European Trade Policy and the Regulation of Subsidies: What Can We Expect from the EU-Australia FTA?

Abstract

AbstractSubsidies play an important role in the European Union’s trade policy. This concerns both the use of autonomous instruments and the many bilateral and multilateral trade negotiations. Currently, the creation of a new regulation is being discussed, on the basis of which the European Commission could act against foreign subsidies that distort the internal market. At the same time, the EU is trying to agree on more far-reaching subsidy rules in its bilateral trade agreements and continues to advocate a reform of subsidy rules at the WTO level. Overall, the EU’s aim is to create a level playing field for the provision of subsidies. For Australian trade policy, the regulation of subsidies has been less important so far. Nevertheless, there are reasons for including more far-reaching subsidy rules in a free trade agreement between the EU and Australia (“EU-Australia FTA”). On the one hand, they can serve as a template for further agreements and as a political signal with regard to multilateral reforms of WTO subsidy law. On the other hand, Australia can use the opportunity to negotiate provisions that make it easier for Australian companies to deal with a new EU subsidy regime.