Prohibited Subsidies Two categories of subsidies are prohibited by Article 3 of the SCM Convention. The first category consists of subsidies that, legally or in fact, depend entirely or as conditions on export performance (export subsidies). The SCM agreement is accompanied by a detailed list of export subsidies. The second category consists of subsidies which, alone or among other conditions, refer to the use of domestic imported goods (subsidies for local content). These two categories of subsidies are prohibited because they are supposed to directly affect trade and are therefore most likely to have a negative impact on the interests of other Members. The Agreement on Subsidies and Countervailing Measures (“ASCM” or “Agreement”) sets out and extends subsidies and countervailing duties to Articles VI and XVI of the 1994 General Agreement on Tariffs and Trade (“GATT 1994”). It contains disciplines both on the use of trade-distorting subsidies and on the application of countervailing duties by the various WTO members, which aim to offset the effects of subsidies. This chapter provides a detailed overview of the rights and obligations identified by ASCM and their interaction with other parts of the WTO agreement. He will briefly discuss the history of grants and compensatory measures since the introduction of the GATT in 1947 and then discuss in detail any provisions of the ASCM. A separate chapter of this book (Chapter 17) deals with findings of prejudice in the context of anti-dumping and countervailing investigations under the ASCM and the agreement on the implementation of Article VI of the 1994 General Agreement on Tariffs and Trade, also known as the Anti-Dumping Agreement or ADA. This is the most important and important part of a law, and no law can function properly, unless it has such a supervisory body, and here, in this case, settlement understanding dispute is the regulatory body for the management or decision of disputes related to SCM agreements. Article 30 of Part X of the SCM Convention refers to the dispute settlement agreement and DSU is the only international body responsible for the consultation and settlement of disputes.

The agreement contains all the specific rules and procedures for resolving disputes arising from this agreement. A financial contribution from a government is not a subsidy, unless it grants an advantage. In many cases, such as a cash grant, the existence of an advantage and its assessment will be clear. However, in some cases, the issue of performance will be more complex.