V - ARGUMENTS OF THE THIRD PARTIES

Summary

Australia

1. Introduction

5.1 Australia focuses on a select few topics which raise significant systemic issues as well as important questions of legal interpretation.

2. Financial contribution

(a) Relevance of the nature of government action

5.2 Australia considers that whether a government action can also be characterised as a particular type of transaction (for example, the ‘purchase of services’) is irrelevant to the question of whether it constitutes a ‘financial contribution’ within the meaning of Article 1.1(a)(1). Rather, the relevant question is whether the government action can properly be described as falling within one of the categories of financial contribution set out in Article 1.1(a)(1).

5.3 Australia recalls the statement of the Appellate Body in US – Softwood Lumber IV that ‘{a}n evaluation of the existence of a financial contribution involves consideration of the nature of the transaction through which something of economic value is transferred by a government’. Therefore, Australia submits that it is important to accurately identify the nature of the government action concerned in determining whether it falls within one of the categories of financial contribution.

5.4 In Australia's view, the facts and circumstances surrounding the measure concerned should determine the nature of the government action and, consequently, whether it falls within one of the categories of financial contribution in Article 1.1(a)(1). In other words, it is the nature of the government action, and not its characterisation as a particular type of transaction, that determines whether it falls within Article 1.1(a)(1).