earticle

영어

Under the GATT system, there was no definite regulation on domestic subsidy which had no direct relation with export, though it limited direct supports that might affect export, The reason of regulation is that it may result in unfairness for competing nations because the subsidy can change artificially the comparative advantage structure and may allow some products without comparative advantage to be exported. According to the Agreement on Subsidies and Countervailing Measures of the UR, the definition and countervailing measures on subsidy was modified for clarification. Under the WTO system, subsidies were classified based on their impact on trade and their specificity as banned, countervailable, and permitted subsidies. While the Organization does not allow the first two subsidies the last one allows subsidies on research and development, local development and environmental protection. As a result, export relative price and world income showed expected responses and the coefficients were generally significant. In case of the amount of R&D subsidy, however, there was no statistical significance. The empirical evidences imply that the R&D subsidy was not managed effectively. Therefore, it is needed to reform the subsidy system to improve its effectiveness in terms of resource allocation. And in the long run, subsidy needs to be limited within certain amount to collect for the market failure.