RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/M/30
14 August 2001
(01-4006)
Committee on Subsidies
and Countervailing Measures
MINUTES OF THE SPECIAL MEETING
HELD ON 31 MAY 2001
Chairman:  Mr. Remo Moretta (Australia)
1. The Committee on Subsidies and Countervailing Measures held a special meeting on
31 May 2001.
2. The purpose of the meeting, as set forth in WTO/AIR/1559, was to discuss comments
received from Brazil, Colombia, Malaysia, Mexico, Uruguay and Venezuela on the Chairman'sstatement on notifications that had been adopted ad referendum  at the Committee's 16 May 2001
special meeting.
3. The delegate of Brazil wanted to explain th e rationale for the changes to the Chairman's
statement proposed by the group of delegations which included Brazil, noting that these delegations
fully supported the initiative to reduce the burden of notification.  There was a great benefit to
developing countries to doing so, due to their resource constraints, and this issue had been on the table
for many years.  The original proposal by the EC had contained two elements, one being was a major
emphasis on the review of new and full notifications, and the second being a minor emphasis on the
review of updating notifications.  The Committee had been analyzing this question as a package of
two elements.  The possibility of special and differential treatment in notifications had been a major
focus of the Committee's discussions, but unfortunately it had not been possible to reach a consensusin this regard, and the group of delegations had accepted this outcome, showing flexibility in this
matter.  One draft of the Chair's statement had referred to "de-emphasizing" updating notifications,
which under the circumstances could have been accepted.  The most recent version of the text,
however, made no mention of the periodicity of updating notifications, although there was a mention
of the periodicity of the new and full notifications.  There was therefore an imbalance in the thirdparagraph of the draft statement, which could be easily corrected with the addition of the language
proposed by the group of delegations.  The US suggestion to add a sentence to the end of the third
paragraph was useful, as the purpose of the Committee's work in this regard was not to add to or
detract from rights and obligations.  The problem in the current draft was, however, the lack of clarity
about what would happen to updating notifications.  It needed to be recalled in this regard that one ofthe reasons motivating the whole exercise was a general assessment that updates were as burdensome
as new and full notifications, and it had been necessary to convince capitals to do something about
that problem.  It thus was fair that capitals and outside readers should see the results of the
Committee's efforts.
4. The Chairman noted that the proposed text had been the subject of considerable deliberation.
He believed that it represented a balanced text which was favourable to practitioners, and that it
presented a practical way to move forward with no change to Members' rights and obligations.
5. The delegate of Canada noted that although Canada did not particularly like the proposed
addition, Canada wanted to be practical and constructive and therefore would agree to the proposed
amendment by Brazil and the other delegations.G/SCM/M/30
Page 2
6. The Committee having reached a consensus, the Chairman made the following statement:
"As the Committee is very well aware, compliance with the obligation to notify
subsidies is very poor, and has declined steadily since 1995.  While new and fullnotifications for 1995 were received from 72 Members, only 50 Members submitted
new and full notifications for 1998.  Compliance on updating notifications is even
worse.  For example, for 2000, only 33 Members submitted updating notifications.
Moreover, the problem is widespread, as non-notifiers include some of the largest
trading countries, both developed and developing.  Because of this dismal state of
affairs, the Committee has been discussing for several years now what might be done
in practical terms to try to improve the situ ation.  In this context, I would recall that
the problem of compliance on notifications has been recognized at the Ministerial
level, with Ministers at Singapore directing relevant bodies to 'take appropriate steps
to promote full compliance while considerin g practical proposals for simplifying the
notification process'.
On the basis of our discussions on the notification issue in both the Committee and
the Working Party on Subsidy Notifications, I think it is clear that all Members
genuinely recognize both the problem and the need to find a solution.  I would like to
summarize what I see as Members' views concerning the causes of the problems and
where they believe their attention would best be focused in trying to improve thesituation.  I also would like to propose two specific items for decision by the
Committee which have been suggested as elements that might be of benefit in
identifying and resolving concrete problems of Members in making their
notifications.
Concerning Members' views, I think that we all recognize that virtually all Members
are having significant difficulties in making their notifications, and that these
problems seem to stem primarily from resource constraints.  Members' experience
with the notification system also seems to show that the effort and resources required
to prepare annual updating notifications are essentially equal to those required for
new and full notifications, while in practice the updates receive little attention in the
Committee review process.  It is my sense that in view of these considerations,Members believe that their resources would be best utilized by giving maximum
priority to submitting new and full notifications, every two years, and by de-
emphasizing the review of the annual updating notifications.  In respect of new and
full notifications, Members could focus, in alternating years, first on making their
own notifications, and then on reviewing other Members’ notifications.  It would beexpected that this would have the effect of increasing transparency, which is the
objective of the obligations in question, but none of the steps suggested is intended to
add to or detract from Members' rights and obligations.
It is my sense that Members would want to see whether in practice an intensified
effort in respect of new and full notifications is effective in improving compliance,
and therefore that they would want to review the situation after a trial period of two
years.  As new and full notifications are due on 30 June this year, this would mean
reviewing the situation in 2003.  At that time, Members would need to determine
whether to continue these arrangements for any further trial period.  Can I take it thatthis accurately summarizes the views of Members?
Turning now to items for decision, I would recall that the Committee has discussed at
some length two concrete steps that could be taken to improve compliance onG/SCM/M/30
Page 3
notifications.  These are, first, a review of the notification format, to try to find ways
to simplify its presentational requirements, and second, the possibility of organizing a
subsidy notification seminar.  Thus, I would first propose that the Committee request
the Working Party on Subsidy Notifications to review the subsidy notification format
in G/SCM/6, with a view to identifying mean s to facilitate the presentational aspects
of the required information.  Can the Committee so decide?
Second, I would propose that the Committee request the Secretariat to look into
organizing a subsidy notification seminar in Geneva, back to back with the
spring 2002 regular meeting of the Committee.  The purpose of the seminar will be to
bring together capital-based officials responsible for subsidy matters and for subsidy
notifications for a detailed discussion of the notification obligation and to exchangeexperiences and ideas, with a view to improving understanding of the notification
obligations and identifying ways in which Members could streamline and facilitate as
much as possible their internal processes for developing notifications.  The
Committee would request the Secretariat to report back at the earliest possible date on
all practical and financial aspects of the seminar on notifications.   Can theCommittee so decide?"
7. The Committee took note of the Chairman's statement, and so decided
 in respect of the
Chairman's proposals to refer to the Working Part y a review of the presentational aspects of the
subsidy notification format in G/SCM/6, and to reque st the Secretariat to look into organizing a
subsidy notification seminar back-to-back with the spring regular meeting of the Committee.
8. The meeting was adjourned.
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