Analyses And Implications Of Countervailing Investigations Against Market Economy Countries

As economic globalization increases rapidly and trade liberalization develops in depth,trade relationships among countries are becoming closer and closer,along with ongoing deterioration of trade frictions.As an effective mean for countries to protect their domestic industries and avoid being stricken by subsidized imports,recently,countervailing has been receiving increasing attention.Booming cases of countervailing investigation can be seen in international trade.This paper views the market economy countries as objects of countervailing complaints,and systematically analyze countervailing essential conditions against market economy countries.It obtains certain reference significance for China,as its market economy system becomes more mature.This paper is mainly divided into four parts.The first part discusses the overview of international countervailing cases and focuses on five major market economic countries(regions),such as the United States,the European Union,Canada,South Korea,and India,who had been accused of countervailing.After detail statistics on final reports of countervailing investigations against five countries(regions)from 1995 to 2015,it summarizes and analyzes countervailing projects for each case.The second part starts with the multilateral rules of subsidy and countervailing under the WTO framework.And then discusses subsidy and countervailing policies of five countries(regions).Finally sums up characteristics: Subsidy policies commonly exist in five countries(regions);Subsidies are concentrated;Subsidies are diversified and hidden;As for European and American,subsidies are mainly used to develop agriculture and stabilize domestic(regional)economies.The third part makes use of dynamic panel data of 43 effective countervailing cases against five countries(regions)from 1995 to 2015,and conducts system GMM estimation to examine the relationship between countervailing and export trade volume.The empirical results show that:(1)Imposition of countervailing duties will reduce export of subject products to the complaining country.That is,countervailing duties lead to trade destruction effect;(2)Countervailing claims create deterrent effect and will also lead to trade destruction effect,whatever countervailing duties are finally imposed.The fourth part summarizes and discusses the implications for Chinese government,obtained from market economy countries,in designing and formulating subsidy policies and responding to countervailing investigations.