaining remedies for actionable subsidies The countervailing measures Imposition of countervailing duties The puzzle of double remedies Arbitration Conclusions Chapter: Conclusions and Suggestions List of Cited Cases Bibliography Annex I Annex II Annex III Annex IV Appendix: Instances of business subsidies in Finland...425