Greening Trade Remedies: Environmental Considerations in the Law and Practice of WTO Trade Remedies (European Yearbook of International Economic Law, 31)

This book explores the role of trade remedies in liberalising environmental trade and discouraging environmentally harmful trade. As trade remedies can pose a significant obstacle to environmental trade, this book outlines how trade negotiators can implement restrictions on the application of trade remedies on environmental goods. It also assesses whether and how investigating authorities can account for differences in environmental protection standards in trade remedy investigations and considers what a possible 'trade remedy' for environmental harm might look like. Although the book concludes that trade remedies will remain a trade instrument primarily driven by economic and competitiveness concerns, it demonstrates how environmental considerations can guide trade remedy policy, how investigating authorities can properly account for the environmental costs of production, and how the limited policy space available in the WTO Agreements on Trade Remedies can be used to pursue green policy goals. Preface Abbreviations Contents List of Figures List of Tables Chapter 1: Introduction References Chapter 2: A Role for Trade Remedies in Greening International Trade? 2.1 Introduction 2.2 Global Policy Objectives of Sustainable Development and Environmental Protection Applicable to World Trade Disciplines 2.2.1 WTO Commitment to Sustainable Development and Environmental Protection 2.2.2 Legal Status of the Preamble of the WTO Agreement 2.3 Trade and Environment: From Conventional Beliefs to a New Generation of Cases Featuring Trade Remedy Challenges 2.4 Dual Role of Trade Remedies in Achieving Environmental Protection Through Trade Measures 2.4.1 Lowering the Trade Remedy Burden on Green Industries with Positive Spill-Overs 2.4.1.1 The Burden of Trade Remedies on Environmental Goods 2.4.1.2 Reducing the Use of Trade Remedy Duties on Green Goods? 2.4.2 Application of Trade Remedy Duties to Level the Environmental Playing Field 2.4.2.1 The Competitive Advantages of Environmental Cost Externalities 2.4.2.2 Using Trade Remedies to Level the Environmental Playing Field? 2.5 Chapter Summary References Chapter 3: WTO Rules for Greening Trade Remedies 3.1 Introduction 3.2 Regulation of Trade Remedies in the WTO 3.2.1 History and Emergence of the WTO Trade Remedy Rules 3.2.2 The Foundations Underlying the ADA, ASCM and SGA 3.2.2.1 The Concept of Dumping 3.2.2.2 The Concept of a Subsidy 3.2.2.3 Safeguards 3.2.3 Policy Discretion in the Rules of the ADA and ASCM 3.2.3.1 Initiation and Conduct of a Trade Remedy Investigation 3.2.3.2 Calculation of Trade Remedy Duties 3.2.3.2.1 Under the ADA 3.2.3.2.2 Under the ASCM 3.2.3.2.3 Under the SGA 3.2.3.3 Examination of Injury and Causation 3.2.3.4 Public Interest Test 3.2.3.5 Administrative and Judicial Review of Trade Remedy Measures 3.2.4 Trade Remedy Rules in WTO Accession Protocols 3.2.5 Trade Remedy Rules in RTAs 3.3 Domestic Legislation on Trade Remedies in Selected WTO Members 3.3.1 Overview 3.3.2 Case-Study: EU Trade Defence Instruments Regulations 3.4 Chapter Summary References Chapter 4: The Use of Trade Remedies on Green Goods 4.1 Introduction 4.2 The Case for Liberalising the Environmental Goods Market 4.3 Defining Environmental Goods 4.3.1 Tariff Lines for Environmental Goods 4.3.2 Environmental Goods: Impossible to Define or Impossible to Negotiate? 