Privately Subsidized Recycling Schemes and Their Potential Harm to the Environment of Developing Countries: Does International Trade Law Have a Solution?

The article discusses the problem of privately subsidized recycling schemes that are common in the developed countries and that may in certain circumstances harm the environment of developing countries as a result of the asymmetry in economic development and environmental protection between them and the developed countries where the products originate. This may happen, for instance, when such products are exported to developing countries and have a negative impact on the economic viability of collection and recycling of their own waste. Newly established and still struggling recycling plants, unsupported by private or governmental subsidies or other protective measures prevailing in the rich and more environmentally conscious countries, may be forced to close down. Alternatively, they may decide to abandon expensive collection of local waste, in favor of free or subsidized waste imported from developed countries. In both cases, collection and recycling activities in the importing countries are reduced, and sometimes eliminated. The objective of this article is to document and draw attention to this problem, that has not yet been discussed in the rich literature on trade & environment, and to examine the question of what remedies, if any, may be offered under international trade law (in particular GATT/WTO rules) to affected countries. Would countries in situations as those described above be permitted to take measures against imports harming their recycling activities? Of particular interest in this regard, is how to relate to privately paid, but governmentally induced, subsidies under the WTO Subsidies Agreement? Such subsidies, while fulfilling most economic definitions of subsidies, appear to have escaped the attention of the Agreement’s drafters and may therefore be outside its scope. Importing member countries would therefore be precluded from taking countervailing measures against products enjoying such subsidies. These and other potential protective measures will be discussed in the article, in light of recent case law of the WTO, in particular in the matter of United States – Measures Treating Export Restraints as Subsidies. This discussion will demonstrate the formalistic nature of the existing WTO jurisprudence and show how a more purposive, teleological approach to interpretation of international trade rules could lead to a better solution to the problem at hand

Israel’s foreign investment protection regime in view of developments in its energy sector

This paper discusses the foreign investment protection regime and policy of Israel, analyzes the central features of its bilateral investment treaties (BITs), and argues that time has come to use these treaties as a tool to attract foreign investment to the country, in particular in the energy sector. It shows that until now, BITs have been concluded mainly with developing and transition-economy countries and as a means to protect Israeli investors in those countries. This policy has been based on the perception that only developing countries with politically unstable regimes and corrupt or non-independent judiciaries need such treaties, while Israel can rely on its good reputation of being a democratic state, based on the rule of law, with a free-market economy and a well-reputed judiciary to attract FDI. The paper argues that not only is this viewpoint incompatible with current trends in International Investment Law where more and more BITs are concluded between developed countries, it must also be revised on the background of what has occurred in Israel over the last few years in the energy sector. The paper describes the long saga of the regulatory changes in relation to the natural gas sector, ever since huge offshore gas fields were discovered, including the Supreme Court’s rulings on the changes of the tax regime and on the stabilization clause, and analyses its impact on the investment climate. The paper presents original data on this impact and suggests policy recommendations based on the analysis of the situation

Institutional and Substantive Reform of the Anti-Dumping and Subsidy Agreements – Lessons from the Israeli Experience

This article proposes several amendments to the Anti-Dumping (AD) Agreement and the chapter on Countervailing Duties (CVD) of the Subsidies Agreement, drawing from the experience of the State of Israel in AD and CVD administration over more than a decade. In particular, the Article argues for the need for international regulation of the institutional settings of such administration within Member States. To this end, provisions should be added to the relevant WTO agreements that relate to the nature and composition of the national administering authorities, with the guiding principle being to ensure independence of the authorities and objectivity, fairness and transparency of their investigations and determinations. International Law must try to guarantee that these authorities are immune to political pressures from interested parties. We suggest that the authority in these matters be transferred to independent, quasi-judicial bodies, as opposed to administrative agencies that are part of government ministries or controlled by them or by political organs. We argue, based on reason, as well as on evidence from several countries, that such bodies are more likely to produce balanced decisions, taking into account interests of both domestic industry and consumers, and also show that there are precedents within existing WTO law of such institutional regulation. We then proceeded to discuss amendments of the substantive law, particularly in relation to the definition of dumping. Here we propose granting clear priority to the establishment of normal value on the basis of actual sales by the foreign producer in his home market, and to restrict the use of the other options offered by the AD Agreement. To this end, we suggest, inter alia, to abolish or restrict the use of the methodology that allows sales made at prices below per unit (fixed and variable) costs of production to be treated as not being “in the ordinary course of trade” by reason of price and therefore disregarded in determining normal value. With respect to the assessment of AD and CV duties, we recommend to require compliance with the “Lesser Duty Rule”. We present statistical data from Israel, which shows the significant influence that the application of this Rule has had on the rate of AD duties in Israel. We further recommended the adoption of the Israeli methodology on how to apply the Rule, namely to generally base the calculation upon the price undercutting rate, and not on a target price. In view of the fact that anti-dumping and anti-subsidy procedures and measures are on the rise, and that more and more countries adopt such procedures based on the WTO Anti-Dumping and Subsidies Agreements, it is exceedingly important that these agreements are amended so as to minimize the damage to international trade caused by their use, while at the same time preserving them as a safeguard measure that will allow continued multilateral trade liberalization. This article suggests some ways in which this could be achieved

From Diplomacy to Law: The Juridicization of International Trade Relations

This article deals with the development of law; i.e., the evolution of a legal regime in a field which prior thereto was not subject to law. It is my view that such a process took place in recent decades in the area of trade relations between sovereign nations. The period since World War II, and particularly recent years, is marked by the clear development of a conventional legal regime which regulates trade re- lations among the majority of countries of the world, as expressed by the multiplication of legal norms and the strengthening of the binding nature of these norms and the procedures for enforcing them. An in- depth examination of this phenomenon and an analysis of its political and economic causes may shed light on not only an important phe- nomenon in the field of international law, but also on the role of law generally in human society

From Diplomacy to Law: The Juridicization of International Trade Relations

This article deals with the development of law; i.e., the evolution of a legal regime in a field which prior thereto was not subject to law. It is my view that such a process took place in recent decades in the area of trade relations between sovereign nations. The period since World War II, and particularly recent years, is marked by the clear development of a conventional legal regime which regulates trade re- lations among the majority of countries of the world, as expressed by the multiplication of legal norms and the strengthening of the binding nature of these norms and the procedures for enforcing them. An in- depth examination of this phenomenon and an analysis of its political and economic causes may shed light on not only an important phe- nomenon in the field of international law, but also on the role of law generally in human society