【只是备个份】subsidies

tbt sps is the development of article 3 gatt national treatment

tbt 3 steps:

like product?

less favorable treatment?

justification?

done in one provision

class 7 The SCM Agreement and Agreement on Agriculture

A. The Competing Objectives of WTO Rules on Subsidies

B. The Definition of a Specific Subsidy

C. The Types of Subsidies that Can Be Challenged

D. Agricultural subsidies

E. Case Studies

条约间的关系

gatt+specific agreement on subsidy+agriculture agreement with a provision of subsidy

TWO: apply at the same time一揽子同时适用 首先考虑if there’s old gatt provision

SCM和Ag同时适用，unless there’s a specific provision to the contrary

ex. if you’re dealing with ag subsidies, the rules on export subsidies are mutually exclusive.

*tbt sps 之间也是同样 if it’s a technical regulation, only rules on technical regulation (tbt) apply

industrial subsidy (?)

definition SCM art 1

a financial contribution by government action that provides a benefit that is specific

ex. (ii) gov revenue that is forgone + art 3.2 gatt [tax discrimination]同时适用

specific: article 2, specificity

ex. Russia cheap gas. this is not covered by gatt. everybody benefit from them

这种补贴不是WTO法所规范的补贴

三种: red yellow green

· green disappeared. non-actionable subsidy.

art 31: “The provisions of paragraph 1 of Article 6 and the provisions of Article 8 [non-actionable subsidy] and Article 9 shall apply for a period of five years”

· 现在只有两种: red (prohibited) and yellow (actionable: you can have. but it should not have adverse effects pursuant to art 5, 6)

· ⚠️are subsidies illegal?

there are 2 kinds of subsidies. red and yellow. it depends.

article 3 prohibited subsidies

two kinds

1. export subsidies: ⚠️ generally illegal, but can be legal on agriculture. 农业出口补贴有特别规定
2. use of domestic goods. also violation of 3.4 of gatt. 如补贴违反NT，就属于actionable补贴

article 3 prohibition

3.1 Except as provided in the Agreement on Agriculture, the following subsidies, within the meaning of Article 1, shall be prohibited:

(a) subsidies contingent, in law or in fact4, whether solely or as one of several other conditions, upon export performance, including those illustrated in Annex I5;

(b) subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.

actionable subsidies

prove adverse effect (art 5), serious prejudice (art 6)

to determine: look at the numbers, prices… (6.3)

article 4 remedies

timelines are 1/2

red subsidy：如有违反，立即改正：immediately. 因为red subsidy is the worst in trade

subsidy is always two-track

1. sue the country that illegally subsidies at the WTO

2. the unilateral track: immediately entitled to raise duty upon tariff to cover for injury caused by the subsidy.

(1)“Countervailing duty”

采取反措施的前提条件：

conduct detailed investigation. (that a product is indeed subsidized. similar to anti-dumping investigation)

(2) alternative:

The subsidized exporter can also agree to raise its export prices as an alternative to its exports being charged countervailing duty.

Art. 5. 6 adverse effect大致了解 如何认定(undercutting, market share…)

product subsidy or producer subsidy ?

⚠️gatt

art 3.2: no tax discrimination on like products

art 3.8(b): the provisions of this article shall not prevent the payment of subsidies exclusively to domestic producers.

—> gatt only deals with products!

art 3 prohibit subsidies on products but governments can give subsidies to domestic producers/the business, and this is regulated by the subsidies agreement, not gatt.

⚠️are governments obliged to treat without discrimination imported and domestic products?

—> yes. discrimination between products are prohibited. art 3 GATT

⚠️are governments obliged to give the same subsidies to domestic producers and foreign producers?

—> this is not an issue under article 3, which deals only with products.

⚠️are there rules about subsidies on producers?

—> yes. the subsidies agreement. 3 types. now 2 kinds remain: prohibited or actionable.

brazil-taxation case

question: are the subsidies legal?

GATT Art. 3 管products；SCM管producer

政府有权给国内producer补贴但不给国外producer。不能discriminate产品。GATT只关于产品。

第一点 区分product和producer补贴. GATT art 3 8 (b)deals with products only；carve-out了producer

“In US – Tax Incentives, the Appellate Body observed that Article III:8(b) "makes clear that the provision of subsidies to domestic producers only, and not to foreign ones, does not in itself constitute a breach of Article III." （因为Art. 3是关于product的）

Insofar as the payment of a subsidy only to domestic producers, to the exclusion of foreign producers, affects the conditions of competition in the relevant product market(s), Article III:8(b) carves out an exception for the payment of such subsidies from the national treatment obligation under Article III.

