Countervailing Duties on Transnational Subsidies: WTO Review of the EU Case Against Indonesian Stainless Steel
DOI:
https://doi.org/10.28946/slrev.v9i2.4745Keywords:
Countervailing Duty, European Union Foreign Subsidies Regulation, GATT 1994, SCM Agreement, Transnational SubsidyAbstract
Transnational subsidies are financial assistance provided by a country to industries operating in another country in order to increase trade on a global scale. Transnational subsidies are used frequently in practical cooperation between countries. However, since the European Union imposed countervailing duties on products from Egypt and subsequently on Indonesian stainless-steel products, the concept of transnational subsidies has given rise to debate regarding subsidy regulations in international trade law. This research is aimed at analyzing the existence of transnational subsidy regulations under WTO regulations and the validity of applying the European Union's compensation import duty burden to stainless steel products from Indonesia which are suspected of receiving financial assistance from China through a cooperation project between the Chinese-Indonesian government. This research is research normative juridical which uses statutory, conceptual, case and philosophical approaches. The research results show that the transnational subsidy provisions regulated in the EU FSR are in accordance with the aim of prohibiting subsidies in international trade but are not recognized in the provisions of the SCM Agreement and GATT 1994.References
“International Trade Law Research Guide. “Georgetown Law Library.” Georgetown Law, n.d. https://guides.ll.georgetown.edu/c.php?g=363556&p=4074597.
(DSU), Dispute Settlement Understanding. “Article 1 Paragraph 2,” n.d.
———. "Pasal 3.2; "The Dispute Settlement System of the WTO Is a Central Element on Providing Security and Predictability to the Multilateral Trading System. The Members Recognise That It Serve to Preserve the Rights and Obligation of Member under the Covered Ag," n.d.
1994, GATT. “Article 1 Paragraph 1: “if Any Contracting Party Grants or Maintains Any Subsidy, Including Any Form of Income or Price Support, Which Operates Directly or Indirectly to Increase Exports of Any Product from, or to Reduce Imports of Any Product into, Its T,” 1994.
2.1, Article. “SCM Agreement,” n.d.
543, Paragraph. "The European Commission, "Commission Implementing Regulation (EU) 2022/433 of March 15 2022,." Official Journal of the European Union (Brussels: Official Journal of the European Union, March 16, 2022), n.d. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022R0433&qid=1724263386678.
Acts, Articles on the Responsibility of States for Internationally Wrongful. "Chapter IV Tentang Responsibility of a State in Connection with the Act of Another State," n.d.
Acts, State Responsibility for International Wrongful. “Conduct Which Is Not Attributable to a State under the Preceding Articles Shall Nevertheless Be Considered an Act of That State under International Law If and to the Extent That the State Acknowledges and Adopts the Conduct in Question as Its Own,” n.d.
Agreement, Footnote number 63 SCM. “The Recipient Firm Is a Firm in the Territory of the Subsidizing Member,” n.d.
Agreement, SCM. “Article 2 Concerning Specific,” n.d.
———. “Footnote Number 63 Regarding the Explanation of ‘the Recipient Firm’, That the Subsidy Recipient Must Be within the Jurisdiction of the Subsidy Provider,” n.d.
———. “The Recipient Fir Is a Firm in the Territory of the Subsidizing Member,” n.d., footnote number 63.
Al, Roland Ismer et. “Supporting the Transition to Climate-Neutral Production: An Evaluation Under the Agreement on Subsidies and Countervailing Measures.” Journal of International Economic Law, no. 2 (2023): 220. https://doi.org/https://doi.org/10.1093/jiel/jgac058.
America, Third Party Submission of The United States of. “European Union-Countervailing and Anti-Dumping Duties on Stainless Steel Cold-Rolled Flat Products from Indonesia (DS616),” 2024.
Articles on Responsibility of States for Internationally Wrongful Acts, Article 11. "Conduct Which Is Not Attributable to a State under the Preceding Articles Shall Nevertheless Be Considered an Act of the State under International Law If and to the Extent That the State Acknowledges and Adopts the Conduct in Question as Its Own," n.d.
Baldwin, Richard Edward. “WTO Trade Policy Reviewer: A Must for Surveillance.” Journal of World Trade 46, no. 3 (2012): 537.
Bartels, Lorand. "Does WTO Law Really Not Regulate 'Foreign Subsidies'?" TradeLinks, 2020.
———. "Does WTO Law Really Not Regulate 'Foreign Subsidies'?" TradeLinks (Linlaters Trade Policy, 2020.
