The Balance Of Government Subsidies And Countervailing Measures

Government subsidies and countervailing measures are important problems of the multilateral trading system. Government subsidies Has a dual role. On one hand, every nation around the world has ever used subsidies as a favorable means to promote the economy development and realize some aspects of social objectives. On the other hand, subsidies used by a government may sometimes cause adverse effects of trade interests. Adverse effects are not only central point but also a balance point of subsidies and countervailing measures. Only the countries affected adversely by subsidies can take countervailing measures. Countervailing Measures also exists dual characters: it can regulate subsidies behavior and protect fair trade, but also may become a tool for trade protection in the process of unreasonable application. Therefore, this article focuses on adverse effects of government subsidies and analysis of relief conditions and ways. It primarily discusses how some ambiguous places in the process of proving of adverse effects interact soundly under the guidance of correct theories and the spirits of"fairness"and"freedom"in international trade, and reach an overall balance favorable to the healthy and stable development of the global economy and society. Besides the preface and the conclusion, this paper is composed of the following three chapters:Firstly, this article discusses government subsidy system and definition of subsidies. through discussing the origin and formation of government subsidies, this article gives a clear course of subsidies development. With discussing subsidies effects of economy between economic schools, then this article analyzes that countervailing measures is necessary. Finally this article discusses legal system evolution progress of subsidies and definition of subsidies(Definition of subsidies is divided into three topics: provider of subsidies, financial contribution and benefit. This three topics make an empirical analysis in light of typical report of the Group of Experts and the Appellate Body. Including specificity standard, this chapter discusses identified methods of government subsidies).Secondly, adverse effects is the key issues of this paper. It is mainly about the study of "adverse effects", Based on typical cases, this paper discusses three sorts of "adverse effects"(injury, nullification or impairment of benefits, serious prejudice) and internal logic relationship.Finally, this paper discusses the relief measures of adverse effects, there are two mechanisms: one is dealing according to procedures of domestic countervailing law; the other is dealing through WTO Dispute Settlement Body. This chapter firstly discusses the interpretation and research on the two procedures. and then makes a brief contrast and comment between the two Procedures. Finally, this chapter discusses how the government carry out functions and cope in face of current grim situation of anti-subsidy.SCM(Subsidies and countervailing measures) agreement is a main international Subsidies and countervailing measures agreement. that is a specially standardized SCM under WTO frame. In 2001, China joined the WTO, while enjoying rights, at the same time, China should perform obligations under the framework of WTO agreement. As the member of WTO,China comply with SCM agreement becoming reality. Therefore, in subsidies and countervailing, our related economic law system should be consistent with the SCM agreement. Subsidies firstly meet the general definition (government, financial contribution, benefit) , specificity, and adverse effect, it is useful for we treat subsidies correctly, and avoid to interfere other countries affairs. The purpose of SCM agreement is not to stop all subsidies but to control subsidies and countervailing in certain legal scope, guide effectively the international economic development and balance.