Substantive Rules A member cannot impose a countervailing measure unless he finds that there are subsidized imports, harm to a domestic industry and a causal link between subsidized imports and the injury suffered. As noted above, the existence of a specific subsidy must be determined on the basis of the criteria of the first part of the agreement. However, the criteria for injuries and causes are in Part V. One of the main developments of the new SCM Convention in this area is the explicit authorisation to combine the effects of subsidised imports from more than one Member State if certain criteria are met. In addition, Part V contains rules for determining the existence and amount of a benefit. After graduation, countries are no longer allowed to grant export subsidies for non-agricultural products. Starting in mid-2020, a proposal from the LDC group will be considered, which would allow progressive LDCs to continue to provide non-agricultural export subsidies, while their GNI per capita is less than $1,000. According to the latest information available in mid-2020, Bangladesh, PDR, Nepal and the Solomon Islands remained below this threshold. In the absence of a decision or clarification on this issue, LDCs would no longer benefit from the exemption. Few LDCs provide this type of subsidy. According to the latest WTO analyses, Bangladesh and Nepal would be affected by the loss of this flexibility among countries approaching graduation in 2020 (WTO/FEI, 2020).

7.8 In the event of the adoption of a panel report or an appellate body report finding that a grant has had a negative impact on the interests of another member under Article 5, the member who grants or maintains the grant takes appropriate steps to eliminate the adverse effects or withdraws the subsidy. The grant agreement nominally divides subsidy practices into three categories: prohibited subsidies (red lights); authorized but applicable subsidies (yellow light); (green) subsidies that are not applicable. Export subsidies and import substitution subsidies are prohibited. 1.1 For the purposes of the agreement, a subsidy is deemed to be granted if the subsidy agreement also establishes rules and procedures for the application of countervailing or countervailing duties (CVD) by WTO members with respect to subsidized imports. The concept of financial participation was only incorporated into the SCM agreement after lengthy negotiations. Some Members argued that there could be no subsidies unless there was a charge on the public account. Other MPs felt that forms of public intervention that do not cost the government, but distort competition and are therefore considered subsidies.