Subsidies and Countervailing Measures (SCM) Agreement

The Subsidies and Countervailing Measures (SCM) Agreement, part of the World Trade Organization (WTO), aims to ensure fair international trade by addressing unfair subsidies that a government provides to its businesses, which can give them an unfair advantage in exporting goods. When a country suspects that another country’s subsidies are harming its own industry, it can invoke countervailing measures, like tariffs, to offset the unfair benefit. The agreement sets rules and procedures to prevent misuse of subsidies and ensures that any corrective actions are justified and fair, maintaining a balanced global trading system.