WTO completes framework for environmental, regional and R&D subsidies

The WTO Agreement on Subsidies and Countervailing Measures prohibits subsidies on exports or those conditioned on the use of domestic over imported goods. However, it specifically defines certain subsidies for the adaptation of existing facilities to meet new environmental requirements, for assistance to economically-disadvantaged regions of the country, and for research and development activities of firms or higher education establishments as “non-actionable”, or protected from countervailing-duty or dispute-settlement actions by other WTO Members. To qualify for non-actionable status, a subsidy programme must satisfy specific criteria set forth in the Agreement.

The WTO framework on “non-actionable” subsidies was completed on 2 June when the Committee on Subsidies and Countervailing Measures adopted procedures for the conduct of binding arbitration regarding the status of these types of subsidies. The Committee previously had adopted the other elements of the framework, which are formats for the initial notification of such programmes and for updating notifications.

The Subsidies Agreement provides that governments may notify in advance of implementation subsidy programmes they consider to be “non-actionable”. The Subsidies Committee then reviews these notifications. If there is no consensus in the Committee that a notified programme meets the Agreement's criteria for non-actionability, any Member may request binding arbitration to resolve the status of the programme. The arbitration body is required to present its conclusions within 120 days.

The full text of the arbitration procedures (document G/SCM/19) and the formats for initial and updating notifications (documents G/SCM/14 and G/SCM/13, respectively) are available on the WTO Website (www.wto.org).