Elgar International Economic Law series
Chapter 6: General introduction to the agreement on subsidies and countervailing measures: 'thou shall not subsidize'
PART II Subsidies In the next chapter, we will discuss a second type of contingent trade protection, countervailing duties. While countervailing duties is the term of art used in the WTO jargon, these measures are, to use the anti-dumping parallel, antisubsidy measures. An importing country which establishes that imported products which have been subsidized by the exporting country enter its market causing injury to the domestic producers of the like product, is allowed to take anti-subsidy action to protect its own domestic industry. Countervailing measures are thus unilaterally imposed by the importing country following an investigation into the conditions for imposition of such measures. As we will discuss later, the WTO Agreement on Subsidies and Countervailing Measures (the ‘SCM Agreement’), which disciplines both the use of subsidies and the possible unilateral reaction against subsidies, also provides for another, multilateral avenue using the WTO’s dispute settlement mechanism.
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