The Law and Economics of Contingent Protection in the WTO

The Law and Economics of Contingent Protection in the WTO

Elgar International Economic Law series

Petros C. Mavroidis, Patrick A. Messerlin and Jasper M. Wauters

In this important book, three of the leading authors in the field of international economic law discuss the law and economics of the three most frequently used contingent protection instruments: anti-dumping, countervailing measures, and safeguards. When discussing countervailing measures, the authors also discuss legal challenges against prohibited and/or actionable subsidies. The authors’ choice is mandated by the fact that the effects of a subsidy cannot always be confined to the market of the WTO Member wishing to react against it. Assuming there are effects outside its market, an injured WTO Member can challenge the scheme as such before a WTO Panel. Taking the three agreements for granted as a starting point, the book provides comprehensive discussion of both the original contracts, and the case law that has substantially contributed to the understanding of these agreements.

Chapter 11: Special and differential treatment

Petros C. Mavroidis, Patrick A. Messerlin and Jasper M. Wauters

Subjects: economics and finance, international economics, law - academic, international economic law, trade law


10. Thou shall not be punished in any other way Art. 32.1 SCM states that: ‘No specific action against a subsidy of another Member can be taken except in accordance with the provisions of GATT 1994, as interpreted by this Agreement.’ The interpretation of this provision was the core subject-matter of the dispute between the United States and a host of WTO Members regarding the US Continued Dumping and Subsidy Offset Act of 2000 (the ‘CDSOA’), also known as the ‘Byrd Amendment’. According to this law, the United States promised to disburse the monetary equivalent of all anti-dumping/countervailing duties perceived to those US economic operators that had supported a petition to initiate an investigation. Both the Panel and the Appellate Body held that the Byrd Amendment was violating Art. 32.1 SCM. The Appellate Body, in its report on US – Offset Act (Byrd Amendment), held the view that the US legislation at hand was specific legislation against subsidization: specific, because it was linked to anti-dumping or CVD proceedings; against, because the Byrd payments had an adverse bearing on subsidies and they did not feature among the permissible actions against subsidization (undertakings, provisional or definitive CVDs). We quote from para. 256: Because the CDSOA has an adverse bearing on, and, more specifically, is designed and structured so that it dissuades the practice of dumping or the practice of subsidization, and because it creates an incentive to terminate such practices, the CDSOA is undoubtedly an action ‘against’ dumping or a subsidy, within the...

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