Agreement On Subsidies And Countervailing Measures Meaning

A financial contribution from a government is not a subsidy, unless it grants an advantage. In many cases, such as a cash grant, the existence of an advantage and its assessment will be clear. However, in some cases, the issue of performance will be more complex. For example, when to grant a loan, a capital injection or the purchase of a good performance by a government? Although the SCM agreement does not provide comprehensive guidelines on these issues, the appellate body (Canada Aircraft) has decided that the existence of a benefit must be determined in relation to the market (i.e. on the basis of what the recipient could have obtained in the market). With respect to countervailing duties, Article 14 of the SCM Convention contains a number of elements to determine whether certain types of measures are beneficial. However, in the context of multilateral disciplines, the question of the importance of benefits is not fully resolved. The SCM agreement creates two basic categories of subsidies: those that are prohibited, those that can be implemented (i.e. challenged in the WTO or that take countervailing measures). All specific grants fall into one of these categories. Part I provides that the SCM agreement applies only to subsidies granted specifically to a company or industry or group of companies or industries and defines both the subsidy and the concept of specificity. In Parts II and III, all specific grants are categorized into two categories: prohibited and applicable (1), and they define specific rules and procedures for each category.

Part V defines the physical and procedural requirements that must be met before a member can apply a countervailing measure against subsidized imports. Parts VI and VII define the institutional structure and the modalities for notification and monitoring of the implementation of the SCM Convention. Part VIII contains specific and differentiated treatment rules for different categories of members from developing countries. Part IX contains transitional rules for members of the developed country and the former central plan economy. Parts X and XI include dispute resolution and final rules. Rules of Procedure Part V of the SCM Convention contains detailed rules on the opening and implementation of counter-investigations, the establishment of interim and final measures, the use of companies and the duration of measures. One of the main objectives of these rules is to ensure that investigations are conducted in a transparent manner, that all interested parties have the full opportunity to defend their interests and that the investigating authorities adequately explain the basis of their conclusions. Here are some of the most important innovations of the WTO SCM agreement: b) aid to disadvantaged regions on a member`s territory, granted in accordance with a general regional development framework (31), and non-specific (in the sense of Article 2) in eligible regions, provided that: prohibited subsidies two categories of subsidies are prohibited under Article 3 of the SCM Convention. The first category consists of subsidies that, legally or in fact, depend entirely or as conditions on export performance (export subsidies).

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