Study Of The Wto Subsidy Countervailing Substantive Rules

Subsidies in various forms is widely in international society and almost every nation around the world has ever used subsidies as a means to promote the development of some aspects of its economy. On one hand, the government is entitled to adopt whichever policies it deems appropriate or necessary to promote the ecenomic growth and living standards of its country. On the other hand, subsidies used by a government on its domestic industry may sometimes cause prejudice to the international free trade. Indeed the debate between subsidies and countervailing measures has always been very complicated and delicate issue. In international society it is necessary to establish a set of rules governing subsidies to distinguish between those subsidies provided for legitimate economic and social goals and those having effect of distorting international trade and depriving the trade opportunities of other countries.This Aticle is divided into five Chapters,and sequentially discusses the rationality of providing subsidies and adopting countervailing duties, the definition of "subsidy", analyzes and appraises the three kinds of subsidies as classified in the SCM Agreement, i.e. the prohibited subsidy, the actionable subsidy and nonactionable subsidy, discusses the rule of subsidy in special areas such as agriculture. In the end, it discusses the practical significance of the WTO subsidy and counternvailing measures to China.In the beginning this Article makes an economic analysis of subsidies and countervailing duties to find out the rationality for regulating subsidies and countervailing measures. As illustrated by the economic analysis, it is necessary to regulate and restrict export subsidies which distort international competition and those domestic subsidies that have similar effects of injury. However the wide use of countervailing measures is not encouraged. From the perspective of multilateral trading system, the rationality of subsidy and countervailing duty law is to restrict the use of trade-distorting subsidies and facilitate trade concessions.Pursuant to the provisions of the SCM Agreement, there're two elements embodied in the definition of "subsidy", which are financial contribution provided by a government and the benefit thereby conferred. Additionally, a subsidy has to be specific to be subject to disciplines in the SCM Agreement. By reference to the interpretations in WTO dispute settlement reports, this Article makes a detailed analysis of the concept of "financial contribution", "benefit", etc.Subsidies is classified into prohibited subsidies (redlight), actionable subsidies (yellow light) and non-actionable subsidies (greenlight). This Article makes an analysis of the characteristics of the different classifications of subsidies and its elements. For export subsidies, there is also an analysis of the specific means of providing subsidies,and a lot of legal thoughts brought about by a well-known trade dispute between US and EU—the FSC cases. For nonactionable subsidies,it is pointed out that the provisions of non-actionable subsidies in to some extent consistent with the goal of sustainable development while sometimes can also be used as protectionist tool.There are rules different from the general subsidy rules in some special special areas such as subsidies on agriculture, civil aircraft environmental subsidies and preferential treatment for developing countries.To date China has never initiated countervailing investigations against foreign products, nor has Chinese products ever been facing such investigation initiated overseas. This may partly explain the lagging of the legislation and academic study on subsidies and countervailing measures in China. After entry into WTO, the situation has changed for China, and the influence of subsidies and countercvailing measures will gradually unveil itself. China is a developing country as well as an economy in transition. China should straighten out or improve the existing fiscal supporting measures and mean...