Question

With regard to the WTO, subsidies are covered in two separate international economic law agreements. Which are they?

• A. The Reform Treaty and the Treaty of Rome
• B. The GATT and the Agreement on Subsidies and Countervailing Measures
• C. The International Monetary Funds Articles of Agreement and the European Central Banks Statute
• D. The North American Free Trade Agreement and the Organization of American States Charter

Answer 1

Answer: (B)

The GATT and the Agreement on Subsidies and Countervailing Measures

• With regard to WTO, subsidies are covered in two separate international economic law agreements which are the GATT and the Agreement on Subsidies and Countervailing Measures.
  
• GATT stands for General Agreement on Tariffs and Trade. It is a multinational agreement on international trade.
  
• The main aim of GATT is reduction of tariffs and trade barriers across different nations with mutual understanding.
  
• Countervailing measures are to neutralise negative effects caused by subsidies. These are imposed when investigation reports when a foreign country subsidizes its exports, injuring domestic producers in the importing country.