RESTRICTED  
  
G/SCM/M/111  
 
17 February 2020  
(20-1198) Page: 1/17 
Committee on Subsidies and Countervailing Measures    
 
MINUTES OF THE REGUL AR MEETING  
HELD ON 19 NOVEMBER  2019 
CHAIR: MICH ÈLE LEGAULT DOOLEY (CAN ADA) 
1. The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 19 November 2019, convened in WTO/AIR/SCM/30 dated 8 November  2019.  
2. The Committee adopted  the following agenda:  
1   NATIONAL LEGISLA TION ................................ ................................ .............................  2 
1.1   Review of notifications of new or amended legislation or regulations  
not previously reviewed by the Committee (including Supplemental  
Notifications of existing provisions not previously reviewed)  ................................ .....................  2 
1.1.1   Kenya (G/SCM/N/1/KEN/3 - G/SCM/N/1/KEN/3 - G/SG/N/1/KEN/2)  ................................  2 
1.1.2    Mauritius (G/ADP/N/1/MUS/3 - G/SCM/N/1/MUS/3)  ................................ ......................  2 
1.2   Review of notifications of new or amended legislation with  
outstanding written questions  ................................ ................................ ...............................  3 
1.2.1    Cambodia  (G/ADP/N/1/KHM/2 - G/SCM/N/1/KHM/2 - G/SG/N/1/KHM/2)  .........................  3 
1.2.2    Cameroon (G/ADP/N/1/CMR/1/Suppl.1 - G/SCM/N/1/CMR/1/Suppl.1 - 
G/SG/N/1/CMR/1/Suppl.1)  ................................ ................................ ................................ ... 3 
1.2.3    El Salvador (G/ADP/N/1/SLV/3/Suppl.1 - G/SCM/N/1/SLV/3/Suppl.1 - 
G/SG/N/1/SLV/3/Suppl.1)  ................................ ................................ ................................ .... 3 
1.2.4    Liberia (G/SCM/N/1/LBR and G/SCM/N/1/LBR/Corr.1)  ................................ ...................  3 
1.2.5    United Arab Emirates (G/ADP/N/1/ARE/2/Suppl.1 – G/SCM/N/1/ARE/2/Suppl.1 – 
G/SG/N/1/ARE/2/Suppl.1)  ................................ ................................ ................................ ... 3 
1.2.6    Viet Nam (G/ADP/N/1/VNM/ 2 - G/SCM/N/1/VNM/1 - G/SG/N/1/VNM/2) and 
(G/ADP/N/1/VNM/2/Corr.1 - G/SCM/N/1/VNM/1/Corr.1 - G/SG/N/1/VNM/2/Corr.1)  ....................  4 
2   NATIONAL L EGISLATION – CONTINU ING REVIEW OF LEGISL ATIVE  
NOTIFICATIONS PREVIO USLY REVIEWED BY THE  COMMITTEE  ................................ ........  4 
2.1   El Salvador (G/ADP/N/1/SLV/3/Suppl.1 - G/SCM/N/1/SLV/3/Suppl.1 - 
G/SG/N/1/SLV/3/Suppl.1)  ................................ ................................ ................................ .... 4 
2.2   Viet Nam (G/ADP/N/1/VNM/2 - G/SCM/N/1/VNM/1 - G/SG/N/1/VNM/2) and 
(G/ADP/N/1/VNM/2/Corr.1 - G/SCM/N/1/VNM/1/Corr.1 - G/SG/N/1/VNM/2/Corr.1)  ....................  4 
3   SEMI -ANNUAL REPO RTS OF COUNTERVAIL ING DUTY  
ACTIONS (ARTICLE  25.11) ................................ ................................ ...............................  5 
4   PRELIMINARY AND FINAL COUNTERVAILING  DUTY  
ACTIONS: NOTIFICATIO NS (ARTICLE 25.11)  ................................ ................................ ... 5 
5   ARTICLE 27.4 EXT ENSIONS OF THE TRANS ITION PERIOD FOR THE  ELIMINATION OF 
EXPORT SUBSIDIES  ................................ ................................ ................................ .........  5 
6   IMPROVING THE TI MELINESS AND COMPLET ENESS OF NOTIFICATIO NS AND OTHER 
INFORMATION FLOWS ON  TRADE MEASURES UNDE R THE SCM AGREEMENT ....................  6 G/SCM/M/111  
 
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  7   SUBSIDIES AND OV ERCAPACITY – ITEM RE QUESTED BY CANADA, T HE EUROPEAN 
UNION, JAPAN, AND TH E UNITED STATES ................................ ................................ ...... 10 
8   IMPLEMENTATION O F PARAGRAPH 2 OF THE  MINISTERIAL DECISIO N ON FISHERIES 
SUBSIDIES (WT/MIN(17 )/64; 13 DECEMBER 20 17) – ITEM REQUESTED  BY ARGENTINA, 
AUSTRALIA,  CANADA, THE EUROPEA N UNION, ICELAND, JA PAN, THE REPUBLIC OF  
KOREA, NEW ZEALAND, NORWAY, CHINESE TAIP EI, AND THE UNITED S TATES  .............  13 
9   ARTICLE 25.8 QUEST IONS TO CHINA ON POT ENTIAL STEEL SUBSIDI ES – ITEM 
REQUESTED BY THE EUR OPEAN UNION AND THE UNITED STATES  ................................ . 14 
10   OTHER BUSINESS  ................................ ................................ ................................ .... 16 
11   DATE OF NEXT RE GULAR MEETING  ................................ ................................ ..........  17 
12   ANNUAL REPORT O F THE COMMITTEE ON S UBSIDIES AND COUNTER VAILING 
MEASURES TO THE COUN CIL FOR TRADE IN GOO DS (ARTICLE 32.7)  .............................  17 
 
1  NATIONAL LEGISLATION  
1.1  Review of notifications of new or amended legislation or regulations not previously 
reviewed by the Committee (including Supplemental Notifications of existing provi sions 
not previously reviewed)  
3. The Chair noted that, in accordance with the Committee's procedures (G/SCM/W/293/Rev.1), 
the new legislative notifications on the agenda were those that had been circulated in all three 
languages not less than six weeks befor e the meeting. The deadline for written questions on these 
notifications was 28 October 2019. In accordance with the review procedures, legislative notifications 
of Cambodia, Cameroon, El Salvador, Liberia, United Arab Emirates, and Viet Nam were taken up 
under this item due to outstanding written questions about them.  
4. Oral questions could be asked at the meeting, and any Member wishing to receive a written 
answer to any such question would have to submit its question in writing to the Member concerned 
and to the Secretariat not later than 9 December 2019. Written answers were due not later than 
6 January  2020.1  
5. The primary review of these notifications was held in the Committee on Anti -Dumping 
Practices. Members were thus requested to limit t heir questions to issues specifically related to 
countervailing measures, and to save horizontal and anti -dumping -specific questions for the 
Anti-Dumping Committee.  
1.1.1   Kenya (G/SCM/N/1/KEN/3  - G/SCM/N/1/KEN/3  - G/SG/N/1/KEN/2)  
6. Written questions and responses with respect to this notification can be found in:  
• G/ADP/Q1/KEN/4  - G/SCM/Q1/KEN/4  - G/SG/Q1/KEN/4 – questions from the 
United  States  
• G/ADP/Q1/KEN/5  - G/SCM/Q1/KEN/5  - G/SG/Q1/KEN/5 – replies to the United  States  
7. The Committee took note  of the no tification,  questions and answers.  
1.1.2   Mauritius (G/ADP/N/1/MUS/3  - G/SCM/N/1/MUS/3)  
8. Written questions and responses with respect to this notification can be found in:  
• G/ADP/Q1/MUS/4  - G/SCM/Q1/MUS/4 – questions from the United States  
• G/ADP/Q1/MUS/5  - G/SCM/Q1/MUS/5 – replies to the United States2 
 
