State subsidies are a major factor in the distortion of international competition.1 Industrialized countries account for the great bulk of subsidies (especially in the agricultural sector). Although subsidies are a popular instrument of State intervention in the economy, the GATT only addresses them in a rather rudimentary and timid way. Under the general provision of Article XVI:1 of the GATT, subsidies, which may change competitive conditions in favour of domestic products, must be notified. Paragraphs 2 to 4 of Article XVI of the GATT specifically refer to...
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