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View this email in your browser <https://mailchi.mp/law/perspective-356?e=dd153d6a25> 哥伦比亚大学国际直接投资展望中文版都可以在我们的网站查看: https://ccsi.columbia.edu/content/columbia-fdi-perspectives <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=9031538eea&e=dd153d6a25> . *Columbia FDI Perspectives* Perspectives on topical foreign direct investment issues Editor-in-Chief: Karl P. Sauvant ([log in to unmask]) Managing Editor: Matthew Conte ([log in to unmask]) *The Columbia FDI Perspectives are a forum for public debate. The views expressed by the authors do not reflect the opinions of CCSI or our partners and supporters.* No. 356 May 1, 2023 *Subsidies as a regulatory object: from trade subsidies to outward FDI subsidies* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=e83e7f38bc&e=dd153d6a25> by Keer Huang* <#m_-1412704796812843487__edn1> According to the OECD <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=c759e0b152&e=dd153d6a25>, global outward FDI (OFDI) stocks relative to global GDP increased dramatically between 2005 and 2021, from 25% to 44%. With the growth of OFDI stocks, concerns <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=73b85b3ad3&e=dd153d6a25> increasingly emerge regarding the use of OFDI subsidies, which may lead to negative effects like the distortion of the competitive environment of host countries or of third countries. The term “OFDI subsidy” in this* Perspective* refers to a financial contribution that is directly or indirectly provided by a home country and confers a benefit to an OFDI at either the pre-establishment or post-establishment stage. Such subsidy is de facto or de jure limited to certain enterprises or industries. OFDI subsidies include not only subsidies targeting OFDI, but also those not primarily intended to benefit OFDI but used as such by MNEs, such as industry subsidies. As the scope of the rules on subsidies and countervailing measures has expanded from trade to investment, this *Perspective* calls attention to the need to improve the regulation of OFDI subsidies. Current rules regulating OFDI subsidies can be divided into two categories. One set consists of multilateral subsidy rules. The Agreement on Subsidies and Countervailing Measures (ASCM) <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=0809fdaf0e&e=dd153d6a25> can potentially be used to address OFDI subsidies targeted at the production of goods, while remedies against subsidies may not be available when such subsidies are “transnational.” As for service providers, the General Agreement on Trade in Services (GATS) <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=becbc76e21&e=dd153d6a25> contains no specific provisions on service subsidies. Insofar as subsidizing and countervailing measures are “measures affecting trade in service,”1 such measures are subject to most-favored-nation treatment; in sectors included in a WTO Member's Schedule of Specific Commitments, such measures are also subject to national treatment, unless limitations have been inscribed in the Schedule. The other set includes rules in recent bilateral/plurilateral economic agreements and unilateral instruments (e.g., CPTPP <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=f8af6c77cd&e=dd153d6a25>, EU-UK TCA <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=f4fd476351&e=dd153d6a25>, EU Foreign Subsidies Regulation <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=4752452384&e=dd153d6a25>). These partly depart from the ASCM, inter alia, regarding the following aspects: - *Coverage of rules*. Under the recent rules,2 subsidy providers are no longer limited to “a government or any public body <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=0693999d79&e=dd153d6a25>”; accordingly, state-owned enterprises not exercising governmental functions could be considered as subsidy providers. More importantly, the location of the benefit recipient is not geographically limited to the granting authority.3 - *Transparency requirements*. The transparency mechanism regarding subsidizing activities under the WTO framework has been criticized for its underperformance and ineffectiveness. Recent OFDI subsidy rules strengthened the disclosure requirements for information on subsidizing activities4 and in certain cases, imposed disclosure responsibilities on investors.5 Differences between recent OFDI subsidy rules and the ASCM can also be observed in the determination of adverse effects, countervailing measures, dispute settlement mechanisms, etc. Recent OFDI subsidy rules trigger not only WTO law but international investment law concerns. Specifically, unilateral and potentially country-specific regulatory measures, like an ex post and ad hoc investigation of subsidized OFDI,6 may raise doubts as to the compatibility of international investment agreement (IIA) provisions, especially non-discrimination ones. Countries should work together at different levels when addressing OFDI subsidies. At the multilateral level, international