1 Relevant deadlines for written follow -up questions and written answers in December and January 
2019, respectively, can be found in section 1 of document G/ADP/W/504 - G/SCM/W/579 - G/SG/W/246.  
2 Circulated on 19 November 2019.  G/SCM/M/111  
 
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  9. The Committee took note  of the notification and questions.  
1.2  Review of notifications of new or amended legislation with outstanding written 
questions  
1.2.1   Cambodia  (G/ADP/N/1/KHM/2  - G/SCM/N/1/KHM/2  - G/SG/N/1/KHM/2)  
10. Written questions with respect to this notification can be found in:  
• G/ADP/Q1/KHM/1  - G/SCM/Q1/KHM/1  - G/SG/Q1/KHM/1G/SCM/Q1/KHM/1 – questions 
from the United  States  
• G/ADP/Q1/KHM/2  - G/SCM/Q1/KHM/2  - G/SG/Q1/KHM/1G/SCM/Q1/KHM/2 – replies to 
the United  States  
11. The Committee took note of the notification, questions and answers.  
1.2.2   Cameroon (G/ADP/N/1/CMR/1/Suppl.1  - G/SCM/N/1/CMR/1/Suppl.1  - 
G/SG/N/1/CMR/1/Suppl.1)  
12. Written questions with respect to this notification can be found in:  
• G/ADP/Q1/CMR/3  - G/SCM/Q1/CMR/3  - G/SG/Q1/CMR/3 – questions from the 
United  States . 
13. The Committee took note  of the notification and questions.  
1.2.3   El Salvador (G/ADP/N/1/SLV/3/Suppl.1  - G/SCM/N/1/SLV/3/Suppl.1  - 
G/SG/N/1/SLV/3/Sup pl.1)  
14. Written questions with respect to this notification can be found in:  
• G/ADP/Q1/SLV/8  - G/SCM/Q1/SLV/8  - G/SG/Q1/SLV/7 - questions from the 
United  States  
• G/ADP/Q1/SLV/9  - G/SCM/Q1/SLV/9  - G/SG/Q1/SLV/8 - questions from Mexico  
• G/ADP/Q1/SLV/10  - G/SCM/Q1/SLV/10  - G/SG/Q1/SLV/9 – replies to the 
United  States  
• G/ADP/Q1/SLV/11  - G/SCM/Q1/SLV/11  - G/SG/Q1/SLV/10 – replies to Mexico  
15. The Committee took note  of the notification, questions and answers.  
1.2.4   Liberia (G/SCM/N/1/LBR and G/SCM/N/1/LBR/Corr.1)  
16. Written questions and responses with respect to this notification can be found in:  
• G/ADP/Q1/LBR/1 - G/SCM/Q1/LBR/1 - questions from the United States  
• G/ADP/Q1/LBR/2 - G/SCM/Q1/LBR/2 – responses to the United States3 
17. The Committee took  note of the notification and questions.  
1.2.5   United Arab Emirates (G/ADP/N/1/ARE/2/Suppl.1 – G/SCM/N/1/ARE/2/Suppl.1 
– G/SG/N/1/ARE/2/Suppl.1)  
18. Written questions with respect to this notification can be found in:  
• G/ADP/Q1/ARE/3  - G/SCM/Q1/ARE/3 -G/SG/Q1/ARE/3 – questions from the 
United  States  
• G/ADP/Q1/ARE/4  - G/SCM/Q1/ARE/4  - G/SG/Q1/ARE/4 – replies to the United  States  
 
3 Circulated on 21 November 2019.  G/SCM/M/111  
 
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  19. The Committee took note  of the notification, questions and answers.  
1.2.6   Viet Nam (G/ADP/N/1/VNM/2  - G/SCM/N/1/VNM/1  - G/SG/N/1/VNM/2) and  
(G/ADP/N/1/VNM/2/Corr.1 - G/SCM/N/1/VNM/1/Corr.1  - G/SG/N/1/VNM/2/Corr.1)  
20. Written questions and responses with respect to this notification can be found in:  
• G/ADP/Q1/VNM/5 – G/SCM/Q1/VNM/5 – G/SG/Q1/VNM/5 – questions from the 
European  Union  
• G/ADP/Q1/VNM/7 – G/SCM/Q1/VNM/7 – G/SG/Q1/VNM/7 – replies to the 
European  Union  
21. The Committee took note  of the notification, questions and answers.  
2  NATIONAL LEGISLATION  – CONTINUING REVIEW OF LEGISLATIVE NOTIFICA TIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE  
2.1  El Salvador (G/ADP/N/1/SLV/3/Suppl.1  - G/SCM/N/1/SLV/3/Suppl.1  - 
G/SG/N/1/SLV/3/Suppl.1)  
22. Written questions and answers with respect to this notification can be found in:  
• G/ADP/Q1/SLV/12  - G/SCM/Q1/SLV/12 -G/SG/Q1/SLV/11 – follow -up questions from 
the United  States  
• G/ADP/Q1/SLV/13  - G/SCM/Q1/SLV/13 -G/SG/Q1/SLV/12 – replies to follow -up 
questions from the United  States  
23. The Committee took note  of the notification, questions and answers.  
2.2  Viet Nam (G/ADP/N/1/VNM/2  - G/SCM/N/1/VNM/1  - G/SG/N/1/VNM/2) and 
(G/ADP/N/1/VNM/2/Corr.1 - G/SCM/N/1/VNM/1/Corr.1  - G/SG/N/1/VNM/2/Corr.1)  
24. Written questions and responses with respect to this notification can b e found in:  
• G/ADP/Q1/VNM/6 – G/SCM/Q1/VNM/6 – G/SG/Q1/VNM/6 – follow-up question from the 
United  States . 
• G/ADP/Q1/VNM/8 – G/SCM/Q1/VNM/8 – G/SG/Q1/VNM/8 – replies to follow -up questions 
from the United  States . 
25. The Committee took note  of the notification, questions and answers.  
26. The Chair, recalling the Committee's agreed procedures, informed Members that for new 
legislative notifications to be placed on the agenda of the spring 2020 meeting, they would have to 
be circulated in all thre e languages not later than six weeks before the meeting. Shortly after that 
date, the Secretariat would circulate a document informing Members of all legislative notifications 
to be reviewed at the next meeting. Pursuant to paragraph 8 of document G/SCM/W/ 293/Rev.1, all 
unanswered written questions pertaining to new legislative notifications reviewed at the meeting, as 
well as the subject notifications, shall automatically be retained on the agenda of the next Committee 
meeting and on the agendas of subsequ ent Committee meetings until written answers are 
submitted.  
27. The Chair also noted that in order to place previously -reviewed legislation on the agenda of 
the next meeting for further review, written questions must be submitted to the Member concerned 
and th e Secretariat, not less than six weeks before the meeting; and written answers to such 
questions must be submitted to the Member concerned and the Secretariat, not less than two weeks 
before the meeting. The Secretariat would circulate the usual triple -symbolled document containing 
these and the other deadlines shortly after the meeting.4  
 
