Subsidies at the GATT

Abstract

This chapter examines the subsidy issue at the multilateral level through the negotiations at the GATT. Attention will be focused on the role of the EU and North American states because they have been the primary actors in this field and they are also the subject of this study. The subsidy issue poses particularly difficult problems for the multilateral system because it challenges state sovereignty and core values represented by individual states. In North America, the Canada-US dispute has been tied to developments at GATT while the EU’s Common Agricultural Policy’s (CAP) subsidy program has been influenced by US-EU wrangling. This GATT history of dealing with subsidies in non-primary products will account for the bulk of this chapter. It sketches out the origins of the subsidy issue and the attempts to resolve it. The following chapter turns its attention to two narrower issues in the multilateral subsidy saga, agriculture and aerospace. The major lesson gleaned from a study of the multilateral subsidy issue is the difficulty of reconciling domestic imperatives with international pressure for change.