Abstract
US—Definitive Anti-Dumping and Countervailing Duties on Certain Products from China is the initial WTO dispute in which China claims that US-countervailing duties on certain products from China are inconsistent with the obligations of the United States under the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”). In this dispute, the specific meaning of “public bodies” within Article 1.1 (a) (1) of the SCM Agreement and the question of whether China’s state-owned commercial banks (“SOCB”) constitute “public bodies” are the heart of the matter. This thesis will analyze these issues by examining the reports of the Panel and the Appellate Body. In particular, the thesis will argue that the theory of the governmental function advanced by China is much more persuasive than that of governmental control in terms of defining “public bodies”. Although China’s SOCBs have gone through several stages of reforms, the majority ownership of them has remained in the hands of the Chinese government. However, SOCBs’ policy-oriented nature has been largely marginalized, and currently they only perform subsidiary governmental functions. In this regard, the conclusion this thesis will attempt to reach is that the WTO system needs to give developing countries like China more policy flexibility in order to upgrade their international trade participation to the level required and followed by developed countries. During the process, developing countries should also make the best use of their latent comparative advantage and the effects of globalization.
Highlights
China put banking reform on its agenda in 1978 with the goal of modifying the structure of its banking system
US—Definitive Anti-Dumping and Countervailing Duties on Certain Products from China is the initial World Trade Organization (WTO) dispute in which China claims that US-countervailing duties on certain products from China are inconsistent with the obligations of the United States under the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”)
Regarding the second issue of “specificity”, the Panel agreed with the United States that lending by state-owned commercial banks (SOCB) to the tire industry was de jure specific, but it did not agree that the United States Department of Commerce (USDOC)’s determination of regional specificity in respect of the provision of land-use rights to Aifudi was consistent with the obligations of the United States under Article 2 of the SCM Agreement (Panel Report, 2011, US—Anti-Dumping and Countervailing Duties, para.9.161)
Summary
China put banking reform on its agenda in 1978 with the goal of modifying the structure of its banking system. China argued that the Panel erred, first, in relying on municipal law usages to interpret the SCM Agreement, and, second, in concluding that these usages supported its finding that government control, without more, is the single criterion that defines a “public body”, “organismo público”, or “organisme public” (Panel Report, 2011, US—Anti-Dumping and Countervailing Duties, para.8.87). China recalled that in US—Countervailing Duty Investigation on DRAMS the Appellate Body referred to the Draft Articles in the section of its report, in particular the Commentary to Article 8 of the Draft This passage of the Commentary makes clear that state ownership is not sufficient to attribute the conduct of a state-owned corporate entity to a state, and by extension to a Member for the purpose of Article 1.1 of the SCM Agreement, and that instead it supported China’s view of the term “public body”. It has been contentious that China has not and may not complete a full transi-
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