cooperation <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=6183439b26&e=dd153d6a25> is needed to fill gaps in existing international subsidy rules, for differences over subsidy practice exacerbate macroeconomic costs. When reforming WTO subsidy rules, countries should consider whether and under what conditions rules on actionable subsidies apply to OFDI subsidies, and if so, how transparency should be enhanced to monitor OFDI subsidies at both national and sub-national levels. Also, other forums (like the OECD) could promote inter-governmental discussions of OFDI subsidy regulation. Bilateral and plurilateral agreements can also promote international regulatory coordination. So far, only few international economic agreements have rules governing subsidization policies of home countries,7 which can be improved in the future. For instance, transparency rules could be strengthened, and consultation proceedings on OFDI subsidies undermining fair competition could be introduced. Meanwhile, attention should be paid to enhancing consistency between host countries’ countervailing policies and the existing IIA network. For instance, subsidy exemptions should be granted for foreign investments on a non-discrimination basis under the OFDI subsidy rules. Also, the involvement of amicus curiae in ISDS cases may help determine whether countervailing measures achieve public policy objectives under broadly worded clauses, for the determination of OFDI subsidies’ effects requires technical expertise. From trade subsidies to OFDI subsidies, the area of global subsidy regulation is now experiencing new developments as well as challenges. To achieve a better regulation of OFDI subsidies, regulation itself needs to be regulated ------------------------------ * <#m_-1412704796812843487__ednref1> Keer Huang ([log in to unmask]) is a PhD candidate at Wuhan University Institute of International Law. The author wishes to thank Victor Crochet for his insightful comments on the earlier draft and Lena Hornkohl, Hamid Mamdouh and an anonymous peer reviewer for their helpful peer reviews. 1 Article 1, GATS <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=576b4eea91&e=dd153d6a25> . 2 E.g., Article 17.6.2, CPTPP <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=9f6a095554&e=dd153d6a25> . 3 E.g., Article 2, EU Foreign Subsidies Regulation <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=1e2a4cf310&e=dd153d6a25> . 4 Article 369.1, EU-UK TCA <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=8806ee5eb1&e=dd153d6a25> . 5 Article 21, EU Foreign Subsidies Regulation <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=aac5fe756d&e=dd153d6a25> . 6 Article 11, EU Foreign Subsidies Regulation <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=88f7d2c71d&e=dd153d6a25> . 7 E.g., Article 8(2), Section III, Draft Comprehensive Agreement on Investment between the EU and China <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=e3a66c4eda&e=dd153d6a25>; Article 2.1.3, U.S.–China Phase One Trade Deal <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=5791d1cd5c&e=dd153d6a25>; Chapter 3, EU-UK TCA <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=3880fa9104&e=dd153d6a25> . *The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “Keer Huang**, ‘**Subsidies as a regulatory object: from trade subsidies to outward FDI subsidies,**’ Columbia FDI Perspectives, No. 356, May 1, 2023. Reprinted with permission from the Columbia Center on Sustainable **Investment (**http://ccsi.columbia.edu* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=85d2199a5d&e=dd153d6a25>*).” A copy should kindly be sent to the Columbia Center on Sustainable Investment at **[log in to unmask]* <[log in to unmask]> For further information, including information regarding submission to the *Perspectives*, please contact: Columbia Center on Sustainable Investment, Matthew Conte, [log in to unmask] *Most recent Columbia FDI Perspectives* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=6f8ca8056a&e=dd153d6a25> - No. 355, Fabrizio Opertti and Christian Volpe Martincus, “Investment promotion in the new international context: what is the next frontier and how to get there <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=22ec4da15e&e=dd153d6a25>,” *Columbia FDI Perspectives*, April 17, 2023 - No. 354, Martin Wermelinger, “What can governments do to boost FDI for sustainable development? <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=363c01bc27&e=dd153d6a25>” *Columbia FDI Perspectives*, April 3, 2023 - No. 353, Mark Feldman, “An opportunity to reimagine investment arbitration in Beijing <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=b4263f5235&e=dd153d6a25>,” *Columbia FDI Perspectives*, March 20, 2023 *All previous FDI Perspectives are available at https://ccsi.columbia.edu/content/columbia-fdi-perspectives <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=0d6e655140&e=dd153d6a25>* . *Other relevant CCSI news and announcements* - CCSI is seeking a *Senior