The Chinese translation of Luca Rubini’s The Definition of Subsidy and State Aid: WTO Law and EC Law in Comparative Perspective, originally published by OUP in 2009, has been published by the China Legal Publishing House in the series Essentials of European Law.
As Luca noted when the translation was announced a few years ago, ‘This is a tremendous recognition of the worth of the analysis of the book after more than [now 10] years since it was published. This monograph was, and to a large extent still is, the first conceptual analysis of the difficult legal and policy issue of the definition of subsidy, also through a comparison between the two different legal systems. The law is not fully up-to-date, but the underlying analysis certainly is. This justifies its long life-shell and this continuing interest.‘
The publication comes at a momentous time, where multiple crises are interlacing and many have at its centre the redefinition of public intervention in the economy. Subsidies are the quintessential form of state action, and their regulation the lab where key ideas – market, state, public policy – are continuously redefined. The appearance of the book in the Chinese market opens up completely new opportunities for engagement with the academic and policy world in China.
Luca Rubini with the English original and the Chinese translation of Subsidy, State Aid and the WTO.
It gives me great delight to write this preface to the Chinese translation of this book which originally came out in 2009. Writing these few words gives me the opportunity to compare the context surrounding its publication in 2009 and the circumstances we are currently living in. It also offers the chance to re-assess its main themes and their validity after ten years.
The book came out at the height of the ‘great crisis’ - the financial, economic and regulatory upheaval that significantly shaped the years to come. Curiously, the book was published also at the apex of the development of subsidy laws, both in the WTO and in the EU. It was arguably the first treatise (at least in English language) to comprehensively focus on the key legal and policy issues raised by difficult task of defining subsidies, and distinguishing the task of their assessment from the definition. As I tried to explain in those pages, the logic of market expansion was at that moment at its height but, exactly because of the crisis and the resurgence of state intervention in the economy, important questions were being asked about what would have happened in the future and whether a new balance or trend would have become predominant. In sum, writing the book at that time benefited from two background factors. It was written in time of crisis and at the apex of development of the law.
In 2019, we still live in a period of crisis which is arguably even more profound. The current crisis is not only economic but political and even ideological. There is a rise in protectionism but – and this is largely new – protectionism is now not only practiced but preached and sometimes supported by a virulent rhetoric. The foundations of the liberal understanding of world affairs are challenged, often by those countries that established them. Against this background, China has rapidly emerged as a key economic and political power. Questions are being asked about the Chinese system of economic and corporate governance and about whether it does fit the understanding and regulatory framework of the current multilateral trade system. Subsidies and their laws are at the core of these questions. Even the current focus on State-Owned Enterprises is largely a subsidy issue.
For the first time in decades, there is talk of and appetite for embarking on a new process of reform of the multilateral trade rule-book. The disciplines on subsidies are at the top of the negotiating agenda. Various doubts are raised about their fitness to the job. Some claim they may not be biting enough. It is also known that transparency and governance have not really worked in these first twenty-five years or so. Additionally, there is no recognition of the fact that subsidies are often good and legitimate. Think for example of government support to fight common challenges like climate change. Admittedly, there are clear difficulties in shaping rules that achieve their goal and avoid abuse but the lack of specific rules for ‘good’ subsidies looks like a glaring gap in the law. If action now follows these discussions, diplomats and negotiators will be faced with various difficulties: not only the political difficulty in sustaining momentum but also the technical difficulty to craft any deal in legal language. China has a key role to play in this process.
One of the main themes of the book is the analysis of how the law does regulate the market distortions caused by subsidies and recognizes the public policy objectives they may pursue. In essence, the issue is how public policy goals are achieved through state support, how public intervention is combined with the free market, and how all this is regulated. All these issues are perennial (and the fact that they regularly appear both in the WTO and in the EU is testament to this), and are obviously at the core of the current discussion of the integration of the Chinese system into the world trading system.
I hope that the publication of the book in Chinese will provide some inspiration to these discussions and some food for thought to the eager Chinese readers.
Birmingham, September 2019