11. Special and differential treatment Article 27 sets forth a whole list of exceptions to the general rules on subsidies with respect to developing countries. Most of these provisions are transitional in nature and allow developing countries more time to eliminate some subsidies programmes which would otherwise be in violation of the rules on prohibited subsidies of Article 3 SCM Agreement. Most of these transitional arrangements have now expired and a lot of the special and differential treatment provisions of Article 27 have thus lost their meaning. The Agreement also contains some additional exceptions for developing countries involved in countervailing duty examination, which continue to apply. In what follows we will provide a brief overview of the special and differential rules for developing countries. A special and differential treatment (that is, essentially a longer transitional period during which prohibited subsidies will be tolerated and in general a more ‘relaxed’ approach vis-à-vis subsidies) is provided for developing country Members (Art. 27 SCM Agreement) and for Members in the process of transformation from centrally planned to market economies (Art. 29 SCM Agreement).1 Article 27 distinguishes between developing countries in general, on the one hand, and so-called ‘Annex VII countries’, including least developed countries, on the other. Those countries listed in Annex VII to the SCM Agreement are (a) least developed countries designated as such by the United Nations which are Members of the WTO; and (b) any of the following WTO Member countries as long as their GNP per capita...
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