The Economics of WTO Rules on Subsidies and Countervailing
This paper evaluates the WTO rules relating to subsidies and countervailing measures from a welfare economics perspective. It concludes that the rules relating to "nonviolation" subsidies, export subsidies and certain agricultural subsidies have sound economic justification. The rules governing domestic subsidies generally, by contrast, do little to identify or police undesirable subsidies. Further, as has been argued elsewhere, countervailing measures are economically undesirable.