Abstract

Governments impose subsidies for a variety of reasons. The World Trade Organization is the primary international trade regulator. Subsidies have become a primary focus of the Agreement on Subsidies and Countervailing Duties (SCM Agreement) 1994 and the Agreement on Agriculture (AoA) 1994. The primary sources for the research paper were the WTO agreement and the doctrinal method. It should be noted that the application and scope of the SCM Agreement are dependent on the definition of subsidy. It is pertinent for WTO to define subsidies and make rules because if they fail the countries cannot counter measure against the unjust processes. The main question that the paper attempts to address is whether there are conflicting provisions in both agreements and how the agreements are viewed by developing countries like India, developed countries like the United States, and the European Union. What are the various definitions of subsidy and how do these definitions affect the economy on a related question is which definition is most appropriate from the perspective of developing countries such as India? What are the arguments for having or not having subsidies. Furthermore, what are the WTO rules on subsidies, and what are the implications for international trade? The author tried to establish the features of the agreements in detail to further analyze the provisions. Various orders of the DSU are used to substantiate the provisional disharmony.

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