WORLD TRADE
ORGANIZATIONG/SCM/Q3/COL/14
5 July 2002
(02-3760)
Committee on Subsidies and
 Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement
 on Subsidies and Countervailing Measures
Comments and Further Questions from ECUADOR Regarding COLOMBIA1
The following communication, dated 18 June 2002, has been received from the Permanent
Mission of Ecuador.
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STATEMENT BY THE DELEGATION OF ECUADOR
COMMITTEE ON SUBSIDIES AND COUNTERVAILING MEASURES
Mr Chairman,
We consider it essential to make a few specific comments on the replies by Colombia,
particularly with regard to its interpretation of the Doha mandate:
(1) The Doha mandate on implementation expressly refers to the special situation of
certain developing countries, for which the procedures set forth in document
G/SCM/39 must be followed.
(2) The above-mentioned document G/SCM/39,  in describing the programmes that may
be lawfully extended, specifies the requirements that certain developing countries
must fulfil, stating that their share of world merchandise export trade must not be
greater than 0.10 per cent and that their total gross national income must be at or
below US$20 billion each year.
(3) Colombia does not come within these specific criteria of document G/SCM/39, not
even on the interpretation of paragraph 10.6 of the Doha Decision on
Implementation-Related Issues and Concerns, since it would be straining belief to
regard it as being at a similar stage of development, when it exceeds by four times themaximum established for gross national income, while its share of world trade is
100 per cent higher than those countries that do come within these criteria and have
duly requested an extension.
                                                     
1 G/SCM/N/74/COL and G/SCM/N/48/COL-G/SCM/N/60/COL-G/SCM/N/71/COL.G/SCM/Q3/COL/14
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(4) It is the duty of this Committee to ensure the observance of these specific
implementation criteria, since not to do so would entail a serious systemic imbalance
and serious damage to the economies of small developing countries such as Ecuador,
which does fulfil these requirements, but which does not have such programmes.
(5) Consequently, it is absolutely clear that the mandate on implementation should be
applied case by case and country by country, so that only those which fulfil the
conditions agreed by the Members may be granted an extension.
Furthermore, I should like to place it on record that the replies are not satisfactory and that
this Committee would be issuing a blank cheque if it were to authorize extensions when the goods that
would benefit are not clearly identified.  Thus , with regard to document G/SCM/Q3/COL/7 of
11 March 2002, concerning Colombia's reply No. 3 to Australia, in which it states that the sectors that
benefit under the Free Zone Regime include "food", and concerning Colombia's reply No. 3 to Japan,
which states that the main beneficiary sectors of the Special Import-Export System (SIEX) are "those
producing food", we should like to point out a further concern to this committee, namely that they are
including agro-industrial goods that cannot be covered by the Agreement on Subsidies andCountervailing Measures but by the Agreement on Agriculture.
In view of the above-mentioned factors we do not believe that Colombia fulfils the basic
requirements for its request for the extension of the Free Zone Regime and the SIEX programmes to
be considered.  I should like to make it clear that it gives us no pleasure to express such oppositionwith regard to a country with which we have excellent relations, which is our partner in the Andean
Community and with which we share long-standing  and strong bonds of friendship.  However, the
fact is that we are here in the WTO to respect the multilateral agreements so as to ensure predictability
for a fair international trading system, and not to do so, especially in this case, would cause severe
damage to our economy, since we would lose foreign markets and investment opportunities, inaddition to the devastating impact that Colombian subsidies would have on our domestic market.
With regard to the Transport Compensation Mechanism, the request for whose extension has
been submitted under Article 27.4 of the Agreement on Subsidies and Countervailing Measures, we
shall give our opinion in due course since we are now analysing the computation of competitiveness
carried out by the Secretariat at our request.  However, we should like to point out that Columbia is
now submitting a list of industrial products that would benefit under this Mechanism, whereas indocument G/SCM/Q3/COL/8, of 12 March 2002, Colombia, in reply 6 to the questions posed by
Canada, stated that "non-traditional industrial and ag ricultural exports (other than coffee, petroleum
and emeralds) are eligible", that is to say, all its exports except for coffee, emeralds and petroleum,
which Colombia does not regard as traditional.  And yet it now says the opposite in reply 3 to our
questions, stating that it is submitting a "list of industrial products", whereas Annex 2 to which itsreply includes agricultural products.  It is clear therefore that this matter requires a more detailed
analysis and it is our intention to continue, in a constructive manner, to seek transparency, for which
the fullest possible information is required;  it is to that end that we shall submit further questions.
Thank you, Mr Chairman.G/SCM/Q3/COL/14
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QUESTIONS TO COLOMBIA
COMMITTEE ON SUBSIDIES AND COUNTERVAILING MEASURES
1. It would be appreciated if Colombia would submit a complete list, to at least four digits (tariff
heading), of all the products (including agricultural products) for export to any destination that benefit
or may benefit from its three export subsidy programmes, namely the Free Zone Regime (ZF), the
Special Import-Export System for Capital Goods and Spare Parts (SIEX) and the Transport
Compensation Mechanism (TCM).
2. In document G/SCM/Q3/COL/7 of 11 March 2002 Colombia states in reply 3 to Australia
that the sectors that benefit from the free zones include " food ";  in Colombia's reply to question No. 3
from Japan it is stated that the main industries receiving benefit from the SIEX include " those
producing food ";  and in document G/SCM/Q3/COL/8 of 12 March 2002 Colombia states in reply
No. 6 to Canada that non-traditional … agricultural exports  other than coffee, petroleum and
emeralds are eligible under the Transport Compensation Mechanism.  We should be grateful thereforeif Colombia would reply to the following questions:
(i) Why is Colombia including agricultural products in its request for an extension to the
three export subsidy programmes under the Agreement on Subsidies and
Countervailing Measures (ASCM)?  We should be grateful if it would explain itsreasons for so doing.
(ii) Why is it seeking an extension of these subsidies under the Agreement on Subsidies
and Countervailing Measures for agricultural products within its three programmes
(ZF, SIEX and MCT), which must have existed on or before 1 September 2001, inaccordance with the special procedures of document G/SCM/39, whereas it had
notified the Committee on Agriculture, by means of document G/AG/N/COL/26 of
28 May 2001, "that it did not apply any export subsidies between 1 January and
31 December 1999 or between 1 January and 31 December 2000"?
(iii) On what WTO legal provision does Colombia base its view that export subsidies for
agricultural products are covered by the Agreement on Subsidies and CountervailingMeasures, and request extensions to these subsidies for agricultural exports when,
according to its commitments under the Agr eement on Agriculture, it is obliged to
reduce such subsidies?
(iv) Does Colombia not consider that su ch an extension would be tantamount to
reintroducing export subsidies, broadening their scope and extending them to
agricultural products through the Agreement on Subsidies and Countervailing
Measures, which is in contradiction with the commitments to reduce export subsidies
under the Agreement on Agriculture?  We should also be grateful if Colombia would
explain the reasons on which its reply is founded.
3. We should be grateful if Colombia would provide full details of the countries to which the
products that benefit or may benefit under the MCT are or may be directed, since that programme,
according to Colombia, "is a measure designed to encourage exports to countries that do not have
direct transport services".
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