4 G/ADP/W/504 - G/SCM/W/579 - G/SG/W/246.  G/SCM/M/111  
 
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  28. Some Members had yet to submit any notification concerning legislations. The Chair 
underlined the importance of these notifications in terms of transparency, and recalled  that for many 
Members all that would be required was a single nil notification. For any Members that conducted 
countervailing duty investigations but had not yet notified their legislation, it was all the more 
important for the Committee to have the oppor tunity to review and ask questions about that 
legislation. Therefore, the Chair encouraged all Members that had not yet made a legislative 
notification to do so as promptly as possible.  
29. The Chair referred to the document G/SCM/N/18/Add.50 which contained t he latest revision 
of the list of authorities competent to initiate and conduct investigations within the meaning of 
Article  25.12 of the SCM Agreement and invited all Members with such an authority to submit the 
required notification pursuant to Article 2 5.12 of the SCM Agreement, or to review and update as 
necessary their previously -submitted notifications.  
30. The Committee took note  of the Chair's statement.  
3  SEMI -ANNUAL REPORTS OF COUNTERVAILING DU TY ACTIONS (ARTICLE  25.11)  
31. The Chair  recalled that document G/SCM/N/349 and G/SCM/N/349/Suppl.1 had invited all 
Members to submit no later than 15 June 2019, their semi -annual reports under Article 25.11 of the 
SCM Agreement of countervailing duty actions taken during the period 1 January th rough 
30 June 2019. Document G/SCM/N/349/Add.1 provided the current status of Members' reporting for 
that period. Paragraph 1 of the document listed those Members reporting countervailing duty actions 
during the period. Paragraph 2 listed Members that had notified having taken no countervailing duty 
action during the period. Paragraph 5 of the document listed the 42  Members that had submitted a 
one-time notification that they had no investigating authority, had taken no countervailing actions 
to date, and d id not anticipate taking any such actions in the foreseeable future.  
32. One-time notifications served a useful transparency function, as they assisted non -active 
Members to meet their notification requirements in a streamlined way. Any eligible Member that ha d 
not already done so thus was urged to submit a one -time notification. The Secretariat was ready to 
assist any Member in this regard.  
33. Unfortunately, as listed in paragraphs 3 and 4 of the document, 37 Members had not 
submitted a semi -annual report for Jan uary-June 2019. The Chair urged those Members to submit 
their reports as soon as possible.  
34. No comments or questions were raised concerning the semi -annual reports of Australia, Brazil, 
Canada, China, the European Union, India, New Zealand, Peru, Chinese Ta ipei, Turkey, and the 
United  States.  
35. The Committee took note  of all semi -annual reports submitted.  
4  PRELIMINARY AND FINA L COUNTERVAILING DUT Y ACTIONS: NOTIFICAT IONS 
(ARTICLE 25.11)  
36. The Chair reported that since the Committee's April 2019 regular meeting, notifications under 
Article 25.11 of the SCM Agreement with respect to preliminary and final countervailing duty actions 
had been received from Australia, Colombia, the European Union, India,  Mexico, Chinese Taipei, and  
the United States. Those notifications were listed in documents G/SCM/N/348, G/SCM/N/350, 
G/SCM/N/351, G/SCM/N/352, G/SCM/N/353, G/SCM/N/354, and G/SCM/N/355.  
37. No Member took the floor regarding those notifications.  
38. The Committ ee took note  of the notifications.  
5  ARTICLE  27.4 EXTENSIONS OF THE TRANSITION PERIO D FOR THE ELIMINATIO N OF 
EXPORT SUBSIDIES  
39. The Chair  recalled that Members that had been granted extensions under Article 27.4 pursuant 
to the procedures in WT/L/691 were requ ired, under paragraph 2(c) of the procedures, to submit G/SCM/M/111  
 
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  transparency notifications in respect of each year of the final two -year phase -out period, i.e. calendar 
years 2014 and 2015. The deadline for the notification pertaining to 2014 was 30  June 2015. A 
reminder to this effect had been circulated in document G/SCM/N/290/INF.  
40. Antigua and Barbuda, Belize, Costa Rica, Dominica, Dominican Republic, El  Salvador, 
Guatemala, Jamaica, Jordan, Mauritius, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, and 
Saint Vincent and the Grenadines had submitted these notifications, which had been circulated in 
the G/SCM/N/290 series.  
41. Furthermore, given that 2015 was the final year of the two -year phase -out period pursuant 
to the previously mentioned procedures, the Memb ers with extensions needed to have completed 
the elimination of their export subsidies by 31 December 2015. They also had to provide a final 
transparency notification in respect of calendar year 2015 not later than 30 June 2016. A reminder 
concerning that final round of Article 27.4 –related notifications had been circulated in document 
G/SCM/N/299. For the information of Members, the Chair  had asked Secretariat to prepare a room 
document indicating the current status of notifications and of actions reported  by Members with 
extensions under Article  27.4.5 
42. To date, fifteen of the beneficiary Members – Antigua and Barbuda, Belize, Costa  Rica, 
Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Jamaica, Jordan, Mauritius, 
Papua  New Guinea, Saint Kitts  and Navis, Saint Lucia, and Saint Vincent and the Grenadines - had 
submitted those final notifications. The Chair reminded other Members with extensions to submit 
their final transparency notifications as soon as possible. The deadline for the elimination  of the 
export subsidies had been four years earlier while for submitting the final notification had been more 
than three years earlier. She emphasized the importance for the system that both the Members 
benefit from extensions complete their compliance wi th the corresponding substantive and 
transparency obligations.  
43. New Zealand  noted that this agenda item had been before the Committee for a couple of years 
and that Saint Lucia was the only Member that had provided a notification since the previous meeting 
of the Committee. It strongly encouraged those Members with outstanding notifications to submit 
their notifications prior to the next Committee meeting. New Zealand requested to keep this item 
on the agenda for the next meeting.  
44. The United States  urged rem aining Members to provide their pending notifications.  
45. The Chair  noted that the Committee would revert to that issue at the next meeting.  
46. The Committee took note  of the statements made.  
6  IMPROVING THE TIMELI NESS AND COMPLETENES S OF NOTIFICATIONS AND OT HER 
INFORMATION FLOWS ON  TRADE MEASURES UNDE R THE SCM AGREEMENT  
47. The Chair  recalled that since the request of the Chairman of the Trade Policy Review Body in 
spring 2009, the Committee had been discussing, at formal and informal meetings , "ways to improve 
the timeliness and completeness of notifications and other information flows on trade measures". 
The substance of those discussions was reflected in the minutes of the previous meetings.  
48. The Chair recalled also that at Committee's April 2019 meeting a number of Members had 
indicated their willingness to continue discussions on ways to improve timeliness and completeness 
of notification obligations under the SCM Agreement, with the notification of subsidies being the 
most fundamental. In t his regard, there were two topics to cover under this agenda item, (i) the 
status of Members' notifications of subsidies and (ii) the US proposal regarding a written process for 
questions and answers under Articles 25.8 and 25.9 of the SCM Agreement.  
49. Regar ding the status of subsidy notifications, the Chair noted that the Secretariat had 
prepared and updated a background note at the request of Members, providing a snapshot of the 
 
