The World Trade Organization (WTO) has been at the forefront of promoting free trade and reducing trade barriers among member countries since its establishment in 1995. One of the most significant agreements signed by the WTO is the Agreement on Subsidies and Countervailing Measures (SCM). The SCM agreement sets out rules and regulations on subsidies and provides a mechanism for resolving disputes related to subsidies. This article focuses on the legal text of the WTO SCM agreement.

The SCM agreement is a legal instrument that aims to address the negative effects of subsidies on international trade. Subsidies can distort competition, disadvantage unsubsidized products and services, and harm other countries` interests. Therefore, the SCM agreement aims to regulate subsidies and provide a level playing field for WTO member countries.

The legal text of the SCM agreement consists of a preamble, 28 articles, and three annexes. The preamble outlines the purpose and objectives of the agreement. It states that the agreement aims to clarify and improve the disciplines of the General Agreement on Tariffs and Trade (GATT) related to subsidies and countervailing measures. The preamble also recognizes the need for balance between the liberalization of trade and the need to protect domestic industries.

The 28 articles of the SCM agreement set out the rules and procedures related to subsidies. The first part of the agreement defines what constitutes a subsidy and sets out the conditions for a subsidy to be considered prohibited, actionable, or non-actionable. The agreement also establishes the procedures for determining whether a subsidy exists, its nature, and the amount involved.

The second part of the agreement sets out the rules for investigating and countervailing subsidies. It provides for a mechanism for members to initiate an investigation into subsidies and outlines the requirements for countervailing measures. The agreement also provides for consultations, notification, and information exchange among member countries.

The third and final part of the agreement sets out the procedures for resolving disputes related to subsidies. The SCM agreement provides for consultations, mediation, and dispute settlement procedures related to subsidies. The procedures are similar to those set out in the WTO Dispute Settlement Understanding.

The three annexes to the SCM agreement provide additional information and details related to the agreement. Annex I provides a list of prohibited subsidies, while Annex II provides a list of actionable subsidies. Annex III contains guidelines for the application of Article 27, which deals with the calculation of the benefit of subsidies.

In conclusion, the legal text of the WTO SCM agreement is a comprehensive and detailed instrument that aims to regulate subsidies and provide a level playing field for WTO member countries. The agreement sets out the rules and procedures related to subsidies and provides for a mechanism for resolving disputes related to subsidies. The SCM agreement plays a vital role in promoting free trade and reducing trade barriers among member countries.