Legal Analysis of Export Subsidies under the Agreement of Subsidy and Countervailing Measures

Abstract

Export subsidies, for several decades now, have attracted significant attention due to their undesirable impacts on international trade. In the Uruguay Round 1994, the World Trade Organization (WTO) generated the Agreement on Subsidies and Countervailing Measures (ASCM) which contains global rules to regulate the different types of subsidies and to offset their adverse effects on other WTO Members. This paper, through its three sections, therefore aims to provide a legal analysis of the provisions of export subsidies contained in Articles 3 and 4 of the ASCM. By doing so, this paper answers the question of whether the ASCM is sufficient to cease the distortive effect of the export subsidy. To that end, doctrinal legal research has been conducted through analysis of the black letter of law and the case laws. In conclusion, the ASCM succeeded in giving the export subsidies per se prohibited nature, either in law or in fact. Unfortunately, the mere repayment of the amount of the subsidy is not always a sufficient remedy. As such, punitive countermeasures must be introduced to implement remedial provisions and to deter export subsidies.