Abstract
The WTO’s Agreement on Subsidies and Countervailing Measures (“SCM Agreement”) plays an important role in ensuring a level playing field in international trade. The agreement captures illegal subsidization practices that have distorting effects on global trade. The number of disputes involving subsidy has been in steady increase, and at the same time subsidy disputes are becoming ever more complex in many respects. In the meantime, the fact that the agreement turns a blind eye to the legitimacy of governmental policies, as it currently stands, has also drawn increasing criticism as well. For instance, the agreement does not contain a general exceptions clause as found in Article XX of the General Agreement on Tariffs and Trade 1994 (“GATT 1994”). Nor does Article XX of GATT 1994 apply to this agreement either.
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Notes
- 1.
Information was not available concerning the number of companies that claimed this credit on their 2011 returns.
- 2.
Article 1.1(a)(1)(iii) of the SCM Agreement thus provides that:
(a)(1) there is a financial contribution by a government or any public body within the territory of a Member (referred to in this Agreement as “government”), i.e. where:
(iii) a government provides goods or services other than general infrastructure, or purchases goods; (emphasis added)
See also the statement “In determining the proper legal characterization of a measure under Article 1.1(a)(1) of the SCM Agreement, a panel must assess whether the measure may fall within any of the types of financial contributions set out in that provision. In doing so, a panel should scrutinize the measure both as to its design and operation and identify its principal characteristics.” (WTO 2008, 2012, 2014).
- 3.
This paper has consulted some documents, which are personally owned but currently inaccessible, since the investigation of the case was finished. The author did not have these document included in the bibliography but stated the reference in the manuscript.
- 4.
Statement of Administrative Action, H. Doc. 103–316, 103d Cong., 2d Sess. 929–30 (1994).
- 5.
See Royal Thai Government v. United States, 30 CIT 1072, 1090, 441 F.Supp.2d 1350, 1368 (2006) “The specificity test {of 19 U.S.C. § 1677(5A)(D)(iii)} was intended to function as a rule of reason and to avoid the imposition of countervailing duties in situations where, because of the widespread availability and use of a subsidy, the benefit of the subsidy is spread throughout an economy”; see also Statement of Administrative Action (“SAA”), H.R. Doc. No. 316, vol. 1, 103d Cong., 2d Sess. (1994).
- 6.
The nature of the R&D programs administered by the U.S. federal government and state governments of the United States are well documented in recent subsidy disputes between the European Union and the United States (WTO 2011).
References
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Lee, J. (2016). Green Subsidies and Countervailing Duty Investigations: Some Implications from Recent Examples of Korea. In: Park, DY. (eds) Legal Issues on Climate Change and International Trade Law. Springer, Cham. https://doi.org/10.1007/978-3-319-29322-6_8
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