Munich Personal RePEc Archive

Missing WTO rules and a non-functioning Appellate Body: lessons from Argentina's biodiesel exports

Nogues, Julio J. and O'Connor, Ernesto (2020): Missing WTO rules and a non-functioning Appellate Body: lessons from Argentina's biodiesel exports.

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Abstract

This paper reviews the recent experience of importing countries’ contingent protection measures against input subsidies from escalated export taxes in biodiesel imports from Argentina. The analysis indicates that the end result of a WTO that is empty of rules on primary agricultural export barriers opens the door for arbitrary policies by exporting countries and leaves importing countries without a legal right to impose compensating contingent measures. This was made clear by the findings of the WTO Panel and Appellate Body in the Argentina-EU biodiesel case. Nevertheless, under Trump’s charge against the multilateral trading system, since December 2019 the WTO Appellate Body remains non-functioning and therefore, importing countries can now impose counteracting measures without risking a negative legal finding as the EU faced. As illustrated by the US contingent measures, a non-functioning Appellate Body now facilitates arbitrary measures by importing countries. The obvious solution to this mess is to include WTO rules on agricultural export barriers, and reinstate the the Appellate Body to normal functioning.

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