Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-27T10:43:58.444Z Has data issue: false hasContentIssue false
  • English
  • Français

‘Where Have all the Distortions Gone?’ Appellate Body Report, Ukraine–Ammonium Nitrate

Published online by Cambridge University Press:  02 July 2021

Cristina Herghelegiu  and
Luca Rubini
Cristina Herghelegiu
Affiliation:
Université Libre de Bruxelles, Belgium
Luca Rubini*
Affiliation:
Birmingham Law School, UK European University Institute, Italy
*
*Corresponding author: Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This article reviews the Appellate Body Report in the Ukraine–Ammonium Nitrate dispute that focused on the impact of Russia's dual pricing in the natural gas market on the ammonium nitrate market. Interpreting the WTO Anti-Dumping Agreement (ADA), the Appellate Body rejected the possibility to reject input costs, which, though distorted, were duly reported in the company's records, and to replace them with a surrogate price which, for the Ukrainian authorities, was the (adjusted) export price of Russian natural gas at the German border. In this article, (a) we fully review the background of the dispute, showing the connections between natural gas and ammonium nitrate prices, and the impact on Russia's price regulation of the domestic market on them; (b) we then review the ADA and concur with the interpretation of the Appellate Body, essentially for systemic reasons; (c) for completeness, we also investigate whether econometrics could accurately determine the natural gas benchmark price in Russia and conclude in the negative; (d) since dual pricing gives an economic benefit to domestic ammonium nitrate producers, we finally test dual pricing under the WTO subsidy rules. The conclusion is that the current disciplines are not likely to apply to dual pricing and lead us to conclude that important distortions are currently left without regulation in the WTO.

Keywords

WTO case lawanti-dumpingdual pricinggovernment distortionssubsidy
Type
Original Article
Information
World Trade Review , Volume 20 , Special Issue 4: WTO Case Law , October 2021 , pp. 566 - 581
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Although the paper is a joint-effort, Cristina Herghelegiu is mainly responsible for Parts 2, 3 and 5, Luca Rubini for Parts 4 and 6. Introduction and conclusions have been jointly written.

