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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.
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.
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.
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.
-the purchase of goods, or the provision of goods or services (other than general infrastructure). Under the Agreement, actions can only be taken against subsidies that are "specific." A specific subsidy is one that is only given to one company, or to a special group of companies.
An export subsidy reduces the price paid by foreign importers, which means domestic consumers pay more than foreign consumers. The World Trade Organization (WTO) prohibits most subsidies directly linked to the volume of exports, except for LDCs.
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.)
Definition: Subsidy government payment to producers attempting to lower the price of produce and increase quantity produced (encourage production). In the international trade context, the subsidy is given to domestic producers to increase their international competitiveness.
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