A Study On The Establishment Of Market Benchmark Measuring Benefit In WTO Subsidy Cases

Government subsidies are like a two‐sided blade. On the one hand, governments can develop economies and achieve various social goals by providing subsidies. On the other hand, government subsidies can have negative effects on international trade. The theme of multilateral agreements on subsidies is to categorize various subsidies on a reasonable basis and regulate them accordingly with the aim to protect legitimate use of government subsides while to prevent them from becoming a unfair trade measure and non‐tariff trade barrier.The countervailing measures are aim on the benefit which is conferred by governmental subsidies. The benefit conferred by subsidies gives the enterprises artificial competitive advantage and the order of competition in international trade will be distorted. Meanwhile the concept of benefit is employed as one legal criteria of subsidy in the Agreement on Subsidies and Countervailing Measures. Comparing with the concept of a financial contribution which is amplified by four explanatory sub‐paragraphs, the word “benefit” is not clearly defined in the SCM Agreement.This dissertation is composed of five chapters.The first chapter is an empirical study of the ASCM. The rules of subsidy are about defining a subsidy. This Chapter introduces firstly the interpretive conclusion of benefit developed by the Panel and Appellate Body in Canada–Aircraft, that is “a benefit would only be conferred if a financial contribution was provided on terms that are more advantageous than those that would have been available to the recipient on the commercial market”. The DSB clarify several vague terms to restraint the discretionary power of the subsidy investigation authority of WTO members.Chapter two is about the benchmark for benefit determination. Chapter three is about appropriate adaptations of the commercial benchmark choice rule. The fourth chapter is about the new development of subsidy categorizing rules in the Doha Round. Developments in the negotiation so far are not so favorable to China whose possible consequences are to put the law and practices against China by some WTO members into the forming multilateral rules. Consequently, the equal rights concerning the Market Economy status to be gained by China in 2016 will be deprived.The fifth Chapter is about the new challenges and the counter‐measures by China. This dissertation present some counter‐measures from international level and domestic level. On the international level, China should play a more active role in the Doha Round negotiation by alliance with Brazil and other developing countries. In the negotiation process, China should put forward proposals containing favorable opinions by the DSB into the negotiation agenda. China should seek to ask the DSB to clarify some unfavorable opinions concerning subsidy categorizing. In the domestic level, China should modify the Anti‐subsidy Regulation in accordance with the subsidy categorizing rules in the ASCM. Besides that, governments of all levels in China should carry out the subsidy policies in accordance with the categorizing and regulating principle in the ASCM.