5 RD/SCM/36/Rev.4.  G/SCM/M/111  
 
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  level of compliance with the various notification obligations under the SCM Agr eement since 1995, 
the most recent of which had been circulated in document G/SCM/W/546/Rev.10.  
50. The Chair noted that Members were required to submit their 2019 new and full notifications 
by 30 June 2019. She had called for an open -ended informal meeting on  27 June 2019 to provide 
an update on the state of compliance with subsidy notification obligations. At the same meeting the 
Secretariat had informed Members about the technical assistance offered on subsidy notifications.  
51. Despite those efforts, however, t he chronic low compliance with this fundamental 
transparency obligation constituted a serious problem in the proper functioning of the Agreement. 
She recalled that at previous meetings Members had stressed the importance of the information 
provided through  subsidy notifications and the value of complying with the relevant provisions of 
the SCM Agreement. Members also had recommitted to implementation of existing notification 
obligations under Article 25.3 of the SCM Agreement in the Ministerial Decision of 
13 December  2017.  
52. Despite Ministers' recommitment to the notification obligation as well as her various reminders 
as the Chair of the Committee , the level of  compliance with subsidy notification  obligation remained 
low. Ninety -five Members had not made the ir 2019 new and full subsidy notifications. Seventy -two 
Members  still had not made their 2017 new and full subsidy notification, although the deadline had 
been more than two years earlier. Further, sixty Members still had not made their 2015 notifications,  
which had been due more than four years earlier. Many of th ose Members either had never notified 
or had done so only in the distant past.  
53. The Members that had not yet made their 2019 notifications were: Afghanistan; Albania; 
Angola; Antigua and Barbuda; A rmenia; Bahrain, Kingdom of; Bangladesh; Barbados; Belize; Benin; 
Bolivia, Plurinational State of; Botswana; Burkina Faso; Burundi; Cabo Verde; Cambodia; Cameroon; 
Central African Republic; Chad; Colombia; Congo; Costa Rica; Côte d'Ivoire; Democratic 
Repub lic of Congo; Djibouti; Dominica; Ecuador; Egypt; Eswatini; Fiji; Gabon; the Gambia; Ghana; 
Grenada; Guatemala; Guinea; Guinea -Bissau; Guyana; Haiti; Israel; Jamaica; Jordan; Kenya; 
Kuwait, the State of; Kyrgyz Republic; Lao People's Democratic Republic; L esotho; Liberia; 
Lichtenstein; Madagascar; Malawi; Malaysia; Maldives; Mali; Mauritania; Mongolia; Mozambique; 
Myanmar; Namibia; Nepal; Nicaragua; Niger; Nigeria; Oman; Pakistan; Panama; 
Papua  New Guinea; Peru;  Qatar; Russian Federation; Rwanda; Saint Kit ts and Nevis; Saint  Vincent 
and the Grenadines; Samoa; Saudi Arabia, Kingdom of; Senegal; Seychelles; Sierra Leone; Solomon 
Islands; South Africa; Sri Lanka; Suriname; Tanzania; Tonga; Trinidad and Tobago; Tunisia; 
Uganda; United Arab Emirates; Uruguay; Va nuatu; Venezuela, Bolivarian  Republic of; Viet  Nam; 
Yemen; Zambia; and Zimbabwe.  
54. The Chair invited the Members that had not yet submitted their 2019 notifications to provide 
an update to the Committee on their progress in preparing those notifications. No such delegation 
took the floor.  
55. The Chair urged Members that had not yet submitted their notifications to do so, and recalled 
that the Secretariat continued to be available for enquiries about compliance with notification 
obligations. The  Secretariat had assisted many Members in the past and Members finding themselves 
unable to comply with their obligations were encouraged to consult the Secretariat. There was a 
range of resources that delegations could draw upon in working to rectify the situation, including the 
Secretariat Handbook on Notification Requirements for the SCM  Agreement and the two Geneva -
based Internship Programmes coordinated by the Secretariat. The Secretariat had recently modified 
the handbook for the notifications to be s ubmitted which was available in all three official languages 
of the WTO.  
56. In addition, the Secretariat had launched a series of regional technical assistance activities 
with an aim  to bring together the officials of Developing Members who were responsible f or preparing 
subsidy notifications. Th ose activities  included discussions on Members' subsidy notification 
obligations and offered opportunities to exchange experiences and ideas in order to streamline and 
facilitate internal processes for submitting notif ications.  
57. The Chair also mentioned that she had been consulting with some Members informally and 
bilaterally to explore what could be done to identify the challenges that the least -developed and G/SCM/M/111  
 
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  developing Members had been facing with when preparing their notifications and what steps could 
be taken to overcome those difficulties. Although she could meet with a limited number of Members 
yet, those Members had expressed an interest to explore ways to exchange views and experiences 
in an informal setting. The Chair would keep discussing th e issue with Members and inform the 
Committee about her bilateral contacts in due course.  
58. New Zealand  expressed concerns with the low levels of compliance with the notification 
requirements in the SCM Agreement. Without notifi cations it was difficult to assess what 
programmes were in place which might affect the trade interests of other Members. It encouraged 
Members with pending notifications  to submit their notifications as soon as possible, including "nil" 
notifications for those Members who had no subsidy programmes in place. Members facing difficulties 
should seek assistance from the Secretariat.  
59. Japan  echoed the statements made by the Chair and New Zealand and noted that 
transparency through the notification obligation was  one of the most important foundations to make 
the WTO system work more effectively. All Members should make their notifications within the 
deadlines.  
60. The European Union  noted that despite the repeated calls by many Members , the level of 
compliance with no tification obligation remained very poor. It thanked the Secretariat for its efforts 
with respect to the handbook on notification requirements as well as the seminars organized and 
encouraged it to maintain those initiatives to help Members. The EU underli ned the importance of 
the subsidy notification obligation and encouraged Members to increase their efforts to provide their 
notifications.  
61. Canada observed that the proportion of notifying Members in 2019  was higher than the 
previous years which was a posit ive development. The number of Members completing subsidy 
notifications, however, continued to be well below the full compliance level. Canada reiterated the 
importance of complying with notification requirements of the SCM Agreement. It appreciated that 
it was a resource intensive undertaking that required coordination between multiple levels of 
government, but also a fundamentally important transparency exercise. Canada encouraged 
Members to make their best efforts to fulfil their notification requirement s, including by making nil 
notification s, and to seek assistance from the Secretariat when necessary.  
62. The Republic of Korea  welcomed the improved response rate of full and new notifications in  
2019 but also  expressed concerns over the chronic low -level of compliance with notification 
obligations. Korea urged Members  that were in the process of preparing notifications to imple ment 
notification obligations as soon as possible.  
63. Norway  thanked the Chair for the update and for the initiative to engage Members in informal 
discussions. Transparency was of high importance for the sound functioning of the multilateral 
trading system an d Members had an obligation to submit timely and complete notifications. Referring 
to the discussions within v arious WTO bodies , Norway hoped  that the Membership would agree on 
concrete steps to improve compliance and enhance transparency soon.  
64. Australia  expressed its support for the Chair's efforts and recalled the Ministerial Decision in 
Buenos Aires. It encouraged those Members who had no subsidy programmes to provide "nil" 
notifications.  
65. The United States  echoed the previous statements and recalled that  technical assistance was 
available for Members. The US also applauded the efforts of the Chair.  
66. With respect to the second topic under this agenda item, the Chair recalled that at the 
Committee's April 2019 regular meeting, a number of Members had indicat ed their willingness to 
continue discussions on the proposal from the US regarding procedures for questions and answers 
under Articles 25.8 and 25.9 of the SCM  Agreement.6  
67. The United States  recalled that previously it had introduced its formal proposal th at written 
answers to initial questions under Article 25.8 be provided within sixty days and that follow -up 
 
