Article 3 of the agreement prohibits the use of local content and export subsidies for non-agricultural products. Least developed countries (and other countries with GNI per capita of less than US$1,000 in 1990) are exempt from the export subsidy ban (Article 27.2 and Appendix VII of the agreement and paragraph 10.1 of the Doha Ministerial Decision on Implementation Issues and Concerns (WT/MIN(01)/17). After graduation, countries are no longer allowed to grant export subsidies for non-agricultural products. Starting in mid-2020, a proposal from the LDC group will be considered, which would allow progressive LDCs to continue to provide non-agricultural export subsidies, while their GNI per capita is less than $1,000. According to the latest information available in mid-2020, Bangladesh, PDR, Nepal and the Solomon Islands remained below this threshold. In the absence of a decision or clarification on this issue, LDCs would no longer benefit from the exemption. Few LDCs provide this type of subsidy. According to the latest WTO analyses, Bangladesh and Nepal would be affected by the loss of this flexibility among countries approaching graduation in 2020 (WTO/FEI, 2020). Developing countries The SCM agreement recognises three categories of members from developing countries: the least developed countries (LDCs), members with a per capita GNP of less than US$1000 per year, listed in Schedule VII of the SCM Convention, and other developing countries. The lower a member`s level of development, the more favourable the treatment he or she receives for grant disciplines. For example, LDCs and members with a per capita GNP of less than US$1000 per year, listed in Schedule VII, are exempt from the ban on export subsidies. Other developing countries have eight years to end their export subsidies (they cannot increase their export subsidies during this period). With regard to import substitution subsidies, LDCs have eight years and other developing countries have five years to end these subsidies.
Achievable subsidies are also treated more favourably. For example, some subsidies related to privatization programmes for members of developing countries cannot be applied multilaterally. With regard to countervailing measures, exporters from developing countries are entitled to more favourable treatment in the event of a closed investigation when the level of subsidies or import volume is low. 7.9 If, within six months of the date the DSB adopts the panel`s report or the appellate body`s report, the member has not taken appropriate steps to eliminate the adverse effects of the subsidy or withdraw the subsidy, the DSB authorizes the requesting member to take counter-measures corresponding to the degree and nature of the negative effects found, unless the DSB agrees to reject the request. Previous transition periods for local content grants have expired. Least developed countries (and other members of developing countries receiving CMS) must phase out export subsidies for products that have achieved export competitiveness (provided a country`s global market share on this product exceeds 3.25%) 2000. (WTO/FEI, 2020). Article 13 of the Agricultural Subsidies Agreement sets out specific rules on agricultural subsidy during the implementation period provided for by this agreement (until 1 January 2003). Export subsidies, which are fully compliant with the agricultural agreement, are not prohibited by the SCM Convention, although they remain subject to countervailing measures. Domestic aid, which is fully compliant with the agricultural agreement, is not multilaterally applicable, but may also be subject to countervailing duties.
Finally, domestic aid under the agricultural agreement cannot be implemented multilaterally and is not subject to countervailing measures.