Agreement On Subsidies Wto

The agreement subsidized the use of subsidies and regulates the measures that countries can take to counter the effects of subsidies. The scope of these prohibitions is relatively narrow. Industrialized countries had already accepted the ban on export subsidies under the Tokyo Round subsidy agreement, and subsidies for local content, prohibited by the subsidy agreement, were already inconsistent with Article III of the GATT 1947. The essence of the new agreement in this area is the extension of obligations to developing countries subject to certain transitional rules (see section below on special and differential treatment) and the creation of a mechanism for the early resolution (of three months) of complaints concerning subsidies prohibited by Article 4 of the Subsidies Agreement. This Article shall not apply to subsidies for agricultural products referred to in Article 13 of the Convention on Agriculture. A subsidy granted by a WTO member government is „countervailable“ under the Agreement (again, certain exceptions apply to agricultural subsidies) if it „harms“ the domestic industry of another country or if it „seriously harms“ the interests of another country. Serious disadvantages can arise in cases where a subsidy is granted: members of industrialized countries that cannot benefit from special and differential treatment have the possibility to terminate prohibited subsidies for three years from the date of entry into force of the subsidies agreement. Such subsidies must be notified to the notifying Member within 90 days of the entry into force of the WTO Agreement. The establishment of a multilateral redress system allowing members to challenge subsidies that have adverse effects is a major step forward from the pre-WTO regime. However, the difficulty will persist in most cases for a complaining member to demonstrate the commercial effects of the subsidy, a factual analysis that panels may, in some cases, find difficult (2). A U.S.

company harmed by unfairly subsidized imports into the U.S. may also file a complaint or „petition“ with the U.S. Department of Commerce requesting a countervailing duty investigation. A countervailing duty investigation is a unilateral measure taken by a WTO member government to determine whether a domestic industry is harmed by subsidized imports. . . .