The Definition Of The Gatt And The Wto System Of Subsidies

Before we study subsidy and countervailing duty law, we have to know what is "subsidy", what is the nature of it. How can subsidy affect the international trade? Otherwise, it is unnecessary for the international trade system to regulate subsidy.This article will begin the discussion with how to define "subsidy" from angle of legislation. On one hand, the definition of subsidy cannot be so narrow that many opaque government acts cannot be regulated. On the other hand, the definition cannot be so broad that almost all government acts can be seen as countervailable subsidies. We have to devise an appropriate definition of subsidy-at least as applies to trade policy. Then we can identify those subsidies that actually distort international trade. Therefore, the specificity test has been designed to identify those subsidies that actually distort international trade. The specificity test has been used to determine whether other nations' subsidy or incentive programs are countervailable focuses on which industries or firms benefit from the program. Government assistance that is broadly available or that benefits most domestic industries should not be subject to countervailing duties. The specificity test identifies what constitutes a government program, what industries or groups are involved and whether the benefits are being supplied selectively. Duties are warranted when the benefit conferred results in economic distortions that affect international trade.Then the article narrates the evolvement of subsidy and countervailing duty law in international trade system. From the process of evolvement, we can see how the devisers of international trade system resolved this problem and what problem has arises when these rules were applied to international trade disputes settlements.Finally, in according to the current subsidy and countervailing law of our country, part three of this article analyzes the deficiencies of the legislation of subsidy and countervailing duty law of our country and brings about some relevant proposals.