Bernard M. Hoekman, Petros C. Mavroidis, Sunyana Sasmal. “Managing Externalities in the WTO: The Agreement on Fisheries Subsidies.” San Domenico, 2022, 4888.
Blockx Jan, Mattiolo Pierfrancesco. “The Foreign Subsidies Regulation: Calling Foul While Upping The Ante?,.” European Foreign Affairs Review 28, no. S1 (2023): 53–73.
Bown, Hillman. “WTO’ing a Resolution to the China Subsidy Problem,” n.d., 13.
———. “WTO’ing a Resolution to the China Subsidy Problem,” n.d., 5.
Cartagena. “WTO GATT And Uruguay Round Results,” n.d., 151.
———. “WTO GATT And Uruguay Round Results,” n.d., 147.
———. “WTO GATT And Uruguay Round Results,” 1997, 146.
Centre, International Trade. “The WTO Agreement on Subsidies and Countervailing Measures,.” Export Promotion and the WTO, no. 4 (2009). https://doi.org/https://doi.org/10.18356/211dcdaa-en.
Commission, The European. "Commission Implementing Regulation (EU) 2022/433 of March 15 2022," n.d., 543.
———. "Commission Implementing Regulation (EU) 2022/433 of March 15 2022," n.d., paragraph 695.
———. "Commission Implementing Regulation (EU) 2022/433 of March 15 2022." Official Journal of the European Union (Brussels: Official Journal of the European Union, March 16, 2022), 2022. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022R0433&qid=1724263386678.
Court, The General. “Judgment of 1.3. 2023 - Case T-480/20 (EXTRACTS) Hengshi Egypt Fibreglass Fabrics and Jushi Egypt for Fibreglass Industry V Commission," 2023.
Criddle, Evan. “The Vienna Convention on the Law of Treaties in U.S. Treaty Interpretation,” n.d., 438. http://ssrn.com/abstract=1004197.
Crochet, Hegde. “China’s ‘Going Global’ Policy: Transnational Production Subsidies Under the WTO SCM Agreement,” n.d., 20.
———. “China’s ‘Going Global’ Policy: Transnational Production Subsidies Under the WTO SCM Agreement,” n.d., 13.
Crochet, Weihuan Zhou Victor. “Attribution to the State: A Critique of Cross-Border Subsidies.” UNSW Law Research 24, no. 18 (2024). https://www.cibel.unsw.edu.au/research/CIBEL-working-paper-series.
Damme, Isabelle Van. “Treaty Interpretation by The WTO Appellate Body.” The European Journal of International Law, no. 3 (2010). https://doi.org/https://doi.org/10.1093/acprof:oso/9780199562237.003.0006.
Daniel Brou, Michele Ruta. “A Commitment Theory of Subsidy Agreements,.” The B.E. Journal of Economic Analysis & Policy 13, no. 1 (2013): 239–70. https://doi.org/https://doi.org/10.1515/bejeap-2012-0061.
Erpenbach, Jackson. “The Federal Coal Leasing Program as an Actionable Subsidy Under International Trade Law.” Michigan Journal of Environmental & Administrative Law, 2020, 522. https://doi.org/https://doi.org/10.36640/mjeal.9.2.federal.
Gulotty, Robert. “WTO Subsidy Disciplines.” World Trade Review 21, no. 3 (n.d.): 332. https://doi.org/https://doi.org/10.1017/S1474745622000118.
———. “WTO Subsidy Disciplines.” World Trade Review 21, no. 3 (2022): 334. https://doi.org/https://doi.org/10.1017/S1474745622000118.
Hegde, Victor Crochet, Vineet. “China’s ‘Going Global’ Policy: Transnational Production Subsidies Under the WTO SCM Agreement.” Journal of International Economic Law 23, no. 4 (2020): 2. https://doi.org/https://doi.org/10.1093/jiel/jgaa029.
Hegde, Crochet. “China’s ‘Going Global’ Policy: Transnational Production Subsidies Under the WTO SCM Agreement,” no. 13 (n.d.).
———. “China’s ‘Going Global’ Policy: Transnational Production Subsidies Under the WTO SCM Agreement,” n.d., 13.
———. “China’s ‘Going Global’ Policy: Transnational Production Subsidies Under the WTO SCM Agreement,” n.d., 2.
Hernandez, Gustavo E Luengo. "Regulation of Subsidies and State AIDS in WTO and EC Law: Conflicts in International Trade Law (European Monographs) (European Monographs Series Set) (Alphen Aan Den Rijn: Kluwer Law International, 2007)," n.d., 106.
