This dispute is particularly important because for the first time a WTO Panel was confronted with the issue of whether transnational subsidies could be actioned against under WTO law. This is one of the new forms of subsidies which has emerged as a key policy issue in current trade debates and various countries are taking action against them, most notably through the countervailing duties (CVDs). From a legal standpoint, the Panel had to determine whether the definition of subsidy under Article 1.1(a) WTO Agreement on Subsidies and Countervailing Measures (ASCM), on its own and via the application of the International Law Commission’s (ILC’s) Draft Articles on State Responsibility, could cover these measures. The dispute is thus of great interest also from the more general perspective of legal interpretation of trade law and the use of public international law. The Panel report was appealed into the void, but nonetheless represents the most authoritative legal analysis on the issue. The assessment of the report is mixed. On the one hand, the Panellists provided a cautious, and correct, school interpretation of the controversial WTO rules on subsidies. On the other hand, they opened the door to the use of the international law rules of attribution to essentially broaden the scope of WTO subsidy rules.
Luca Rubini (Sun,) studied this question.