4.3.2.1 Environmental Goods Negotiations: An Overview 4.3.2.2 Shortcomings of Environmental Goods Negotiations 4.3.3 WTO Compatibility of Environmental Tariff Lines 4.3.3.1 Are Products with Different Carbon Content ‘Like’ Products? 4.3.3.2 Could Justifications Under Art. XX GATT Be Applied? 4.4 Restrictions on the Use of Trade Remedies on Environmental Goods 4.4.1 Abolishing the Imposition of Trade Remedies on Environmental Goods 4.4.2 Disciplining Trade Remedies on Environmental Goods 4.4.2.1 Limiting the Duration of Trade Remedies 4.4.2.2 Limiting the Scope of Trade Remedies 4.4.2.3 Raising the De Minimis Level and/or Capping the Upper Level of Trade Remedy Duties 4.4.2.4 Defining the Like Product and Domestic Industry 4.4.2.5 Redefining Material Injury 4.4.2.6 Applying a Mandatory Lesser-Duty Rule 4.4.2.7 Tightening Causation and Non-Attribution Rules 4.4.2.8 Applying a Mandatory Public Interest Test 4.4.2.9 Conditional Acceptance of Undertakings 4.4.2.10 Ensuring Procedural Neutrality 4.5 Options for Implementation 4.5.1 Amendments to the ADA, ASCM and SGA 4.5.2 Environmental Goods Agreement 4.5.3 Regional Trade Agreements 4.5.4 Unilateral Policy Choices: Who Sets the Right Example? 4.6 Chapter Summary References Chapter 5: Low Environmental Standards and the ASCM Rules 5.1 Introduction 5.2 Low Environmental Standards as Subsidies 5.2.1 The ‘Invisible’ Subsidy of Low Environmental Standards 5.2.2 Low Environmental Standards as Actionable Subsidies Under the ASCM 5.2.2.1 Financial Contribution (Art. 1.1(a) ASCM) 5.2.2.2 Benefit (Art. 1.2 ASCM) 5.2.2.3 Specificity (Art. 2 ASCM) 5.2.2.4 Adverse Effects and Serious Prejudice (Art. 5–6 ASCM) 5.2.3 Rethinking the Scope of WTO Subsidies Disciplines 5.2.3.1 Interpretation of ASCM Rules 5.2.3.2 Amendments to the ASCM 5.2.3.3 Regional Trade Agreements 5.3 Dual Pricing Schemes as Actionable Subsidies Under the ASCM 5.3.1 Environmental Impacts of Dual Pricing Schemes 5.3.2 Dual Pricing Schemes as Input Subsidies Under the ASCM 5.3.2.1 Financial Contribution (Art. 1.1(a) ASCM) 5.3.2.2 Benefit (Art. 1.1(b) ASCM) 5.3.2.2.1 Indirect Subsidies Under the ASCM 5.3.2.2.2 Benefit and Benefit Pass-Through (Art. 1.1(b) ASCM) 5.3.2.3 Specificity (Art. 2 ASCM) 5.3.2.4 Export Contingency (Art. 3 ASCM) 5.3.2.5 Adverse Effects and Serious Prejudice (Art. 5–6 ASCM) 5.3.3 Strengthening WTO Subsidy Disciplines for Dual Pricing 5.3.3.1 Amendments to the ASCM 5.3.3.2 Regional Trade Agreements 5.4 Benefit Calculation and Environmental Costs of Production 5.4.1 ASCM Rules on Benefit Calculation (Art. 14 ASCM) 5.4.1.1 Market Benchmarks in the Country of Production 5.4.1.2 Government Distortions, Alternative Benchmarks and Environmental Cost Internalisation 5.4.2 China-Specific Methodology (Sect. 15 CAP) 5.4.3 Remodelling ASCM Benchmarking Rules 5.4.3.1 Multilateral Negotiations on Art. 14 ASCM 5.4.3.2 Putting Sect. 15(b) CAP to Practice 5.5 Chapter Summary References Chapter 6: Low Environmental Standards and the ADA Rules 6.1 Introduction 6.2 Environmental Regulation and Government-Distorted Costs and Prices 6.3 Environmental Cost Distortions and Normal Value Calculations 6.3.1 Market Economies: Standard Methodology (Art. 2.1 ADA) 6.3.2 Market Economies: Alternative Methodologies (Art. 2.2 ADA) 6.3.2.1 The Structure of Art. 2.2 ADA 6.3.2.2 Grounds to Disregard Domestic Prices (Art. 2.2 ADA) 6.3.2.2.1 Insufficient Environmental Regulations as a Particular Market Situation (Art. 2.2 ADA) 6.3.2.2.1.1 Existence of a PMS 6.3.2.2.1.2 Proper Comparison 6.3.2.2.2 Environmental Standards and Sales Outside the Ordinary Course of Trade (Art. 2.2 ADA) 6.3.2.3 Alternative Methodologies to Determine the Normal Value (Art. 2.2 ADA) 6.3.2.3.1 Environmental Costs in the Constructed Normal Value (Art. 2.2, 2.2.1.1 and 2.2.2 ADA) 6.3.2.3.1.1 Cost of Production (Art. 2.2 ADA) 6.3.2.3.1.1.1 Can a Lack of Environmental Costs Be a Reason to Leave the Producers’ Costs Aside? (Art. 2.2.1.1 ADA) 6.3.2.3.1.1.2 Including Environmental Cost in the Cost of Production (Art. 2.2.1.1 ADA) 6.3.2.3.1.1.3 The Issue of Start-Up Costs in the Renewable Energy Sector (Art. 2.2.1.1 ADA) 6.3.2.3.1.2 SG&A Costs (Art. 2.2.2 ADA) 6.3.2.3.2 Environmental Costs in Prices to Appropriate Third Countries (Art. 2.2 ADA) 6.3.3 Non-Market Economies: Alternative Methodologies (Art. 2.7 ADA + Second Ad Note) 6.3.3.1 NME Methodologies (Art. 2.7 ADA + Second Ad Note) 6.3.3.2 China’s Accession Protocol (Sect. 15 CAP) 6.3.3.3 Approaches by WTO Members 6.3.3.3.1 EU Significant Distortions Methodology 6.3.3.3.2 US TPEA Amendment 6.4 Fair Comparison and Environmentally Motivated Adjustments to the Dumping Margin 6.4.1 Price Comparability, Fair Comparison, and Adjustments (Art. VI:1 GATT and Art. 2.4 ADA) 6.4.2 Environmentally Motivated Adjustments to the Dumping Margin 6.4.2.1 Imports from Market Economies 6.4.2.1.1 Application of the Standard Methodology 6.4.2.1.2 Application of Alternative Methodologies Based on a Finding that a PMS Does Not Permit a Proper Comparison 6.4.2.1.3 Application of Alternative Methodologies Based on a Finding of Sales Outside OCT 6.4.2.2 Imports from Non-Market Economies 6.5 Reform of the Anti-Dumping Regime 6.5.1 Expanding the Concept of ‘Dumping’ 6.5.2 Interpreting the Existing ADA Rules 6.6 Chapter Summary References Chapter 7: Low Environmental Standards and the SGA Rules 7.1 Introduction 7.2 Environmental Considerations in Safeguards Investigations 7.3 Expanding the Scope of Safeguards Measures 7.4 Chapter Summary References Chapter 8: Environmental Injury and Trade Remedy Rules 8.1 Introduction 8.2 Environmental Harm and the Injury Rules: State of Play 8.2.1 Environmental Harm in Trade Remedy Injury Determinations 8.2.2 Environmental Costs in the Calculation of the Injury Margin 8.3 Expanding the Scope of Trade Remedies: Recent Developments and Legislative Proposals 8.3.1 US Environmental CVD Proposal 8.3.2 Regulating Environmentally Harmful Subsidies 8.3.2.1 Fisheries Subsidies 8.3.2.2 Fossil Fuel Subsidies 8.3.2.3 Agricultural Subsidies 8.3.3 Rebalancing Measures in the EU-UK TCA 8.3.4 Proposals for Social Safeguard Measures 8.4 Designing Trade Remedy Calculation Methods to Remove Environmental Injury 8.4.1 Applicable Environmental Standard 8.4.1.1 An International Minimum Standard? 8.4.1.2 An Individual Standard? 8.4.2 Violation and Evidence 8.4.3 Remedies 8.4.4 Enforcement Mechanisms 8.5 Chapter Summary References Chapter 9: Concluding Remarks 9.1 A Dual Role for Trade Remedies in Greening World Trade 9.2 Limiting the Use of Trade Remedies on Green Goods 9.3 Calculating Environmental Costs of Production in Trade Remedy Calculations 9.4 Designing an Instrument to Remedy Environmental Injury Based on Trade Remedy Calculation Methods Cited Case Law GATT WTO EU Other