Definition Of Subsidy Research Articles

Indonesia's Regulation and Implementation of Subsidies in View of Agreement on Subsidies and Countervailing Measures 1995-WTO

<em><span lang="IN">Regulation and implementation of subsidies in Indonesia is in the form of financial assistance provided by the government either directly or indirectly to companies, industries, industrial groups or exporters. With the aim of increasing export activities and reducing import activities for the welfare of the people and not violating the provisions of the 1945 Constitution, as the definition of subsidies is explained in the PP. Number 34 of 2011 concerning Anti-Dumping Measures, Compensatory Measures and Trade Security Measures Article 1 paragraph 8. In the Indonesian Government's policy, subsidies are given as long as they are to achieve people's welfare, and do not violate the order in the 1945 Constitution. However, in terms of government policy to improving people's welfare and protecting the domestic economy, often causing problems in the scope of international trade. This article aims to examine and understand how subsidies are regulated and implemented in Indonesia in terms of the Agreement On Subsidies And Countervailing Measures 1995-WTO. This research is normative legal research which examines written law based on applicable laws and regulations. The results of this research are that based on the policy issued by the Indonesian government, subsidies are given in order to realize the domestic economy, so based on this policy, basically the Agreement On Subsidies And Countervailng Measures 1995-WTO limits subsidies, so that their use does not cause harm to other countries' industries.</span></em>

Book Review: The Definition of Subsidy and State Aid: WTO and EC Law in Comparative Perspective, by Luca Rubini. (Oxford: Oxford University Press, 2009)

Book Review: <i>The Definition of Subsidy and State Aid: WTO and EC Law in Comparative Perspective</i>, by Luca Rubini. (Oxford: Oxford University Press, 2009)

Past its Use-By Date: Regulation 868 Concerning Subsidy and State Aid in International Air Services

This article is about European Union (EU) Regulation 868 of 2004. It outlines EU rules on subsidy and state aid prior to 2001 and explains how Regulation 868 was a response to the events of September 2001. Regulation 868 is examined, focusing on the definition of subsidy and unfair pricing, the issue of non-commercial advantage and the determination of material injury to the Community air industry. Finally, the article considers the actual effectiveness of the Regulation, calls from the European airline industry for its revision and pragmatic alternatives using air services agreements (ASAs).

The Myths and Facts of Fossil Fuel Subsidies: A Critique of Existing Studies

Fossil fuel subsidies are of enormous import to policy-makers and public opinion, making it critical to properly define them. However, traditional methodologies tend to place subsidies in the realm of tax expenditure analysis, presenting a flawed picture. A recent report on government subsidies to the Canadian energy sector prepared for the International Institute for Sustainable Development exemplifies this flawed approach along several dimensions: it is not based on a robust underlying economic framework, it fails to account for complex interactions between tax and royalty systems in existing fiscal policy, and it uses a definition of subsidies that was created for a different purpose. The authors of this paper propose an alternative “economic view,” based on economic rents, which provides a neutral benchmark against which subsidies, royalties and other energy-focused fiscal measures can be measured. Using marginal effective tax rate (METR) analysis, the authors show that it is possible to obtain a more accurate picture of energy subsidies and their impact on resource allocation and economic activity. This improved schema will ideally allow governments to better understand subsidies and devise sound policies, leading to less waste and distorted investment choices.

Lessons Learned from DISC/FSC/ETI Disputes: Reshaping the Quest Towards a GATT/WTO Friendly Corporate Tax Reform in the United States

The Corporate Tax Policy of the United States has long been considered to be disadvantageous to U.S manufacturers and exporters, who allege that adoption of the world-wide taxation policy has affected their competitiveness. The tax legislative measures introduced by the United States to address this criticism such as the Domestic International Sales Corporations (DISC), Foreign Sales Corporation (FSC) and the Extraterritorial Income Act (ETI), however, have failed the GATT/WTO scrutiny. Although the American Job Creation Act, 2004 has almost resolved the matter between the U.S and EU, the dispute is far from settled. The FSC/ETI disputes were considered as an opportunity to introduce fundamental tax reforms in the U.S. Among the various proposals made so far, the proposal to introduce a progressive consumption type taxation replacing the current corporate income tax has gained significant popularity. Most academic writings suggest that a progressive two-tiered consumption tax such as a destination basis X tax could be treated as a direct tax under the GATT/WTO in view of the wage tax element. But prejudging the WTO legality of destination basis X-tax would not be appropriate on the basis of a pure textual interpretation of a footnote in an Annex in the SCM Agreement, which predated the current treaty provisions. Before classifying a measure as a prohibited illegal subsidy, it needs to be examined whether such tax legislation is based on - neutral or - objective criteria and whether it otherwise meets the definition of subsidy. A broad based and functional interpretation of destination basis X-tax could establish that it is not a trade distorting export subsidy within the meaning of the GATT/WTO. It will be unwise to preempt discussions on this topic assuming its inconsistency with the GATT/WTO.The other proposal is to implement a territorial income tax. Although such a tax scheme is WTO-compatible, if administered under the guidelines provided by the WTO dispute panels, it will face other difficulties such as significant transition problems and interference with a number of 3 bilateral treaties. Again, it is uncertain whether such a tax system could improve the competitiveness of the U.S industry.

