WTO規(guī)則與運(yùn)作課件：Chapter 9 Rules of subsidies and countervailing measures

1、Chapter 9 Rules of subsidies and countervailing measuresContent pIntroduction pDefinition and classification of subsidiespRemedies on subsidypCountervailing measurespCase 1.Introduction pSubsidies, are government measures, have two-sided effects. On the one hand, subsidies can promote economic devel

2、opment, on the other hand, subsidies would distort the resources allocation and make production deviate from the market principles which leads to unfair competition.pFrom the perspective of international trade, subsidies may cause unfair competition between imported goods and domestic produced goods

3、. pSubsidies may be the behavior of the exported country, as well as imported countries.pThere is a close relationship between subsidies and the economic development polices, therefore, we could not believe that all of the subsidies is strictly forbidden.p is aimed at adjusting the subsidies and cou

4、ntervailing behaviors.pThis agreement with Article 6, Article 16 of GATT together constitute the Subsidies and Countervailing rules of WTO.Question pWhat are the differences between subsidy and dumping?2. Definition and classification of subsidiespFor the purpose of this Agreement, a subsidy shall b

5、e deemed to exist if:p(a) there is a financial contribution by a government or any public body within the territory of a Member; or there is any form of income or price support in the sense of Article XVI of GATT 1994;p(b) a benefit is thereby conferred.(1)The scope of subsidy p(i) a government prac

6、tice involves a direct transfer of funds (e.g. grants, loans, and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);p(ii) government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits); The scope of subsidy

7、 p(iii) a government provides goods or services other than general infrastructure, or purchases goods;p(iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normal

8、ly be vested in the government and the practice, in no real sense, differs from practices normally followed by governments;Question pThe exemption of an exported product from duties or taxes borne by the like product when destined for domestic consumption, or the remission of such duties or taxes in

9、 amounts not in excess of those which have accrued, do you think this measurement is a subsidy? pWhether a measure constitutes a subsidy depends on two essential factors:pGovernments financial support;pThe funding produces interests.Governments financial supportpFirstly, the support is related to go

10、vernment or public institutions.pSecondly, the financial support has many forms.pThirdly, the government subsidy is not conditional on the expenditure incurred by the Government.The funding produces interestspIt does not constitute subsidy that financial support have no benefits. Therefore, benefits

11、 are the essential condition for the funds constituting a subsidy.pInterests, or benefits, generally are understood that advantages enjoyed by funding recipients relative to those who do not receive subsidies. the U.S. takes countervailing measures against the lead exports of British pThe original e

12、nterprise, who produces leads and exports to the U.S., is state-owned enterprises. However, this enterprise experiences several ownership restructuring. A buyer purchases some parts of the business in the market price. The U.S., on the grounds that the original subsidy exists on the new buyer, still

13、 imposes countervailing duties on leads from the new buyer. pIs this reasonable? Why?pDSU rules that the original subsidy does not produce benefits for new buyers, as it is paid with the full market price.pThe criterion of interest is not the products or production, but the beneficiaries.(2)Specific

14、 subsidypSuch subsidy explicitly limiting access to a subsidy to certain enterprise or industry or group of enterprises or industries shall be specific.pThe specific subsidy has four types: enterprise specific subsidy, industry specific subsidy, region specific subsidy and prohibited subsidy.p SCM i

15、s only bounding the subsidy which has specificity.(2)Specific subsidypIf adopting objective criteria or conditions governing the eligibility（資格） for, and the amount of, a subsidy, specificity shall not exist, provided that the eligibility is automatic and that such criteria and conditions are strict

16、ly adhered to. (2)Specific subsidypThe specificity may be also established by considering such factors as following: use of a subsidy programme by a limited number of certain enterprises, predominant use by certain enterprises, the granting of disproportionately large amounts of subsidy to certain e

17、nterprises, and the manner in which discretion has been exercised by the granting authority in the decision to grant a subsidy.Question pAre the subsidies provided to state-owned enterprises viewed as specific in China?(3)Classification of subsidiespThe subsidies, according to SCM, are divided into

18、three types: prohibited subsidies, actionable subsidies and non-actionable subsidies.(1)Prohibited subsidiespExcept as provided in the Agreement on Agriculture, the following subsidies shall be prohibited:p(a) subsidies contingent, in law or in fact, whether solely or as one of several other conditi

19、ons, upon export performance; p(b) subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.(2) Non-Actionable subsidies psubsidies which are not specific within the meaning of Article 2 (prohibited subsidies);psubsidies which are speci

20、fic within the meaning of Article 2 but which meet all of the conditions provided for in the following paragraphs. (three exceptions: see paragraph 2, article 8 of SCM agreement )(3) Actionable subsidiespNo Member should cause, through the use of any subsidy referred to in paragraphs 1 and 2 of Arti

