| Due to the compromise between developed countries and developing countries, the current WTO-centered multilateral trading system is a mixture with the incorporation of trade liberalization and trade protection. The multilateral trading system has an unshakable economic basis and meanwhile is faced with a series of economic and political conflict, thus bringing about WTO system gearing to pragmaticism, compromise and regulation. With a view to frequent intersection of legal and economic problems involved with WTO, the approach to WTO rules is the method of law and economics. It is accepted that law which is able to minimize transaction costs is fair, and law which is able to reduce the cost of law is efficient. Therefore, it is of vital importance to adopt the representative economic analysis approach to fairness and efficiency from the perspective of cost and benefit, supply and demand.This paper adopts trade remedy system which is an important part of WTO protecting fair competition system. It is an attempt to conduct research on trade remedy rules of on the basis of theory of law and economics so as to discover the fact that the globalized fairness, justice, efficiency, property protection and transaction promotion are leading values. Trade remedy system of WTO conforms to efficiency to a certain extent on the one hand, reflects fairness on the other. It attempts to seek the balance between the two.However, the current multilateral trading system formed on the basis of economic power is not a perfect one. The marked band stamped by the major economic powers and its influence on the formulation of trade rules more often than not leads to unfairness and injustice, particularly in the field of trade remedy, the interest balance always favors the major economic powers, making the developing members the unfavorable one.As the situation of international financial crisis is growing worse, the abuse of trade remedy measures and the practice of protectionism by certain countries under the cover of WTO rules will no doubt lead the world to the vicious circle of trade protection, thus exerting a negative influence on the world economic resurgence. During London Financial Summit in April 2009, in spite of the G-20's declaration of the reiterated Washington promise that no barriers should be set for investment and trade in goods and service, protectionism has been gaining momentum. In the face of grave economic situation, some countries manage to shift their financial troubles onto their neighbors. Moreover, those countries in the dominant position of international division of labor and global trading regime are facing the intensified moral risk when shifting their financial crisis on to other countries. To stop up the loophole of rules by counting on a new round of extensive treaty negotiation to be initiated by WTO, seems unrealistic or too slow to save the critical situation, to say the least. Much less, however comprehensive trade rules may be, they can be taken advantage of or abused.China as one of the third economies, has always been as good as its word and sparing no effort to expand the import of related nations and strengthen the investment and trade cooperation. China constantly opposes protectionism by taking actions. However, the practice of shifting crisis on to China in the name of protectionism does not come to an end. Statistics issued by Secretariat of WTO in May 2009 shows that there launched globally 208 anti-dumping investigations and 14 countervailing investigations, among which 73 and 10 investigations are targeted at China respectively, accounting for 35% and 71% of the total cases worldwide. Since 2009, China has got involved in trade disputes more than ever. As all sorts of trade barrier measures such as technical barriers to trade, import restriction and abused trade remedy investigation make great impact on China's foreign trade, China's enterprises are facing unfavorable international trade and investment climate. In this situation, it is of theoretical and realistic significance to explain trade protection and trade disputes and amplify China's trade remedy system by furthering the research on the spirit and deficiency of WTO.The thesis has eight parts which include Introduction, Body (six chapters) and Conclusion. In Introduction, the analysis of current academic research on trade remedy shows that they are mainly focusing on international agreement, domestic law and comparative aspects of trade remedy measures and the research is fragmentary, descriptive and operative. It also shows that the current research bear deficiencies in the study of the functions, characteristics, value orientation and trend of trade remedy system from the perspective of economics and law at both domestic and international level. The topic I choose to study is important because it explores efficiency and fairness of trade remedy system from the prospective of law and economics and the approach is rare. The research on trade remedy system under WTO is valuable theoretically and practically. Meanwhile, the research has its innovations and breakthroughs in the following aspects. Firstly, the perspective is very new. In the past, the research on trade remedy usually rested on the rules level. This thesis, however, emphasizes the contributing factors of trade remedy system of WTO and is believed to be conducive to the further understanding of the inner economic mechanism of WTO rules. Secondly, this thesis predicts the new rules to be born in the future on the basis of the present-day research and proposes China's countermeasures. Thirdly, the useful exploration of China's trade remedy system is of value to the establishment of an overall efficient trade remedy system and to seeking trade relief and anti-relief through Chinese enterprises and associations by taking advantage of trade remedy system. Finally, the approach adopted in this thesis is innovative. The research