A Study On Environmental Subsidies In International Trade

Trade and environment is a hot topic in the WTO. Environmental subsidies have impact on the two. Environmental subsidies are originally non-actionable subsidies in SCM Agreement, but the terms of non-actionable subsidies of 5-year period terminated in 1999, and the members did not agree on whether or not continue or terminate the application of it, so the legal effect of the relevant rules to environmental subsidies then have been temporary frozen. However, on the one hand, in practice, a large number of countries are still implement environmental subsidies; On the other hand, the latest emendatory draft of SCM Agreement did a complete reservation on Article 8 of the original non-actionable subsidies. Therefore, in future WTO trade negotiations, the effectiveness of the rules related to environmental subsidies have the possibility of being restored.On the one hand environmental subsidies help to improve the domestic environment, optimize the allocation of resource, promote industrial upgrading and enhance the competitiveness of domestic export products, etc. ; On the other hand there are also risks of being misused, abused, resulting in greater environmental damage and distortion of the domestic market and international trade. In the WTO trade negotiations, the developed and developing countries have different views on the issue of the reform of environmental subsidies. The developing countries called to increase subsidies which benefit developing countries, opposed to developed countries to building a new "green trade barriers" under the pretext of environmental protection, and called for sharing of environmental technology. However, developed countries regarded lower environmental standards in developing countries as a subsidy, claimed to levy countervailing environmental duty to the export products of developing countries.As people around the world call for high quality environment for living, the out environmental costs of production becoming inherent is the development trend of the future. This trend does not negate the existence of the value of environmental subsidies, but the conditions to the applicable of environmental subsidies will be more stringent, more technical parameters will be added to, the environmental subsidies which have negative effects will be phasing out. Whether the new emendatory draft of SCM Agreement, or the exploring for reforms of the rules on environmental subsidies of European Union and United States fully reflect this. The environmental subsidy legal system of China is far from perfect, Can not adapt to the needs of the development of the situation, therefore, the reform and improvement of the legal system of environment subsidies cannot be delay.The full text includes introduction,five chapters and conclusion. The first is introduction. Chapter I is Theoretical overview of environmental subsidies. Chapter II is regulations on environmental subsidies in the WTO. Chapter III is the policy of environmental subsidies in representative region and nation (that is, the EU and the United States). Chapter IV is the reform about the legal system of environmental subsidies. Chapter V is the status of environmental subsidies policy to China and future strategy in response. The end is some concluding remarks.