What Is Scm Agreement

A financial contribution from a government is not a subsidy, unless it grants an advantage. In many cases, such as a cash grant, the existence of an advantage and its assessment will be clear. However, in some cases, the issue of performance will be more complex. For example, when to grant a loan, a capital injection or the purchase of a good performance by a government? Although the SCM agreement does not provide comprehensive guidelines on these issues, the appellate body (Canada Aircraft) has decided that the existence of a benefit must be determined in relation to the market (i.e. on the basis of what the recipient could have obtained in the market). With respect to countervailing duties, Article 14 of the SCM Convention contains a number of elements to determine whether certain types of measures are beneficial. However, in the context of multilateral disciplines, the question of the importance of benefits is not fully resolved. 7.9 In the event that the member has not taken appropriate measures to eliminate the negative effects of the grant or to withdraw the subsidy within six months of the adoption of the panel`s report or the appellate body`s report, the DSB gives the complaining member permission to take action. , depending on the degree and nature of the adverse effects, unless the DSB agrees to reject the application. 4.12 For the purposes of litigation under this section, with the exception of the time frame expressly set out in this section, the DSU`s time frame for enforcement of such disputes is half the time frame it provides. (c) if, despite the emergence of non-specificity resulting from the application of the principles set out in paragraphs (a) and b), there is reason 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). The application of this paragraph takes into account the extent of the diversification of economic activities under the jurisdiction of the granting authority and the duration of the grant program.

measured over a three-year period; However, such a measure may be composed and include other factors. Industrialised countries that cannot receive special and differentiated treatment will be granted for three years from the date the SCM Convention enters into force for them in order to put an end to prohibited subsidies. These subsidies must be communicated to the notifying member within 90 days of the WTO agreement coming into force. 4.10 If the DSB`s recommendation does not follow within the time frame set by the body that begins on the date of adoption of the panel`s report or the appeals agency report, the DSB gives the requesting member permission to take appropriate counter-measures (9), unless the DSB agrees to reject the application. Article 3 of the agreement prohibits the use of local content and export subsidies for non-agricultural products.