Determination Of Subsidy In Agreement On Subsidies And Countervailing Measures In WTO

First chapter is the overview of the subsidy. The author, firstly points out the necessity to intensify the study on subsidy and countervailing subject based on the aspects of the characteristics of Chinese foreign trade, the trade friction situation, fulfillment of WTO member's obligations, the study deficiency on subsidy; secondly indicates that the definition and elements of subsidy in SCM Agreement(hereinafter Agreement) occupy the core position on subsidy study; finally points out the mode of determining subsidy in Agreement, the way to explain Agreement articles by panel and appellate body.The financial contribution, benefit, and specificity elements of subsidy are discussed in second, third and fourth chapter respectively. Combining the explanation of panel and appellate body on the elements of subsidy in the cases like Canada-Dairy Products, US– Export Restraints, Australia– Automotive Leather, Canada– Aircraft, US– FSC, US– Lead and Bismuth II and the articles of subsidy regulated in Agreement, the author dissertates in detail the essentials of determining subsidy—the bodies and forms of financial contribution; the substance of benefit, the criterion of determining benefit; the definition and classifications of specificity, the circumstances of specificity de jure(in law) and de facto(in fact). The dissertation mainly orientates the role of government in performing subsidy and countervailing measures. The thesis summarizes that contribution is the government transferring resources to the specific industries or enterprises directly or indirectly using the way of altering resource allocation; since the government's actions violate the market rule, the specific industries or enterprises are conferred the unfair competition advantage, that is benefit, which is judged by the basis of the market; specificity not only meets the demand to modulate subsidy according to its specificity, but also excludes the normal government action for adjusting domestic economy, which is non-specific and necessary.The fifth chapter is the revelation for reforming subsidy and countervailing policies and law in China. The author proposes that Chinese government should insist and improve the policies and regulations which are consistent with Agreement and change or abandon the ones that are inconsistent with Agreement. As for the subsidy policies, firstly the government should comply with market rules; enhance the competition of the state-owned enterprises by establishing modern enterprise system rather than by implementing subsidy measures such as grants or tax-free ways. Secondly, the government should carry out the export rebate policy based on the principle of rebating the fund within the levied amounts. Thirdly, the government should liquidate or adjust the tax preferential treatments in respect of enterprise income tax to the foreign and foreign investment enterprises. As for the revision of subsidy and countervailing law, considering the problems like the Countervailing Regulation of the People's Republic of China ( hereinafter the Countervailing Regulation ) which mainly modulates subsidy coming from foreign countries, and certain amount of articles'deficiency still existed in the Countervailing Regulation, the author proposes that firstly, the name of Countervailing Regulation should be revised into the Subsidy and Countervailing Law; secondly, the articles of governing the domestic subsidy measures should be added into the Subsidy and Countervailing Law; thirdly, the factors of determining the specificity de facto(in fact) should be added into the Subsidy and Countervailing Law which not only regulates the countervailing rules and procedures, but also guides the domestic subsidy measures in law.The thesis keeps the thread of the study as follows: the author begins with the necessity analysis of intensifying the subsidy and countervailing study in China, secondly points out that the definition and elements of subsidy occupy the core position in the framework of SCM Agreement and subsidy and countervailing study. Combining the cases of DSB with the articles in SCM Agreement, the author analyses the role of government and market in determining subsidy. Finally, the author indicates the government should adjust the subsidy policies and revise the countervailing regulation.