on international trade with traditional legal approach sees no more breakthrough. Basically, it adopts comparative approach and is not so effective. This thesis further explores the essence of trade remedy system of WTO and its fairness and efficiency from the perspective of law and economics, institutional economics, and political economics, and it also studies the current situation and implementation of China's trade remedy system from the perspective of supply, performance and transaction expense. These approaches are not frequently reviewed in academic circles at home and abroad.In Chapter One, the thesis defines trade remedy system of WTO and reviews the historical process of trade remedy system of WTO with the application of the theory of supply and demand of law and economics and meanwhile, it also discuses the role of trade remedy measures in international trade. It also points out that trade remedy system of WTO includes rules of anti-dumping, countervailing measures and safeguard measures and they are the important parts of WTO rules. The purpose of trade remedy is to eliminate unfair trade. It is aimed at providing a certain period of time to relief and adjust for domestic industry suffering from great loss in the intense import competition and rectify the domestic unbalanced trade order caused by foreign unfair competition and unusual import. The basic function of WTO rules is to reduce transaction cost caused by trade barriers (e.g. tariff and non-tariff barriers) that is set by WTO members against law. However, the formulation and effective implementation of trade remedy rules of WTO are greatly influenced by its members' national law. For instance, the determination of dumping and subsidy and injury, the standard of dramatic increase, and enforcement of WTO agreements on trade remedy measures is duplicated from domestic trade remedy laws prevailed in European and American countries. In addition, multilateral trading system as WTO is, its member states share great difference in politics, economy and law. As a consequence, the formulation of trade remedy rules of WTO is nothing but a basic framework and the contents are ambiguous and not well-organized in terms of norm. As for WTO members, law of investigation state is applied to both trade remedy investigation and judicial review when it comes to trade remedy cases. The practice makes the authorities of WTO members take their interest into consideration and abuses discretion, this will by no means impair the unity, stability and predictability of WTO multilateral trading system.In Chapter Two, it points out through the analysis of international trade and policies that WTO multilateral trade agreements including trade remedy agreements are generated from the equilibrium of the game of the trade policies among different countries in the world trade history. The founders of WTO is faced with a difficult alternative, namely, WTO needs free trade policy out of concern for economic efficiency maximization. To meet the needs of interest group and maintain the stability of rule, WTO has to accept trade protection policy. The founders have to weigh carefully the advantages and disadvantages in the dilemma and make a feasible second best choice so as to meet the needs of both sides. Pragmatically-inclined, compromise and rule oriented as it is, trade remedy system of WTO fully embodies the WTO theory and supports and promotes the gradual and continuing trade liberalization orientation in the international trade development. It is regretful that the present trade remedy mechanism or lawful trade restriction mechanism has been abused by many WTO members by using it as a tool to protect trade (namely, alienation of WTO rules) rather than the law originally targeting at the encouragement and pursuit of free trade.Chapter Three reveals the ambiguous delimitation of property in trade remedy rules through the analysis of internal and external effects and brings to light the information asymmetry derived from the lack of transparency when handling trade remedy cases. In addition, through the analysis of benefit and cost of trade remedy system, it points out that the government should take full consideration of benefit and cost of the measures taken before the adoption of trade remedy measures in an effort to efficiency maximization on the basis of cost minimization so as to bring the effect of system into full play. In practice, however, trade remedy measures are frequently adopted by many countries though not always effective. Therefore, the motives of supply of trade remedy policy need to be discussed from the perspective of political economics. The analysis shows that in practice, the policy makers take the political interests as the primary objective rather than social welfare maximization. The political pressure from domestic interest group usually makes trade protection policy possible or the policy may possibly please the interest group and therefore bring political interest for the government. In the negotiation of international trade policy, the hidden interests and competition power are decisive. Multilateral trade rules are unavoidably much influenced by state power in the pattern of international politics and economy. Developed countries played an important role in the formulation of multilateral rules. Trade remedy rules reflect their domestic industry interest to large extent.In Chapter Four, the thesis studies the fairness of trade remedy system. Although WTO agreements as economic treaties are devoted to efficiency, that is trade liberalization, by comparison, the pursuit of fairness is no doubt an ultimate aim. The evolvement from GATT to WTO is in fact a development of putting undue emphasis on liberalization rather than fairness. The design of trade remedy system of WTO reveals the concept of fair trade. Certainly, due to the confinement of government rationality, WTO member's intervene in the matter