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 12: Standard of review

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

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


11. Special and differential treatment Article 27 sets forth a whole list of exceptions to the general rules on subsidies with respect to developing countries. Most of these provisions are transitional in nature and allow developing countries more time to eliminate some subsidies programmes which would otherwise be in violation of the rules on prohibited subsidies of Article 3 SCM Agreement. Most of these transitional arrangements have now expired and a lot of the special and differential treatment provisions of Article 27 have thus lost their meaning. The Agreement also contains some additional exceptions for developing countries involved in countervailing duty examination, which continue to apply. In what follows we will provide a brief overview of the special and differential rules for developing countries. A special and differential treatment (that is, essentially a longer transitional period during which prohibited subsidies will be tolerated and in general a more ‘relaxed’ approach vis-à-vis subsidies) is provided for developing country Members (Art. 27 SCM Agreement) and for Members in the process of transformation from centrally planned to market economies (Art. 29 SCM Agreement).1 Article 27 distinguishes between developing countries in general, on the one hand, and so-called ‘Annex VII countries’, including least developed countries, on the other. Those countries listed in Annex VII to the SCM Agreement are (a) least developed countries designated as such by the United Nations which are Members of the WTO; and (b) any of the following WTO Member countries as long as their GNP per capita...

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