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Sustainable resource development in the Arctic: Using export trade agreements to restrict environmentally harmful subsidies

Part of: International Law for Sustainability in Arctic Resource Development

Published online by Cambridge University Press:  03 February 2020

Tomohiko Kobayashi Open the ORCID record for Tomohiko Kobayashi [Opens in a new window]
Tomohiko Kobayashi*
Affiliation:
Professor, Department of Law, Otaru University of Commerce, 3-5-21 Otaru, Hokkaido 047-0034, Japan
*
Author for correspondence: Tomohiko Kobayashi, Email: kobayashi@otaru-uc.ac.jp
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Abstract

Although the Arctic is emerging as a promising region for energy development and maritime transportation, navigational safety is a persistent and growing concern. What can international trade regulations do to ensure the safe transportation of natural resources on the Northern Sea Route (NSR) and the sustainable development of the Arctic region? Government support is almost inevitable for shipyards, particularly in a highly competitive market. Shipyards build large-scale vessels that navigate the Arctic Ocean. However, excessive export competition will soon lead to over-production and exportation of substandard products. Assuming that even a single incident in the NSR could have a disastrous impact on the flora and fauna of the entire Arctic region, the potential for substandard vessel use represents a significant risk and potential damage to the environment. Although the World Trade Organization (WTO) has detailed rules for this purpose with an effective dispute settlement mechanism, the history of WTO disputes has proven that WTO proceedings sometimes result in unintended consequences. As an alternative option, along with negotiations under the WTO and the Organisation for Economic Cooperation and Development (OECD), this paper suggests the possibility of a critical mass agreement to mutually allow more flexible government support for vessels only if they have superior environmental performance.

Keywords

Export subsidiesWTOCritical mass agreementsWTO dispute settlementCountervailing duties (CVD)
Type
Research Article
Information
Polar Record , Volume 56 , 2020 , e17
Copyright
© Cambridge University Press 2020

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