In other words, to the extent that the payment of subsidies exclusively to domestic producers of a given product affects the conditions of competition between such a product and the like imported product, resulting in an inconsistency with the national treatment obligation in Article III, such a payment would be justified under the exception contained in Article III:8(b), provided that the conditions thereunder are met.”

???第二点 关于SCM art 3.1(b) (I give you xxx subsidy if you use domestic goods.—>red subsidy)

39:00 US Boeing

I will give subsidy to domestic producers that produce cars.

air companies that produce wings.

when you refer to a category of production as a designation criteria, it’s not covered by 3.1(b)

subsidy conditional on the use of domestic product, illegal. 不等于

not contrary to 3.1(b), it’s protected by 3.8.(b)

in the subsidy programme, in the way you designate who can get subsidy.

对比以下两种drafting：

“… a requirement to use domestic over imported goods in order to have access to the subsidy would not be covered by the exception in Article III:8(b) and would therefore continue to be subject to the national treatment obligation in Article III. ”

—> if producer uses domestic products, then you have subsidies. requirement like this is prohibited.

“conditions for eligibility for the payment of subsidies that define the class of eligible "domestic producers" by reference to their activities in the subsidized products' markets would be justified under Article III:8(b) ”

—> this is ok. because this does not oblige the producers to buy or use domestic products.

ex. when the subsidy is written as: i will give a subsidy to domestic producers that produce cars that have four wheels… ok using domestic products is a designation of who get subsidy, this is ok

“conditions for eligibility for the payment of subsidies that define the class of eligible "domestic producers" by reference to their activities in the subsidized products' markets would be justified under Article III:8(b). By contrast, a requirement to use domestic over imported goods in order to have access to the subsidy would not be covered by the exception in Article III:8(b) and would therefore continue to be subject to the national treatment obligation in Article III.”

文字游戏？a question of drafting

agriculture subsidy

背景：agriculture subsidies: special set of rules.

SCM Art. 3.1 “Except as provided in the Ag Agreement”. 所以涉及农业出口补贴时，看农业条约特别规定。

goal: subject agriculture to gatt rules. quickly integrate agri to international trade rules. 其实农业被gatt涵盖，此乃应有之义。然当涉及农业时许多发达国家并不遵守规则，因此特制定专门的农业补贴规则。

art 3, 4 tarification and schedule

tariffication: all hidden border restrictions are transformed into numbers. more transparency

农业的补贴已经tarrification了

subsidy-schedules

the subsidies under Ag agreement functions under the basis of schedule!

countries that had subsidy in 乌拉圭回合 can maintain then and should write into schedule.

the rule on export subsidy in Ag: you should not have them unless it’ written in your schedule.

idea是逐渐reduce，已有补贴的写入scheduel并承诺逐渐减少；没有的不能新增。

Article 3

Incorporation of Concessions and Commitments

1. The domestic support and export subsidy commitments in Part IV of each Member's Schedule constitute commitments limiting subsidization and are hereby made an integral part of GATT 1994.

2. Subject to the provisions of Article 6, a Member shall not provide support in favour of domestic producers in excess of the commitment levels specified in Section I of Part IV of its Schedule.

3. Subject to the provisions of paragraphs 2(b) and 4 of Article 9, a Member shall not provide export subsidies listed in paragraph 1 of Article 9 in respect of the agricultural products or groups of products specified in Section II of Part IV of its Schedule in excess of the budgetary outlay and quantity commitment levels specified therein and shall not provide such subsidies in respect of any agricultural product not specified in that Section of its Schedule.

两种补贴在Ag中的叫法：support

SCM art 3.3 schedules for ag subsidies. domestic support and export subsidy

you can maintain export subsidies, but write them into schedules.

既不能超过schedule中承诺的量，也不能种类超出（schedule中没有的种类）。

*schedule 有很多种，有tariff的，有subsidy的，还有service的。

⚠️谈到农业补贴，首先想what is written on the subsidy schedule

如果是空白的，就不能补贴。当然，under the carpet可以。

article 6 domestic support

-gov有权给domestic support subsidy to the maximum written in schedule.

-AMS (aggregate mesure of support）

in the concept of domestic suppory, 不是所有补贴都是坏补贴。好补贴不用计算进AMS。

every year, AMS. but some subsides are not computed into AMS and are thus not reported.(that are considered to be good subsidies. subsidy of water, to remote areas?transport )

-Art. 6.4: shall not be included in AMS. “under the carpet”. nobody knows this. no report

5 (developed) or 10% (developing) of total annul value of ag production. de minimis subsidies. this is not public (under the carpet).

