Article 3.1(B) Of The Scm Agreement

7.9 If, within six months of the adoption of the Appellate Body or Appellate Body report, the Member has not taken appropriate measures to eliminate the adverse effects of the subsidy or withdraw the subsidy, and if there is no agreement on compensation, the DSD shall authorize the complaining Member to take countermeasures. are proportionate to the degree and nature of the adverse effects found, unless the DSB mutually agrees to reject the application. 5.66 Canada refers to a second contextual element, Article 3.1(b), which prohibits “conditional” subsidies. for the use of domestic goods in relation to imported products. According to Canada, Brazil`s interpretation of “contingency” as “inclination”, if prompted to reach its logical conclusion in Article 3(1)(b), would lead to the prohibition of subsidies to domestic industries with a national “inclination” or “orientation” content. For Canada, if Brazil`s argument with respect to Article 3.1 is correct, it would at least be prohibited to subsidize the following sectors or concerns: 5.62 Canada argues that Article 3, because of its usual importance, therefore does not prohibit programs or subsidies that were aimed only at expanding trade or increasing international competitiveness as a general objective, which could lead to an increase in exports. According to Canada, this distinction is essential to the legal structure of the grant agreement, according to which there are three distinct categories of subsidies. . . .


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