Research On The Rule Of Retaliation Under The SCM Agreement

Subsidy,as a non-tariff barriers,has become an effective tool for trade protection.In the course of the continuous development of economy and the deepening of international economy and trade subsidy is manifesting a variety of development trends.Meanwhile,the phenomenon of abuse of subsidy becomes even more pervasive which will not only damage the interests of other countries,but also undermine the international economic order of trade freedom.Radically speaking,the WTO dispute settlement mechanism has provided the member states with a trade guide of certain stability and predictability,and retaliation,as the last resort and the most powerful measure of implementation,plays a decisive role in promoting the timely and full implementation of the relevant member states in the decision.Relevant provisions in Article 4 and Article 7 of Agreement on Subsidies and Countervailing Measures(hereinafter referred to as SCM Agreement),as a part of the current WTO dispute settlement system,technically stipulates the application of retaliation rules in the case of subsidy.In view of the fuzziness of the relevant provisions and the academic researches on subsidy retaliation rules are not that ample,the research achievements mainly appear in a small section of the study of WTO implementation mechanism and it's mostly the statement of fragmented views which is void of of systematic collation and research;in the practice of arbitration,the amount of arbitration awards of subsidy retaliation that available for reference is highly limited,in addition,the phenomenons of abuse of subsidies in international trade appear frequently,hence it is necessary to carry on the thorough research to the retaliation rules under the SCM agreement.This paper is divided into five parts.The first part is an overview of the basic theory of retaliation under the SCM agreement,it starts from three aspects including the connotation of revenge,the legal characteristics and the purpose to larify the basic concept of retaliation under this Agreement,then compare WTO retaliation rules with the retaliation rules of SCM agreement so as to analyzed the relationship between them thus paving the way for the later development of the article.The second part and the third part are the key chapters of this paper.The second part is the analysis from both aspects of the procedural requirements and substantive elements,combined with relevant provisions and arbitration practice,it makes a concrete exposition of the application of the rules of retaliation under the SCM agreement.The third part takes the relevant provisions as the breakthrough point to identify the meaning of key terms and clearly put forward the standards and the new development of the determination of the level of retaliation under prohibited subsidies and actionable subsidies with typical cases as evidence,and further provide a clear basis for the reasonable and effective use of retaliation rules.Everything is not perfect.The world always leaves something to be desired,and subsidy retaliation rules are not an exception.Although it serves as a non-alternative deterrence to a certain extent,it still has some defects.Therefore,the fourth part of this paper points out the deficiency of the rule and puts forward the corresponding suggestions on its improvement.Nowadays,China is facing an enormous international pressure and severe challenges in the subsidy issue,as such it is urgent to establish the corresponding implementation mechanism and coping strategies.The fifth part of this article starts from the concrete practice in China,puts forward the reasonable and feasible countermeasures based on the current situation so as to use the rules flexibly and effectively to better safeguard our national interests.