Tuesday, 23 December 2008

The Great Subsidy War is Coming?

On Dec 22nd, China requested the establishment of the panel in the case against US AD & CVD duties on certain products (steel pipe, tires, etc.). This is the third case China has brought against the US and the 2nd case China brought against US CVD practices. There are several interesting issues in this case:

1. The request for the panel was made only a few days after the US brought a case against Chinese export subsidies. As the US itself has been providing various loans lately to private firms, one wonders whether this would set off the trigger for a global war on subsidies (and/or CVDs) ? To be more specific, one wonders whether China would bring a case against US subsidies (rather than CVD practices) any time soon?

2. In its panel request, Chin also alleged that the US breached Art. 15(b) of the Accession Protocol of China, which sanctions the application of the "alternative benchmark" approach in CVD investigations against China. According to China, the US breached this provision by failing to make a finding of "special difficulties" before resorting to the "alternative benchmark" approach. The interesting legal question here is: does the Accession Protocol create legal obligations for China only, or does it create legal obligations for other WTO members as well?

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