In this paper we claim that, in the WTO Appellate Body (AB)’s ruling in US-Countervailing Measures (China), the AB decision has essentially left unchanged the practice of imposing countervailing duties (CVDs) on environmental goods. While the US has formally “lost” the case, a change in the procedures and tests used to motivate the CVD will allow the US to continue using this policy tool. From an economic point of view, this is not welcome news since CVDs have the standard distortionary effects of tariffs and could go against environmental goals. From a political-economy point of view, the CVDs in this case appear driven by pressure of domestic manufacturers of clean energy technology and products.
Rachel Brewster et al., Trade in Environmental Goods: A Review of the WTO Appellate Body’s Ruling in US — Countervailing Measures (China), 15 World Trade Review 327-349 (2016)
Library of Congress Subject Headings
International trade--Law and legislation, International law--Economic aspects, Foreign trade regulation—environmental aspects, Subsidies, World Trade Organization