RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/487
7 February 2002
(02-0603)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
MEMBERS' DIFFICULTIES IN MAKING SUBSIDY NOTIFICATIONS,
AND THE PLANNED SUBSIDY NOTIFICATION SEMINAR
Reply to Questions in Document G/SCM/W/473
of 18 December 2001
Paper Submitted by the United States
The following communication, dated 5 February 2002, has been received from the Permanent
Mission of the United States.
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B. QUESTIONS CONCERNING DIFFICULTIES IN NOTIFYING
Q1. Does your government face resource constraints in trying to make subsidy notifications?
If so, what are the major bottlenecks in the notification system of your government?  Is the
problem primarily an insufficient number of staff to handle the notifications, or is it more a
question of insufficiently trained staff?
Q2. Depending on your answer to question 1, above, if the notification questionnaire format
could be simplified, would this make a difference to your government’s ability to make the
required subsidy notifications?
Q3. Balancing your government’s needs for as simp le a format as possible against its needs
to be able to understand other Members’ notifications when it reviews them, how much
simplification could be introduced without sacrificing transparency?
Reply
As a general matter, we are prepared to be flexible in considering proposals to simplify
subsidy notifications, provided that they do not undermine Members' existing obligations under the
Subsidies Agreement.  Article 25.3 of the Subsidies Agreement lists five items that should be included
in a notification.  As long as the terms of this Article are respected, we are willing to consider any
specific format changes.  Generally, however, we do  not believe notifications can be simplified to any
great extent without sacrificing transparency.
Q4. Considering the notification format itself, and the concepts underlying it as found in
SCM Articles 1-3, in your government’s experience, do individuals responsible for making
notifications have difficulties understanding the requirements due to the language used in the
Agreement to define “subsidy”, “specificity”, etc. ?  For example, do these individuals believe
that subsidies are in the nature of cash grants  only, and do not encompass revenue foregone viaG/SCM/W/487
Page 2
tax and duty incentives?  Could some sort of explanation be introduced into the questionnaire
format to make more clear the scope of measures that are subject to notification?  How might
such an explanation be worded?
Q5. Does your government experience general pr oblems due to the formatting requirements
of the notification questionnaire?  In particular, does your government maintain any
pre-existing information that addresses the substance of the notification questionnaire, but does
not correspond to the questionnaire’s format?  If so, what are the specific problems that your
government encounters when it tries to fo rmat the information as required by the
questionnaire?  If the information were to be notified in its pre-existing format, could it
nevertheless be keyed to the data elements of the subsidy questionnaire?
Q6. In reviewing other Members’ notifications, would your government find it problematic
to review information that was formatted in a way other than the way foreseen in the subsidy
questionnaire, but that comprehensively ad dressed the substantive elements of the
questionnaire?  How important would it be for this information to be keyed or coded to the
questionnaire format?
Q7. Does your government maintain any info rmation about its subsidy or incentive
programmes on official web sites?  How much wo uld your notification of subsidies be simplified
if such information could be submitted in its pre-existing format?  As a reviewer of
notifications, what sorts of limits should there be to the substitution of information from websites for completed notification questionnaires?  Would references to web sites be a useful
supplement to substantive information provided in a notification?
Reply
While reformatting pre-existing information to meet the formatting requirements of the
notification questionnaire can be time-consuming, a common format is needed to ensure the greatest
degree of transparency.  It is also important to address each of the required elements of the
notification - a web site can be provided for additional information purposes.
Q8. Concerning General Rule 6, which requires that  notification of subsidies provided “to
specific products or sectors” be organized on a product- or sector-specific basis, does this rulepose problems for your government when notifying subsidies that are provided on a horizontal,
rather than a product- or sector-specific basis?  What are the specific steps and difficulties in
preparing sector- or product-specific informatio n for subsidies provided on a horizontal basis?
Does this rule present problems for notification  of subsidies that are provided on a product- or
sector-specific basis (e.g., some agricultural subsidies)?
Reply
Notifying industrial subsidies on a product-specific basis - rather than on a programme basis -
is a significant problem.  In this regard, perh aps the Committee could consider adopting the approach
that notifications for programmes which benefit more than one or two products, can be notified on a
programme, rather than product basis, provided that all programme notifications describe the
industries or sectors which benefit from the programme.
Q9. Would a redrafting of General Rule 6 to refer to subsidies "provided on the basis of
specific products or sectors" help to resolve this  problem?  (The idea would be to clarify that
programme-based information, rather than product- or sector-specific information would be
required for subsidies provided on a horizontal basis, which product- or sector-specific
subsidies would continue to need to be notified on that basis.)G/SCM/W/487
Page 3
Q10. Would such a redrafting pose problems for the review of subsidy notifications, and if so,
what would those problems be?
Q11. To what extent does the general requirement to provide statistical information on the
trade effects of notified subsidies (chapeau of item 9) impede or delay the presentation of
subsidy notifications?
Q12. To what extent does the need to compile the specific kinds of statistical information
referred to in items 9(a) and 9(b) impede or delay the presentation of subsidy notifications?
Q13. How important is this statistical informat ion about other Members’  subsidies to your
government when reviewing subsidy notificati ons?  Could these reporting requirements be
made less stringent in some manner?  If so, how?
Reply
This information is generally not available to us and therefore, has not impeded or delayed
our notifications.  While the requested statistical information would be helpful in some contexts, we
do need view it as critically important.
Q14. Does your government find, in preparing s ubsidy notifications, that there is conceptual
overlap or redundancy in some of the information elements as currently drafted?
