Wto Subsidies Agreement Pdf

Under the grant agreement, a WTO member government, if it believes that a prohibited or applicable subsidy is granted or maintained by another member government, may request consultations with that government as part of WTO dispute settlement procedures. In the case of prohibited subsidies, the complaining country does not have to show any adverse effects on its own industrial sector (the exceptions apply to developing countries). For achievable grants, the complaining country must demonstrate that it has a negative effect. A subsidy granted by a WTO member government is prohibited by the subsidy agreement if it depends, legally or effectively, on export performance or the use of domestic imported goods. These prohibited subsidies are commonly referred to as export subsidies or import substitution subsidies. They are considered specific and are considered particularly harmful under the subsidy agreement and U.S. law. (Specific provisions apply to agricultural subsidies under the WTO Agreement on Agriculture.) A grant from a WTO member government is “capable of acting” under the agreement (in turn, certain exceptions are granted for agricultural subsidies), if it “violates” another country`s domestic industry or when it creates “serious prejudice” for the interests of another country. Serious prejudices can arise in cases where a subsidy is granted: the World Trade Organization (WTO) Agreement on Subsidies and Compensation Measures (subsidy agreement) provides rules on the use of government subsidies and the application of remedial measures to combat subsidized trade, which have adverse trade effects. These remedial measures can be pursued through WTO dispute settlement procedures or as part of a Review Procedure (CVD) that can be conducted unilaterally by any WTO member government. Under the agreement, only “specific subsidies” can be taken. A specific grant is a grant that is only awarded to a particular company or group.

A U.S. company aggrieved by unfairly subsidized imports into the United States may also file a complaint or “petition” with the U.S. Department of Commerce requesting a matching investigation. An investigation into countervailing duty is a unilateral step taken by a WTO member government to determine whether a domestic industry is harmed by subsidized imports. Under the subsidy agreement, countries can apply a special import duty called countervailing duty (CVD) to offset the benefit of prohibited or applicable subsidies for imported products. Countervailing duties can only be levied if the investigating body of the importing country finds that imports of the product concerned are subsidized and harm a domestic industry. For more information on the Department of Commerce`s efforts to implement the grants, visit the Grant Administration Office`s website. In addition, you can learn more about filing a compensatory tax claim by visiting the import administration website. The petitioners` advice is available via e-mail: Petitioners_Support@ita.doc.gov. One of the advantages of WTO dispute settlement is that it offers not only remedies for subsidies that affect domestic competition, but also remedial measures for subsidies that affect competition in foreign markets.

Prior to the subsidies agreement, the U.S. Countervailing Duty Act, which applies only to subsidized products imported into the United States, was the only practical way for U.S. companies to compete with subsidized foreign competition. If no amicable solution is found in the first consultations, the matter can be referred to the WTO Dispute Settlement Body (DSB), which is made up of representatives of all WTO members.