Under the WTO's Agreement on Subsidies and Countervailing Measures (ASCM), 'Export Subsidies' (subsidies contingent upon export performance) are generally classified as prohibited 'Red Light' subsidies.
- True
- False
Answer: True
The WTO strictly prohibits export subsidies because they are explicitly designed to distort global trade by artificially lowering the price of a country's goods in foreign markets, harming competitors in other nations. If a country is found guilty of providing a prohibited Red Light subsidy, it must withdraw it immediately, or the affected countries can impose retaliatory countervailing duties.