In chapter 20 Pietro Poretti subjects subsidies to very close analysis. His chapter is a painstaking enquiry into important aspects of subsidies rule-making, namely: (1) the categorisation of subsidies; (2) the possible scope of future disciplines as defined by and in relation to other GATS provisions; (3) the inadequacy of the conditional national treatment obligation and non-violation complaint provisions in disciplining subsidies; and (4) the impracticality of a retaliatory mechanism in the services context.

I do not disagree with the arguments put forward in the chapter.

Subsidies continue to be an active policy tool which a government uses to redistribute wealth for specific social, political or economic gains.

An important fact remains however, that subsidies alter the conditions of competition and interfere with price signals. Subsidies can become problematic in any liberalised services market as their effects can hardly be contained within borders. The degree of ‘distortiveness’ nevertheless depends on the form of subsidy, the duration, the market structure, the regulatory framework, the eligibility conditions and the way in which the subsidy scheme in question interacts with other policies.

From a negotiating perspective, trade officials need comprehensive information about Members’ existing subsidy schemes before determining distortive effects and subsequently the scope and application of future disciplines. As it happens, procrastination, despite explicit mandate under Article 15:1, in favour of the status quo has effectively deterred information sharing.