Yes, but it takes a little scripting. What you have to do is to accumulate your order somehow before it goes to PayPal, and subtotal the amount just before sending it to PayPal. At that point you apply shipping charges (based on subtotal), THEN any cart-wide discounts.

Here is a simple example of that, but it uses quantities rather than amount (which would be a simple modification - change coming shortly!)...

http://members.aol.com/paypalcart/index1.html

Ron.