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 govern-mental 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.
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