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Synopsis and References to the Case

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Chapter Summary

This chapter presents a case study to raise fundamental issues under the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”). This is also the first subsidies case that went through all the key stages of WTO dispute settlement: Panel and Appellate Body, implementation Panel and Appellate Body, and arbitration on the amount of retaliation. One important legal question that arose in the chapter was whether a subsidy that is otherwise within the scope of one of the items of the Illustrative List of Prohibited Subsidies but does not meet all the criteria for a prohibited subsidy under that item, is nevertheless prohibited. The case illustrates the difficulties presented by situations where both parties to a dispute subsidize their manufacturers.

Keywords: aircraft; appellate body; Brazil; export financing programme; SCM Agreement



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