21、cle 1, adverse effects to the interests of other Members, i.e.:p(a) injury to the domestic industry of another Member;p(b) nullification or impairment of benefits accruing directly or indirectly to other Members under GATT 1994; p(c) serious prejudice to the interests of another Member. pThis Articl

22、e does not apply to subsidies maintained on agricultural products as provided in Article 13 of the Agreement on Agriculture.3.Remedies on subsidiesp(1)Remedies on prohibited subsidiespConsultations Whenever a Member has reason to believe that a prohibited subsidy is being granted or maintained by an

23、other Member, such Member may request consultations with such other Member.pReferring to the DSBReferring to the DSBpIf no mutually agreed solution has been reached within 30 days of the request for consultations, any Member party to such consultations may refer the matter to the Dispute Settlement

24、Body (“DSB”) for the immediate establishment of a panel, unless the DSB decides by consensus not to establish a panel. Referring to the DSBpIf the measure in question is found to be a prohibited subsidy, which may be established with the assistance of Permanent Group of Experts (PGE), the panel shal

25、l recommend that the subsidizing Member withdraw the subsidy without delay. In this regard, the panel shall specify in its recommendation the time-period within which the measure must be withdrawn.Referring to the DSBpWhere a panel report is appealed, the Appellate Body shall issue its decision with

26、in 30 days from the date when the party to the dispute formally notifies its intention to appeal. pWhen the Appellate Body considers that it cannot provide its report within 30 days, it shall inform the DSB in writing of the reasons for the delay together with an estimate of the period within which

27、it will submit its report. Referring to the DSBpIn no case shall the proceedings exceed 90 days. The appellate report shall be adopted by the DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus not to adopt the appellate report within 20 days following

28、its issuance to the Members.Referring to the DSBpIn the event the recommendation of the DSB is not followed within the time-period specified by the panel, which shall commence from the date of adoption of the panels report or the Appellate Bodys report, the DSB shall grant authorization to the compl

29、aining Member to take appropriate countermeasures, unless the DSB decides by consensus to reject the request. (2)Remedies on Non-actionable subsidiespWhen the non-actionable subsidies has resulted in serious adverse effects to the domestic industry of that Member, such as to cause damage which would

30、 be difficult to repair, such Member may request consultations with the Member granting or maintaining the subsidy.(2)Remedies on Non-actionable subsidiespIf no mutually acceptable solution has been reached in consultations within 60 days of the request for such consultations, the requesting Member

31、may refer the matter to the Committee. pIf the Committee determines that such effects exist, it may recommend to the subsidizing Member to modify this programme in such a way as to remove these effects. pIn the event the recommendation is not followed within six months, the Committee shall authorize

32、 the requesting Member to take appropriate countermeasures commensurate with the nature and degree of the effects determined to exist. (2)Remedies on Actionable subsidiespAccording to the article 7, SCM agreement, the remedies on actionable subsidies is as same as the above remedies on prohibited su

33、bsidies.pIt includes consultations and referring to DSB (including arbitration).Prerequisites to remedies p(a) injury to the domestic industry of another Member;p(b) nullification or impairment of benefits accruing directly or indirectly to other Members under GATT 1994; p(c) serious prejudice to th

34、e interests of another Member. Serious prejudicep(a) the total ad valorem subsidization of a product exceeding 5 per cent; p(b) subsidies to cover operating losses sustained by an industry;p(c) subsidies to cover operating losses sustained by an enterprise, other than one-time measures which are non

35、-recurrent and cannot be repeated for that enterprise and which are given merely to provide time for the development of long-term solutions and to avoid acute social problems;p(d) direct forgiveness of debt, i.e. forgiveness of government-held debt, and grants to cover debt repayment.Some cases of s

36、erious predudicep(a) the effect of the subsidy is to displace or impede the imports of a like product of another Member into the market of the subsidizing Member;p(b) the effect of the subsidy is to displace or impede the exports of a like product of another Member from a third country market;p(c) t

37、he effect of the subsidy is a significant price undercutting by the subsidized product as compared with the price of a like product of another Member in the same market or significant price suppression, price depression or lost sales in the same market;Applying procedures of DSU on actionable subsid

38、iesProceduresTime limitsBeginning date Consultation 60 daysThe date of requesting for consultationThe determination of panel120 daysThe date of composition and the establishment of panels terms of reference The determination of appellate body60 daysThe date of notifying the intention of appealCompen

39、sation or countermeasures6 monthsThe date of the DSBs adoption of the report of the panel or appellate bodyarbitration60 daysThe date of expiry of the reasonable period of time 4.Countervailing measurespMembers shall take all necessary steps to ensure that the imposition of a countervailing duty on

