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Subsidies andCountervailing Measures

Submitted by:Ankush Sood (053004)Krutika Kalantry (053019)Kanwarpreet Singh (053021)Lily Sharma (053024)Ravneet Singh (053034)Sahil Kalia (053038)

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INTRODUCTION

GATT 1947 imposed three different levels of obligation

on the contracting parties:

Quantitative restrictions

Tariffs

Subsidies

In the Uruguay Round comprehensive attempt was made

to elaborate detailed rules on subsidies andcountervailing duties that were applicable to all the

WTO members.

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Agreement on Subsidies and

Countervailing Measures The SCM Agreement addresses two distinct issuesA. The multilateral disciplines (set of rules) on the provision of

subsidies that a Member nation must follow

B. The countervailing measures to neutralize the adverse effect ofsubsidised imports

The Agreement categorically mentions:

...the exemption of an exported product from duties or taxes

borne by the like product when destined for domestic consumption,

or the remission of such duties or taxes in amounts not in excess of

those which have accrued, shall not be deemed to be a subsidy.

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Subsidies A measure is defined to be a subsidy if it contains the following

three elements:

(a) it is a financial contribution

(b) the contribution is by a government or any public body within theterritory of a Member

(c) the contribution confers a benefit

All the subsidies have been categorized into the following threetypes:

(a) Prohibited Subsidies

(b) Actionable Subsidies

(c) Non- Actionable Subsidies

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Indias Export Promotion

Programmes Advance License

Export Promotion Capital Goods Scheme (EPCG)

EOUs, EPZs, EUTPs and STPs

Duty Drawback Scheme

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Indias Experience with the ASCM(Agreement onSubsidies and Countervailing Measures)

In case of prohibited or actionable subsidies causing

adverse effects in the market , importing thesubsidized product the country imposes acountervailing duties to neutralize the effect of thesubsidy.

Countervailing Duties

Did not face any request for remedial action

under Articles 4, 7 and 9

Indian products had countervailing duties

imposed on them in three major industrialised

economies (USA, the EEC and Canada)

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Central Government programmes

for export promotion(Received countervailing duty proceedings)

Advance License

US-Metal Castings , Rolled Carbon Steel Flat Products

EEC-Advance Release Orders (ARO) Scheme for sulphanilic acid

Canada-Rolled Carbon and Alloy Steel Sheet and Strip

DutyEntitlementPass Book (DEPB) Scheme

US- Quality Steel Plate ,Hot-Rolled Carbon Steel Flat Products

EEC-Broad Spectrum Antibiotics ,PolyethyleneTetraphthalate (PET) Film , PolyethyleneTetrapthalate,Certain Flat Rolled Products ofIron orNon-alloy Steel and Sulphanilic Acid

Canada-Hot-Rolled Carbon Steel,Stainless Steel Round Bar

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ExportPromotion Capital Goods Scheme (EPCG)

US-Cut-to-Length Carbon Steel Plate ,Hot-Rolled,Carbon Steel Flat Products

EEC- Broad Spectrum Antibiotics,PET film,Flat Rolled Products ofIron orNon-alloy Steel and Polyethylene Tetrapthalate

ExportOrientedUnits (EOUs), ExportProcessingZones (EPZs), ElectronicHardwareTechnologyParks (EUTPs) and SoftwareTechnologyParks (STPs)

US and Canada- not been investigated

EEC-Broad Spectrum Antibiotics

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THANK YOU