SA no longer eligible for US subsidy preference
On 10 February 2020, the United States of America revoked the subsidy preference for some developing nations, including South Africa. The change is an amendment to the United States’ internal list of developing and least-developed countries used specifically in subsidy or countervailing measure investigations.
This change affects whether the US may impose countervailing measures against unfairly subsidies imports from developing countries. Under the World Trade Organisation rules, specifically the Agreement on Subsidies and Countervailing Measures, a nation cannot impose countervailing measures on illegally subsidised imports if the amount of subsidy is de minimum (which is generally 1% ad valorem). In the case of developing and least-developed countries the de minimis subsidization thresholds of a country is 2%. Thus, it is now easier for the US to impose countervailing measures on the developing and least-developed countries removed from the United States’ internal list if they illegally subside their goods (down from 2% to 1%).
The following countries have been removed from the United States’ internal list for this purpose: Albania; Argentina; Armenia; Brazil; Bulgaria; China; Colombia; Costa Rica; Georgia; Hong Kong; India; Indonesia; Kazakhstan; the Kyrgyz Republic; Malaysia; Moldova; Montenegro; North Macedonia; Romania; Singapore; South Africa; South Korea; Thailand; Ukraine; and Vietnam.
© Trade Law Chambers 2020