6 G/SCM/W/557/Rev.3.  G/SCM/M/111  
 
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  questions be answered in thirty days. Although the mandatory deadlines for written answers to 
questions under Article 25.8 were necessary for the pr oper functioning of the provision, it recognized 
the concerns raised by some developing countries with respect to strict deadlines. Since no 
consensus had been reached on mandatory deadlines previously, the US proposed an alternative 
under which Members wo uld agree to non -mandatory deadlines for responses to Article  25 8 
questions.  
68. Under that proposal, Members would only agree to make their best efforts to submit written 
responses to Article 25.8 questions within sixty days and written responses to follow -up questions 
within thirty days. According to the US, such guidelines would signal that Members of the Committee 
were committed to making the important transparency provisions contained in the SCM Agreement 
function properly. While that was a less ambitious  outcome it would be an important, initial step to 
enhance a critical transparency tool.  
69. Although it had been reluctant to reconsider its position, the US had heard certain Members' 
comments and modified its position to take into account those concerns. Wh ere written responses 
to questions posed under Article 25.8 are not provided in a timely manner, or not at all, that 
important tool would be rendered ineffective and thus undermine transparency and the proper 
functioning of the SCM Agreement.  
70. The idea of M embers committing to providing written responses to Article 25.8 questions 
within a specified time was not a radical one and was in fact rooted in the accepted practices of the 
Committee. Therefore, there was nothing extraordinary about the proposal becaus e it mirrored the 
existing practice of providing answers to questions on regular notifications and reflected the practice 
most Members had followed when answering Article 25.8 questions. The US would ask that the 
proposal be adopted in the same manner as t he procedures for review of regular notifications and 
expected that the new proposal would overcome Members' concerns. The US indicated that it 
remained open -minded noting that it had made very significant modifications to the proposal to 
reach agreement.  
71. The US reminded that this provision was used infrequently – less than once a year on average 
- which suggested it was not being abused. It was, however, an important transparency tool and 
the new proposal would advance its proper functioning. The US remain ed flexible in finding a 
pragmatic solution that would satisfy the underlying objective of enhancing the exchange of 
information.  
72. Canada  reiterated that the subsidy notification process was a fundamentally important 
transparency exercise and expected that Members would make every effort to provide their 
notification and respond to questions from Members in a timely and complete manner. Canada 
further noted that the information request process contemplated under Articles 25.8 and 25.9 of the 
SCM Agreement we re important pillars for achieving the transparency objectives of the Agreement. 
Canada encouraged constructive discussions and was interested in hearing thoughts as to how the 
concerns raised previously such as capacity issues as well as complex state str uctures could be 
addressed in order to advance the proposal.  
73. Japan  supported the proposal noting that it did not provide for mandatory requirements. 
Members should respect and follow the proposal as a best effort basis. That guideline would be a 
good pract ice for transparency of subsidies.  
74. The European Union  echoed the previous statements made in support  of the proposal. It 
considered that the written question and answer process under Article 25.8 and 25.9 were very 
important especially in light of the stat ements made by China during the special meeting of the 
Committee with regard to not replying to questions in writing when they were about non -notified 
programmes.   The EU welcomed further discussions and expected that the Committee could move 
the issue fo rward.  
75. Korea  reiterated its support for the revised proposal of the US which could serve as a useful  
guideline in operating Article 25.8 of the Agreement.  
76. China  reiterated its position at the previous meetings noting that Articles 25.8 and 25.9 neither 
stipulate that Members should submit written replies, nor specify a deadline for submitting answers. G/SCM/M/111  
 
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  The requirement for making written answers would impose new su bstantive obligations on Members. 
China recalled that many questions raised by the Members pursuant to Article 25.8 had been 
incorporated into the normal questions upon subsidies notifications. Therefore, the proposal would 
not only cause difficulties to t he LDC Members but would also pose challenges to many developing 
Members by increasing their workload and distracting their focus on preparing their notifications. 
China reiterated the importance of transparency expecting that the relevant discussions coul d be 
conducted in a pragmatic manner. China was of the view that all Members would do their best to 
fulfil their respective transparency obligations in accordance with the relevant provisions of the 
SCM Agreement.  
77. Australia  reiterated its ongoing support f or the proposal and noted that the US had been very 
flexible in modifying its proposal. Referring to the discussions made at the special meeting of the 
Committee, Australia noted that it had long been the practice of Members to ask questions on non -
notified programmes. Any efforts to improve the clarity of those procedures would be welcomed. 
Australia also noted that it was necessary to consult with different central or sub -central agencies 
to get answers for those questions . The best way to do that was written questions and the easiest 
way to  reply was in writing. Australia was interested to hear why the proposal would add to capacity 
burden of developing Members.  
78. Norway  supported the proposal noting that this was a best efforts text. It hoped  to find 
consensus to move forward on that basis.  
79. The Russian Federation  welcomed the efforts to increase timely responsiveness of the 
Members and noted that it was not in opposition of the idea for establishment the deadlines for 
replies to written questions.  However, for some Members , the implementation of the proposal might 
become a challenge, in particular with regard to the collection of the information from the regional 
authorities. It could be a more time -consuming process to make comprehensive replies. The 
Russian  Federation was in the process of fi nalizing internal procedures on the proposal and expected 
to come with a position at the next meeting.  
80. Chinese Taipei  expressed its support noting that the revised proposal had merits to enhance 
transparency without being mandatory.  
81. India indicated its rea diness to discuss the proposal with the US as well as other Members 
reiterating the issues it had flagged previously. It noted that in a number of notifications the 
questions were being raised about sub -central schemes for which collecting the relevant inf ormation 
from sub -federal authorities was not easy. Therefore, although it was on the best endeavour basis, 
setting timelines for sub -central schemes did not reflect the realities. India suggested that two 
different timelines for central and sub -central go vernments could be considered. Referring to the 
phrase "appropriately answered" used in paragraph 4 of the proposal, India reiterated its concern 
as to who would determine whether the question has been "appropriately answered". India also 
indicated that it  was ready to engage further discussions on the proposal.  
82. The Chair stated that it appeared that Members wished to continue discussions on those issues 
at the next regular meeting of the Committee.  
83. The Committee took note  of the statements made.  
7  SUBSIDIES AND OVERCAPACITY – ITEM REQUESTED BY CAN ADA, THE EUROPEAN 
UNION, JAPAN, AND TH E UNITED STATES  
84. The United States  recalled the call by G20 Leaders at their summit in Hangzhou , China, in 
September 2016 , for the establishment of a Global Forum on Steel Excess Capacity which was a 
recognition of the severe and widespread negative impact of excess capacity on trade and workers 
in the steel sector. In their Hangzhou Declaration, G20 Leaders had highlighted the role of subsidies 
and other types of government suppor t in creating excess capacity noting that those market -
distorting support measures required immediate attention.  
85. The Global Forum was established in December 2016 whose membership included all members 
of the G20 as well as interested non -G20 members of the  OECD accounting for over 90%  of global 
steel production capacity.  G/SCM/M/111  
 
