ABSTRACT
Subsides are policy instruments that may be used to achieve a variety of government objectives but may also distort trade fl ows. 1 Member countries can respond to subsidization by foreign governments, depending on the circumstances, either unilaterally by levying countervailing duties on subsidized imports or multilaterally by bringing dispute settlement proceedings before the WTO Dispute Settlement Body. The principal provisions concerning subsidies are GATT Articles VI and XVI and the Agreement on Subsidies and Countervailing Measures (‘SCM Agreement’).
