MJIEL Vol 8 Issue 2 2011 - A1

Abstract: The paper investigates the implications of reviving and expanding upon the green light – an early category of non-actionable subsidies (Part IV of the WTO SCM Agreement) which expired in the year 2000. Focusing on the issue of policy space for granting ‘environmental’ subsidies (‘green space’), the paper analyses these expired provisions in light of the negotiating history as well as current experience in EU law of State aid. It concludes that reviving and expanding upon the green light substantive provisions must inevitably coincide with a substantial improvement on procedures regarding transparency, proportionality and abuse prevention. Even if politically feasible, resurrecting and expanding on the environmental green-light involves large transaction costs and requires scarce political capital to be invested in the idea. Facing inevitable trade-offs, it seems critical for the trade and environment constituencies to focus attention on the areas in which efforts would bear best results. That is, policy areas where the ASCM disciplines in reality create a chilling effect over Members’ autonomy to devise environmental support programmes. Renewable energy subsidies seem to be one important area where tension has risen in international trade. However, rather than seeking to revive the expired green light category to address that problem, the paper suggests that sector-specific solutions to be sought for renewables.


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