Studies On The Rules And Regulations Of Subsidy & Countervailing Measures Under The WTO Framework

Subsidy and counter-veiling have always been one of the buzzwords in the global economic field. The relative clauses and terms in (ASCM) and complete the present international regulations and rules on the concerning issues. The rules are fair and reasonable, because, on one hand, it allows the parties to imply some Non-actionable Subsidies to fulfill their economic and social policies and to realize the strategic goals of economic growth; on the other hand, it prohibits the parties from using the subsidies which can distort the international trade and sources allocation; meanwhile, the ASCM also entitles the parties to use the counter-veiling measures to protect the securities and interests of their domestic industries.However, in reality, in the hopes of promoting the economic development, the governments of the parties usually provide the domestic industries and enterprises with different kinds of subsidies and preferential treatments, some of which are actually forbidden and limited by the WTO. At the same time, these parties accuse the other countries for the use of the subsidy policy, and even overuse and misuse the counter-veiling measures as a trade barrier for their protectionist purpose.Therefore, recently the figure of the international conflicts involved subsidy, especially about some sensitive commodities, is inclining. When confronting the developed parties, the developing parties are obviously in a disadvantageous status. In addition, the regulations and rules for subsidy&counter-veiling still have some shortcomings per se. For example, some key concepts still have some ambiguity, and the rules have not taken enough accounts to the reality of the developing parties and therefore allowed them plenty of preference. Thus, to some extent, the existing regulations and rules still only work as the basic principal and guidance, so that they can not effectively maintain the global order with the use of subsidy&counter-veiling measures. The deficient international rules bring China more and more serious challenges in the protectionist environment. Meanwhile, due to the planned economy influences, there are some subsidies still existing in Chinese subsidy system, which are actually not compatible with the WTO rules, for example, the subsidies supplied to the SOEs and joint ventures, and the import substitute subsidy for motor industry. All these above subsidies bring more threats for us suffering counter-veiling measures. And these threats turned into reality in 2004 when Canada successively accused Chinese government of providing subsidies for three times. What is worse, the other major parties also began to amend their domestic legislation so that the non-market economies such as China could also be subject to the counter-veiling measures. And the conspicuously increasing export, the chaotic condition of export all make the things even worse, and we face more risks of accusation.In order to eliminate and avoid the risks of accusation, we should, firstly, do some necessary changes to the present domestic subsidy system, canceling the prohibited subsidies, making good use of the actionable subsidies, and taking full advantages of the non-actionable subsidies. And we also need to capitalize on the favorable treatments which the ASCM allows to developing parties. Secondly, the government, the industrial organizations and the enterprises themselves should closely cooperate to reduce and control the risks of accusation. The government should preside to build the information service system, and give the priority to the construction of infrastructures related to export. The industrial organizations should help the enterprises to study the rules and knowledge about the subsidy&counter-veiling measures, and build up the alarming system against counter-veiling, and organize the enterprises to actively response to the accusations. The enterprise should master the relative rules as soon as possible. However, the most important things for the enterprises to do are to adjust their export strategy, improve the technology innovation, and increase the technological added-value in the prices of their products.