Legal Researcher (Associate Research Scholar) *to help carry forward the Center’s diverse research agenda. This position will collaborate with CCSI's Director and Research Staff to execute the Center’s applied research agenda on the laws, policies, and practices that shape international investment and its alignment with sustainable development and human rights. Specifically, the incumbent will supervise and contribute to ongoing advisory, research, and technical support projects with the goal of advancing more responsible and rights-respecting laws, policies and practices in land and resource investments <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=c0c41904dc&e=dd153d6a25> (e.g. agriculture, renewable energy and mining projects) at the local, national and international level. The ideal candidate will also be able to lead or contribute to work related the Center’s other primary focus areas <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=b99ad43983&e=dd153d6a25>, including investment law and policy, natural resource governance, the energy transition, or SDG-aligned finance. *More details on the position, and how to apply, can be found here <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=777fd238fb&e=dd153d6a25>.* - CCSI and the Sabin Center for Climate Change Law are hiring for the position of *Senior Researcher or Senior Associate (**Associate Research Scholar or Senior Staff Associate)**, Climate Law & Finance*. The incumbent will work collaboratively with CCSI's and the Sabin Center’s Leadership and Research Staff to analyze the interrelated legal, finance, and policy pathways critical to achieving global climate goals and facilitating the energy transition, and the corresponding implications for public, private, and institutional financial sector actors, regulators, and alliances. *Please note that there are two different application channels for this posting: we are accepting applicants with a JD (or equivalent legal degree) or PhD degree as well as applicants with other degrees. **More details on the position and instructions for applying can be found here <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=092264fc00&e=dd153d6a25>* . - *Applications are now open* for our 2023 virtual Executive Training on Investment Treaties and Arbitration for Government Officials from *September 18-22, 2023*. This course is designed for government officials facing complex and pressing issues concerning international investment treaties. The course will address: States’ objectives in their investment policy; links between treaties, investment flows, and development objectives; investor-state dispute settlement, and the concerns of states; trends and developments in treaty practice; opportunities and challenges facing governments in treaty reform; and other approaches to investment governance. *Applications will be considered on a rolling basis until July 15, 2023. **For more information, and to apply, visit our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=cde8045844&e=dd153d6a25>.* Karl P. Sauvant, Ph.D. Senior Fellow Columbia Center on Sustainable Investment Columbia Law School - Columbia Climate School *Copyright © 2023 Columbia Center on Sustainable Investment (CCSI), All rights reserved.* [log in to unmask] *Our mailing address is:* Columbia Center on Sustainable Investment (CCSI) Columbia Law School - Columbia Climate School, Columbia University 435 West 116th Street New York, NY 10027 Add us to your address book <https://columbia.us6.list-manage.com/vcard?u=ab15cc1d53&id=a61bf1d34a> unsubscribe from this list <https://columbia.us6.list-manage.com/unsubscribe?u=ab15cc1d53&id=a61bf1d34a&e=dd153d6a25&c=1a6eb8b4ba> update subscription preferences <https://columbia.us6.list-manage.com/profile?u=ab15cc1d53&id=a61bf1d34a&e=dd153d6a25&c=1a6eb8b4ba> [image: Email Marketing Powered by Mailchimp] <http://www.mailchimp.com/email-referral/?utm_source=freemium_newsletter&utm_medium=email&utm_campaign=referral_marketing&aid=ab15cc1d53&afl=1> -- *Karl P. 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Second Edition <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3830031>,* "Agenda for Practice-oriented Research <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4103768>", "How Would a Future WTO Agreement on Investment Facilitation for Development Encourage Sustainable FDI Flows, and How Could it be Further Strengthened? <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4084032>”, "Green FDI: Encouraging Carbon-neutral Investment <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3943705>", "More Attention to Policies! Improving the Distribution of FDI Benefits <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3818974>", "Facilitating Sustainable FDI in a WTO Investment Facilitation Framework: Four Concrete Proposals <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3496967>", "An Inventory of Concrete Measures to Facilitate the Flow of Sustainable FDI: What? Why? 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