Complexity of Disciplining Input Subsidies under the Countervailing Duty Law: A Focus on the US and the WTO

This article explores the structural complexities of addressing input subsidies under the counter vailing duty (CVD) system, with a particular focus on practices and legal developments in the US. Traditionally, input subsidies have been managed under the CVD system as ‘indirect’ subsidies. However, recent trends in the US reveal a shift towards addressing these subsidies within the anti-dumping (AD) framework; for example, by embracing them as a particular market situation (PMS). This article identifies why input subsidies in earlier production stages are not effectively addressed under the CVD law by examining the structural limitations of the US CVD law and the World Trade Organization (WTO) jurisprudence. Specifically, through a review of upstream subsidy cases in the US from January 2011 to July 2024, the article highlights the challenges and complexities involved in applying upstream subsidy provisions. The article concludes by emphasizing the need for clearer and more effective legal disciplines on input subsidies within the CVD framework to ensure comprehensive regulation of such practices.