Luca Rubini

‘The Good, the Bad, and the Ugly.’ Lessons on Methodology in Legal Analysis from the Recent WTO Litigation on Renewable Energy Subsidies

This article is about methodology in legal analysis. In particular, it is about the importance of integrity and coherence in legal methodology.

United States – Use of Zeroing in Anti-Dumping Measures Involving Products from Korea: It's déjà vu all over again

This paper analyzes the dispute between Korea and the United States regarding the method of calculating anti-dumping duties. The case mirrors other recent WTO disputes involving zeroing. Even though it ceased zeroing in original investigations in December 2006, the United States implemented the policy change only prospectively. As a result, the margins applied to the products in this dispute remained unchanged because they had been calculated prior to the policy change. The United States did not contest Koreas claims. The Panel confirmed that zeroing was used and, following the long line of Panel and Appellate Body rulings, found the practice inconsistent with the Anti-Dumping Agreement. After the Panel Report was adopted, the United States recalculated the margins without zeroing. It, however, refused to refund unliquidated cash deposits that were based on zeroing, highlighting the United Statess continued lukewarm compliance with WTO rulings on zeroing. This dispute offers an opportunity to ponder on weaknesses of the WTO Dispute Settlement and the ability of one Member to take advantage of it. Since the facts and their legal assessment were undisputed, why was litigation necessary? Can compliance with WTO law be improved with broader findings and more incisive remedies?

'The Wide and the Narrow Gate'. Benchmarking in the SCM Agreement after the Canada – Renewable Energy/Fit Ruling

This paper is about the future of benchmarking in the SCM Agreement after the Canada – Renewable Energy/FIT dispute. This case left us with bad law. The author claims that WTO dispute settlement organs are now faced with two options. After outlining the risks that a normalization-and-expansion of this ruling may pose, the paper speculates on how the much-preferable clarification-and-narrowing of the law could be done. In so doing, it draws on the significant EU experience in State aid law with respect to the use and relevance of ‘price-discovery mechanisms’, which is one of the intriguing undercurrents of the dispute. This exercise, however, exposes many challenges and difficulties, many of them already occurred in EU law. The conclusion is thus that the amount of helpful clarification the WTO judicature could offer is limited. This leads to suggest, once again, that the only solution is law reform.

Who’ll Stop the Rain? Allocating Emissions Allowances for Free: Environmental Policy, Economics, and WTO Subsidy Law

This article investigates the environmental and economic impact of the free allocation of emissions allowances in Emissions Trading Schemes (ETSs) as well as its compatibility with trade law. Free allocation can facilitate the industry’s gradual adjustment to an ETS and hence boost its acceptability. At the same time, however, the article shows that the economic and environmental benefits of free allocation are debatable. Moreover, the practice of free allocation possibly contravenes WTO law. The conclusion that free allowances may constitute an objectionable subsidy under WTO subsidy disciplines raises questions of law reform. Should the ETS be reformed to fit conventional trade imperatives, or should trade law be rethought so as to be responsive to contemporary environmental protection strategies? The article argues that, considering the questionable benefits of free allocation, any adjustment to trade law should be narrow and temporary.

The Subsidization of Renewable Energy in the WTO: Issues and Perspectives

The fast deployment of renewable energy is crucial in the fight against climate change. While there are significant advances from the technological, commercial and even public opinion perspective, renewable energy still faces significant obstacles and barriers which justify a significant public support. The issue is not ‘if’ but ‘how’. Subsidies are part of this policy tool-box. Economics and empirical research are telling us that design is crucial, and so is the synergy of the various instruments of support. The proper and continuous exchange of information between private and public actors is also of the essence. Against this background, the key question for those dealing with systems of rules and governance, is to ask whether the current discipline, particularly that of subsidies, offers sufficient policy space to accommodate the said needs of public support. The goal of this paper is therefore to analyze issues and perspectives coming out from this question of policy space. This paper has thoroughly analyzed the current rules applicable to subsidies in the WTO and has come to the conclusion that, for various reasons, depending either on the nature of the subsidies themselves or on the uncertainty of the legal texts, on the heavily distorted nature of energy markets or on the inconsistency of trade and environmental perspectives, the current discipline is not tipped in favor of an acceptable and certain degree of ‘green policy space’. This has led to extend the analysis to the typical second step of legal assessment, to consider whether there are any exceptions or justifications that could apply and, through their shelter, guarantee the required amount of policy space. While there are currently no rules recognizing that subsidies for environmental purposes and more specifically for renewable energy support may be desirable and legitimate, the focus has shifted to what has emerged as a troublesome but credible hypothesis: the applicability of the general exceptions of GATT Article XX. Since this is not however the first-best solution, we have provided a blueprint for law reform, outlining the main principles and traits of a would-be new system of governance of legitimate subsidies in the WTO. The focus has been on the concept of community, the combination of mechanisms of hard and soft governance, the the reinforcement of transparency and of the institutional frameworks, and the possibility of using the fairly developed system of justifications in EU State aid law for a model, particularly with respect to the design and possibly the content of the specific exceptions.

The Elusive Frontier: 'Regulation' Under EC State Aid Law

The more one gets involved with the definition of State aid under Article 87(1) EC the more there is a realization of how elusive this is. Each and every element of this concept still raises fundamental questions and is still subject to debate. There is one area, however, which is the real frontier of EC State aid law, and indeed of any system aiming to control public subsidies: regulation. This paper attempts to sketch some of the aspects raised by the legal status of regulation under EC State aid control. It does not propose to offer definitive answers. The fact itself that after more than fifty years since the entry into force of the Treaty of Rome we are asking this question is probably a sign that there are no final answers. From another perspective, the issue ultimately depends on policy and not legal choices, which is partly beyond our remit. What we aim to achieve with this paper is two-fold. On the one hand, to analyze the issue at an operative micro-level, by assessing it against the various traditional elements of the notion of State aid under Article 87(1) EC. At the same time, to insert the issue of the control of regulation within its broader systemic and institutional context. This turns on asking what other EC law provisions, particularly internal market rules, could apply to the same measure and what institutional, and even constitutional, implications the application of State aid, rather than internal market rules, might have. It can be anticipated that these considerations do play a crucial role in the definition of EC State aid under Article 87(1) EC and on whether regulation should be covered or not.

What shapes the law? : reflections on the history, law, politics and economics of international and European subsidy disciplines

This book puts together several contributions that, from various time, system and disciplinary perspectives, address the same questions – what has shaped subsidy laws? Which actors mould subsidy and State aid law and what forces are at work? The book includes reports from former or current negotiators, officials, practitioners and scholars, that focus on various attempts to regulate subsidies at the national, European and international levels. Prominence is given to the actual practice, and to the account given by the key actors, operating in the field since the 1970s. Various disciplines are interrogated – from history to law, from political science to economics. What comes out is a fascinating account that provides a goldmine of insights and leads for further enquiry in a topical and under-researched area.