Wto Subsidies Agreement

17 The main element of the export subsidy reform programme is the obligation to reduce subsidized export volumes and the amount of funds spent to subsidize exports. Developed countries have committed to reducing the basic volume of subsidized exports by 21% from 1995, in identical annual levels over a six-year period, and by 36% on the corresponding budgetary expenditure for export subsidies. For developing countries, the necessary reductions over a 10-year period were 14% relative to volume and 24% for budgetary expenditure over the same period. But the WTO is an organization of countries and their governments. The WTO does not deal with business and cannot regulate businesses through measures such as dumping. Therefore, the anti-dumping agreement only concerns the measures that governments can take to combat dumping. With subsidies, governments act on both sides: they subsidize and act against each other. As a result, the grant agreement disciplines both grants and reactions. The agreement contains a definition of the subsidy. In addition, the concept of a specific subsidy is introduced, i.e. a subsidy that is only available to a company, industry, group of companies or a group of industries in the country (or state, etc.) that grants the subsidy. The disciplines defined in the agreement apply only to specific grants. These may be domestic or export subsidies.

Article 13 of the Agricultural Subsidies Agreement sets out specific rules on agricultural subsidy during the implementation period provided for by this agreement (until 1 January 2003). Export subsidies, which are fully compliant with the agricultural agreement, are not prohibited by the SCM Convention, although they remain subject to countervailing measures. Domestic aid, which is fully compliant with the agricultural agreement, is not multilaterally applicable, but may also be subject to countervailing duties. Finally, domestic aid under the agricultural agreement cannot be implemented multilaterally and is not subject to countervailing measures. At the end of the implementation period, the SCM agreement applies to subsidies for agricultural products under the provisions of the Article 21 Agreement on Agriculture. 54 of UNCTAD. Let us present here only the so-called “Cancun of Compromise” scenario. It reflected a likely compromise among WTO members, which did not become a reality. The scenario calls for a harmonised reduction in imposed quotas [15], an 80% reduction in export subsidies and a 60% reduction in domestic support in industrialized countries. In developing countries, it provides for a smaller reduction in import duties, a 70% reduction in export subsidies and a 20% reduction in national support.

It also provides for a 20% increase in import quotas in developed and developing and least developed countries. 6 The SCM agreement addresses two issues: multilateral disciplines governing the granting of subsidies and the application of countervailing measures to compensate for the harm caused by subsidized imports.