Hostname: page-component-78c5997874-lj6df Total loading time: 0 Render date: 2024-11-05T14:18:18.827Z Has data issue: false hasContentIssue false
  • English
  • Français

Sustainable resource development in the Arctic: Using export trade agreements to restrict environmentally harmful subsidies

Part of: International Law for Sustainability in Arctic Resource Development

Published online by Cambridge University Press:  03 February 2020

Tomohiko Kobayashi Open the ORCID record for Tomohiko Kobayashi [Opens in a new window]
Tomohiko Kobayashi*
Affiliation:
Professor, Department of Law, Otaru University of Commerce, 3-5-21 Otaru, Hokkaido 047-0034, Japan
*
Author for correspondence: Tomohiko Kobayashi, Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Although the Arctic is emerging as a promising region for energy development and maritime transportation, navigational safety is a persistent and growing concern. What can international trade regulations do to ensure the safe transportation of natural resources on the Northern Sea Route (NSR) and the sustainable development of the Arctic region? Government support is almost inevitable for shipyards, particularly in a highly competitive market. Shipyards build large-scale vessels that navigate the Arctic Ocean. However, excessive export competition will soon lead to over-production and exportation of substandard products. Assuming that even a single incident in the NSR could have a disastrous impact on the flora and fauna of the entire Arctic region, the potential for substandard vessel use represents a significant risk and potential damage to the environment. Although the World Trade Organization (WTO) has detailed rules for this purpose with an effective dispute settlement mechanism, the history of WTO disputes has proven that WTO proceedings sometimes result in unintended consequences. As an alternative option, along with negotiations under the WTO and the Organisation for Economic Cooperation and Development (OECD), this paper suggests the possibility of a critical mass agreement to mutually allow more flexible government support for vessels only if they have superior environmental performance.

Keywords

Export subsidiesWTOCritical mass agreementsWTO dispute settlementCountervailing duties (CVD)
Type
Research Article
Information
Polar Record , Volume 56 , 2020 , e17
Copyright
© Cambridge University Press 2020

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.)

