The Dilemma of China as Respondent to Anti-Subsidy Proceedings - A Study of the First EU Anti-Subsidy Investigation against China

摘要

The EU launched its first anti-subsidy investigation (the CFP case) against China on 17 April 2010. The CFP case has followed a similar approach to that of other WTO Members (such as the United States) vis-a-vis China. This paper analyzes the main issues in the CFP case: policy plans, loans and land-use rights. It is found that a mere allegation of government interference by the petitioners can trigger a request for nation-wide information on company ownership and operations. This takes the scope of investigation far beyond the producers and exporters of the relevant product, encompassing nation-wide providers of credit, raw materials, electricity and land. Any shortfall in the amount of information provided can instantly lead the investigating authority to apply facts available' when making decisions. This practice is inconsistent with the Agreement on Subsidies and Countervailing Measures (SCM Agreement), as it aims to deal with government activities only. An unfairly high burden of proof was also imposed on China in the CFP case. Solutions are proposed in conclusion for a return to fair and legal anti-subsidy practices.