TRADE REMEDIES: SUBSIDIES AND COUNTERVAILING MEASURES: Its Application in Developing Countries
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Trade remedies are trade policy tools that a government can use to take remedial action against imports that hurt local producers. These policies are designed to provide relief from imports that are deemed unfair, or in other cases it is an adjustment from import surge. There are three primary types of trade remedies: anti-dumping, safeguards, and countervailing measures. Countervailing measure, which is the focus of this bulletin, is concerned with imposing duties that counterbalance the effect of subsidies that an exporting country offers to its domestic producers and businesses.
This measure is used to protect local industries against unfair trade practices. The use of countervailing measures is contained in the World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures (ASCM) in Article IV of the General Agreement on Tariffs and Trade (GATT) 1994. Kenya is a member of the WTO and is, therefore, party to the ASCM. However, she has not used this trade remedy much since the agreement came into force.