How Determining The Benefits Of Subsidies In WTO Framework

The course of determining a subsidy is so complicated that few countervailing measures are implemented by WTO members, because the subsidy policy of a nation is very secret and it's very difficult to obtain the proofs. Determining the benefits of subsidy is the key to prove whether such subsidy exists, which relates to the extent of countervailing duty. So this paper specially discuss the problem of how to determine the benefits of subsidies in WTO framework and summarize the rules of determining the benefits of subsidies when Dispute Settlement Body of WTO has being settled countervailing issues, so as to provide some references for the future countervailing investigation and appealing for our country.This paper mainly analyzes how to identify the benefits of subsides in WTO framework from static and dynamic point of view, including five parts: Introduction, definitions of subsidy and benefits of subsidy, how to determine the static benefits of subsidies in WTO framework, how to determine the dynamic benefits of subsidies in WTO framework, summarize the advantages and disadvantages of determining benefits of subsidies in WTO framework and conclusions.On the premise of that the recipient of a subsidy and the final beneficiary is the same entity and the benefits from the financial contribution are conferred the recipient one time and not transferred to others any more, the static analysis about determining of benefits of subsidies will be carried out. First part mainly argues the relevant regulations in Subsidies and Countervailing Measures Agreement. In this agreement, although the articles about benefits of subsides are few, we may get some rules how to identify the benefits of subsidies through other articles, for example, the forms of benefits of subsidies can be concluded from the types of "financial contribution", which are money, property rights, service and practicality. "Specificity" helps us know the range of recipient of benefits of subsidies. The second part abstracts some usual rules of determining the benefits of subsidies from the explanations of panel reports and appellate reports during the DSB settling the related issues. From my point of view, these treaty explanations are more important than the articles of SCM agreement because they are more practical to the given issue and can make up the disadvantages of the agreement.When the recipient of a subsidy and the final beneficiary is not the same entity, the dynamic analysis is very necessary in respect that the benefits of a subsidy may be passed through certain channel to other firms. The various shifting channels lead to different forms of benefit-shifting. This chapter argues that the benefits of a subsidy are passed through respectively from upstream firms to downstream firms, from state-owned firms to the privatized firms, from the foreign components providers to the domestic system integrators. Then get the conclusion which the benefits-shifting of subsidies is not necessary and must find the affirmative proofs to prove such case.After static and dynamic analysis, evaluating the advantages and weaknesses of determining the benefits of subsidies in WTO framework, the last part of this paper is the conclusion, which summarizes the former arguments of this paper.