Subsidies and countervailing duties
This survey pays attention to a recent development of the literature that analyzes two important regulatory features found in the Agreement on Subsidies and Countervailing Measures (the SCM agreement): the restrictive treatment of domestic subsidies and the general prohibition of export subsidies. T...
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2016
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| Online Access: | https://ink.library.smu.edu.sg/soe_research/1914 https://ink.library.smu.edu.sg/context/soe_research/article/2913/viewcontent/10_2016.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | This survey pays attention to a recent development of the literature that analyzes two important regulatory features found in the Agreement on Subsidies and Countervailing Measures (the SCM agreement): the restrictive treatment of domestic subsidies and the general prohibition of export subsidies. The WTO's restriction on domestic subsidies is challenged by the existing terms-of-trade theory that offers an efficiency foundation for the market-access focus of the GATT rules. On the other hand, against the backdrop of the SCM agreement and preferential trade agreements (PTAs), a recent literature attempts to provide a rationale for the WTO to restrict the use of domestic subsidies and for trade agreements to take a deep-integration approach to domestic policies. To offer a rationale for the prohibition of export subsidies, a recent literature considers a firm-delocation externality and a profit-shifting externality in various imperfect competition settings. |
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