The Subsidies and Countervailing Measures Agreement (MCS) addresses two separate but closely related issues: multilateral disciplines governing the granting of subsidies and the application of countervailing measures to compensate for the damage caused by subsidized imports. Measures against dumping subsidies (unjustifiable price sales) and special countervailing duties to compensate for emergency subsidy measures to temporarily limit imports to protect domestic industry. (b) subsidies to cover the economic losses of a sector; Developing countries The SCM agreement recognises three categories of members from developing countries: the least developed countries (LDCs), members with a per capita GNP of less than US$1000 per year, listed in Schedule VII of the SCM Convention, and other developing countries. The lower a member`s level of development, the more favourable the treatment he or she receives for grant disciplines. For example, LDCs and members with a per capita GNP of less than US$1000 per year, listed in Schedule VII, are exempt from the ban on export subsidies. Other developing countries have eight years to end their export subsidies (they cannot increase their export subsidies during this period). With regard to import substitution subsidies, LDCs have eight years and other developing countries have five years to end these subsidies. Achievable subsidies are also treated more favourably. For example, some subsidies related to privatization programmes for members of developing countries cannot be applied multilaterally. With regard to countervailing measures, exporters from developing countries are entitled to more favourable treatment in the event of a closed investigation when the level of subsidies or import volume is low. 16.3 If the domestic industry has been interpreted to refer to producers in a given region, i.e.
in a market within the meaning of paragraph 2, countervailing duties are levied only on the affected products shipped to that area for final consumption. If the constitutional law of the importing member does not authorize the imposition of countervailing duties on this basis, the importing member may collect the countervailing duties without restriction only if: (a) exporters have had the opportunity to cease exporting at subsidized prices to the territory concerned or to give other guarantees in accordance with Article 18 and, to the extent that no appropriate guarantee has been given. , and in this regard, no reasonable guarantee has been given. , and b) these duties cannot be applied solely to the products of certain producers who supply the area concerned. Prohibited subsidies: subsidies that require recipients to meet certain export targets or to use domestic products instead of imported goods. They are prohibited because they are specifically aimed at distorting international trade and are therefore likely to harm other countries. They can be challenged under the WTO dispute settlement process if implemented on an expedited schedule.