Study On Infant Industry Protection In China Under WTO Framework

Encouraging free-trade principle and generally objecting trade protection, WTO stipulates exception clauses based on free-trade principle. The clauses allow certain trade protection which provides opportunities for developing countries' carrying out trade protection policies. These policies turn to new characteristics and responding infant industries' protection measures have new trends.Our country's present implementing protection measures cannot adapt to new situations: the effective protection level of tariff barrier is low, the structure of tax rate is illogical and tax types are limited; the use of non-tariff barrier remains mostly in obvious non-tariff barrier as free-trade leads to the hard protection to infant industries, though incomplete recessive non-tariff barrier has been used recently.Two principles should be followed for our country's infant industries' protection measures: One is to follow WTO rules and the other is to promote our country's infant industries' development. The countermeasures are as follows: First, tariff should be innovated. The discriminative tariff favorable policies should be canceled and real tax rate should be close to nominal rate. Optimize tax rate structure according to industry's competitive ability. Add new taxes. Second, emphasizing the effectiveness of recessive non-tariff barrier. Use the subsidies reasonably and legally. Cancel red-light subsidy gradually, use yellow-light instead and adopt widespread green-light subsidy. Antidumping and technique measures should be completed. Legislation and judicatory procedures for anti-dumping should be improved. Strengthen the cooperation of every industry association. Create special technique standards, build our country's international trade barrier's technique system, participate international standard institution and promote infant industry's development.Based on qualitative analysis, this paper builds a dynamic game model with four players, and studies protection measures for our country's infant industries under WTO clauses. Countermeasures for these protections are analyzed quantitatively in this paper and provide guidance for making trade policies and industry developing programs to government.