./.RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/AUS/18
2 November 2000
(00-4598)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions Posed by the EUROPEAN COMMUNITY1
Regarding the New and Full and Updating Notification of AUSTRALIA2
The following communication, dated 1 November 2000, has been received from the
Permanent Mission of Australia.
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FEDERAL PROGRAMMES
Question:
(1)  Textiles
The programme Textile Clothing and Footwear Import Credits Scheme is not
mentioned in the notification to the WTO.
The European Community in Regulation 978/2000 imposing countervailing duties on
imports of polyester staple fibres (PSF) found this scheme to be countervailable.  The
Regulation explained that it is a subsidy since it  involves a financial contribution in the form of
import duty foregone which confers a benefit on th e recipient.  This scheme is an export subsidy
since the benefit is calculated on the basis of export sales and therefore contingent upon export
performance.  This programme is part of the Textile, Clothing and Footwear Plan (TCFP), and
it seems that it should be includ ed in the Australian notification.
Australia is requested to notify this sche me in accordance with Article 25 of the SCM
Agreement, or explain why its notification is not required.
Response:
The Textile Clothing and Footwear (TCF) Import Credits Scheme ceased on 30 June 2000.
Australia notes that in regard to the countervailing duties on imports of polyester staple fibre
(PSF), PSF was not an eligible product under th e Import Credits Scheme.  Any import credits
received by the company investigated were not for polyester staple fibre.
                                                     
1 G/SCM/Q2/AUS/15
2 G/SCM/N/38/AUS-G/SCM/N/48/AUSG/SCM/Q2/AUS/18
Page 2
Question:
(2)  Passenger Motor Vehicle (PMV) Export Facilitation Scheme
It seems that this scheme follows the same approach as the Textile, Clothing and
Footwear Import Credits Scheme in that it provides for exemption from import duty on
condition that firms export and use domestic goods.  It appears that it does enable industry to
make significant inroads into the exports mark et as external trade data reported that the
exports of PMV doubled between 1995/96 and 1997/98.
Australia is requested to notify this sche me in accordance with Article 25 of the SCM
Agreement, or explain why its notification is not required.
Response:
As explained in G/SCM/Q2 /AUS/10 and G/SCM/ Q2/AUS/14, this programme is not
notifiable under the SCM Agreement.
Australia notes that the scheme terminates on 31 December 2000.
Question:
(3)  Export Market Development Grants Scheme
The European Community in Regulation 978/2000 imposing countervailing duties on
imports of polyester staple fibres (PSF) analysed this scheme, established by the Export Market
Development Grants Scheme Act of 1997, as involving a financial contribution by theGovernment of Australia in the form of a grant which confers a benefit on the recipient.  This
subsidy is an export subsidy since the subsidy is  in fact tied to anticipated export earnings
because the grant is given unless the company has planned export earnings.
Australia is requested to notify this sche me in accordance with Article 25 of the SCM
Agreement, or explain why its notification is not required.
Response:
The Export Market Development Grants (EMDG) Scheme is not a specific subsidy within the
meaning of the WTO Agreement on Subsidies and Countervailing Measures.  It is not notifiable under
the SCM Agreement.
The EMDG Scheme assists with the development of an export culture and creating greater
innovation within Australian business.  It is an open access scheme governed by non-discretionary
legislation that reimburses part of the expenses incurred by a business in promoting market
development for goods, services, intellectual proper ty or know how.  Any type of firm from any
industry may apply.  Funding is not related to export performance.
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