Regulation of Subsidies at the Multilateral Level and in Brazil

Subsidies are political-economic instruments of States either to protect national industry or to enable export. As their effects, subsidies cause distortions that might be very prejudicial to industries that lack this type of support. Besides, subsidies must be ruled internationally otherwise if all types of subsidies were allowed, stronger countries would be privileged since they have better economic conditions to promote their industries. For this reason, multilateral cooperation must also be encouraged by international law. Specificity is the main criteria for prohibited subsidies by WTO once the more specific they are, greater distortions they cause. In view of that, the study explores the multilateral trade system, its rules, illegal and actionable subsidies, and it also analyzes WTO’s unilateral system for countering illegal subsidies, known as countervailing measures. In the end, it shows how subsidies are treated by law under Brazil’s structure.