Interpreting the 'Removal' Obligation in Article 7.8 of the WTO SCM Agreement
25 Pages Posted: 29 Dec 2013
Date Written: January 21, 2013
The meaning of the phrase ‘remove the adverse effects’ as used in Art. 7.8 of the WTO Subsidies and Countervailing Measures Agreement (SCM Agreement) is unclear; it has been explored neither in the jurisprudence of the DSM, nor in academic literature. There are three fundamental principles underlying the interpretation of the SCM agreement – avoidance of economic analyses, proscription of retrospective remedies and interpretation of ‘withdrawal’ in Art. 4.7 as prospective cessation. Based on these fundamental interpretive principles, there are several possible meanings of the removal obligation, including equivalent subsidisation, price controls and quantitative restrictions. In the absence of decisive reasons to prefer one over the other, the removal obligation should be construed as a result rather than process obligation. This analytical inquiry demonstrates the problems engendered and perpetuated by the avoidance of economic analyses in interpretation of the SCM Agreement.
Keywords: WTO, SCM Agreement, Subsidies, Adverse Effects, Remedies
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