Author: Toyirov, Azizbek

Annotation: The regulation of subsidies under the Agreement on Subsidies and Countervailing Measures (SCM Agreement) is a cornerstone of the World Trade Organization’s (WTO) efforts to ensure a fair and predictable multilateral trading system. Subsidies, while often employed by governments to promote economic growth and social welfare, can distort international trade when misused, undermining competition and creating imbalances in global markets. The SCM Agreement provides a structured framework for addressing these challenges, categorizing subsidies into prohibited, actionable, and non-actionable forms—a system commonly referred to as the "traffic light" approach. Among these, prohibited subsidies—such as export subsidies and domestic content subsidies—are of particular significance due to their inherently trade-distorting nature. Unlike actionable subsidies, which require evidence of adverse effects, prohibited subsidies are deemed impermissible based solely on their characteristics, reflecting the WTO’s strict stance against practices that undermine fair competition. This article explores the nuanced regulation and supervision of prohibited subsidies under the SCM Agreement, focusing on the intricate legal provisions outlined in Articles 3 and 4. It examines the conceptual foundations of export and domestic content subsidies, emphasizing their implications for global trade. By analyzing key provisions, case law, and interpretative guidance from WTO bodies, this study aims to elucidate the balance the SCM Agreement seeks to achieve between disciplining harmful trade practices and preserving the legitimate use of subsidies as policy tools.

Keywords: SCM Agreement, subsidy, prohibited, actionable, export, domestic, trade, distortion, WTO, rule.

Pages in journal: 132 - 135