References

Al-Mahish, M. (2017) ‘The Impact of Energy Subsidy on Nitrogen Fertilizer Producers in the GCC’, Applied Econometrics and International Development 17, 99–122.Google Scholar
Balmaceda, M. (2009) ‘Background to the Russia–Ukrainian Gas Crisis: Clarifying Central Issues and Concepts’, Russian Analytical Digest, No. 53.Google Scholar
Blonigen, B.A. and Bown, C.P. (2003) ‘Antidumping and Retaliation Threats’, Journal of International Economics 60, 249–273.CrossRefGoogle Scholar
Blonigen, B.A. and Prusa, T.J. (2016) ‘Dumping and Antidumping Duties’, in Bagwell, K. and Staiger, R.W. (eds.), Handbook of Commercial Policy, Vol. 1, Part B, Amsterdam: North-Holland, 107–159 (chapter 3).Google Scholar
Bown, C.P. (2006) ‘The World Trade Organization and Antidumping in Developing Countries’, Policy Research Working Paper Series 4014, The World Bank.CrossRefGoogle Scholar
Bown, C.P. (2010) ‘Assessing the G20 Use of Antidumping, Safeguards, and Countervailing Duties During the 2008–2009 Crisis’, in Evenett, S.J. (ed.), Unequal Compliance: The 6th GTA Report. London, UK: CEPR and VoxEU.org, 39–47 (chapter 3).Google Scholar
Bown, C.P. (2011) ‘Taking Stock of Antidumping, Safeguards and Countervailing Duties, 1990–2009’, The World Economy 34, 1955–1998.CrossRefGoogle Scholar
Bown, C.P. and Crowley, M.A. (2013) ‘Import Protection, Business Cycles, and Exchange Rates: Evidence from the Great Recession’, Journal of International Economics 90, 50–64.CrossRefGoogle Scholar
Bown, C.P. and Crowley, M.A. (2014) ‘Emerging Economics: Trade Policy and Macroeconomic Shocks’, Journal of Development Economics 111, 261–273.CrossRefGoogle Scholar
Bown, C.P. and Crowley, M.A. (2016) ‘The Empirical Landscape of Trade Policy’, Policy Research Working Paper; No. 7620. World Bank, Washington, DC.CrossRefGoogle Scholar
Bown, C.P. and McCulloch, R. (2015) ‘Antidumping and Market Competition: Implications for Emerging Economies’, RSCAS Working Papers 2015/76, European University Institute, Florence.CrossRefGoogle Scholar
Bown, C.P. and Tovar, P. (2011) ‘Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform’, Journal of Development Economics 96, 115–125.CrossRefGoogle Scholar
Broda, C., Limao, N., and Weinstein, D.E. (2008) ‘Optimal Tariffs and Market Power: The Evidence’, American Economic Review 98, 2032–2065.CrossRefGoogle Scholar
Crowley, M.A. (2010) ‘Split Decisions in Antidumping Cases’, The B.E. Journal of Economic Analysis & Policy, De Gruyter 10, 1–26.CrossRefGoogle Scholar
Crowley, M.A. and Hillman, J. (2018) ‘Slamming the Door on Trade Policy Discretion? The WTO Appellate Body's Ruling on Market Distortions and Production Costs in EU–Biodiesel (Argentina)’, World Trade Review 17, 195–213.CrossRefGoogle Scholar
Esta, I. and Rolland, S.E. (2015) Subsidies, Clean Energy, and Climate Change. E15Initiative. Geneva: International Centre for Trade and Sustainable Development (ICTSD) and World Economic Forum.Google Scholar
EU. (2006) ‘Subsidies – Submission of the European Communities’, WTO/TN/RL/GEN/135, 24 April 2006.Google Scholar
EU Agricultural Markets Briefs. (2019) ‘Fertilizers in the EU: Prices, Trade and Use’, No. 15, June 2019.Google Scholar
Feinberg, R.M. and Reynolds, K.M. (2006) ‘The Spread of Antidumping Regimes and the Role of Retaliation in Filings’, Southern Economic Journal 72, 877–890.Google Scholar
Finger, M. and Nogués, J. (2005) Safeguards and Antidumping in Latin American Trade Liberalization: Fighting Fire with Fire. New York: Palgrave.CrossRefGoogle Scholar
Henderson, J. (2011) Domestic Gas Prices in Russia – Towards Export Netback?. Oxford Institute for Energy Studies.CrossRefGoogle Scholar
Huang, W.Y. (2007) Impact of Raising Natural Gas Prices on US Ammonia Supply. Washington. DC: U.S. Department of Agricultural, Economic Research Service. Technical Bulletin No. WRS-0702.Google Scholar
Ikenson, D.J. (2020) ‘Tariffs by Fiat: The Widening Chasm between US Antidumping Policy and the Rule of Law’, Cato Institute, Policy Analysis, No. 896.Google Scholar
