Industries or businesses may require their government to take protections. The WTO agreement sets out the requirements for protection investigations conducted by national authorities. The emphasis is on transparency and compliance with established rules and practices to avoid arbitrary methods. The investigating authorities must publicly announce the hearing date and make other appropriate evidence available to interested parties. The evidence must contain arguments as to whether a measure is in the public interest. The agreement contains a definition of the subsidy. In addition, the concept of a specific subsidy is introduced, i.e. a subsidy that is only available to a company, industry, group of companies or a group of industries in the country (or state, etc.) that grants the subsidy. The disciplines defined in the agreement apply only to specific grants.
These may be domestic or export subsidies. What is the name of this agreement? Agreement on Subsidies and Countervailing Measures When a country restricts imports to protect its domestic producers, it must in principle give something back. The agreement stipulates that the exporting country (or exporting countries) can claim compensation through consultations. In the absence of an agreement, the exporting country can retaliate, for example by taking equivalent measures, and can increase tariffs on exports from the country that applies the protection measure. In certain circumstances, the exporting country must wait three years after the protection measure is imposed before it can thus be retaliated edable, i.e. if the measure complies with the provisions of the agreement and if it is due to an increase in imports from the exporting country. The agreement defines two categories of subsidies: prohibited and achievable. It originally included a third category: unenforceable subsidies. This category lasted five years and ended on December 31, 1999 and was not renewed. The agreement applies to both agricultural and industrial products, unless subsidies are tax-exempt under the agricultural agreement peace clause, which is due to expire at the end of 2003. But the WTO is an organization of countries and their governments.
The WTO does not deal with business and cannot regulate businesses through measures such as dumping. Therefore, the anti-dumping agreement only concerns the measures that governments can take to combat dumping. With subsidies, governments act on both sides: they subsidize and act against each other. As a result, the grant agreement disciplines both grants and reactions. But there are also fundamental differences that are reflected in the agreements. Legal definitions are more precise, but overall, the WTO agreement allows governments to combat dumping in the event of actual (substantial) harm to competing domestic industry. To do so, the government must be able to demonstrate dumping, calculate the extent of dumping (how much the export price is below the exporters` real estate prices) and demonstrate that dumping causes harm or threatens to do so. Achievable subsidies: in this category, the complaining country must demonstrate that the subsidy is detrimental to its interests. Otherwise, the subsidy is allowed. The agreement defines three types of damage they can cause.