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Agreement on Subsidies and Countervailingmeasures (Scma)

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Chapter Summary

World Trade Organization (WTO) rules on subsidies contained in the subsidies and countervailing measures (SCMA) are intended to impose disciplines on the granting by public authorities to industry of economic support that may negatively affect international trade. Part I SCMA with the heading "General Provisions" is composed of arts 1 and 2. Article 1 SCMA defines the term subsidy and article 2 SCMA develops the term specificity of a subsidy. The Uruguay Round of multilateral trade negotiations which ended in 1994 resulted in the adoption of the SCMA, among the other multilateral WTO agreements. The WTO panels and the Appellate Body have not expressly considered the issue of potential transfer of liabilities. The panels and the Appellate Body found, inter alia, that the imposition of equal rates of countervailing duty with respect to both timber harvesters and independent downstream processors was inconsistent with the SCMA.

Keywords: Appellate Body; multilateral trade negotiations; subsidies and countervailing measures (SCMA); Uruguay Round; World Trade Organization (WTO)



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