———. "Regulation of Subsidies and State AIDS in WTO and EC Law: Conflicts in International Trade Law (European Monographs) (European Monographs Series Set) (Alphen Aan Den Rijn: Kluwer Law International, 2007)," 2007, 106.
Hoekman, mavroidis, Sasmal. “Managing Externalities in the WTO: The Agreement on Fisheries Subsidies,” n.d., 12.
Horlick. “An Annotated Explanation of Articles 1 and 2 of the WTO Agreement on Subsidies and Countervailing Measures,” n.d.
Horlick, Gary N. "An Annotated Explanation of Articles 1 and 2 of the WTO Agreement on Subsidies and Countervailing Measures." Global Trade and Customs Journal 8, no. 9 (2013): 297–99. https://doi.org/https://doi.org/10.54648/GTCJ2013041.
———. “An Annotated Explanation of Articles 1 and 2 of the WTO Agreement on Subsidies and Countervailing Measures.” Global Trade and Customs Journal 8, no. 9 (2013): 297–99. https://doi.org/https://doi.org/10.54648/GTCJ2013041.
Hornkohl, Lena. “The Role of Third Parties in the Enforcement of the Foreign Subsidies Regulation: Complaints, Participation, Judicial Review, and Private Enforcement.” SSRN Electronic Journal, 2023. https://doi.org/https://doi.org/10.2139/ssrn.4433639.
Huang, Wen. “China-US Currency Subsidy Dispute from WTO Perspective: Review and Response,” n.d., 136.
———. “China-US Currency Subsidy Dispute from WTO Perspective: Review and Response,” n.d., 135.
Indonesia, PT. Indonesia Ruipu Nickel and Chrome Alloy (IRNC) and PT. Jindal Stainless. “No Title,” n.d.
Jan Blockx, Pierfrancesco Mattiolo. “The Foreign Subsidies Regulation: Calling Foul While Upping the Ante?,.” European Foreign Affairs Review 28 (2023): 53–74. https://doi.org/https://doi.org/10.54648/EERR2023014.
Joseph F. Francois, David Palmeter. “US – Countervailing Duty Investigation of DRAMS.” World Trade Review 7, no. 1 (2008): 225. https://doi.org/https://doi.org/10.1017/S1474745608003728.
Lakshmikumaran, Sridharan Attoreys. “Beyond Territorial Reach: Transnational Subsidies and The Evolving Landscape.” London: Lexology, 2024. https://www.lexology.com/library/detail.aspx?g=f8b34c63-9e54-4a17-8475-cc23cb90818e.
———. “Legality of R&D Subsidies in the WTO,” n.d., 23.
———. “Subsidies and Countervailing Duties,” n.d., 24.
Lee, G.M. “Subsidies and Countervailing Duties.” Handbook of Commercial Policy 1 (2016): 33. https://doi.org/https://doi.org/10.1016/bs.hescop.2016.04.009.
Li. “Legal Issues in the European Unions Anti-Cross Border Subsidy Measures: A Study,” n.d.
Li, Tianziran. “Legal Issues in the European Unions Anti-Cross Border Subsidy Measures: A Study.” Advances in Economics, Management and Political Sciences 83, no. 1 (2024): 33. https://doi.org/https://doi.org/10.54254/2754-1169/83/20240713.
Lowenfeld, Andreas F. “International Economic Law, 2nd Ed.” New York: Oxford University Press, 2008.
Mehra, Arpit. “Beyond Territorial Reach: Transnational Subsidies and The Evolving Landscape,” 2024. Lakshmisri.com.
Meier-Kaienburg, Nils. “The WTO’s Toughest Case: An Examination of the Effectiveness of the WTO Dispute Resolution Procedure in the Airbus-Boeing Dispute over Aircraft Subsidies.” Journal of Air Law and Commerce 71, no. 2 (2006): 203.
Nagy. “Foreign Subsidies, Distortions and Acquisitions: Can the Playing Field Be Levelled?,” n.d., 148.
Nagy, Csongor Istvan. “Foreign Subsidies, Distortions and Acquisitions: Can the Playing Field Be Levelled?,” no. 148 (n.d.).
Nagy, Csongor István. “Foreign Subsidies, Distortions and Acquisitions: Can the Playing Field Be Levelled?” Central European Journal of Comparative Law 2, no. 1 (2021): 152. https://doi.org/https://doi.org/10.47078/2021.1.147-162.
Nation, United. “Vienna Convention on the Law of Treaties.” United Nations §, 2005, Article 31.
Panel. “Communication from The Panel; European Union-Countervailing and Anti-Dumping Duties on Stainless Steel Cold-Rolled Flat Products from Indonesia,” 2024.
