Subsidies In accordance with Article 25 of the Grant Agreement, Members must communicate to the Grants Committee all specific subsidies (at all levels of government and for all product sectors, including agriculture). New and complete notifications are due every three years, with update notifications in the follow-up years. Notifications shall be subject to in-depth review and discussion by the SCM Committee. Members in transition to a market economy Members in transition to a market economy will have seven years to end 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 with economies in transition also enjoy preferential treatment with respect to countervailable subsidies. The Agreement on Subsidies and Countervailing Measures (“ÄTMS” or “Agreement”) sets out and extends the subsidies and countervailing elements of Articles VI and XVI of the General Agreement on Tariffs and Trade 1994 (“GATT 1994”). It provides for disciplines both on the use of trade-distorting subsidies and on the application by some WTO members of countervailing duties to offset the effects of subsidies. This chapter provides a detailed overview of the rights and obligations defined by the NSCM and its interaction with other parts of the WTO Agreement. It will briefly discuss the history of subsidies and countervailing measures since the introduction of GATT in 1947, and then discuss in detail each provision of the ÄTMS.
A separate chapter of this book (Chapter 17) examines findings of injury in anti-dumping and countervailing duty investigations, which are governed by the CESSM and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, also known as the Anti-Dumping Agreement or the TLK. Developing countries The SCM Agreement recognizes three categories of developing countries: least developed members (LDCs), members with a per capita GNP of less than $1000 per year, listed in Annex VII of the SCM Convention, and other developing countries. The lower a member`s level of development, the more favourably it is treated with regard to subsidy disciplines. For example, least developed countries and Annex VII members, whose per capita GNP is less than $1,000 per year, are exempt from the export subsidy ban. Other developing countries have eight years to end their export subsidies (they cannot increase the level of their export subsidies during this period). . . .