United States - Countervailing measures concerning certain products from the European communities (WTO Doc. WT/DS212/AB/R): Recurring misunderstanding of non-recurring subsidies

Gene M. Grossman, Petros C. Mavroidis

Research output: Chapter in Book/Report/Conference proceedingChapter

12 Scopus citations

Abstract

Facts of the Case In United States - Countervailing Measures Concerning Certain Products from the European Communities (WTO Doc. WT/DS212/QB/R, henceforth Certain Products, the Appellate Body (AB) of the World Trade Organization was called upon to revisit the issue of whether the United States can legally impose countervailing duties following the privatization of state-owned enterprises that had received non-recurring subsidies. In twelve cases, the United States Department of Commerce (USDOC) had applied either the “gamma method” or the “same-person method” in assessing the impact of a change of ownership on the continued existence of a benefit from a countervailable subsidy. The European Communities challenged the legality of these methods. Under the gamma method, the USDOC applied an “irrebuttable presumption” that the benefits from a non-recurring subsidy remain in existence for the entire useful life of the assets purchased with benefit of a subsidy. The USDOC did not undertake any inquiry into whether and to what extent a non-recurring subsidy continued to benefit the producers during the useful life of the assets. Rather, when confronted with a change of ownership, the USDOC simply allocated the subsidy benefit between seller and purchaser to match the fraction of the assets that had been transferred.

Original languageEnglish (US)
Title of host publicationThe WTO Case Law of 2002
Subtitle of host publicationThe American Law Institute Reporters' Studies
PublisherCambridge University Press
Pages78-87
Number of pages10
ISBN (Electronic)9780511754456
ISBN (Print)9780521834223
DOIs
StatePublished - Jan 1 2005

All Science Journal Classification (ASJC) codes

  • General Social Sciences

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