Q15. If your government believes there to be overlap, how might this be eliminated?  What
drafting improvements might be introduced to clarify such situations, while preserving the
substantive requirements of Article 25 from which the questionnaire is drawn?
The Committee might want to re-examine whether there is a need for all the information
requested in G/SCM/6 and whether there is an overlap in the information requests made.  In
particular, the Committee could look at items five , six and seven under “Information to be Provided.”
The "form of the subsidy" requested in item five may overlap with information on "how the subsidy is
provided" in item six.
Similarly, information on "whether a fixed or fluctuating amount per unit" is granted,
requested in item six, may overlap with information on the "subsidy per unit," requested in item
seven.
As a general matter, beyond the request for information on beneficiaries, some of the other
information requested in item six may not be unnecessary.
Q16. Do the requirements to provide information on the policy objective or purpose of the
subsidy, its background and authority, and to whom and how it is provided pose significant
difficulties to your government in preparing its subsidy notifications?  How might theserequirements be simplified?
The policy objective/background information request generally does not pose problems.
The request for information on a programme's background could be simplified by not
requiring detailed information regarding a particular programme's origins or history.  Alternatively,
perhaps the request for background information can be satisfied via a reference to an easily accessible
document or one that is provided with the notification.G/SCM/W/487
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Information as to the identity of the beneficiaries is important and should be provided to the
extent it is available.
Q17. Does the requirement to furnish an explanation where a particular element of
information cannot be provided pose particular difficulties to your government in preparing itsnotifications?  If so, is there a way to simplify this requirement while preserving its substantive
content?
As a general matter, the need to provide an ex planation as to why certain information cannot
be provided does not pose a particular problem.   
Q18. Is there sufficient flexibility in item 7 of the subsidy questionnaire (information on the
amounts of subsidies provided) for your government to be able to notify such information
without undue difficulty?  If not, is there a way to simplify this requirement while preserving its
substantive content?
We believe that there is sufficient flexibility in item seven such that Members can notify
subsidy amounts as best they can.
C. QUESTIONS PERTAINING TO THE SUBSIDY NOTIFICATION SEMINAR
Q1. Concerning the number and nature of pa rticipants in the seminar, how many
individuals in your government have day-to-day responsibility for gathering information about
subsidies and for preparing and submitting subsidy notifications based on that information?  If
more than one, please describe the differen ces in these individuals ’ responsibilities.
Q2. Would it be sufficient for your government to have two participants in the seminar?  If
not, why not, and how many participants would be optimal from your government’s point of
view?
Q3. Would two days be a sufficient/appropriate length for the seminar?  If not, what would
be more appropriate?
Q4. Would the following schedule be appropriate:  First session:  detailed presentation of the
basic definitions in Articles 1, 2 and 3 of the SCM Agreement, and presentation of the subsidy
notification obligations in the light of these definitions.  Second session:  Presentations by
Members concerning the specific problems they experience in preparing subsidy notifications.
Third session:  Information-sharing and brainsto rming among Members as to possible practical
solutions for the identified problems (ways to coordinate and streamline gathering and
formatting of subsidy information).  Fourth sess ion:  Follow-up steps to ensure that information
shared and lessons learned would be retained and implemented.  (It has been emphasized that
to be effective, such follow-up should be immediate and intensive.)  Ideas suggested to date have
included establishment of informal contacts among capital-based officials, planning of futurefocused technical assistance activities, etc.
Q5. Does your government normally send capital-based representatives to the Committee’s
regular meetings?  If not, why not?
Q6. Does your government view this subsidy noti fication seminar as an important event in
improving its ability to understand the subsidy rules, and to make subsidy notifications in a
complete and timely manner?  (That is, does your government view the seminar as a priorityG/SCM/W/487
Page 5
event for its participation?)  Does your government  plan to send capital-based participants to
the seminar?  If so, how many and what are their functions?  If not, why not?
Q7. In the view of your government, would financial sponsorship only of participants from
least-developed country Members be appropriate?  If not, why not?  What other objectivecriteria for eligibility for financial sponsorship could be developed that might be more
appropriate?
Q8. If your government would be prevented from sending participants to the seminar due to
financial constraints, what is the minimum level of financial sponsorship that would make it
possible to send participants (e.g., airfare only, airfare and subsistence for the days in Geneva,
etc.)?
Q9. Assuming that it is not possible to finance the seminar out of existing trust funds in the
WTO (a possibility currently being explored), and assuming a total budget of approximately
CHF 225,000, would your government consider making  a donation to finance it?  If so, how
much would your government be in a position to contribute?
Q10. If the seminar were financed by earmarked contributions from individual Members,
and there were a surplus in the budget for the seminar (due to fewer than expected participants
from Members eligible for financial sponsorship,  however they might be identified), how should
any such surplus be disposed of?  Two possible  options have been discussed (i) returning the
surplus to the sponsors on a pro- rata basis; or (ii) making the surplus available on a first-come,
first-served basis to other developing country Members.  Are there other, more appropriate,
options?
Reply
Perhaps the most important issue for the proposed seminar is making sure that those Members
that need the assistance the most are the ones most likely to attend.   A Member that maintains a large
number of subsidy programmes should attend rather than one that does not.  Thus, some information
gathering on plans for participation might be useful in terms of encouraging those Members that
would benefit the most.  Similarly, Members that do attend should be encouraged to bring some of
their subsidy information with them such that tangible progress might be achieved in the course of theseminar.  This information could be solicited through a questionnaire from the Secretariat.
The proposed length, schedule and budget assumptions appear reasonable to us.  Assuming
there is a continuing need, any surplus funds should be made available on a first-come, first served
basis.
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