Under the grant agreement, a WTO member government, if it believes that a prohibited or applicable subsidy is granted or maintained by another member government, may request consultations with that government as part of WTO dispute settlement procedures. In the case of prohibited subsidies, the complaining country does not have to show any adverse effects on its own industrial sector (the exceptions apply to developing countries). For achievable grants, the complaining country must demonstrate that it has a negative effect. For more information on the Department of Commerce`s efforts to implement the grants, visit the Grant Administration Office`s website. In addition, you can learn more about filing a compensatory tax claim by visiting the import administration website. The petitioners` advice is available via e-mail: Petitioners_Support@ita.doc.gov. If no amicable solution is found in the first consultations, the matter can be referred to the WTO Dispute Settlement Body (DSB), which is made up of representatives of all WTO members. The DSB establishes a body that communicates its results to the parties to the dispute within 90 days due to prohibited subsidies or 180 days for applicable grants. If the court finds that the measure in question constitutes a prohibited subsidy, the subsidizing state must immediately withdraw it. In the case of feasible grants, the subsidizing state must either withdraw the subsidy or eliminate the adverse effects. If a prohibited subsidy has not been withdrawn within a specified time frame (set by the panel) or if the subsidized country has not taken appropriate measures within six months to withdraw an applicable subsidy or eliminate its harmful effects, the DSB may authorize the complaining country to take action. The World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures (Subsidy Agreement) contains rules on the use of government subsidies and the application of remedial measures to combat subsidized trade, which have detrimental trade effects.

These remedial measures can be pursued through WTO dispute settlement procedures or as part of a Review Procedure (CVD) that can be conducted unilaterally by any WTO member government. Under the agreement, only “specific subsidies” can be taken. A specific grant is a grant that is only awarded to a particular company or group. One of the advantages of WTO dispute settlement is that it offers not only remedies for subsidies that affect domestic competition, but also remedial measures for subsidies that affect competition in foreign markets. Prior to the subsidies agreement, the U.S. Countervailing Duty Act, which applies only to subsidized products imported into the United States, was the only practical way for U.S. companies to compete with subsidized foreign competition. A subsidy granted by a WTO member government is prohibited by the subsidy agreement if it depends, legally or effectively, on export performance or the use of domestic imported goods.

These prohibited subsidies are commonly referred to as export subsidies or import substitution subsidies. They are considered specific and are considered particularly harmful under the subsidy agreement and U.S. law. (Specific provisions apply to agricultural subsidies under the WTO Agreement on Agriculture.) A grant from a WTO member government is “capable of acting” under the agreement (in turn, certain exceptions are granted for agricultural subsidies), if it “violates” another country`s domestic industry or when it creates “serious prejudice” for the interests of another country. Serious prejudices can arise in cases where a subsidy is granted: a U.S. company harmed by unfairly subsidized imports into the U.S. may also file a complaint or “petition” with the U.S. Department of Commerce