Expired measures, excess duty drawbacks and causation : the Appellate Body report in EU – PET (Pakistan)

Abstract

The Appellate Body report in EU – PET (Pakistan) raises distinct questions relating to the need for findings in relation to expired measures, the conditions under which duty drawback schemes may constitute subsidies and the causation methodology to apply under the SCM Agreement. We conclude that the report offers no clear guidance on whether the function and design of WTO dispute settlement require or preclude findings in case of expired measures. We welcome the Appellate Body’s conclusion that, in case of duty drawback schemes, the financial contribution element of the subsidy is limited to the excess remission or drawback of import charges. Finally, although the Appellate Body rightly found that authorities are free to choose the methodology for causation analysis provided that the analysis is complete and objective, the methodology used by the investigating authority in this case show a number of deficiencies that were not recognized by the Appellate Body.