World Trade

Organization :
SUBSIDIES AND
COUNTERVAILING
MEASURES

Prepared by :
JANE HAZEL M . GUIRIBA

1
 HISTORY

ubsidy”;
material injury to an established domestic industry, or mater
oth anti-dumping and countervailing duties.
of subsidies to exclusively domestic producers

2
 HISTORY
with tariff concession, constituting a “non-violation nullific

port trade”;
an on the domestic market;

3
 HISTORY

disciplines (that is, prohibition of subsidies that resulted

4
 HISTORY
•April 15 , 1994
•“The Final Act Embodying the Results
of the Uruguay Round of Multilateral
Trade Negotiations”,
•signed by ministers in Marrakesh on 15
April 1994
•Marrakech, Morocco,
•The Final Act covers all the
negotiating areas cited in the Punta
del Este Declaration with two
important exceptions.

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 MISSION

the use of subsidies

s the actions countries can take to counter the effects of su

6
 WHAT IS A SUBSIDY?

s:
government or any public body
regone government revenue, goods or service provided by govern

pient, not the cost to the government

7
 WHAT IS A COUNTERVAILING DUTY?

to the regular duty & other charges

mports which have been found to be subsidized in the
final determination

•Countervailing duty=
______________subsidy_____________
subsidized exported
product

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 TYPES OF SUBSIDIES
Yellow subsidies
ing adverse effects (injury, serious prejudice, nulli
ocess in all cases and through countervailing duty i
verse effects of the subsidy or imposition of counte

9
 ACTIONABLE SUBSIDIES
c Industry:
ial injury, and “material retardation” of the establishment of
measure actions (in fact, sole basis for such actions).
irment of Benefits
embers Under

of application” of GATT Article XXIII”;

complaint: when a member reduces its bound tariff for a good
ffect of the improved market access through subsidization.

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 ACTIONABLE SUBSIDIES

r.

e product of another member in the same market or significant price suppr

or commodity as compared to the average share it had during the previous
 ACTIONABLE SUBSIDIES
SIDIES are countervailable/ actionable

mited to:
r group of enterprise
tor or group of industries
ographic region within the jurisdiction of the granti

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 TYPES OF SUBSIDIES
sidies
s that are non-specific - determined on the basis of
ia or conditions
ly adhered to
re and horizontal in application
ises
stance to disadvantaged regions and for environmenta

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 TYPES OF SUBSIDIES

idy can avail of remedy measures by bringing the mat

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 MULTILATERAL REMEDIES
Prohibited Subsidies
Request for consultations, including
statement of available evidence regarding
existence and nature of subsidy;
Consultations as quickly as possible;
If no solution w/In 30 days referral to
Dispute Settlement Body for immediate
establishment of panel;
Panel may request assistance from Permanent
Group of Experts for binding advice on
whether it is a prohibited subsidy.
Circulation of panel report within 90 days of Circulation of panel report within 120 days of
date of composition of panel and
establishment of terms of reference;
Actionable
Request for consultations, including statement
of available evidence regarding existence and
nature of subsidy and injury caused to domestic
industry (nullification or impairment, or serious
prejudice);
Consultations as quickly as possible;
If no solution within 60 days referral to
Dispute Settlement Body for establishment of
panel; composition of panel and terms of
reference within 15 days
date of composition of panel &establishment of
terms of reference;
 MULTILATERAL REMEDIES
Prohibited Subsidies Actionable
If DSB recommendation is not If member does not take steps
followed within time period within 6 months from date of
specified by panel (which DSB’s adoption of panel or
commences from data of adoption AB report, DSB authorizes
of the panel/AB report), DSB grants complaining member to take
Applicable DSU
authorization time periods shall appropriate countermeasures,
to complaining
be half. to take appropriate
member commensurate to the degree
proportionate countermeasures. and nature of adverse effects.
 WHAT IS A COUNTERVAILING DUTY?

to the regular duty & other charges

mports which have been found to be subsidized in the
final determination

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 COUNTERVAILING DUTY

.
al rules in ASCM:
t is, any specific subsidy, must be causing injury to
must conform with ASCM rules.
 IMPOSING COUNTERVAILING DUTY

nsideration or,
e product under consideration

ded by the government of the country of export or origin

material injury or material retardation of growth or the prev

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 IMPOSING COUNTERVAILING DUTY

d potential negative effects on cash flow, inventories, employ

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Procedural Process

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 Steps in Calculating the
Subsidy
1.Calculation should reflect the amount of
subsidy found to exist during the period of
investigation and not simply the face
value of the financial contribution.
2.Check whether benefit is expensed during
period of investigation. Else allocate
3.Calculate per unit subsidy (Article 19.4)
during the period of investigation for each
scheme
4.Arrive at the total per unit subsidy for all
schemes.
 ------------------------------------------------


http://ia.ita.doc.gov/pcp/pcp-subsidy-allegation.html
Subsidies Agreement : Countervailing Duty Perspective.
REFERENCES
www.icai.org/resource_file/8837Presentation_on_Subsidy.ppt 
 Trade Remedies: A Tool Kit.
www.adb.org/documents/books/trade.../Trade-Remedies-Toolkit.pdf
 TRADE POLICY COMMITMENTS AND CONTINGENCY MEASURES.
http://docs.google.com/viewer?a=v&q=cache:mJ0f7i5KF1wJ:www.wto.org/english/res_e/book
 Module 3.7 - 3.7 Subsidies and Countervailing Measures.
www.unctad.org/en/docs/edmmisc232add15_en.pd
 Subsidy Definition. http://www.investopedia.com/terms/s/subsidy.asp
 Subsidy - Wikipedia, the free encyclopedia. http://en.wikipedia.org/wiki/Subsidy
 Uruguay Round Subsidies and Countervailing Measures (SCM) Agreement
Negotiating History. http://www.worldtradelaw.net/history/urscm/urscm.htm
 Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1A, THE LEGAL TEXTS: THE RESULTS OF
THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS 275 (1999), 1867 U.N.T.S.
14. [Not reproduced in I.L.M.]
 WTO|Subsidies and Countervailing Measures –Gateway.
http://www.wto.org/english/tratop_e/scm_e/scm_e.htm
 The GATT Uruguay Round: a negotiating history (1986-1994).
http://books.google.com.ph/books?id=_zdx2wjwNeAC&pg=PA221&lpg=PA221&dq=agreeme
THANK YOU.