40、any imported product is in accordance with the provisions of Article VI of GATT 1994 and the terms of this Agreement. pCountervailing duties may only be imposed pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement and the Agreement on Agriculture.pTh

41、e term “countervailing duty” shall be understood to mean a special duty levied for the purpose of offsetting any subsidy bestowed directly or indirectly upon the manufacture, production or export of any merchandise. (1) Implying scope of WTO countervailing rulespIn general sense, only are WTO counte

42、rvailing rules adoptable to either prohibited subsidies or actionable-subsidies.pHowever, where a member did not notify as provided of its non-actionable subsidies, or, when determining whether or not they are specific, WTO countervailing rules will also be utilized.(2) Substantial countervailing ru

43、les of WTOpInitiation of countervailing investigationpAcquirement of evidences related to subsidies and injuries thereofpConsultationspCalculating the amount of a subsidypDetermination of injurypTaking provisional countervailing measurespUndertakings rules under WTO countervailing agreementpImpositi

44、on and collection of final countervailing dutiespNotifications on subsidies and countervailing dutiespSpecial and differential treatment favoring developing countries under WTO countervailing rulesInitiation of countervailing investigationpA countervailing investigation aims to determine the existen

45、ce, degree and effect of any alleged subsidy. It shall be initiated upon a written application by or on behalf of the domestic industry.pAn application shall include sufficient evidence of the existence of (a) a subsidy and, if possible, its amount, (b) injury within the meaning of Article VI of GAT

46、T 1994 as interpreted by this Agreement, and (c) a causal link between the subsidized imports and the alleged injury.Specifically, the application shall contain the following information: p(i) the identity of the applicant and a description of the volume and value of the domestic production of the l

47、ike product by the applicant. Where a written application is made on behalf of the domestic industry, the application shall identify the industry on behalf of which the application is made by a list of all known domestic producers of the like product (or associations of domestic producers of the lik

48、e product) and, to the extent possible, a description of the volume and value of domestic production of the like product accounted for by such producers;Specifically, the application shall contain the following information: p(ii) a complete description of the allegedly subsidized product, the names

49、of the country or countries of origin or export in question, the identity of each known exporter or foreign producer and a list of known persons importing the product in question;p(iii) evidence with regard to the existence, amount and nature of the subsidy in question; Specifically, the application

50、 shall contain the following information: p(iv) evidence that alleged injury to a domestic industry is caused by subsidized imports through the effects of the subsidies; this evidence includes information on the evolution of the volume of the allegedly subsidized imports, the effect of these imports

51、 on prices of the like product in the domestic market and the consequent impact of the imports on the domestic industry.pIn no case, an investigation shall be initiated unless the application shall be considered to have made “by or on behalf of the domestic industry”.pIn special circumstances, the a

52、uthorities concerned may initiate an investigation of their own accord.pNo investigation shall be initiated when domestic producers expressly supporting the application account for less than 25 per cent of total production of the like product produced by the domestic industry. pThere shall be immedi

53、ate termination in cases where the amount of a subsidy is de minimis (the subsidy is less than 1 per cent ad valorem), or where the volume of subsidized imports, actual or potential, or the injury, is negligible. pAn investigation shall not hinder the procedures of customs clearance. pInvestigations

54、 shall, except in special circumstances, be concluded within one year, and in no case more than 18 months, after their initiation. Acquirement of evidences related to subsidies and injuries thereofpIn the acquirement of these evidences, article 12 of WTO SCM agreement stipulates that the countervail

55、ing authorities mayp(a) issue questionnaires, which will be replied within at least 30 days, to exporters, foreign producers or interested members;p(b) carry out investigation on the spot;p(c) in case in which any interested member or interested party refuse access to, or otherwise does not provide,

56、 necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. Consultations pAs soon as possible after an application is accepted, before the initiation of

57、any investigation and even through the whole period of investigation, Members the products of which may be subject to such investigation shall be invited for consultations and arriving at a mutually agreed solution. Calculating the amount of a subsidypWTO requires that any method used by the investi

58、gating authority to calculate the benefit to the recipient shall be transparent and adequately explained. pFurthermore, any such method shall be consistent with the following guidelines: p(a) government provision of equity capital(股本資金) shall not be considered as conferring a benefit, unless the inv

59、estment decision can be regarded as inconsistent with the usual investment practice (including for the provision of risk capital) of private investors in the territory of that Member;p(b) a loan(貸款) by a government shall not be considered as conferring a benefit, unless there is a difference between

60、 the amount that the firm receiving the loan pays on the government loan and the amount the firm would pay on a comparable commercial loan which the firm could actually obtain on the market.pIn this case the benefit shall be the difference between these two amounts; p(c) a loan guarantee(貸款擔(dān)保) by a