News 24 Jun. 2021
Curtis successfully defends foreign states' procedural privileges in the UK Supreme Court
News 23 Jun. 2021
Ibrahim Elsadig joins Curtis as Partner in Dubai
News 09 Aug. 2021
Curtis, Mallet-Prevost, Colt & Mosle enters into association with Chevalier Law in Singapore.
Event 23 Apr. 2021
Partner Borzu Sabahi to speak on Damages, Enforcement and Annulment of Arbitral Awards at Executive Training Program hosted by the Government of India and the Indian Institute of Foreign Trade
Client Alert 13 Oct. 2021
Green Claims Code: How the UK Competition and Markets Authority is saying “enough” to corporate greenwashing
Event 21 Sep. 2021
Partner Simon Batifort Lectures on the Defense of States in Investment Arbitration at Université Paris Nanterre
News 15 Oct. 2021
Claudia Frutos-Peterson and Elisa Botero Ranked Among the Top 100 Female Lawyers in Latin America by Latinvex
News 13 Oct. 2021
Curtis Joins The Appellate Project to Promote Appellate Practice to Diverse Law Students
News 20 Sep. 2021
Curtis Successfully Defends the Sultanate of Oman and Oman Aluminium Rolling Company LLC in U.S. Department of Commerce Trade Case
News 16 Aug. 2021
Curtis Establishes Presence in Saudi Arabia
Client Alert 05 Oct. 2021
Proposed Legislative Changes to Federal Estate, Gift and Trust Taxation
Publications 22 Sep. 2021
Client Alert 24 Jun. 2021
U.S. Insight: Update on Virtual Notarization (Executive Order 202.7) During the COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021)
U.S. Insight: Update on Virtual Witnessing (New York Executive Order 202.14) During The COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021)
A subsidy is any financial aid provided by a government to a producer or seller of a good or service that is designed to increase the competitiveness of a particular industry firm or entire industry. For example, agricultural products are frequently subsidized by national governments in an effort to increase domestically grown and raised foodstock (among other reasons).
Various governments subsidize different industries, depending on the national priorities and politics at play. Over time, industries as diverse as tobacco, steel, alcohol, agriculture, weapons, and textiles have all been subsidized. There is no inherent limit to the industries that any particular government will subsidize, although nations with different political leanings will tolerate different levels of subsidization.
Illegal subsidies are any subsidy that falls afoul of an international or domestic adjudicating body. A huge variety of subsidies could be considered “illegal” in various contexts. For example, a normally acceptable subsidy could be ruled illegal if it results in a firm “dumping” its products into a neighboring country contrary to anti-dumping legislation. Or, a policy that favors the use of domestic goods in the manufacture of automobiles could offend the WTO’s rule against subsidies that distort international trade.
There are countless forms of subsidies, including, but not limited to:
Their common feature is that they all seek to selectively provide a financial benefit to a producer, consumer, or user of a particular good or service.
There are a host of arguments for the proposition that subsidies should not be provided in some, most, or all circumstances. They include the market-distortion argument (that subsidies impair the efficient operation of the free market) and the corruptibility argument (that political actors are acutely prone to corruption when enacting subsidies).
Subsidies, it is argued, typically impair the efficient operation of the free market. They create artificial or political barriers to the free movement of goods and services in a way that benefits one party over another. Further, they add legal and political complexity to transactions that isn’t otherwise necessary.
There is substantial disagreement over the effect of subsidies on the economy as a whole. It is probably safe to say that subsidies tend to take with one hand while they give with another. Certain subsectors of the economy are helped by certain subsidies, while other sectors of the economy are harmed by still other subsidies.
It is impossible to know with certainty how subsidies as a whole, or any one particular government subsidy, affect the economy. As with much economic research, there are so many variables at play that it is extraordinarily difficult to tease out the effects of one policy or group of policies.