Research On Actionable Subsidies In Agreement On Subsidies And Countervailing Measures

Governmental subsidies is a significant measure interfering in national economy as well as a state's sovereignty act. From the point of economics Theory of Strategic Trade Policy, governmental subsidies play an active role for a country's economy. But it goes against the principle of fair competition, distorts market competition and not good for the world economy and wealth accumulation from the view of jurisprudence. Therefore international society hoped to cope with governmental subsidies respectively through legislation: restricting or prohibiting subsidies which distorts the relationship of international trade; not intervening subsides which are not relating to international trade. Start from the above thinking, actionable subsides system was established, in Agreement on Subsidies and Countervailing Measures.Actionable subsides are based on the definition of a subsidy under Agreement on SCM, specificity is their primary characteristic. According to Agreement on SCM, subsidy means that granting authority gives an enterprise or a industry a financial contribution or any form of price support so that an enterprise or a industry acquires a benefit. Specificity of actionable subsides includes enterprise/industry specificity and regional specificity.There are three circumstances violating actionable subsidy system: injury to the domestic industry of another Member; nullification or impairment of benefits,to other Members; serious prejudice to the interests of another Member. There are four steps in determining injury to the domestic industry of another Member: firstly determining the like products; secondly determining the domestic industry; thirdly determininginjury; fourthly determining causation between subsides and injury. In determining nullification or impairment of benefits to other Members, benefits are actually refer to the relation of trade competence held in GATT, and are reasonably anticipated by victims. In determining serious prejudice to the interests of another Member, if an defendant is an developed country, an plaintiff only need to testify existence of legal subsidy measures, and serious prejudice to the interests of another Member can be inferred to be existed. But when a developing country acts as a defendant, both the existence of legal subsidy measures and legal injurious caused by subsidy measure, are needed to testified by a plaintiff.Actionable subsides system has been established, it still has many defects which need to be modified, replenished and improved in the later WTO negotiations.