The Interpretation of "Public Body" in the Multilateral Trading System (WTO): A Case Study of China and the United States

Subject Areas : International Legal Research

Seyed Mohamad Hassan Razavi ¹ , Zahra Biniaz ²

1 - Department of Public and International Law, Faculty of Law and Political Sciences, University of Tehran
2 - Faculty of Law and Political Sciences, University of Tehran

Received: 2023-09-13 Accepted : 2024-01-21 Published : 2024-02-13

Keywords: subsidies, WTO, Multilateral Trading System (MTS), SCM Agreement, Public Body, US-China,

Abstract :

Background and purpose: The conflicting perspectives of the United States and China in relation to the choice of the optimal economic model have resulted in international economic lawfare, which can be defined as resorting to law as an instrument to win the transnational US-China trade war. One of the prime areas of lawfare between the United States and China in the trade war is the question of whether China’s State-Owned Enterprises (SOEs) should be deemed as "public bodies.” This affects the applicability of WTO’s multilateral disciplines to government subsidies to China’s SOEs. The main question of the present research is the analysis of the defining criteria of the term “public body” in the interpretation of the WTO’s Dispute Settlement Body (DSB). Method: The present study was carried out using a descriptive-analytical method. Findings and results: Three criteria for interpreting the term “public body” are discernable: a) The US favors the “government control” criteria, b) China defines its criteria based on the government's responsibility towards "government organs,” and c) the dispute settlement body has found that the criteria of “government function” based on “exercise of government authority" to be appropriate. The interpretation of the term “public body” offered by the Dispute Settlement Body has achieved a balance between the perspectives of the United States and China. Although China has complied with the Dispute Settlement Body’s interpretation in developing its national legislation, the conflict between the two economic powers has not subsided.