The Definition of Subsidy and State Aid: WTO and EC Law in Comparative Perspective - By L. Rubini

The Definition of Subsidy and State Aid: WTO and EC Law in Comparative Perspective - By L. Rubini

The Definition of Subsidy and State Aid. By LUCA RUBINI

The Definition of Subsidy and State Aid. By LUCA RUBINI

Fossil Fuels - At What Cost? Government Support for Upstream Oil Activities in Three Canadian Provinces: Alberta, Saskatchewan and Newfoundland &amp; Labrador

The study finds that Canadian federal and provincial governments provided $2.84 billion to support oil production in 2008. The comprehensive report uses an internationally agreed definition of subsidy adopted by the World Trade Organization to determine the value of oil production subsidies in Alberta, Saskatchewan and Newfoundland & Labrador. This detailed analysis is the first of its kind in Canada and allows appropriate comparisons of subsidies with other countries. The report estimates the impact of existing subsidies over the next 10 years. The study forecasts the cost of subsidies to governments would double by 2020. The report estimates a 2 per cent rise in Canada’s greenhouse gas emissions by 2020 and a projected rate of growth for the oil production industry. As a member of the G20, Canada has recognized that efforts to deal with climate change, wasteful energy consumption, market distortions and barriers to clean energy investment are undermined by inefficient fossil-fuel subsidies and has pledged to phase out its inefficient fossil-fuel subsidies over the medium term. The federal and provincial governments have already made progress in reducing the level of subsidies and incentives to the oil production industry, though a number of significant subsidies remain and new ones have emerged. According to the study, the federal government’s share of subsidies in 2008 was $1.38 billion. Within the provincial governments, Alberta was estimated at $1.05 billion, Saskatchewan at $327 million and Newfoundland & Labrador at $83 million. A total of 63 subsidy programs were identified. In most cases, the subsidies were intended to increase exploration and development through a mix of tax breaks and royalty reductions.

The Definition of Subsidy and State Aid: WTO and EC Law in Comparative Perspective by Luca Rubini Oxford, UK: Oxford University Press, 2010

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“Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade”—A Comment

LeClair [LeClair, M. S. (2002). Fighting the tide: alternative trade organizations in the era of global free trade. World Development , 30 (6), 949–958] concludes that in theory Fair Trade is a second-best alternative to aid, may impose losses on non-Fair Trade producers and prolongs dependence on unsustainable modes of production. This paper shows how these conclusions depend upon a particular definition of subsidy and upon the assumptions of full employment and that Fair Trade goods face price-inelastic demand. An adverse impact on non-Fair Trade producers is possible but not intrinsic, and the claim of economic inefficiency cannot be sustained within a more general analysis.

Privatization and The Definition of Subsidy: A Critical Study of Appellate Body Texturalism

Analysis of the Appellate Body's (AB) treatment of a particular legal question often provides insight into issues of more general importance. In this article, examination of the AB's treatment of a particular subsidy issue is used to explore the Agreement on Subsidies and Countervailing Measures’ (SCM Agreement) definition of subsidy and to question the efficacy of the AB's reliance on texturalism. The legal question analyzed arose when European governments challenged the US's imposition of countervailing duties (CVDs) on steel manufactured by ‘privatized’ steel companies. The US claimed the CVDs were proper since subsidies provided prior to privatization had ‘passed through’ to the privatized companies. The AB, relying heavily on the meaning of words rather than on consideration of ‘object and purpose’, found that the US had violated its obligations under the SCM Agreement. An analysis of the AB's logic and the authorities cited demonstrates that neither justifies the AB's conclusion. A heuristic model of the definition of subsidy is used to show that the question raised by privatization implicates issues of causation, overlooked by the AB, that are important in correctly interpreting the SCM Agreement. The problems arising from AB texturalism are contrasted with the justifications given for that approach, suggesting that a change in approach may be warranted.

The US–Canada softwood lumber dispute and the WTO definition of subsidy

AbstractIn the softwood lumber dispute, the United States argues that Canada's forestry practices, especially the fees charged by provincial governments to private firms to harvest trees on public lands (stumpage rights), result in undue subsidization of Canadian lumber. Within the World Trade Organization, the concept of subsidy is defined as a ‘government financial contribution’ that confers a ‘benefit’ on firms and that is ‘specific’. In US–Softwood Lumber IV, the WTO authorities ruled that stumpage rights were specific and constituted a financial contribution through the provision of a good (timber). However, in order to demonstrate whether and to what extent these rights confer a benefit on lumber producers, the United States still has to ensure that its methodology to assess the ‘adequacy of remuneration’ is compatible with WTO provisions and to conduct a satisfactory ‘pass-through’ analysis of the alleged input stumpage subsidy to unrelated downstream lumber producers.

Risk Shifting, Technology Policy and Sales Contingent Claims: When is Launch Aid to the Aerospace Industry a Subsidy?

This paper studies the criteria with which the presence or absence of 'subsidy' in sales contingent Launch Aid R&D support may be determined when payoff-relevant market incompleteness limits the precision of market-based pricing to non-trivial intervals. Existing criteria correctly account for the opportunity cost of capital when markets are complete and frictionless, but fail when the interval between bid and ask prices may not be finessed away. An economic definition of subsidy must necessarily capture opportunity cost, and we develop a definition that fully incorporates government's opportunity cost in both complete and incomplete market settings.