1.The agreement, when it originally came into force, contained a third category of unenforceable subsidies. This category (accompanied by a provision with a presumption of serious infringement of certain types of applicable subsidies) was provisionally applicable for a period of five years, until 31 December 1999, and could be extended by consensus of the SCM Committee, in accordance with Article 31 of the agreement. No such consensus had been reached as of December 31, 1999. Back to text 2. To alleviate this problem, the SCM agreement established, over a five-year interim period, which ended on December 31, 1999, a sub-category of applicable subsidies, for which there was a rebuttable presumption of serious bias. In accordance with section 31, this provision could be extended (along with the non-applicable subsidy provisions) as part of the SCM consensus. No such consensus had been reached as of December 31, 1999. Back to Text 34 The top three developed countries, and in particular the United States, have traditionally played the role of “guardian” of fair competition in the multilateral trading system. A significant number of CVD cases in the United States have only been initiated and have not been closed, indicating the introduction of trade restrictions for bilateral agreements. The WTO Agreement on Subsidies and Countervailing Measures disciplines the use of subsidies and regulates the measures countries can take to counter the effects of subsidies. The agreement allows a country to use the stock market fund dispute settlement procedure to request the withdrawal of the subsidy or the elimination of its adverse effects. Or the country can open its own investigation and ultimately impose additional duties (countervailing duties) on subsidized imports, which harms domestic producers.
51 The United States has proposed the removal of export subsidies and strict disciplines for export credits. The similar proposal was circulated in the Harbinson text and in the proposal put forward by developing countries. The same approach was supported by the Cairns group . The EU and the US have jointly proposed the abolition of export subsidies for unspecified products, which are of particular interest to developing countries, and the reduction of export subsidies for the remaining products. Presentation of the Convention on Subsidies and Compensatory Measures Browse or download the text of the Agreement on Subsidies and Compensatory Measures in the Gateway 49 Legislation The first, released in March 2003, was written by Mr. Harbinson, Chair of the WTO Agriculture Committee. In mid-August 2003, the EU and the United States jointly proposed a framework for further agricultural reforms. This proposal reflected a compromise between previous US and European proposals . The joint proposal has provoked reactions from other WTO members. The counter-proposal was submitted by 16 developing countries in September 2003 and received support from four other developing countries.
On the other hand, a revised draft ministerial text of WTO ministers was put into circulation at the end of August. 5 The EC has introduced significant changes to subsidies. The agricultural agreement required WTO members to reduce direct export subsidies. In the “rule-setting agreements,” negotiators reformulated the rules of action set out in the original GATT. Subsequently, the new agreement on subsidies and countervailing measures (“SCM agreement”) was adopted. 39 One case concerned the EU. In October 1997, the United States requested consultations with the EC on export subsidies allegedly granted by the EC to processed cheeses, ignoring the EC`s commitment to reduce export subsidies (WT/DS 104). The United States has alleged violations of several articles (8,9,10 and 11) of the Agriculture Convention and Article 3 of the SCM Convention. But the panel in this case has not been set up. In general, WTO members have avoided litigation over agricultural subsidies.