⚠️农业补贴第一反应看schedule

article 9 export subsidy

• export subsidy is product-specific (xx for carrots) product by product. 论种类

vs

• domestic support is an aggregate amount. each government has an amount. 不论种类 要有entry

⚠️ schedule white?

no subsidy under ag agreement (of course under carpet ok), 特别法不适用，回到SCM一般规则subject to SCM agreement, 根据adverse effect标准判断，meaning according to effects actionable or prohibited. 最终结论，只能给little subsidy （SCM adverse effect标准下， is the subsidy causing adverse effect to the competitor?当然如果是red类的直接不合法）

⚠️

ex.

the us cotton case. us schedule 中没有cotton entry

if you cannot benefit from the specific flexibility under the ag agreement, you’re subject to the normal rules of subsidy agreement which means no export subsidies, and the others are yellow and red depending on their effect.

1:18:00 例子，美国schedule里没有出口补贴条目，那么就不能出口补贴。即，不适用农业补贴的特殊规定，只能退回到SCM一般规定（禁止出口补贴，其他的据效果决定时可起诉还是禁止的补贴。）

ex.

if you have a white paper (your schedule is blank), can yon give domestic support? not under the ag agreement. you can always give under the carpet of course, and you can give subsidies so long as they don’t give adverse effect, so you can give little subsidies.

EC-sugar case

第一点cannot in your schedule violate agreement.

article 10 Prevention of Circumvention of Export Subsidy Commitments

Any Member which claims that any quantity exported in excess of a reduction commitment level is not subsidized must establish that no export subsidy, whether listed in Article 9 or not, has been granted in respect of the quantity of exports in question

“220 we find no provision under the Agreement on Agriculture that authorizes Members to depart, in their Schedules, from their obligations under that Agreement. Indeed, as we have noted, Article 8 requires that, in providing export subsidies, Members must comply with the provisions of both the Agreement on Agriculture and the export subsidy commitments specified in their Schedules. This is possible only if the commitments in the Schedules are in conformity with the provisions of the Agreement on Agriculture. Thus, we see no basis for the European Communities' assertion that it could depart from the obligations under the Agreement on Agriculture through the claimed commitment provided in Footnote 1. ”

第二点Indian imported part is also subject to schedule number. footnote没用？

“222. As we noted above, Footnote 1, being part of the European Communities' Schedule, is an integral part of the GATT 1994 by virtue of Article 3.1 of the Agreement on Agriculture. Therefore, pursuant to Article 21 of the Agreement on Agriculture, the provisions of the Agreement on Agriculture prevail over Footnote 1. We, therefore, do not agree with the European Communities that "there is no hierarchy between the export subsidy commitments in a Member's schedule and the Agreement on Agriculture." ”

第三点 ag和subsidy两条约适用关系

article 21. other WTO agreements still apply, subject to specific rules of agriculture.

“The provisions of GATT 1994 and of other Multilateral Trade Agreements in Annex 1A to the WTO Agreement shall apply subject to the provisions of this Agreement. ”

对于农业产品来说，并不是只有ag agreement 适用！一般性的subsidy agreement也有效！

ex. is there a specific rule in ag? yes, the export subsidy of agriculture! 农业产品出口补贴有特别规定。

us cotton case. the ag flexibility applies if you have a commitment in your schedule.

ag specific rules apply, but other agreements also apply.

美国没有，所以必须遵守subsidy agreement

“We note that the introductory language of the chapeau makes it clear that the Agreement on Agriculture prevails over Article 3 of the SCM Agreement, but only to the extent that the former contains an exception. ”

“The key issue before us is whether the Agreement on Agriculture contains "specific provisions dealing specifically with the same matter" ”

us-cotton case

—> 美国schedule中没有cotton的entry

—> ag agreement在cotton上是silent的。当ag silent，回归一般的subsidy，subsidy agreement applies。所以美国不能有棉花出口补贴

legal structure

there’s flexibility in ag, export and domestic support, if you write it in your schedule!

when ag is silent, subsidy agreement apply.

the Nairobi ministerial decision.

· prohibit ag export subsidy for rich countries.

eliminate all ag export subsidies starting from rich countries. 富国现在被禁止使用一切出口补贴了，一经phased out

ex. 瑞士出台巧克力法案禁止出口非洲的补贴

· footnote 4, 5 : transition is given to certain products and certain countries.

⚠️区分发达国家还是发展中国家，情况不同。ex. 对瑞士，禁止所有出口补贴（农业与否）。对秘鲁，农业出口补贴可以，当然，前提是要写入schedule。