WTO Case Study And Research On The Impact Of Privatization On The Countervailing Duties

Privatization often means that entities the state previously subsidized will no longer receive such subsidies. Thus, privatization raises the question of how to apply the definition of a subsidy in a countervailing duty investigation when a privatized entity, which no longer receives a subsidy, did receive a subsidy before it was privatized. Specifically, the question raised is whether a non-recurring financial contribution to the previous owners still confers a benefit to the new owners, and therefore qualifies as a countervailable subsidy. WTO rules have no clear guidance on this question . So for resolving it we have to turn to the WTO cases. United States– Countervailing Measures Concerning Certain Products from the European Communities is a typical case on such matters. It referres to many questions: Whether the evolution of change in ownership methodologies applied by the US Department of Commerce is consist with the SCM agreement? Whether privatization triggers the need for a re-examination of the existence of benefit? Is there any benefit passes through when the privatization transaction takes place for fair market value and at arm's length? The answers to these questions will help us evaluate the impact of privatization on the countervailing duties. Thus ,this article will focus on the United States Countervailing Measures Case ,first look back on the agency application of United States countervailing duty law in the privatization context, then analysis on the DSB findings on the change in ownership methodologies challenged in this dispute and the impact of privatization on the determination of subsidization and related countervailing duties. Finally look for some valuable guidline for our countervailing duties practice.