| Government subsidies are like a two-sided blade. On the one hand, governments can develop economies and achieve various social goals by providing subsidies. On the other hand, government subsidies can have negative effects on international trade. On account of the fact that the two-sided effects of subsidy can not be abolished at the same time, the theme of multilateral agreements on subsidies is to categorize various subsidies on a reasonable basis and regulate them accordingly with the aim to protect legitimate use of government subsides while to prevent them from becoming a unfair trade measure and non-tariff trade barrier. This thesis consists of three parts, namely, introduction, the main body and conclusion. The main body is composed of five chapters, and the author analyzes the evolution and its underlying reasons of subsidy categorizing rules in the GATT/WTO system. The main contents go as follows:The first chapter is about the subsidy categorizing rules before the Uruguay Round negotiation. To some degree, the subsidy categorizing rules in this stage embody the principle of categorizing subsidies and regulate them respectively. But the multilateral rules lack of the definition of subsidy and the rules of categorizing and regulating subsidies are not distinguished, in other words, there are integrated. In this stage, the multilateral rules are designed to categorize and regulate subsidies both in direct and indirect ways. The direct way is to stipulate substantive obligations for the GATT contracting parties to restrict the use of some subsidy to prevent them from distorting the flow of international trade. The indirect way refers to empower the contracting parties to levy anti-subsidy duties on those imported goods granted of subsidies and bounties. The rules embodying the direct way develop substantially at this stage. For example, the provisions in Havana Charter and articles in GATT1947lay the foundation for modern rules on subsidies categorizing. On the ninth session of the contracting parties conference of GATT, the rules are modified to distinguish export subsides and non-export subsidies by adding provisions of section B. The Tokyo Round Subsidies Code carries out more details on categorizing subsidies. Although the Subsidies Code makes a vague difference between export subsidies and domestic subsidies, but it regulates the export subsidies in a stricter way and prohibit export subsidies on non-primary products by providing an illustrative list of export subsidies. On the whole, the modification to GATT1947and the Subsidies Code can be traced to the Havana Charter. In the early stage of the evolution of multilateral rules on categorizing subsidies, comprehensive and strict rules are formed. On the whole, the categorizing rules in GATT1947are based on "an effect-oriented approach" which is guided by pure economic theories, while the rule on the prohibition of export subsidies without considering the bi-level price effect in the Tokyo Round Subsidies Code embodies a turning to a normative approach. The shift of the guidng principles of GATT from embedded liberalism to neo-liberalism contributes to the turning mentioned above.The second chapter is about the formation of ASCM in the Uruguay Round negotiations. ASCM is the basic law to settle disputes concerning subsidy categorizing by the DSB of WTO. The preparatory works of treaties are supplemental materials to interpret treaties. In this chapter, the author puts emphasis on the proposals by various contracting parties, summaries of the secretariat with the aim to analyze the formation of the definition of subsidy, specificity standard and the categorizing and regulating rules in the ASCM. Meanwhile, the author analyzes how the ASCM balances the different concerns and interests of two blocs, namely the US and the EC. As one of the results of the Uruguay Round negotiations lasting from1986to1994, the ASCM embodies a great improvement. The ASCM is formed on the traditional categorizing and regulating principle guided by economic theories; furthermore, by more abstract legal terms, the ASCM draws clear distinctions between three categories of subsidies according to different legal consequences. More important, the ASCM defines the term subsidy and the specificity of a subsidy. On the whole, the categorizing rules in the ASCM embody a further step toward the normative approach which means the contracting parties reach a consensus on what kind of subsidies always hamper the free flow of international trade and carry out rules in combination with objective standards to prohibit or reduce certain kinds of subsidies. Meanwhile, the ASCM embodies a uniform approach to categorize and regulate subsidies in direct way.The third chapter is an empirical study of the ASCM. The rules of subsidy categorizing include two aspects, the first one is about defining a subsidy, and the second one is about categorizing a certain subsidy. In combination of the latest or the typical disputes, the author analyzes the subject, object and the consequence elements in the definition of a subsidy and the specificity test in categorizing a certain subsidy; also the detailed rules categorizing the prohibited subsidies, the actionable subsidies and the non-actionable subsidies. Based on the analysis mentioned above, several conclusions can be drawn as follows:the DSB clarify several vague terms to restraint the discretionary power of the subsidy investigation authority of WTO members. In disputes concerning China, the DSB delivers several favorable and unfavorable opinions.The fourth chapter is about the new development of subsidy categorizing rules in the Doha Round. The revision of the subsidy rules is an important agenda of the Doha Round. The undecided issues in the Uruguay Round are carried out again for discussion in this round; meanwhile, new topics are also discussed, and developments in the negotiation so far are not so favorable to China whose possible consequences are to put the law and practices against China by some WTO members into the forming multilateral rules. Consequently, the equal rights concerning the Market Economy status to be gained by China in2016will be deprived. In this Chapter, the author analyses the different proposals and two chairman draft texts. Then the author discusses the possible evolution of the negotiation and its influences on China.The fifth Chapter is about the general evolution trend in subsidy categorizing rules and the counter-measures by China. The author draws the conclusion as follows:first, the guiding principle of the evolution has transformed from an effect-oriented approach to a normative approach; secondly, the law and practice of the US play a key role in the evolution of the rules mentioned above, but the dominant role of the US has declined dramatically. Also, the developing countries (to cite Brazil as an example) have gained some power in shaping the new rules. Furthermore, the current rules allows little policy space for a member of WTO to grant subsidies for justified social and economic reasons because the expiring of non-actionable subsidies. Based on the analysis mentioned above, the author present some counter-measures from international level and domestic level. On the international level, China should play a more active role in the Doha Round negotiation by alliance with Brazil and other developing countries. China should propose the direction of revising the subsidy categorizing rules should be guided by the principle of being just and fair with taking all the participants’concerns into account. China should propose to improve the analysis standard of the adverse effects guided by the Entitlement Model Theory to prevent the trade-protectionism trend by some WTO members when conducting anti-subsidy investigation. In the negotiation process, China should put forward proposals containing favorable opinions by the DSB into the negotiation agenda. Also, China should support the proposal about the net subsidy by Canada to achieve a more balanced discipline in this field. Furthermore, China should support the motion that renew the rules concerning non-actionable subsidies and expand the scope of its application. Given that the Doha Round negotiation is in standstill and new rules about subsidies categorizing will not come into being in the near future, China should seek to ask the DSB to clarify some unfavorable opinions concerning subsidy categorizing. In the domestic level, China should modify the Anti-subsidy Regulation in accordance with the subsidy categorizing rules in the ASCM. Besides that, China should add articles to the Anti-subsidy Regulation by drawing references from law and practice of the developed countries without breaching the obligations of a WTO member. Last but not the least, governments of all levels in China should carry out the subsidy policies in accordance with the categorizing and regulating principle in the ASCM. |
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