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A specific subsidy is one that is only given to one company, or to a special group of companies. Prohibited Subsidies. A subsidy granted by a WTO member government is prohibited by the Subsidies Agreement if it is contingent, in law or in fact, on export performance, or on the use of domestic over imported goods.
What is an illegal subsidy?
Prohibited subsidies: subsidies that require recipients to meet certain export targets, or to use domestic goods instead of imported goods. They are prohibited because they are specifically designed to distort international trade, and are therefore likely to hurt other countries' trade.
What is an example of a government subsidy?
When the government gives a tax break to a corporation who creates jobs in depressed areas, this is an example of a subsidy. When the government gives money to a farmer to plant a specific farm crop, this is an example of a subsidy. When you are given a partial scholarship to college, this is an example of a subsidy.
Are subsidies allowed under WTO rules?
A subsidy granted by a WTO member government is prohibited by the Subsidies Agreement if it is contingent, in law or in fact, on export performance, or on the use of domestic over imported goods. (Special rules apply to agricultural subsidies under the WTO Agreement on Agriculture.)
What are the different types of subsidies?
The paper identified three types of subsidies: subsidies that increase revenue, subsidies that lower the cost of production, and subsidies that are not linked to production or input.
What is anti subsidy duty?
Countervailing duties (CDs), also known as anti-subsidy duties, are trade import duties imposed under World Trade Organization (WTO) rules to neutralize the negative effects of subsidies.
What is an actionable subsidy?
actionable subsidy. Bounty, grant, or subvention enjoyed by the exporters of a country that may be challenged by an importing country if it injures its domestic industry.
What are non-actionable subsidies?
Non-actionable subsidies are those which are applied to research and pre-competitive development activities, and others which assist disadvantaged regions. Prohibited subsidies cover mainly export subsidies and subsidies contingent upon the use of domestic over imported materials.
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