Wto Subsidies Agreement

See also: > The Rules Negotiations > Fisheries Subsidies 9 All specific subsidies fall into one of these categories. Members in transition to a market economy Members that are in transition to a market economy shall be granted a period of seven years to phase out prohibited subsidies. However, such subsidies must have been notified within two years of the entry into force of the WTO Agreement (i.e. before 31 December 1996) in order to qualify for special treatment. Members in process shall also enjoy preferential treatment with regard to countervailable subsidies. 4 Countries should “try to avoid export subsidies for primary products”, but they are not really prohibited from doing so: they should not provide subsidies that ensure that the exporting country receives “more than the fair share of world export trade in that product”. There are many ways to calculate whether a particular product is disposed of heavily or only slightly. The agreement limits the range of possible options. It contains three methods for calculating the normal value of a product. The most important is based on the price on the domestic market of exporters. If it cannot be used, two other solutions are available, the price calculated by the exporter in another country or a calculation based on the combination of the exporter`s cost of production, other expenses and normal profit margins. And the agreement also defines how a fair comparison can be made between the export price and what would be a normal price.

A U.S. company harmed by unfairly subsidized imports into the U.S. may also file a complaint or “petition” with the U.S. Department of Commerce requesting the initiation of a countervailing duty investigation. A countervailing duty investigation is a unilateral measure taken by a WTO member government to determine whether a domestic industry is harmed by subsidized imports. Under the subsidy agreement, countries can impose a special import duty – called a countervailing duty (CVM) – to offset the benefit of prohibited or countervailable subsidies for imported products. Countervailing duties may be imposed only if the investigating body of the importing country finds that imports of the product concerned are subsidising and harming a domestic industry. However, there are also fundamental differences that are reflected in the agreements. (c) subsidies to cover the operating losses of an undertaking, with the exception of one-off measures which are not recurrent and cannot be repeated for that undertaking and which are granted only to create time for the development of long-term solutions and to avoid acute social problems; Measures against dumping subsidies (sales at unjustifiably low prices) and special countervailing duties to offset subsidies Emergency measures to temporarily limit imports in order to protect domestic production. 43 The share of State aid in farmers` total income is highest in Switzerland (75%), Norway (71%), Korea (66%), Iceland (63%) and Japan (59%). .

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