Detailed rules are established to determine whether the subsidy violates a domestic industry in the complaining country. Harm is defined as physical harm itself, the risk of physical harm, or a significant delay in the creation of a national industry. The injury assessment must include an analysis of the volume of subsidized imports, the impact of these imports on the prices of the products on the domestic market of the complainant country, and the impact of these imports on domestic producers of those products. A causal link must be established between subsidized imports and potential damage. The SCM agreement is generally based on the DSU`s dispute settlement rules. However, the agreement contains specific or additional dispute resolution rules and procedures that include, among other things, expedited procedures, including allegations of prohibited subsidies. It also provides specific mechanisms for collecting the information needed to assess the existence of serious biases in the case of applicable subsidies. Multilateral disciplines are the rules for determining whether or not a member can grant a grant. They are imposed by the WTO`s dispute settlement mechanism. Countervailing duties are a unilateral instrument that can be applied by a member as a result of an investigation by that member and the finding that the criteria set out in the SCM convention are met. Specificity. However, assuming that a measure constitutes a subsidy within the meaning of the SCM Agreement, it is not subject to the SCM Convention, unless it has been specifically made available to a company or group of companies or a group of companies or industries.
The fundamental principle is that a subsidy that distorts the allocation of resources within an economy must be disciplined. In the event that a subsidy is widespread within an economy, it is considered that such a distortion will not occur in the allocation of funds. Therefore, only specific grants are subject to the disciplines of the SCM Convention. There are four types of specificities within the meaning of the SCM Agreement: 4.3 When requesting consultations under paragraph 1, the member who is presumed to grant or maintain the grant in question consults as soon as possible. The purpose of the consultations is to clarify the facts and reach an amicable solution. Download the model for the grant contract (excluding state aid). A specific grant is a grant that is only awarded to a particular company or group. 2.3 Any Article 3 subsidy is considered specific. 1.1 For the purposes of this agreement, a subsidy is considered to be given whether: the definition of the subsidy, contrary to the Tokyo Cycle subsidy code, which contains a definition of the subsidy under the WTO SCM agreement. The definition contains three fundamental elements: (i) a financial contribution (ii) from a government or public body in the territory of a member (iii) that awards a benefit. All three elements must be completed for a grant to be completed.
No member should have a negative impact on the interests of other members by using a grant under Article 1, paragraphs 1 and 2, namely: (c) if, notwithstanding the appearance of non-specificity resulting from the application of the principles set out in paragraphs (a) and (b), there are reasons to believe that the subsidy may indeed be specific, other factors may be taken into account. These factors include: the use of a subsidy program by a limited number of firms, the overriding use of certain firms, the granting of disproportionate amounts of subsidies to certain firms, and the manner in which the responsible authority has exerted great force in the decision to grant a subsidy (3).