Empirical Analysis on the EU Trade Remedy Actions: Focusing on the Subsidies and Countervailing Measures Disputes

Abstract

Subsidies have long been regarded as a controversial issue as a representative non-tariff barrier under the World Trade Organization (WTO). The European Union (EU) has been involved in 40 disputes as a complainant or respondent over 109 cases on subsidies and countervailing measures disputes under the WTO dispute settlement. The EU subsidy issues are the second highest level of involvement in trade disputes, following the United States, which recorded a total of 64 disputes. This research explains a mechanism of EU trade remedy actions against subsidies with an empirical analysis on the EU subsidies and countervailing measures over the period of 1995, when the WTO was established, through 2015.

This paper was fundamentally conducted on the basis of statistical data, a report and preceding research on a relevant issue. First, the study analyzed whether subsidies and countervailing measures disputes of the EU in the WTO tends to concentrate on any countries or products. Second, the research independently investigated the specificity and characters of countervailing measures, which were initiated and imposed based on its own initiative called the EU anti-subsidy rules. As a result, the subsidy disputes of the EU showed significant correlativity on specificity concerning the targeted country and product. Third, we clearly verified that the ad-valorem duty was overwhelmingly used rather than a specific duty for the measures by the European Commission (EC) according to the types and characters of the targeted product.

This dissertation ultimately is aimed to serve three different purposes through a sophisticated analysis: 1) comprehension for articles of Agreement of Subsidies and Countervailing Measures in the WTO and anti-subsidy rules in the EC

2) verification and validation of specificity for initiations and measures on subsidy related disputes with data from the WTO and EC

and 3) analysis on the characters of countervailing duties imposed on trade partners. Strongly supported with implications from an actual case study, the conclusions will help to understand internal and external backgrounds of disputes. Also, the dissertation will contribute to predict further possible trade disputes regarding the subsidy issue with the EU, partner of the free trade agreement and the third biggest trade partner of South Korea.