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  86. The Global Forum had provided recommendations to reduce excess capacity and enhance 
market function in the steel sector, including removing and refraining from market distorting 
subsidies a nd other types of support measures that contribute to excess capacity. The Global Forum 
developed a list of such measures which was available in a public report adopted by Global Forum 
Ministers in November 2017.  
87. With the list of measures, it was intended to capture the myriad ways in which governments 
could fuel excess capacity by distorting competition. In putting forward the list, the Global Forum 
emphasized that the identified measures should be removed irrespective of the vehicle through 
which they wer e delivered, whether they were provided directly or indirectly, whether they were 
provided by governments or government -related entities, and whether or not the measures were 
subject to WTO Agreements.  
88. The measures identified by the Global Forum included:  
• Preferential financing inconsistent with market -based conditions, including debt 
forgiveness, guarantees, and policy loans inconsistent with market consideration, 
whether through bank lending, the bond market, asset sales to government, or other 
channels;  
• Equity infusions and conversions inconsistent with market -based conditions including 
debt-for-equity swaps;  
• Grants, awards and cost refunds;  
• Tax exemptions, reductions, and credits;  
• The assumption of liabilities, fees or other charges by governments or gov ernment -
related entities, inconsistent with market considerations;  
• The provision of goods and services by a government for less than adequate 
remuneration, as well as the provision of input support preferentially or at non -market 
rates, including with resp ect to land, energy, raw materials, utilities, and services; and  
• Distortive discretionary policy measures or non -application of market -based policy 
measures, such as export subsidies, tax rebates, restrictions to inward investment or 
support to outward investment, misappropriation of intellectual property, mergers and 
acquisitions at non -market conditions, and lax enforcement of regulations.  
89. Bringing greater transparency to those and other government measures which potentially 
contribute to exces s capacity was a core objective of the Global Forum. In order to fulfil that 
objective, Forum members had established an information -sharing mechanism through which they 
would submit and regularly update information about subsidies and other support measur es 
implicating the steel sector.  
90. Canada  remained concerned with the role government interventions play in the global excess 
capacity in certain sectors which result ed in trade and market distortions affecting all manufacturing 
economies. It welcome d the work of the Global Forum which ha d served as an important venue for 
constructive exchanges and co -operation between Members on global steel excess capacity. Canada 
was disappointed that no consensus could be reached at the recent Ministerial meeting to continue 
the Global Forum mandate beyond December 20 19. While some progress had been made, the 
anticipated slower growth period for steel demand mean s that excess capacity  and government 
interventions preventing appropriate market -based adjustment remain s important issues to address. 
G20-OECD discussions must continue and include all major steel producing countries. Canada 
recognized that the WTO , and the SCM Committee in p articular , are uniquely situated to support 
discussions on the role of subsidies in contributing to global overcapacity. Canada urged Members 
to make full use of the WTO forum to have a long -term solution to global overcapacity.  
91. Japan  noted that subsidies and other types of market distorting supports by governments was 
one of the major causes of overcapacity in industries such as iron and steel, aluminum, 
semiconductor and shipbuilding. Japan reiterated its concerns over such subsidies and government 
suppor ts and highlighted the importance of having further discussions on this issue in the 
Committee. In order to establish a free and fair market, market -distorting subsidies, which were not 
sufficiently addressed under the SCM Agreement, should be removed.  
92. The European Union  reiterated that subsidies were one of the main contributors to 
overcapacity in several sectors which had to be addressed. It echoed the statements made by the G/SCM/M/111  
 
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  previous speakers and expected to see that China would re -join the Global Forum o n Steel Excess  
Capacity to have a more complete picture of the situation and problems in that sector.  
93. China  reiterated that the issue of overcapacity was not in the terms of reference of the 
Committee and it was not an appropriate forum for the discussion of that issue. To take such topics 
into the agenda was not helpful for an overall and exact understanding of the problem. According to 
the terms of reference of the Global Forum on Steel Excess Capacity the term of the Forum was 
three years. At the latest Forum Meeting, Members had not reached consensus on the extension of 
this term. Therefore, the Forum had been terminated in a natural manner. The aim of the Forum 
was co -operation and the principle was collectively corresponding to global issues. According  to 
China, however, in terms of reducing capacity in steel sector the US had not performed its liabilities. 
On the contrary, the it had initiated Section 232 investigations on steel products, which had 
undermined the foundation of the Forum. The capacity o f crude steel of the US had increased by 
2.1 million tons in 2018 compared to 2015.  According to the statistics from AIIS, the steel export 
of the US had amounted to 10.5 million tons in 2017, increasing by 13% on a year -on-year basis.  
94. According to China,  overcapacity was a universal, cyclical and structural problem which was a 
common challenge facing the whole world. The current overcapacity in steel industry was caused by 
the global economic recession resulting from the 2008 international financial crisi s and the 
consequent decrease in demand for steel. China was worried that the increasing measures of trade 
protectionism would hinder Members’ positive responses against overcapacity, which could shake 
the confidence of Members to cope with overcapacity an d increase the difficulty in solving the 
problem.  
95. China recalled that the G20 Summit in Hangzhou had reached a consensus that the 
overcapacity of steel was a global issue requiring collective responses. It noted that the steel 
production in China was achie ved to satisfy the domestic development. While the steel capacity and 
production of China accounted for half of the world total respectively, the steel consumption of China 
was also close to half of the world’s total steel consumption. While 93% of China’s  steel production 
has been used to meet domestic demand; only 7% has been exported without distorting the 
international market heavily. During the period of 2008 -2018, the EU had increased its steel import 
by 14% while decreasing its import from China by n early 57%. Over the same period, the EU’s steel 
export had decreased by nearly 14% in general,  while its export to China had grown by almost 
47%.  
96. China had been actively fulfilling its commitment and eliminating outmoded production 
capacity by improving e nvironmental protection standards as well as safety and quality standards 
for the sake of high -quality development on its own part. It had cut the most of overcapacity and 
made the greatest contribution in that respect. Since 2016, China had downsized the steel production 
capacity by more than 150 million tons, which amounted to 114% of the total capacity cut across 
the world. For that purpose, the Chinese Government had relocated as many as 280,000 steel 
workers. The steel market in China had changed signi ficantly for the better and the crude steel 
capacity utilization had returned to the reasonable range of over 80%, thereby making great 
contribution to the healthy development of the global steel industry.  
97. The Russian Federation reiterated its readiness fo r further search of ways to overcome 
overcapacity. Need for cooperation in this sphere was obvious to ensure healthy international trade 
and greater economic stability. It further noted that the major factor contributing to overcapacity 
was trade protectio nism. According to the Russian Federation, restrictive measures negatively 
affected trade flows and hampered competition. The dialogue and constructive engagement of 
Members could solve the problem, not the trade protectionism. The Russian Federation remai ned 
ready for further discussion on that issue.  
98. The Committee took note  of the statements.  G/SCM/M/111  
 
