Principio de HSUPA

SCM Articles 3 and 4 (seeAppendix 4 for text) place an outright prohibition on subsidies made contingent on export performance or on the use of domestic over imported goods. The SCM flatly states that WTO members “shall neither grant nor maintain” such subsidies. A member found to be maintaining a subsidy falling into the red light can be required to remove the subsidy.

(a) The core of the red light is an ex ante, design-based prohibition.With one important exception (discussed in the next paragraph), the current red light constitutes a ban on a class of subsidies defined according to their design (i.e., without regard to their actual impacts—see¶ III.C.1(a)). This kind of prohibition is operative prior to the implementation (or even the legal creation) of a given subsidy program.

(b) The “in fact” test brings ex post factoand context-based elements into the red light.SCM Article 3 prohibits subsidies that are contingent on export or domestic supply whether the contingency exists “in law or in fact”.126_{The phrase “in fact”}

was intended—at least by some of the SCM’s drafters—to prevent governments from structuring subsidies that implicitly but effectively favor exports or domestic supply. From an analytic perspective, this “in fact” standard introduces a limited but significant departure from the red light’s basic ex ante, design-based

approach.127_{To know whether a subsidy falls within the “in fact” prohibition, it is}

necessary to look at facts that surround its implementation.

124.It also appears highly debatable whether failures to achieve “full cost recovery” for public management of fisheries would be covered by the current SCM definition. Seethe GATT case, Belgian Family Allowances(1952) (under Formal WTO Documents/WTO and GATT Cases in References).

125.The language creating a class of “non-actionable” subsidies—SCM Arts. 8 and 9—was originally adopted only on a provisional basis for a period of five years. SeeSCM Art. 31. That five year period expired on December 31, 1999. See

¶ V.F.4.

126.Although this phrase appears only in Art. 3.1(a) (export subsidies), the WTO Appellate Body has ruled that Art. 3.1(b) (domestic supply subsidies) implicitly includes the “in fact” standard. See Canada—Certain Measures Affecting

the Automotive Industry, ¶ 143 (under Formal WTO Documents/WTO and GATT Cases in References).

127.Note, however, that the “in fact” prohibition does have a partly ex ante, design-based function. It is ex ante, to the extent that it warns governments away from purposeful evasions (or at least from obvious purposeful evasions) of the “in law” standard. It is also partly design-based, to the extent that an “in fact” contingency generally results in part from a subsidy’s design.

(i) The “in fact” standard focuses on the relationship between the criteria for granting a subsidy and the structure of the subsidized industry.128_{In this sense,}

the “in fact” standard is actually a special combination of design-based and context-based classifications.129

(ii) These facts may even at times include facts about the actual use of specific subsidy payments, and in this sense may introduce ex post factoanalysis into red light cases. Nevertheless, it is important to realize that the “in fact” test is not an effects-based standard. In particular, it does not require proving any harmful impact of a given subsidy, or even a subsidy’s actual effects on exports or imports.

(iii) The “in fact” provision is in legal flux, and proposals for clarification have been tabled.130

(c) The law and procedure of Article 3 emphasize rules enforcement.It is an old observation that WTO disciplines sometimes function as a means to promote accommodation and deal-making, and other times more as legal rules subject to enforcement. With its ex ante, design-based, prohibitory character, the red light of Article 3 falls squarely into the latter camp. Even the procedures governing disputes arising under Article 3 have a flavor of “rules enforcement”—the process is subject to an expedited timetable, and a standing group of independent experts is available to make a binding finding regarding the prohibited character of a challenged subsidy.131_{Similarly, the remedies available against violations of Article 3 look}

more like rules enforcement than relationship mending. The prohibitions of Article 3 are enforceable through an obligation to withdraw any offending subsidy, while failure to withdraw a prohibited subsidy can lead to “appropriate countermeasures” that are punitive in character (i.e., are not limited to the degree of harm suffered by the complaining member).132_{Compare these characteristics with the law and}

procedure of the amber light, discussed next.

(d) Limited applicability to fishing subsidies:Despite the significance of international trade in fishery products (the FAO estimates that more than one-third of the fish taken in wild-capture marine fisheries (as measured by value) enter international commerce133_{), the current SCM red light prohibitions have little relevance to}

fishing subsidies.

(i) Fishing subsidies are rarely “export” subsidies:Governments have not often been tempted to make fishing subsidies contingent on export performance.

Current WTO Rules: Overview and Gap Analysis

P A R T I V

IV.A.3–IV.B.1

128.According to the WTO Appellate Body, the existence of an “in fact” contingency “must be inferredfrom the total configuration of the facts constituting and surrounding the granting of the subsidy.” Canada—Measures Affecting the

Export of Civilian Aircraft, ¶ 167; quoted in Canada—Certain Measures Affecting the Automotive Industry, ¶ 99 (italics

in original, underlining added; seeunder Formal WTO Documents/WTO and GATT Cases in References)).

129.A similar reliance on “structural” contextual facts (rather than facts about the specific impacts of a subsidy) is found in SCM Art. 8.2. See ¶ IV.B.5(b)(i)-(ii).

130.See, e.g., TN/RL/W/85 (Australia, April 30, 2003), p. 1.

131.SCM Art. 4.

132.SCM Arts. 4.10 and 4.11, nn. 9 and 10 require that the countermeasures be not “disproportionate in light of the fact that the subsidies dealt with... are prohibited.” For one application of this rule, see United States—Tax Treatment

for “Foreign Sales Corporations” (under Formal WTO Documents/WTO and GATT Cases in References).

This may be due partly to the relative strength since 1949 of the GATT ban on export subsidies, as well as to the fact that the majority of fishing subsidies are granted by countries that are net importers of fish.

(ii) Subsidies encouraging domestic fish supply fall outside SCM Article 3:Some fishing subsidies are meant to promote the supply of fish to domestic markets from domestic enterprises.134_{This may often result in the effective}

displacement or prevention of imports (especially where the subsidized fleet is operating in foreign waters or on straddling or migratory stocks135_{). Indeed,}

such subsidies may even be in pursuit of a more or less explicit policy to promote domestic supply over potential imports.136_{Still, such subsidies are}

rarely (if ever) made legally contingent on domestic supply. Moreover, Article 3.1(b) is really aimed at subsidies to producers who use parts or primary inputs in their production process, rather than at subsidies to their domestic suppliers. It is not fishers who are engaged in “import-substituting” behavior, even though the subsidies they receive may effectively distort import levels. Even where such subsidies are explicitly aimed at ensuring domestic supply, current SCM rules allow them to be reached only through actions under the so-called “amber light.”

IV.B.2 The “amber light”—disciplining subsidies having “adverse effects.”