Social and Behavioral Sciences Commons^™

Subsidies And Countervailing Duties, Gea M. Lee

Research Collection School Of Economics

This survey pays attention to a recent development of the literature that analyzes two important regulatory features found in the Agreement on Subsidies and Countervailing Measures (the SCM agreement): the restrictive treatment of domestic subsidies and the general prohibition of export subsidies. The WTO's restriction on domestic subsidies is challenged by the existing terms-of-trade theory that offers an efficiency foundation for the market-access focus of the GATT rules. On the other hand, against the backdrop of the SCM agreement and preferential trade agreements (PTAs), a recent literature attempts to provide a rationale for the WTO to restrict the use of …