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‘Where have all the distortions gone?’ Appellate Body Report, Ukraine – Ammonium Nitrate, WT/DS493/AB

Author

Listed:
  • Cristina Herghelegiu
  • Luca Rubini
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.

Suggested Citation

  • Cristina Herghelegiu & Luca Rubini, 2020. "‘Where have all the distortions gone?’ Appellate Body Report, Ukraine – Ammonium Nitrate, WT/DS493/AB," RSCAS Working Papers 2020/99, European University Institute.
    • Handle: RePEc:rsc:rsceui:2020/99
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    File URL: https://hdl.handle.net/1814/69299
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Antidumping; discriminatory pricing; subsidies; natural gas; WTO dispute settlement;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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