The Age of Innocence: The Evolution of the Case Law of the WTO Dispute Settlement: Subsidies as a Case Study

Through the analysis of the topical and salient jurisprudence on subsidies and countervailing duties, this paper attempts to trace the development of the role of dispute settlement in the WTO in its first twenty years. Against a paradigmatically unclear regulatory framework, what has been the attitude of the Panels and the Appellate Body during this long period? Was the first phase of dispute settlement one of simple discovery? Has this progressively made way for a more active approach towards the law, which could be – and has been - tagged ‘activism’? Using representative examples of subsidy decisions by Panels and the Appellate Body, this paper argues that the Panels are on the whole more self-restrained than the Appellate Body. Furthermore, the latter is increasingly departing from its original ‘textual’ approach and adopting innovative decisions, which either raise serious doubts about their correctness or should be assessed as being plainly wrong. The paper advocates that WTO adjudicating bodies should pay more attention to the ‘negotiated balance’ and the ‘point of balance’ of the various disciplines in the SCM Agreement and that, in this respect, a stronger use of the negotiating history is necessary.