ABSTRACT
Subsidies have been a concern of policy makers since the seventeenth and eighteenth centuries. Most dictionaries settle upon a fairly narrow definition of subsidy, focusing on financial transfers between the government and private business. For example, the Random House College Dictionary defines it as “a direct pecuniary aid furnished by a government to a private commercial enterprise.” Countries subject to countervailing duties may argue that a subsidy that applies, in reality, only to specific industries is, in theory, generally available. For example, Canada argued that its timber subsidies were generally available because any industry could theoretically take advantage of the subsidy. Most export subsidies were prohibited and were subject to General Agreement on Tariffs and Trade dispute settlement like all other trade barriers, although discipline on export subsidies of agricultural and other basic products was considerably more lax. Countries also had the option of countervailing red subsidies if the imports were causing injury to domestic industries.
