Can Informal Law Discipline Subsidies?

Journal of International Economic Law, Vol. 18, No. 4, 2015, pp. 711-741 (winner of the inaugural John Jackson memorial prize for best article within the Journal in 2015)

UC Irvine School of Law Research Paper No. 2016-03

30 Pages Posted: 23 Dec 2015 Last revised: 5 Jul 2018

See all articles by Gregory Shaffer

Gregory Shaffer

Georgetown University Law Center

Robert Wolfe

Queen's University - School of Policy Studies

Vinhcent Le

University of California, Irvine School of Law

Date Written: December 22, 2015

Abstract

Some subsidies (such as for fossil fuels and fisheries) adversely affect global public goods (such as a stable climate and the maintenance of global fish stocks); others affect global price levels (domestic support for certain agriculture commodities), or have negative consequences for a trading partner. WTO members have negotiated an agreement on subsidies, but there are severe limits to that agreement’s ability to exercise discipline, and the prospects of its amendment remain limited. This article examines whether states can improve discipline through the use of informal mechanisms and, if so, under what conditions. Informal discipline on subsidies depends on the existence of fora to discuss definitions, generate information about their incidence, discuss whether a particular measure fits the definition, and consider whether a remedy exists. This article takes international organizations seriously as fora for generating “law,” not simply as bodies exercising power or coercion, and it explores a particular view of law. If codification is not the only indicator of law, if one accepts that law also emerges in social interaction, then we must attend to the less formal places where the law of subsidies emerges, and affects state actions. The analysis of where disciplines might be found is based on a three-level set of comparisons: (i) Within the WTO, involving horizontal compared to sectoral disciplines, with a focus on committee and other peer-review processes, rather than the traditional focus on the dispute settlement system; (ii) the WTO compared to, and in complement with, other international organizations addressing particular sectors; and (iii) international organizations compared to, and in complement with, non-governmental organizations. The article provides four case studies involving subsidies: (i) export credits, (ii) shipbuilding, (iii) fisheries, and (iv) fossil fuels. It assesses variations in number of actors, the conceptualization of the problem, definitions, obligation, data, and organizations across these case studies and the impact of such differences on the development of subsidy disciplines.

Suggested Citation

Shaffer, Gregory and Wolfe, Robert and Le, Vinhcent, Can Informal Law Discipline Subsidies? (December 22, 2015). Journal of International Economic Law, Vol. 18, No. 4, 2015, pp. 711-741 (winner of the inaugural John Jackson memorial prize for best article within the Journal in 2015), UC Irvine School of Law Research Paper No. 2016-03, Available at SSRN: https://ssrn.com/abstract=2707345

Gregory Shaffer (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

Robert Wolfe

Queen's University - School of Policy Studies ( email )

Ontario K7L 3N6
Canada

Vinhcent Le

University of California, Irvine School of Law ( email )

401 E. Peltason Dr.
Ste. 1000
Irvine, CA 92697-1000
United States

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