Suppose Brazil—the largest producer of sugar—provides 20 percent export subsidy to sugar companies. By what extent would the domestic prices and the terms of trade be affected in Brazil? If the export...

Suppose Brazil—the largest producer of sugar—provides 20 percent export subsidy to sugar companies. By what extent would the domestic prices and the terms of trade be affected in Brazil? If the export subsidy of Brazil hampers the sugar manufacturers of importing countries, what countervailing action would you suggest to protect the domestic industries and prices of the latter?