References

Adlung, R., & Mamdouh, H. (2017). Plurilateral trade agreements: an escape route of the WTO? WTO Working Paper, ERSD-2017-03, 1–23.CrossRefGoogle Scholar
AFP. (2019). Airbus v. Boeing at the WTO: Only the Lawyers Win. AFP, 9 April 2019. Retrieved from https://www.france24.com/en/20190409-airbus-v-boeing-wto-only-lawyers-win (accessed 1 May 2019).Google Scholar
Arctic Economic Council. (2018). New Opportunities: Energy in the Arctic, 22 August 2018. Retrieved from https://arcticeconomiccouncil.com/new-opportunities-energy-in-the-arctic/ (accessed 22 April 2019).Google Scholar
Arctic Law and Policy Institute. (2018). Arctic law and policy year in review: 2017. Washington Journal of Environmental Law & Policy, 8, 106–253.Google Scholar
Chung, J., & Obayashi, Y. (2018). RPT-FOCUS - South Korean Shipbuilders’ Lock on LNG Tanker Market to Hold for Years. Reuters, 20 November 2018. Retrieved from https://www.reuters.com/article/lng-south-korea-shipping/rpt-focus-south-korean-shipbuilders-lock-on-lng-tanker-market-to-hold-for-years-idUSL4N1XV2NP (accessed 22 April 2019).Google Scholar
Coppens, D. (2014). WTO Disciplines on Subsidies and Countervailing Measures: Balancing Policy Space and Legal Constraints. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Cox, K. (2018). Boeing takes over Embraer commercial line with $4.75 billion joint venture. Congressional Quarterly, 6 July 2018, 2018 WL 3321625.Google Scholar
Cox, K. (2019). Embraer shareholders approve $4.2 billion joint venture with Boeing. Congressional Quarterly, 26 February 2019, 2019 WL 924479.Google Scholar
Eiterjord, T. K. (2018). China’s Planned Nuclear Icebreaker. The Diplomat, 17 July 2018. Retrieved from https://thediplomat.com/2018/07/chinas-planned-nuclear-icebreaker/ (accessed 22 April 2019).Google Scholar
European Union Chamber of Commerce in China. (2017). China Manufacturing 2025: Putting Industrial Policy Ahead of Market Forces, 2017. Retrieved from https://www.europeanchamber.com.cn/en/china-manufacturing-2025 (accessed 22 April 2019).Google Scholar
Farzan, A. N. (2019). Trump Reportedly Wants to Buy Greenland. So did the Truman Administration. The Washington Post, 16 August 2019. Retrieved from https://www.washingtonpost.com/nation/2019/08/16/trump-greenland-purchase-harry-truman-denmark/ (accessed 22 August 2019).Google Scholar
Gallagher, P., & Stoler, A. (2009). Critical mass as an alternative framework for multilateral trade negotiations. Global Governance, 15, 375–392.CrossRefGoogle Scholar
Gates, D. (2017). Analysts Pan Boeing Strategy in Pushing for Tariffs on Canada’s Smaller Jet. Seattle Times, 28 September 2017. Retrieved from https://www.seattletimes.com/business/boeing-aerospace/analysts-pan-boeing-strategy-in-pushing-for-tariffs-on-canadas-smaller-jet/ (accessed 1 May 2019).Google Scholar
Gates, D. (2019). Boeing Faces Largest Quarterly Loss in Its History After a $4.9 Billion Financial Hit Due to 737 MAX Grounding. Seattle Times, 18 July 2019. Retrieved from https://www.seattletimes.com/business/boeing-aerospace/boeing-announces-a-4-9-billion-accounting-charge-due-to-737-max-grounding/ (accessed 30 August 2019).Google Scholar
gCaptain. (2018). Russia Ships First Yamal LNG Cargoes to China via Northern Sea Route. gCaptain website, 19 July 2018. Retrieved from https://gcaptain.com/russia-ships-first-yamal-lng-cargoes-to-china-via-northern-sea-route/ (accessed 22 April 2019).Google Scholar
Goldstein, L. J. (2019). Why does China Suddenly want Nuclear Icebreakers? The National Interest, 14 April 2019. Retrieved from https://nationalinterest.org/print/feature/why-does-china-suddenly-want-nuclear-icebreakers-52027 (accessed 22 April 2019).Google Scholar
Gray, A. (2018). Recent Market Developments in the Shipbuilding and Shipping Industries. Presentation at the OECD Council Working Party on Shipbuilding (WP6) on 29 November 2018, 1–74. Retrieved from http://www.oecd.org/fr/sti/ind/workshop-on-factors-impacting-costs-and-distorting-the-shipbuilding-market.htm (accessed 22 April 2019)Google Scholar
Harbinson, S. (2009). The Doha Round: “Death-defying agenda” or “don’t do it again”? European Centre for International Political Economy (ECIPE) Working Paper, 10/2009, 1–21.Google Scholar
Hoekman, B. (2011). Proposals for WTO reform: a synthesis and assessment. Minnesota Journal of International Law, 20, 324–364.Google Scholar
Hoekman, B., & Mavroidis, P. C. (2017). MFN clubs and scheduling additional commitments in the GATT: learning from the GATS. European Journal of International Law, 28, 387–407.CrossRefGoogle Scholar
Hong, N. (2018). China’s Interests in the Arctic: Opportunities and Challenges: Examining the Implications of China’s Arctic Policy White Paper. Institute for China-America Studies (March 2018).Google Scholar
Humpert, M. (2018). Record Traffic on Northern Sea Route as COSCO Completes Five Transits. High North News, 3 September 2018. Retrieved from http://www.highnorthnews.com/record-traffic-on-northern-sea-route-as-cosco-completes-five-transits/ (accessed 22 April 2019).Google Scholar
