The International Context of EC State Aid Law and Policy: The Regulation of Subsidies in the WTO

This chapter addresses the set of rules that control government subsidization to enterprises in the World Trade Organization (WTO). It specifically outlines the principal characteristics of the WTO regulation of subsidies, emphasizing some of the main issues pertaining to the definition and the categories of subsidy. Special attention is given to the SCM Agreement as it comprises the most comprehensive discipline of subsidies and countervailing duties in the WTO. It then draws brief tentative parallels with the EC regulation of state aids. Furthermore, a note on style: the exposition of the various issues frequently followed by extensive passages from the reports of the Panels and the Appellate Body, is provided. It is stated that it is hard to decide in a general way which is the strictest regulation of subsidies, that in the WTO or that in the EC.