Panel, Report of the. “United States-Measures Treating Exports Restraints as Subsidies WT/DS194/R,” 2001, 88. https://www.worldtradelaw.net/document.php?id=reports/wtopanels/usexportrestraints(panel).pdf&mode=download#page=1.
“United States - Measures Treating Exports Restraints as Subsidies WT/DS194/R,” 2001. https://www.worldtradelaw.net/document.php?id=reports/wtopanels/us-exportrestraints(panel).pdf&mode=download#page=1.
Peter Van Den Bossche, Daniar Natakusumah, Joseph Wira Koesnaidi. “No Title.” Introduction to WTO (World Trade Organization) Law (Jakarta: Yayasa Obor Indonesia, no. 44 (2010).
Polgári. “The Role of the Vienna Rules in the Interpretation of the ECHR,” n.d., 85.
Polgári, Eszter. “The Role of the Vienna Rules in the Interpretation of the ECHR.” Erasmus Law Review 14, no. 2 (2021): 83. https://doi.org/https://doi.org/10.5553/ELR.000193.
Purnamasari. “Regulation and Implementation of Indonesia-European Union Biodiesel Subsidies in the Agreement on Subsidies and Countervailing Measures,” n.d., 122.
Purnamasari, Intran Griya. “Arrangement and Implementation of Indonesia-European Union Biodiesel Subsidies in the Agreement on Subsidies and Countervailing Measures.” Lex Reanaissan, no. 1 (2021): 122.
Ratner, Steven R. “International Law Rules on Treaty Interpretation.” The Law and Practice of the Northern Ireland Protocol, Ed. Christopher McCrudden, 2022, 84. https://repository.law.umich.edu/book_chapters/279.
Rights, The European Convention on Human, "Preparatory Works Is the Documents Were Produced during the Drafting of the Convention," n.d. https://www.coe.int/en/web/human-rights-convention/preparatory-works .
Rizzo, Amedeo. “The EU Foreign Subsidies Regulation: A Structural Change to the Internal Market.” SSRN Electronic Journal, 2023, 7. https://doi.org/https://doi.org/10.2139/ssrn.4609016.
Ru, DIng. “The ‘Public Body’ Issue in The WTO: Proposing a Comparative Institutional Approach to International Issue State-Owned Enterprises (SOES).” Thesis, Gergetown University Law Cantre, 2018, 219.
Rubini, Luca. “Are Transnational Subsidies Regulated by EU and WTO Law?: The General Court Has Spoken.” The European University Institute, 2023, 10.
———. “Are Transnational Subsidies Regulated by EU and WTO Law?: The General Court Has Spoken (Case T-480/20 and Case T-540/20).” The European University Institute, no. 9 (2023).
———. “What Shapes the Law? Reflection on the History, Law, Politics and Economics of International and European Subsidy DIsciplines.” San Dominico: European University Institute, 2016, 53.
Sefriani. “International Law; An Introduction.” Jakarta: RajaGrafindo Persada, 2014, 269.
Settlement, Dispute. “European Union-Countervailing and Anti-Dumping Duties on Stainless Steel Cold-Rolled Flat Products from Indonesia,” n.d. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds616_e.htm.
Silviani, Ninne Zahara. “Interpretation of International Agreements Regarding Historical Rights in UNCLOS 1982.” Straits Journal 6, no. 2 (2019): 161. https://doi.org/https://doi.org/10.31629/selat.v6i2.1067.
Thontowi, Jawahir. “No Title.” Law and International Relations, 2016, 108.
Weihuan Zhou, Victor Crochet. “Attribution to the State: A Critique of Cross-Border Subsidies.” UNSW Law Research 24, no. 18 (2024): 8. https://www.cibel.unsw.edu.au/research/CIBEL-working-paper-series.
Wen, Yapei Huang Ximeng. “China-US Currency Subsidy Dispute from WTO Perspective: Review and Response,” Advances in Economics and Management Research,” no. 3 (2023): 136. https://doi.org/https://doi.org/10.56028/aemr.3.1.135;
White. “The Interpretation of The WTO Agreement,” n.d., 103.
William Alan Reinsch, Sparsha Janardhan. “Crossing the Line: Transnational Subsidy.” CSIS, 2022.
Winanda Kusuma, Arion Sintong Hutapea. “No Title.” International Treaty Law, 2022, 38.
Wonhee. “Legality of R&D Subsidies in the WTO.” Thesis for the Degree of Master, Seoul National University, 2012, 23.
WTO. “No Title,” n.d. https://www.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm.
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