Institute for Security and Development Policy. (2018). Made in China 2025: Backgrounder. June 2018. Retrieved from http://isdp.eu/publication/made-china-2025/ (accessed 22 April 2019).Google Scholar
International Maritime Organization. (2010). Guidelines for Ships Operating in Polar Waters. Adopted on 2 December 2009, A 26/Res.1024 (18 January 2010).Google Scholar
International Maritime Organization. (2015). Report of the MEPC on its 68th Session, MEPC 68/21/Add.1 (5 June 2015), Annex 10.Google Scholar
Jackson, J. H. (2000). The WTO “constitution” and proposed reforms: the seven “mantras” revisited, Graduate Institute of International Studies. The Program for the Study of International Organization(s) (PSIO) Occasional Paper: WTO Series, 2, 1–25.Google Scholar
Jin, D. (2016–17). Arctic policy of the Republic of Korea. Ocean and Coastal Law Journal, 22, 85–96.Google Scholar
Kalouptsidi, M. (2019). China’s Shipbuilding Industry: Measuring the Effect of Industrial Policy. LSE Business Review, 15 April 2019. Retrieved from: https://blogs.lse.ac.uk/businessreview/2019/04/15/chinas-shipbuilding-industry-measuring-the-effect-of-industrial-policy/ (accessed 22 April 2019).Google Scholar
Kobayashi, T. (2019). The use of panel process to improve the function of the Appellate Body. In L., Nakagawa, & Chen, J. (Eds.), The appellate body of the WTO and its reform. Singapore: Springer (forthcoming).Google Scholar
Miles, T. (2019). EU Belittles U.S. Claims as ‘Frankly Childish’ at WTO Airbus Hearing. Reuters, 1 May 2019. Retrieved from https://www.reuters.com/article/us-eu-usa-aircraft-wto/eu-belittles-u-s-claims-as-frankly-childish-at-wto-airbus-hearing-idUSKCN1S62QW?feedType=RSS&feedName=businessNews (accessed 1 May 2019).Google Scholar
Morishige, T. (2014). Maritime Green Frontier. Presentation by Mr. Toshiya Morishige, Director General, Maritime Bureau, Ministry of Land, Infrastructure, Transport and Tourism, Japan, 1–18. Retrieved from www.mlit.go.jp/common/001039017.pdf (accessed 22 April 2019).Google Scholar
Organisation for Economic Cooperation and Development. (2017). Imbalances in the Shipbuilding Industry and Assessment of Policy Responses, C/WP6(2016)6/FINAL (19 April 2017).Google Scholar
Organisation for Economic Cooperation and Development. (2018). Peer Review of the Finnish Shipbuilding Industry. Retrieved from http://www.oecd.org/sti/shipbuilding (accessed 30 August 2019).Google Scholar
Organisation for Economic Cooperation and Development. (2019a). Arrangement on Officially Supported Export Credits, TAD/PG(2019)1 (2 January 2019).Google Scholar
Organisation for Economic Cooperation and Development. (2019b). An Analysis of Market-distorting Factors in Shipbuilding: The Role of Government Interventions, C/WP6(2018)17/FINAL (April 2019).Google Scholar
Pagani, E. (2008). The OECD Steel and Shipbuilding Subsidy Negotiations. London: Cameron May.Google Scholar
Riviera. (2018). Icebreaking LNG Carrier Violates Northern Sea Route Rules. Riviera Maritime Media website, 20 April 2018. Retrieved from https://www.rivieramm.com/news-content-hub/icebreaking-lng-carrier-violates-northern-sea-route-rules-25033 (accessed 30 August 2019).Google Scholar
Shepardson, D., Ljunggren, D., Lampert, A., & Wise, A. (2018). U.S trade body backs Canadian plane maker Bombardier against Boeing. Westlaw Journal Aviation 35(25), 7.Google Scholar
The Arctic. (2019a). Putin: Carriers Need to be Encouraged to Use Green Fuel. The Arctic, 9 April 2019. Retrieved from https://arctic.ru/forumarctica/20190409/845601.html (accessed 22 April 2019).Google Scholar
The Arctic. (2019b). Novatek Proposes Zero VAT for Icebreaker Assistance During LNG Transportation. The Arctic, 16 April 2019. Retrieved from: https://arctic.ru/news/20190416/846357.html (accessed 22 April 2019).Google Scholar
Thompson, T. N. (2014). China’s subsidized shipbuilding. The Diplomat, 22 October 2014.Google Scholar
Tomesco, F. (2018). Airbus Seals Bombardier C Series Deal in Challenge to Boeing. Bloomberg, 8 June 2018. Retrieved from https://www.bloomberg.com/news/articles/2018-06-08/airbus-seals-deal-for-bombardier-c-series-in-challenge-to-boeing (accessed 22 April 2019).Google Scholar
Tusiani, M. D. (1996). The Petroleum Shipping Industry, Volume 2: Operations and Practices, Tulsa: PennWell Corporation.Google Scholar
United States Department of Commerce. (2017a). 100- to 150-Seat Large Civil Aircraft from Canada: Initiation of Less-Than-Fair-Value Investigation, 82 FR 24296 (26 May 2017).Google Scholar
United States Department of Commerce. (2017b). 100- to 150-Seat Large Civil Aircraft from Canada: Final Affirmative Countervailing Duty Determination, 82 FR 61252 (27 December 2017).Google Scholar
United States International Trade Commission. (2018). 100- to 150-Seat Large Civil Aircraft from Canada Investigation Nos. 701-TA-578 and 731-TA-1368 (Final), USITC Publication 4759 (February 2018).Google Scholar
