The rapid development of the Internet has led to a growing electronic cross-border delivery of services. While the WTO negotiations have not caught up to the reality of such service trade, the first GATS case dealing with the Internet, namely ‘United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services’, has advanced matters. This paper distils the substantive conclusions of the case and remaining questions in relation to Internet-supplied services and certain core concepts of the GATS. Moreover, it sheds light on the case's implications for the services negotiations under the ongoing Doha Development Agenda. It concludes that the second ever GATS case has provided an encouraging set of answers to the unresolved questions of the WTO's Work Programme on E-Commerce, mainly confirming the applicability of GATS commitments to electronically supplied services and shaping the concept of technological neutrality. While more work or dispute settlement cases are necessary to clarify the remaining questions, the rulings have paved the way for the GATS to be a more effective discipline for cross-border (electronic) trade. The paper also explains that a ‘chilling effect’ of the rulings on the Doha services negotiations is not warranted.

The claim by global trade modelers that the potential contribution to global economic welfare of removing agricultural subsidies is less than one-tenth of that from removing agricultural tariffs puzzles many observers. To help explain that result, this paper first compares the OECD and model-based estimates of the extent of the producer distortions (leaving aside consumer distortions), and shows that 75% of total support is provided by market access barriers when account is taken of all forms of support to farmers and to agricultural processors globally, and only 19% to domestic farm subsidies. We then provide a back-of-the-envelope (BOTE) calculation of the welfare cost of those distortions. Assuming unitary supply and demand elasticities, that BOTE analysis suggests 86% of the welfare cost is due to tariffs and only 6% to domestic farm subsidies. When the higher costs associated with the greater variability of trade measures relative to domestic support are accounted for, the BOTE estimate of the latter's share falls to 4%. This is close to the 5% generated by the most commonly used global model (GTAP) and reported in the paper's final section.

Countries can choose between a wide range of policy instruments to address climate change. While economists tend to argue for the efficiency of instruments such as environmental taxes, many countries are incorporating subsidies into their plans for limiting greenhouse gas emissions. However, these subsidies may conflict with World Trade Organization rules. This paper analyzes the potential benefits of using climate change subsidies in terms of addressing market failures as well as the risks of protectionism arising from such subsidies. It then examines World Trade Organization rules to determine whether they optimally differentiate between beneficial and harmful subsidy policies. It concludes that existing WTO rules do not provide adequate scope for legitimate subsidies and makes suggestions for reforming subsidies law.

We analyze the extent to which the EU-15 and 16 transition economies used the WTO General Agreement on Trade in Services (GATS) to commit to service sector policy reforms. GATS commitments are compared with the evolution of actual policy stances over time. While there is substantial variance across transition economies on both actual policies and GATS commitments, we find an inverse relationship between the depth of GATS commitments and the ‘quality’ of actual services policies as assessed by the private sector. In part this can be explained by the fact that the prospect of EU accession makes GATS less relevant as a commitment device for a subset of transition economies. However, for many of the non-EU accession candidates the WTO seems to be a weak commitment device. One explanation is that the small size of the markets concerned generates weak external enforcement incentives. Our findings suggest greater collective investment by WTO members in monitoring and transparency is needed to increase the benefits of WTO membership to small countries.

Based on the notion that the needs of developing countries are substantially different from those of developed countries, the principle of special and differential treatment (S&D) in the World Trade Organization (WTO) allows a certain degree of discrimination in favour of developing countries. This article considers the potential of this principle in resolving disputes within the WTO. S&D developed in the General Agreement on Tariffs and Trade (GATT) of 1947 and is today reflected in a series of provisions in various WTO agreements. The meaning of S&D as a broader principle could assist in interpreting such provisions. In addition, the principle of S&D could conceivably be used as part of the inherent jurisdiction of Panels and the Appellate Body in connection with procedural aspects of dispute settlement. However, the article concludes that, due to the incoherence of S&D, as well as the difficulties involved in distinguishing between developing countries and in advancing their interests as an amorphous group, S&D is presently of limited value as an independent principle in WTO dispute settlement.

The WTO Anti-Dumping (AD) Agreement requires that anti-dumping duties be reviewed at least every five years (Article 11.3); pursuant to this requirement, domestic trade authorities in the US are charged with the task of making a determination as to whether, after five years, revoking the duties would be likely to lead to continuation or recurrence of dumping (Commerce) and of material injury (ITC). This is called a Sunset Review; a negative determination of likelihood, either with respect to dumping or injury, will result in the duties expiring, the ‘sun’ setting, as it were.