A receives a wide variety of general subsidies from the ng t

A receives a wide variety of general subsidies from the ng tax breaks, low interest financing, and technical 4. The Expando Co. in State State A government (includi assistance) that State A offers to all Expando manufactures wristwatch bands that it recently began to sell in State B. The Flexo Co. in State B manufactures similar watchbands and it has begun to lose some of its market share to Expando. State A and State B are both WTO member states. Flexo would like State B to impose a countervailing duty to offset the subsidies received by Expando from State A, and Flexo has asked the State B Customs Service (which is responsible for imposing such duties) to do so. After making an investigation, the Customs Service refused to impose any duties. domestic enterprises within its territory Expando has appealed to a court. Service? Explain. Should the court overrule the decision of Customs

Solution

No, the court should not overrule the decision of the Customs Service. This is because The Expando Co. in State A receives general subsidies. Under the GATT(General Agreement on Trade and Tariffs) , it could be classified as \"Yellow Light\" subsidies (i.e) subsidies that are not \'specific\'. The subsidy received by Expando Co. must cause the following in order to be termed as \"actionable\" :-

Expando Co. does has not caused a serious prejudice to Flexo Co. in State B and the question does not mention any adverse effect on Flexo Co.\'s exports and also the subsidies received by Expando Co. in State A are general subsidies that are not specifically related to export benefits. Hence, the court need not overrule the decision of Customs Service.