The International Trade Commission ruled against the glossy paper industry.  The ITC did not dispute the claims of NewPage, which brought the case, that China illegally subsidized its paper industry.  But rather found that the paper producers had not been harmed by the subsidies.

The Vinson & Elkins law firm repreesented the Chinese government.  I did not follow the case, but they likely argued that NewPage could not provide a direct link between the subsidies and U.S. industry harm.  A swirl of other economic factors - transportation costs, various input costs, pricing decisions, different submarkets - confound the causation connection.

If the ITC is reticent in connecting subsidies with industry harm, this is a major loophole in trade law.  Should the U.S. then increase domestic subsidies where it can obscure the economic impacts in the maelstrom of other economic factors, and argue that it may be wrong but nobody was hurt?

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