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Subsidy

The document discusses export subsidies and anti-subsidy countervailing measures under WTO agreements. It defines a subsidy as a financial contribution by a government, such as grants, loans, equity, or tax exemptions. It also defines subsidies that increase exports. The anti-subsidy countervailing measure allows countries to impose countervailing duties on subsidized imports if an investigation finds the subsidy is specific, related to exports, or benefits a limited number of producers. Subsidies for research or disadvantaged regions are not actionable.

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67 views1 page

Subsidy

The document discusses export subsidies and anti-subsidy countervailing measures under WTO agreements. It defines a subsidy as a financial contribution by a government, such as grants, loans, equity, or tax exemptions. It also defines subsidies that increase exports. The anti-subsidy countervailing measure allows countries to impose countervailing duties on subsidized imports if an investigation finds the subsidy is specific, related to exports, or benefits a limited number of producers. Subsidies for research or disadvantaged regions are not actionable.

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vikas_aviator
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Apart from dumping, some of the countries also resort to subsidisation of their exports to

other countries. Export subsidies, under the WTO agreement, are treated as unfair trade
practice and such subsidies are actionable by way of levy of anti-subsidy countervailing duty.

There is one more trade remedial measure called "safeguards" which are applied as an
emergency measure in response to surge in imports of a particular item.

• Anti subsidy countervailing measure is in the form of countervailing duty which is to


be imposed only after the determination that:

a. the subsidy is a specific subsidy


b. the subsidy relates to export performance;
c. the subsidy relates to the use of domestic goods over imported goods in the
export article; or
d. the subsidy has been conferred on a limited number of persons engaged in
manufacturing, producing or exporting the article.

What is subsidy for this purpose?

A subsidy is said to exist;

a. if there is a financial contribution by the Government or any public body within the
territory of the exporting country, i.e. where-

• there is a direct transfer of funds (including grants, loans and equity) by the
Government;
• government revenue i.e. otherwise due is foregone and not collected
(including fiscal incentives, I.T. exemption
• a government provides goods or services other than general infrastructure;

b. a government grants or maintains any form of income or price support which operates
directly or indirectly to increase export of any article from its territory.

What is not a subsidy?


• However the subsidy which is for research activities conducted by the persons
engaged in manufacture or export or the subsidy which is for assistance to
disadvantaged regions with the territory of the exporting country is not actionable.
Thus, no countervailing duty is to be levied on such subsidies.
• In anti subsidy countervailing investigation, the Government of the exporting
country/ies is a party to the investigation in addition to the exporters from these
countries. The countervailing duty imposed on the subsidised exports from a country
shall not exceed the amount of such subsidy/ies.
• In India the Designated Authority for anti dumping is also the Authority for
administering anti subsidy countervailing measures.

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