The WTO Perspective on Subsidies in International Trade (Gurwinder Singh)
The issue of subsidies in international trade is a matter of great concern between developed and developing nations. Although, the primary function of a multilateral organization like the WTO is to regulate trade amongst the member nations, it is also a forum for discussion of crucial matters.
This paper discusses the subsidies in international trade. It commences with a brief reference to some economic principles as a premise for a better understanding of international trade law and specifically in dealing with the issue of subsidy. The article focuses on the use of subsidies in international trade, investigating the reason for the differences of opinion between developed and developing nations, the extent of justification for subsidies, and how subsidies affect competition policy. While supporting state-aid when deemed necessary, an effort has been made to differentiate between state-aid and subsidy. Furthermore, this article through case references seeks to reflect different judicial approaches toward subsidies, and the issues concerned to both developed and developing nations. In the present global trend of market liberalization, the paper concludes, by suggesting that subsidies on the basis of necessity should be allowed rather than distorting the principles of free trade through fair trade.