of economy may be a failure out of the reason of politics, economy and law. In the field of trade remedy, government failure is taken place in the case that WTO members take the advantage of the loopholes and deficiencies of trade remedy of WTO and inappropriately take trade remedy measures to impose unreasonable restriction on import, thus making trade liberalization meet with great obstruction. This reveals the differences between WTO's pursuit of the value orientation of fair trade and domestic law's pursuit of the value orientation of protectionism.In Chapter Five, the thesis explores the future trend of trade remedy system of WTO. It points out that the value of fairness has long been neglected and free trade is not always fair in the process of trade liberalization. Doha negotiation, a new round of multilateral trade negotiation has been launched on the Fourth WTO Ministerial Meeting in Kater's capital Doha in November 2001 since the founding of WTO, so as to further reduce trade barriers to resist protectionism and promote economic development all over the world especially in less developed countries. The set objective was expected to be accomplished in three years, however, it was postponed because America and other developed countries bore great differences in agricultural and non-agricultural products market access and other issues which made the negotiation failed many times. The predicament Doha Round faced reflected fairness of interest distribution of all powers in international politics, economy and trade, and meanwhile showed the conflicts of struggling for discourse power and the game of pursuing national benefit maximization and it also showed the great challenge multilateral trading system is facing in the new situation of globalization. Doha negotiation of trade remedy measures operated under the framework of WTO is the result of the compromise made by WTO members at different trade levels and with different economic interests. Through the analysis of current rules negotiation, the thesis points out that, on the one hand, anti-dumping, countervailing measures and other trade remedy measures, being the tools of trade protection policy, can control the impact made by the rapid development of market access on domestic market, economy and social welfare, the trade disputes which are the cost of market access can also be under control so that global free trade regime can be operated smoothly and effectively. On the other hand, however, trade remedy system itself set by WTO can also be the cause of trade disputes. Therefore, the transparency of the terms needs to be improved in order to overuse WTO dispute settlement body caused by selective rules and ambiguity in order to lower cost of trade remedy system to the maximum. China as a big trading country should unite other developing countries and work together to oppose protectionism and resume Doha negotiation. Amendments should be due for Agreement on Anti-dumping and Agreement on Subsidy and Countervailing Measures so as to keep the balance of interests between developed countries and developing countries. Decisions should be carefully weighed for the proportion of benefit and loss when making concessions. The hope of setting up an impartial international economic order lies in the clarification and improvement of multilateral rules, the strict implementation of multilateral discipline, the strengthening of justice of procedures of trade protection, the improvement of transparency and the advocacy of due trade protection and win-win policy.In Chapter Six, the thesis explores the tactics and application of trade remedy measures in China from the perspective of empirical analysis. On the one hand, the thesis analyzes the current situation and its influence on China's economy and trade. It points out that frequent trade remedy measures deeply influences China's exports and weakens the competitiveness of China's industries related in this field. With the increasing number of the cases of trade remedy measures, Chinese government and enterprises should take measures to deal with it. First, dealing with it directly which includes early warning, consultation and plea. Second, lowering the risk from the source which includes reducing overseas market demand, developing regionalism etc. We should, for one thing, take precautions on trade remedy measures from abroad. For another, we should also lessen the negative effect to be brought about by the implemented trade remedy measures. On the other hand, the thesis proposes suggestions for the further implementation of China's trade remedy system in the context of protectionism through the analysis of supply and demand. It also points out that China should formulate and implement trade remedy system on the basis of promoting fair competition and competitive power, and enhancing the efficiency of trade remedy.The Conclusion summarizes efficiency and fairness of trade remedy system of WTO. It points out that transaction cost will increase when the supply of law falls short of demand or the supply of law exceeds the demand. Trade remedy measures have been changed into new barriers to trade due to abuse, which means the rising cost of transaction. Sometimes, trade remedy measures taken by certain nations are inefficient, however, it doesn't militate wide use of these measures as tools of trade policy. Therefore, in a sense, there is more political nature than economic nature as far as trade remedy measures are concerned. Trade remedy measures will possibly have far-reaching influence on national economy while protecting domestic industry and improving market environment. It may have positive and negative effects on the structure of trade, investment and industry and other aspects. As a consequence, we should have all-round understanding of either positive effects of trade remedy or negative effects of the policy.
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