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Informal Law’s Discipline of Subsidies: Variation in Definitions, Obligations, Transparency, and Organisations

By Gregory Shaffer, Robert Wolfe, Vinhcent Le, 
April 2015
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Some subsidies (such as for fossil fuels and fisheries subsidies) 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 one trading partner. Discipline on subsidies depends fundamentally on the existence of fora to discuss definitions, generate information about the incidence of subsidies, and then to determine whether a particular measure fits the definition and ought to be subject to censure. We take international organisations seriously as fora for generating “law” not simply as an exercise of power or coercion, and we explore 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 perhaps has its effects on state actions. Our 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; and dispute settlement compared to committee and other peer-review processes; (ii) the WTO compared to, and in complement with, other international organisations addressing particular sectors; and (iii) international organisations compared to, and in complement with, NGOs. We provide four case studies involving subsidies: (i) export credits, (ii) shipbuilding, (iii) fisheries, and (iv) fossil fuels. We assess variation in definitions, obligation, data and organisations across these case studies and the impact of such differences in the development of subsidy disciplines.

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