Irwin, D.A. (2005) ‘The Rise of US Antidumping Activity in Historical Perspective’, The World Economy 28, 651–668.CrossRefGoogle Scholar
Krishna, R. (1999) ‘Antidumping in Law and Practice’, Policy Research working Paper, No.1823.Google Scholar
Linsdey, B. and Ikenson, D. (2003) Antidumping Exposed: The Devilish Details of Unfair Trade Law. Washington. DC: Cato Institute.Google Scholar
Mah, J.S. and Kim, Y.D. (2006) ‘Antidumping Duties and Macroeconomic Variables: The Case of Korea’, Journal of Policy Modeling 28, 157–162.CrossRefGoogle Scholar
Marhold, A. (2017) Fossil Fuel Subsidy Reform in the WTO: Options for Constraining Dual Pricing in the Multilateral Trading System. Geneva: International Centre for Trade and Sustainable Development (ICTSD).Google Scholar
Marhold, A. and Weiss, F.. (2018) ‘Energy and Fossil Fuels as a Topic of WTO Accession Protocols’, TILEC Discussion Paper. DP 2018-20, Tilburg.CrossRefGoogle Scholar
Mavroidis, P.C. (2016) The Regulation of International Trade. Volume 2. The WTO Agreements on Trade in Goods. Cambridge, MA: MIT Press.Google Scholar
Meng, N., Milner, C., and Song, H. (2016) ‘Differences in the Determinants and Targeting of Antidumping: China and India Compared’, Applied Economics 48, 4083–4097.CrossRefGoogle Scholar
Moore, M.O. and Zanardi, M. (2011) ‘Trade Liberalization and Antidumping: Is There a Substitution Effect?’, Review of Development Economics 15, 601–619.CrossRefGoogle Scholar
Palmeter, D. (1989) ‘The Capture of Antidumping law’, Yale Journal of International Law 14(1), 182–198.Google Scholar
Pirani, S. (2011) Elusive Potential: Natural Gas Consumption in the CIS and the Quest for Efficiency. Oxford Institute for Energy Studies.CrossRefGoogle Scholar
Pirani, S., Stern, J., and Yafimava, K. (2009) The Russo–Ukrainian Gas Dispute of January 2009: A Comprehensive Assessment. Oxford Institute for Energy Studies.CrossRefGoogle Scholar
Pogoretskyy, V. and Melnyk, S. (2017) ‘Russian Energy and the WTO: Overview of the Accession Negotiations of the Russian Federation and Final Commitments’, Oil, Gas & Energy Law Intelligence. Maris BV, Netherlands.Google Scholar
Prusa, T.J. (2001) ‘On the Spread and Impact of Anti-Dumping’, Canadian Journal of Economics 34, 591–611.CrossRefGoogle Scholar
Report of the Working Party. (2011) ‘Report of the Working Party on the Accession of the Russian Federation’, WT/ACC/RUS/70, WT/MIN(11)/2 (17 November 2011).Google Scholar
Selivanova, Y. (2008) Energy Dual Pricing in the WTO: Analysis and Prospects in the Context of Russia's Accession to the World Trade Organization. London: Cameron May.Google Scholar
Soderbery, A. (2015) ‘Estimating Import Supply and Demand Elasticities: Analysis and Implications’, Journal of International Economics 96, 1–17.CrossRefGoogle Scholar
Spanjer, A. (2007) ‘Russian Gas Price Reform and the EU-Russia Gas Relationship: Incentives, Consequences and European Security of Supply’, Energy Policy 35(5), 2889–2898.CrossRefGoogle Scholar
Sykes, A.O. (2006) The WTO Agreement on Safeguards - A Commentary.Oxford: Oxford University Press.CrossRefGoogle Scholar
U.S. International Trade Commission. (1998) ‘Ammonium Nitrate: A Comparative Analysis of Factors Affecting Global Trade’, Investigation No. 332–393, Publication 3135.Google Scholar
Vasileios, R., Federico, I., Giacomo, L., Simonelli, F., Wijnand, S., Jacopo, T., and Colantoni, L.. (2014) ‘The Case of the Chemical Industry – Ammonia’, Composition and Drivers of Energy Prices and Costs in Energy Intensive Industries: The Case of Ceramics, Flat Glass and Chemical Industries. CEPS Special Report No. 85/March 2014, Chapter 2, www.ceps.eu/download/publication/?id=8437&pdf=CEPS%20Energy%20Prices%20Study_Consolidated%20version_0.pdf.Google Scholar
Viner, J. (1923) Dumping: A Problem in International Trade. Chicago: University of Chicago Press. Reprinted 1991 by Augustus M. Kelly, Publishers.Google Scholar
Zanardi, M. (2004) ‘Antidumping: What Are the Numbers to Discuss at Doha?’, The World Economy 27, 403–433.CrossRefGoogle Scholar