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  8  IMPLEMENTATION OF PA RAGRAPH 2 OF THE MIN ISTERIAL DECISION ON  FISHERIES 
SUBSIDIES (WT/MIN(17 )/64; 13 DECEMBER 20 17) – ITEM REQUESTED  BY ARGENTINA, 
AUSTRALIA, CANADA, THE EUROPEAN UNION, ICELAND, JAPAN, THE REPUBLIC OF 
KOREA, NEW ZEALAND, NORWAY, CHINESE TAIP EI, AND THE UNITED S TATES  
99. The United States  recalled the Ministers' recommitment at the Ministerial  Conference in 
Buenos Aires in 2017 to the implementation of exis ting notification obligations under Article 25.3 of 
the Subsidies Agreement, with a view toward strengthening transparency with respect to fisheries 
subsidies. It noted that while better in, 2019 Members' record in meeting their subsidy notification 
obliga tion under Article  25.3 remained poor. It was good news that seventeen or 65% of the top 
twenty -six marine capture producers had notified. In addition, some Members had submitted a 
subsidy notification for the first time in over twenty years. The US urged those Members that had 
not yet submitted a notification to do so as soon as possible. This was an opportunity for the 
Membership to demonstrate that Members could carry out one of the most basic transparency 
obligations in the WTO. Members also had to ensure that their notifications provided greater 
transparency, where needed, that was unique to fisheries subsidies programs, and allowed a better 
understanding of the operation of notified programs.  
100.  Members had to ensure that their notifications have p rovided greater transparency, where 
needed, that was unique to fisheries subsidies programmes, and allowed a better understanding of 
the notified programmes. Meeting the Ministerial mandate with full and comprehensive notifications 
of fisheries subsidies c ould provide important context and benchmarks for finding ways to break 
longstanding stalemates in the negotiations.  
101.  The US recalled that it had asked what practical impediments might be in submitting timely 
and comprehensive notifications of fishery subsi dies. Several Members had indicated the difficulties 
in meeting their notification requirements in a timely manner, and that in some instances this could 
be attributed to capacity, internal coordination challenges, and resource constraints. For those 
Membe rs, the US suggested alerting the Secretariat, to help expedite submission of a "nil" 
notification. For those facing practical challenges, the WTO Secretariat was in a position to help, and 
was immediately available to help provide advice concerning the ga thering and notification of 
fisheries subsidies information.  
102.  The US also noted that it was willing to share experiences and help to ensure capitals were 
well informed of the need to meet the deadline. It was open to any further ideas that would help to 
ensure that all Members comply with the Ministerial directive from Buenos  Aires to provide fisheries 
subsidies notifications under Article 25.3.  
103.  Australia  associated itself with the statement made by the US and reiterated the importance 
of transparency obliga tions with respect to fisheries subsidies, in particular. The notifications were  
also necessary for ongoing negotiations on fisheries subsidies . Australia noted that there were a 
number of Members working on their notifications and it had also had some bil ateral meetings with 
Members who did not have fisheries subsidies. Australia urged those Members to provide a nil 
notification as soon as possible.  
104.  Korea  recalled the Ministerial Decision in Buenos Aires and stressed the importance of the 
implementation of  notification obligations with regard to fisheries subsidies. Transparency was not 
only an obligation but also an essential basis upon which good rules could be established. Korea  
urged Members who had not yet submitted notifications to do so without delay . 
105.  Japan  attached great importance to improving Members' compliance with the notification 
obligations in the area of fisheries subsidies. In order to enhance transparency further it had 
submitted its notification in June 2019. Although many Members had submitted their notifications, 
Japan was concerned with other Members who had not yet  submitted  their subsidy notifications. 
Improving the implementation of existing notification obligations through paragraph 2  of the 
Ministerial Decision  would significant ly contribute to the proper functioning and operation of fisheries 
subsidies disciplines.  
106.  New Zealand  expressed its support to take steps to enhance transparency on fisheries 
subsidies and welcomed Ministerial Decision in December 2017.  Enhanced transparen cy was G/SCM/M/111  
 
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  important to New Zealand and essential in its own right to better assess the trade, resource and 
environment impacts of subsidies. It was also essential that all Members comply with notification 
requirements, as this would be helpful to better under stand the existing fisheries subsidies 
programmes and to identify and address any harmful effects on the sustainability of global fish 
stocks. Noting the importance of comprehensive and timely notifications for the successful 
conclusion of the WTO fisherie s subsidies negotiations, it encouraged Members to notify their existing 
subsidies as soon as possible or seek assistance from the Secretariat.  
107.  Chinese Taipei  echoed the statements made by previous speakers and recalled Ministers' 
recommitment to the imple mentation of existing notification obligations under Article 25.3 of the 
Agreement. This was not a new but rather an existing obligation. For the difficulties of Members in 
preparing fisheries subsidy notifications, Chinese Taipei welcomed the suggestion m ade previously 
that Members could ask technical assistance from the Secretariat. Chinese Taipei also urged 
Members who had not submitted the relevant information on fisheries subsidies to do so.  
108.  Norway  reiterated the importance of having a complete and upd ated overview of different 
Members’ fisheries subsidies for the ongoing fisheries subsidies negotiations. It urged those Members 
who had not yet notified their subsidies as well as the ones who had not provided any fisheries 
subsidies to provide their noti fications without delay. It also urged Members that had difficulties in 
preparing their notifications to ask technical assistance from the Secretariat.  
109.  Canada  echoed the statements made by previous speakers about the importance of 
transparency on fisheries  subsidies. Although the number of notifying Members prior to the June 
2019 deadline increased compared to the previous cycle, many Members have not yet notified any 
fisheries subsidies. Canada urged all Members to comply with the MC11 commitments. Having a 
clear picture of the existing fisheries subsidies maintained by Members is a necessary  first step to 
deliver the commitment to agree on new rules addressing harmful fisheries subsidies. Canada 
expected that all Members would strive to notify their fisher ies subsidies and comply with the 
Ministerial Decision on 2017.  
110.  The European Union  welcomed the positive developments as regards to notifications of 
subsidies as well as notification of fisheries subsidies, in particular. It strongly urged the Membership 
to improve the notifications of their subsidies and stressed the importance of fish eries subsidies 
notifications in line with the Ministerial Decision and in the context of the ongoing negotiations.  
111.  Argentina  echoed the previous statements and encouraged the Membership to step up their 
efforts to comply with the Ministerial Decision. Acc ording to Argentina , this would be an invaluable 
contribution to the ongoing negotiations.  
112.  China  attached great importance to the protection and sustainable development of the marine 
fishery resources and expressed its support for the Ministerial Decision to complete the fisheries 
subsidy negotiations as scheduled and to improve transparency in that regard. It also noted its 
expectation that the transparency requirements would not pose excessive burden on developing and 
least-developed Members. China had be en improving the transparency of its fisheries subsidies 
through concrete actions, showing its firm determination to uphold and support the multilateral 
trading system. It dedicated a whole chapter for the fisheries subsidies in its 2019 subsidy 
notificati on which covered six centrally -provided and twenty local fisheries subsidies. China also 
noted that providing a dedicated chapter on fisheries subsidies in its recent notification did not 
indicate that China had not notified any fisheries subsidies in its previous notifications.  
113.  The Committee took note  of the statements made.  
9  ARTICLE 25.8 QUESTIO NS TO CHINA ON POTEN TIAL STEEL SUBSIDIES  – ITEM 
REQUESTED BY THE EUR OPEAN UNION AND THE UNITED STATES  
114.  The United States  reiterated that it had been concerned with t he lack of transparency of 
China's industrial subsidy regime since 2001. To prompt a more fulsome disclosure of China's subsidy 
programmes, it had raised questions to China under the old Transitional Review Mechanism, 
pursuant to Article 25.8 of the Agreem ent, under the normal Committee procedures and also 
counter -notified subsidy measures under Article 25.10.  G/SCM/M/111  
 
