Research On "Benefit" Determination Issues In The Scm Agreement Under WTO

Issues of subsidies and countervailing have always been hot topics concerning WTO.In the amount of cases involving disputes inside WTO,the ratio of disputes related to anti-subsidy is only second to and sometimes even flat with those concerning anti-dumping.Almost all of the member states of WTO subsidize domestic industries in order to take a lead in the global market,while they are keen to take countervailing measures to prevent subsidies from foreign governments to their industries.When the disputes are being settled,the most important part is to determine the interest of subsidies.Article 1 of Agreements on Subsidies and Countervailing Measures(SCM)expressly defines the definition of subsidy,but it does not provide a specific explanation of the constituent elements of "interest".The provisions of "interest" are mentioned mainly in Article 1.1 and 14 of SCM,among which Article 14 provides the principles for methods employed by investigating authorities in calculating the interest mentioned in Article 1.1,which does not elaborate how to determine the interest.Consequently,the WTO Dispute Settlement Understanding and parties in the settlement have to spend a lot more time and energy identifying the "interest".In the process of interest-determining,if the recipient is the ultimate beneficiary,it is usually called a normal subsidy.Then,the Dispute Settlement Body generally carries out the work based on the core topic-"benchmark",which is the criterion for determining the interest.Combined with practical reference in WTO cases,it is identified as benchmark of the market.Although the panels\appellate body always choose external market as the benchmark,they do not give a specific and applicable rule nor provide a systematic guidance for future tradings in WTO.On the other hand,if the recipient is not identical with the ultimate beneficiary,the recognition of the interest shall be carried out under specific circumstances.In this case,the Dispute Settlement Body needs not only to follow general principles,but also to solve special problems risen from the case.China is in need of summarizing the problems concerning the determination of interest in WTO rules as well as analyzing the plight existed domestically in order to react actively.In response to the normal determination of interest,China could adopt strategies in responding to lawsuits so as to reduce the difficulties in providing evidence.Moreover,China shall play a more active role in participating in the making of rules in WTO and be more cautious and diverse in providing subsidies.Under special circumstances.China shall be more prudent in using upstream subsidies and build up our own rules of upstream subsidies as well.