| The benefit is one of the elements of the subsidy. To properly calculate the benefits, the investigation authority should choose the appropriate benchmark. Because of the fuzzy of the WTO rules, there is some controversy about the application of out-of-country benchmark. Since 2006, the United States frequently combines anti-dumping and countervailing investigation on products from China. And in many countervailing investigations,United States Department of Commerce(hereinafter referred to as USDOC) rejected in-country benchmarks to calculate benefits of subsidies. Specifically, in some cases USDOC rejected interest rates in China as benchmarks, and used an external proxy benchmark to determine whether Chinese renminbi( "RMB")-denominated loans provided by State-owned commercial Banks conferred a benefit. In some cases, USDOC rejected in-country private prices in China as benchmarks for calculating the benefit conferred by the provision, by State-owned enterprises. USDOC’s practices lead to Chinese products for higher countervailing tax, and make Chinese products lost the price advantage, and make China enterprises suffer economic losses. Through the analysis of the rules of WTO, USDOC’s countervailing cases and the WTO related case, the author research the legitimacy of out-of –country benchmark, market distortions and the comparability of out-of-country benchmark.This dissertation is divided into introduction and text, the text is divided into five parts.The first part is an overview of the out-of-country benchmark. This part describes what is the benefit of subsidy, what is the out-of–country benchmark. In the countervailing investigation, investigating authority may reject in-country private prices if it reaches the conclusion that the market is distorted, thus rendering the comparison required under article 14(d) of the SCM Agreement circular. So, the in-country private prices is not the appropriate benchmark, investigating authority can use the out-of-country benchmark.The second part analyzes the legitimacy of out-of –country benchmark. Firstly, author makes a literal interpretation of article 14 of SCM Agreement. Then, analyzing Panel report and AB report of the cases US-Softwood Lumber IV and US — Anti-Dumping and Countervailing Duties, author make the conclusion that article 14(d) and article 14(b) allow the investigation authority reject in-country benchmark and resort to out-of-country benchmark when the market is distorted.The third part expounds the market distortions. Author analyzes what is the market distortions, how to identify the market distortion and factors of market distortion. Firstly,author analyzes the USDOC’s practice in order to know the reasons to identify the market distortions. Then, author analyzes Panel report and AB report of the cases US — Anti-Dumping and Countervailing Duties(China) and US — Countervailing Measures(China). The author draws a conclusion that the key to decide whether there is the market distortion is whether the private prices is the market-determined prices.The fourth part expounds the comparability of out-of-country benchmark. Firstly,though analyzing the USDOC’s practice, author want to know the investigation authority how to select the comparable out-of-country benchmark. Then, author analyzes Panel report and AB report of the cases US — Anti-Dumping and Countervailing Duties( China) and US — Countervailing Measures(China), the Panel and the Appellate Body pointed out that the investigation authority shall ensure the selected out-of-country benchmark can reflect domestic current market conditions.The fifth part puts forward the countermeasures for the application of out-of-country benchmark. China should make efforts to reduce the negative impact. First, China should actively use the international trade rules to protect our rights and interests, actively participate in multilateral negotiations. Second, China needs to establish information database so as to put forward concrete defense. The last, China should continue to reform the domestic market. |