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  115.  As steel was a vital sector in the US, it had raised questions and counter -notified numerous 
possible steel subsidy measures in China. Notwithstandin g its claim to the contrary at prior meetings, 
however, China had not notified the vast majority of its steel subsidy programmes over the last 
eighteen years of its WTO Membership.  
116.  The growth of the steel industry in China had been remarkable since China h ad become a WTO 
Member. Its steel capacity had grown over 500% since 2001 and it accounted for half of the global 
steel production. The growth of capacity in China had outpaced the growth in demand. Its steel 
capacity exceeded domestic demand by at least 2 00 million tons.  
117.  In a market economy, when capacity outpaced demand, the owners of that capacity were 
threatened by financial loses which forced them to reduce capacity or exit from the market. In a 
market economy, when there was excess capacity in an indu stry it would be difficult to obtain 
commercial financing for even more capacity investments. However, those market dynamics did not 
appear to apply in China.  
118.  The financial crisis in 2008 had led to a severe drop in global demand for steel. In China, 
howev er, the financial crisis had no effect; capacity had continued to grow despite falling global 
demand. Steel capacity in China had increased by 500 million tons or by 78% between 2008 and 
2015 while its internal demand for steel had increased by only half o f that amount.  
119.  Ministry of Industry and Information Technology of China and many market analysts agreed 
that China's steel demand had peaked, and it had been declining since 2013. China's excess 
production had spilled over to export markets while there was  insufficient domestic demand. China's 
exports had grown from less than 7 million tons to 70 million tons between 2001 and 2018 which 
had led to a rise in trade remedy cases in both developed and developing countries against Chinese 
steel products.  
120.  Accordi ng to China, the growth in capacity and exports – in both good and bad times  – had 
been accomplished with little or no government subsidy support, even for those companies owned 
by the government, while a superficial examination of the annual reports of se veral of the largest 
steel companies in China indicated otherwise. In those reports, under the title of "government 
subsidies" or "government grants", many of China's top steel companies listed dozens of 
government -funded projects through the provision of grants.  
121.  The Article 25.8 questions co -submitted by the EU and the US enquired about 160 government 
subsidies or government grants listed in the annual reports of six of the largest steel companies in 
China. More recent annual reports indicate the same gene ral level of government subsidies. All of 
the listed government subsidies or government grants might not be subject to the notification 
requirements of Article 25 of the SCM Agreement; however, there were certainly more than the 
three non -specific programm es China had claimed to be the exclusive instances of government 
intervention in the steel industry or the few other programmes that China claimed it had notified 
under different names or had not been specific.  
122.  In other fora, China argued that some or all those other programmes were from provincial 
and local governments. If so, the US asked China to explain why those programmes had not been 
notified in its subsidy notification covering sub -central government entities as well as in its most 
recent subsidy no tification. It had taken China sixteen years to submit its first sub -central subsidy 
notification however it was clear how deficient the notification was. The US recalled that China had 
stated that it would send those Article 25.8 questions to the local go vernments for possible inclusion 
in the 2019 notification. While there were several restructuring subsidies in China's 2019 notification, 
however, there were little, if any, of the subsidies from those Article 25.8 questions.  
123.  According to steel company ann ual reports, several of China's steel companies had received 
relatively large government equity infusions which were not surprising given that most of the largest 
steel companies in China were government -owned. The US and the EU had asked China to explain 
whether those government investments could be commercially justified; however, no response had 
been received even in the context of China's oral responses at previous meetings.  
124.  The European Union  indicated that it was fully associated with the US statement  and thanked 
China for its subsidy notification made in June 2019. With regards to the Article 25.8 questions, G/SCM/M/111  
 
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  however, The EU remained concerned that the level of notification was not fully complete. It noted 
that in China's most recent notification, stee l subsidies appeared only in five instances all of which 
were related to reduction of overcapacity. The EU acknowledged that there might be some steel 
subsidies that were covered by particular preferential tax regime within the subsidy notification; 
howeve r, it remained unconvinced that all of those Article 25.8 questions had been covered 
satisfactorily by the notification. The European indicated that it would welcome further clarification 
in that regard.  
125.  China  had noticed the sustained concern of the US an d the EU about its steel industry policies 
which China would like to clarify. China also indicated that its efforts in improving the transparency 
of the steel subsidy policies should not be ignored or underestimated. In its latest subsidy notification 
for the period of 2017 -2018, China had incorporated subsidies involving the steel sector. Although 
those policies were not specific to steel industry China had included them in the notification for the 
purpose of improving transparency.  
126.  For example, at the cen tral governmental level there were preferential tax treatment for 
environmental protection, water and energy conservation, clean development mechanism, fund for 
energy conservation and emission reduction, fund for air pollution prevention and control, R&D super 
deduction for enterprises, and reward and support fund for the structural adjustment of industrial 
enterprises.  
127.  At the local governmental level, there were;  
i. Fund for environmental protection, Jiaozuo city of the Henan Province.  
ii. Fund for prevention and control of air pollution, Jiaozuo and Xinxiang city of the Henan 
Province.  
iii. Fund for environmental protection, Hu -nan province.  
iv. Fund for energy conservation, Tianjin Municipality.  
v. Reward and support fund for dissolving overcapacity, Yunan pro vince.  
128.  China had sent the annual report of the six steel enterprises mentioned in the documents to 
the competent local governments for further verifications. It noted that the verified subsidies relating 
to steel sector had been included in the 2017 -2018 l ocal subsidy notification submitted on 30 June 
2019 and asked Members to refer to its new and full subsidy notification.  
129.  With regard to the programs indicated in the annual reports, China noted that the annual 
reports were formulated upon supporting progra ms, while its notification was based on policies. 
Therefore, different programs sometimes might come from the same policy and there was no one -
to-one correlation between those two. Even with the same program, there could be duplication of 
statistics among different subsidiaries. According to the SCM Agreement, however, not every 
program released in the annual report shall be notified. As a result, not every program disclosed in 
the enterprises' annual reports corresponded to one of China's submitted subsidy  notifications. For 
this reason, it was pointless to compare the number of subsidy policies notified with the programs 
disclosed in the annual reports.  
130.  China reiterated that overcapacity was a universal, cyclical and structural problem in economic 
developm ent which was also a common challenge facing the whole world. The current overcapacity 
in steel industry was caused by the global economic recession resulting from the 2008 international 
financial crisis and the resultant decrease in the demand for steel. The subsidy issue was only a part 
of the whole and reaching to the conclusion that subsidies were the primary cause of the overcapacity 
would not be helpful for the final resolution of that issue.  
131.  Japan  stated that, in the interest of transparency, Members  should continue the discussion on 
this issue in the Committee.  
132.  The Committee took note  of the statements made.  
10  OTHER BUSINESS  
133.  No Member raised any items under other business.  G/SCM/M/111  
 
- 17 - 
 
  11  DATE OF NEXT REGULAR  MEETING  
134.  The Committee decided  to hold its next regular meeting during the week of 27  April 2020, 
with the exact date to be confirmed in due course. As usual, that meeting would be immediately 
preceded by a special meeting for review of subsidy notifications.  
12  ANNUAL REPORT OF THE  COMMI TTEE ON SUBSIDIES AN D COUNTERVAILING 
MEASURES TO THE COUN CIL FOR TRADE IN GOO DS (ARTICLE 32.7)  
135.  The Committee adopted  its Annual Report (2019) to the Council for Trade in Goods.7 
136.  The meeting was closed . 
 
__________  
 
7 G/L/1341  - G/SCM/155.