Book contents
- Frontmatter
- Contents
- Foreword
- A note on the American Law Institute
- List of reporters
- 1 Introduction
- 2 United States – Section 129(c)(1) of the Uruguay Round Agreements Act (WTO Doc. WT/DS22/R of 15 July 2002): Beating Around (The) Bush
- 3 United States – Tax Treatment for “Foreign Sales Corporations” Recourse to Arbitration by the United States Under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement (WT/DS106/ARB): A Comment
- 4 United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany (WTO Doc. WT/DS213/AB/R): The Sounds of Silence
- 5 United States – Countervailing Measures Concerning Certain Products from the European Communities (WTO Doc. WT/DS212/AB/R): Recurring Misunderstanding of Non-Recurring Subsidies
- 6 Canada – Export Credits and Loan Guarantees for Regional Aircraft (WT/DS222/R): A Comment
- 7 United States – Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe From Korea
- 8 Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products
- 9 India – Measures Affecting the Automotive Sector
- 10 United States – Section 211 Omnibus Appropriations Act of 1998 (WT/DS176/AB/R): A Comment
- 11 United States – Preliminary Determination with Respect to Certain Softwood Lumber from Canada: What is a Subsidy?
- 12 European Communities – Trade Description of Sardines: Textualism and its Discontent
- Index
- References
3 - United States – Tax Treatment for “Foreign Sales Corporations” Recourse to Arbitration by the United States Under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement (WT/DS106/ARB): A Comment
Published online by Cambridge University Press: 06 July 2010
- Frontmatter
- Contents
- Foreword
- A note on the American Law Institute
- List of reporters
- 1 Introduction
- 2 United States – Section 129(c)(1) of the Uruguay Round Agreements Act (WTO Doc. WT/DS22/R of 15 July 2002): Beating Around (The) Bush
- 3 United States – Tax Treatment for “Foreign Sales Corporations” Recourse to Arbitration by the United States Under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement (WT/DS106/ARB): A Comment
- 4 United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany (WTO Doc. WT/DS213/AB/R): The Sounds of Silence
- 5 United States – Countervailing Measures Concerning Certain Products from the European Communities (WTO Doc. WT/DS212/AB/R): Recurring Misunderstanding of Non-Recurring Subsidies
- 6 Canada – Export Credits and Loan Guarantees for Regional Aircraft (WT/DS222/R): A Comment
- 7 United States – Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe From Korea
- 8 Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products
- 9 India – Measures Affecting the Automotive Sector
- 10 United States – Section 211 Omnibus Appropriations Act of 1998 (WT/DS176/AB/R): A Comment
- 11 United States – Preliminary Determination with Respect to Certain Softwood Lumber from Canada: What is a Subsidy?
- 12 European Communities – Trade Description of Sardines: Textualism and its Discontent
- Index
- References
Summary
Some of the legal analysis in this study derives from joint work between Robert Howse and Susan Esserman on this ruling, “Trade disputes quire fairer arbitration,” FT.com, Sep 12, 2002
Introduction
This chapter discusses the decision by the arbitrator on suspension of concessions (“retaliation”) in the dispute between the US and the EU regarding the tax treatment of offshore corporate income under US legislation. By way of background, the first part of the chapter (section 2) describes the operation of the US scheme, including as revised after the first round of WTO rulings.
We observe that the arbitrators have adopted an unconventional approach with respect to the notion of countermeasures, which emphasizes the incentive to induce compliance while largely jettisoning proportionality between the countermeasure and the injury suffered by the wronged state as a meaningful normative constraint. Section 4 considers this approach from the perspective of established principles of inter-national law and highlights a number of important shortcomings. Section 5 takes this approach for granted and asks whether countermeasures could actually be relied upon in order to induce compliance. We conclude with respect to export subsidies, the incentives of complainants are such that under-enforcement can often be expected.
The prospect of inducing compliance through countermeasures thus appears to be somewhat poor and at odds with established principles of international law.
- Type
- Chapter
- Information
- The WTO Case Law of 2002The American Law Institute Reporters' Studies, pp. 36 - 63Publisher: Cambridge University PressPrint publication year: 2005
References
- 3
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