Event 14 Oct. 2022
Curtis Provides Capacity Training to the Government of Uganda
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Event 21 Sep. 2022
Kalidou Gadio Speaks at AIEN 2022 International Energy Summit
News 15 May. 2023
Curtis represents e-commerce retailer in its fight to recover monies withheld by PayPal, the global payment giant
News 16 Dec. 2022
Curtis Trade Team is top ranked in Chambers Asia-Pacific 2023
Event 08 May. 2023
Partner Irene Petrelli to Participate in ICC YAAF Event
News 02 May. 2023
Curtis Italy with DeA Capital in the Acquisition of Magic S.r.l
Event 23 May. 2023
Partners Luciana Ricart and Fernando Tupa Will Teach a Workshop on Hearings in Investment Arbitration for Arbanza School of Arbitration’s Online Program
Publications 23 Feb. 2023
Fernando Tupa Publishes Book on Forum-Specific Consent to International Arbitration in Investment Agreements
Event 03 May. 2023
Dr. Borzu Sabahi to Speak at ICSID-ADGM Joint Conference: Investment Protection and Armed Conflict
News 27 Sep. 2022
Curtis Boosts Riyadh Office with New Corporate Partner Stuart Davies
News 25 May. 2023
Curtis Files SCOTUS Amicus Brief for Distinguished Law Professors in First Amendment Retaliatory Arrest Case
News 06 Mar. 2023
Russia Sanctions at the First Anniversary: An Overview of Current Sanctions in the US, UK, and EU and How Global Companies Can Navigate Evolving and Conflicting Sanctions Regimes
Client Alert 30 Aug. 2022
The EU Adopts the “Maintenance and Alignment” Sanctions Package
Client Alert 24 Jun. 2021
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) — U.S. Insight
International Trade
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.
Daniel Porter
Partner
ITC Injury Proceedings
WTO and International Trade Dispute Settlement
Trade Remedy Practice
Economic Sanctions
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