Subsidies are bad for the home country(WTO)
ii SUBS i D i ES, TRADE AND T h E WTO C tH e e C o N o MICS of SUBSI d I e S world trade report 2006 58 t he overall impact of the export subsidy on the home country is decidedly negative. d omestic consumers pay a higher price for a product that they are blocked from sourcing at a lower price from the world market. t his leads to welfare losses for consumers. d omestic producers are direct beneficiaries from the policy, since their production has expanded as a result of the subsidy. Consumers in the foreign country benefit from lower world prices. f oreign producers, however, are net losers, since they now have to compete with the lower prices. Uncompetitive producers will be forced to exit the industry. o verall, however, the country is better off, since the increased benefit to consumers offset the loss to the producers. The above report comes from WTO in its 2006 publication: https://www.wto.org/english/res_e/booksp_e/anrep_e/wtr06-2c_e.pdf Although it refers ...