ABSTRACT
Countervailing duty laws had already been in use for decades in many countries before the General Agreement on Tariffs and Trade (GATT) came into existence. Therefore, from its inception, the GATT recognized the importance of subsidies as trade problems, and subsidies are, in part, the focus of three major GATT Articles—VI, XVI, and XXIII. The GATT endorsed the operation of countervailing duty laws to counter subsidies and noted that subsidies could cause trade problems in certain instances. The GATT’s 1979 Code on Subsidies and Countervailing Measures—Subsidies Code—greatly elaborated upon these initial GATT provisions. The 1979 Subsidies Code also continued the GATT practice of granting “special and differential” treatment to developing countries. Thus, developing countries were effectively exempt from much of the subsidy discipline. The major innovation of the Uruguay Round was that the new Subsidies Agreement was integrated into the core of the GATT agreement—that is, no longer was it just a voluntary, side agreement.