United States Trade Representative. (2019). USTR Proposes Products for Tariff Countermeasures in Response to Harm Caused by EU Aircraft Subsidies, USTR Press Release, 8 April 2019. Retrieved from https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/april/ustr-proposes-products-tariff (accessed 22 April 2019).Google Scholar
Winslett, G. (2018). Critical mass agreements: the proven template for trade liberalization in the WTO. World Trade Review, 17, 405–426.CrossRefGoogle Scholar
World Maritime News. (2018a). New Northern Sea Route transit record for Christophe de Margerie. World Maritime News, 8 August 2018. Retrieved from https://worldmaritimenews.com/archives/258161/new-northern-sea-route-transit-record-for-christophe-de-margerie/ (accessed 22 April 2019).Google Scholar
World Maritime News. (2018b). COSCO’s Heavy-Lift Ship Crosses Northern Sea Route. World Maritime News, 6 September 2018. Retrieved from https://worldmaritimenews.com/archives/260239/coscos-heavy-lift-ship-crosses-northern-sea-route/ (accessed 22 April 2019).Google Scholar
World Maritime News. (2019). Hyundai Heavy Inks Formal Contract to Take Over DSME. World Maritime News, 8 March 2019. Retrieved from: https://worldmaritimenews.com/archives/272782/hyundai-heavy-inks-formal-contract-to-take-over-dsme/ (accessed 22 April 2019).Google Scholar
World Trade Organization. (1998). Appellate Body report in United States — Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/ABR, adopted on 6 November 1998.Google Scholar
World Trade Organization. (2001). Doha Ministerial Declaration, adopted on 14 November 2001, WT/MIN(01)/DEC/1 (20 November 2001).Google Scholar
World Trade Organization. (2004a). European Communities – Aid for Commercial Vessels – Request for Consultations by Korea, WT/DS307/1 (19 February 2004).Google Scholar
World Trade Organization. (2004b). European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft: Request for Consultations by the United States, WT/DS316/1 (12 October 2004).Google Scholar
World Trade Organization. (2004c). United States – Measures Affecting Trade in Large Civil Aircraft: Request for the Establishment of a Panel by the European Communities, WT/DS317/1, (12 October 2004).Google Scholar
World Trade Organization. (2005a). Panel report, Korea — Measures Affecting Trade in Commercial Vessels (Korea – Vessels (EU)), WT/DS273/R, adopted 11 April 2005.Google Scholar
World Trade Organization. (2005b). Dispute Settlement Body – Minutes of Meeting: Held in the Centre William Rappard on 11 April 2005, WT/DSB/M/187 (25 April 2005).Google Scholar
World Trade Organization. (2005c). Panel report, European Communities – Measures Affecting Trade in Commercial Vessels (EC – Vessels), WT/DS301/R, adopted 20 June 2005.Google Scholar
World Trade Organization. (2005d). Dispute Settlement Body – Minutes of Meeting: Held in the Centre William Rappard on 20 June 2005, WT/DSB/M/192 (15 July 2005).Google Scholar
World Trade Organization. (2011a). Appellate Body report in EU – Aircraft, WT/DS316/AB/R, adopted 1 June 2011.Google Scholar
World Trade Organization. (2011b). European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft – Appellate Body report and Panel report – Action by the Dispute Settlement Body, WT/DS316/16 (6 June 2011).Google Scholar
World Trade Organization. (2012a). Appellate Body report in US – Aircraft (Second Complaint), WT/DS353/AB/R, adopted 23 March 2012.Google Scholar
World Trade Organization. (2012b). United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint) – Appellate Body report and Panel report – Action by the Dispute Settlement Body, WT/DS353/13 (26 March 2012).Google Scholar
World Trade Organization. (2018a). Appellate Body report in European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft – Recourse to article 21.5 of the DSU by the United States, WT/DS316/AB/RW, adopted 28 May 2018.Google Scholar
World Trade Organization. (2018b). Korea – Measures Affecting Trade in Commercial Vessels (Japan) – Request for Consultations by Japan, WT/DS571/1 (13 November 2018).Google Scholar
World Trade Organization. (2018c). European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft – Recourse to article 21.5 of the DSU by the European Union and Certain Member States – Communication from the Panel, WT/DS316/41 (20 November 2018).Google Scholar
World Trade Organization. (2019a). Appellate Body report in United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint) – Recourse to Article 21.5 of the DSU by the European Union, WT/DS353/AB/RW, adopted 28 March 2019.Google Scholar
World Trade Organization. (2019b). Panel report in Russia — Measures Concerning Traffic in Transit, WT/DS512/R, adopted 26 April 2019.Google Scholar
Xinghua. (2018). China’s Arctic Policy. Xinhua, 26 January 2018, Section IV.1. Retrieved from: http://english.gov.cn/archive/white_paper/2018/01/26/content_281476026660336.htm (accessed 22 April 2019).Google Scholar
Young, O. R. (2016). The Arctic Council at twenty: how to remain effective in a rapidly changing environment. UC Irvine Law Review, 6, 99–119.Google Scholar