WORLD TRADE  
ORGANIZATION  G/SCM/Q2/KOR/24 
21 July 2004 
 (04-3157) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Questions from the UNITED STATES Regarding  
the New and Full Notification of the Republic of KOREA1 
 The following communication, dated 20 July 2004, is being circulated at the request of the 
Delegation of the United States  
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I. FORESTRY 
  Forest Products Utilization Assistance Programme  
 Please provide more information regarding the eligibility requirements for this programme.  
In particular, which industries are eligible to rece ive this assistance?  Are producers of chemical and 
wood pulp eligible to receive benefits under this programme? 
 
II. FISHERY 
 
A.   Support for the Development of Deep-Sea Fishery 
B.   Support for Fishing Activities C.   Local Tax Reduction for Building and Acquisition of Deep-Sea Fishing Vessels  
 Please explain to what extent support through the above listed programmes contributes to the 
creation or maintenance of capacity in the fisheries sector?  More specifically, how are factors such as 
oversupply and overcapacity taken into account when  determining the amount of support given to the 
fishing industry under these programmes?  
D.   Other Fishery Programmes 
    Does Korea maintain any subsidy programmes,  not fully described in its notification, 
administered by either the central or sub-nationa l governments, for any of the types of assistance 
listed below?  If so, please provide all the relevant  information in accordance with Article 25 of the 
Subsidies Agreement.  
 • Replacement of Old Fishing Vessels and Equipment 
 • Fishermen and New Fishermen Support  • Fisheries Development Support Fund  • Production of New Fishing Nets 
                                                     
 
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  • Insurance, Risk and Disaster Assistance  
 • Loans and Other Support to Fishing Cooperatives  • Direct Sales/Marketing Assistance  • Distribution System Improvement Assistance   • Development of  New Fish and Marine Products 
 • Export Supports 
 • Fishery Fund Loans and Other Assistance  • Other Fishing-Related Loans ( e.g., loans for: shellfish harvesting, fish wholesalers, 
rural fish distributors, other food distributors, processors, fishing net producers, fish farming, fish-breeding equipment) 
 • Fishing Fleet Reduction 
 • Aquaculture Development     • Tax Free Fuel  • Fuel Distribution Infrastructure  • Research and Development 
 • Fishing Port Construction 
 • Fishing Village Development  • Tax Waivers on Fishing Equipment  
III. ENVIRONMENT, RESEARCH AND DEVELOPMENT 
 
 Support for Recycling Equipment and Technology Development  
 
 With regard to the Support for Recycling Equipment and Technology Development 
programme, because paper producers are able to u se recycled paper in producing their products, 
please explain whether paper producers eligib le to participate in this programme. 
 
IV. GENERAL 
 A.   Support to the Semiconductor Industry  
 The ROKG is reportedly providing a large am ount of R&D funds to the "Next-Generation 
Growth Engines".  As part of this progra mme, monies are earmarked for development of 
next-generation of semiconductors.  In addition, the Ministry of Commerce, Industry and Energy 
announced that it was going to provide seven billi on won for developing semiconductor materials and 
equipment.  Please explain whether these f unds for the development of next-generation 
semiconductors have been budgeted.  If so, please  explain why these programmes do not qualify as 
notifiable under Article 25 of the SCM Agreement.  If they do qualify as notifiable, please provide the 
information required under Article 25.   
B.   Financing for Raw Materials  
 
 The Korean Government recently announced va rious low-interest loan programmes to assist 
companies’ purchase of raw materials.  The progr ammes were announced due to the increases in raw 
material prices due to Chinese demand for these raw materials.  However, most of the programmes 
were targeted to SMEs.  Please explain whether th ese programmes have been implemented.  If so, 
please explain why these programmes do not qualify as notifiable under Article 25 of the SCM Agreement.  If it does qualify as notifiable, please pr ovide the information required under Article 25.  
 
C.   Grants for Investment 
 
 The Ministry of Finance and Economy stated that  foreign investors will be eligible for grants 
equal to 15 per cent of their investment in the count ry.  Factors to be used to determine the exact  G/SCM/Q2/KOR/24 
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 amount of the grant are type of industry, location, number of jobs created.  Has this programme been 
implemented?  If so, please explain why this programme does not qualify as notifiable under Article 25 of the SCM Agreement. If it does qua lify as notifiable, please provide the information 
required under Article 25.   D.   Paper Subsidies  
 Does Korea maintain any subsidy programme, not fully described in the notification, 
administered by either the central or sub-nati onal governments, for any type of assistance listed 
below?  If so, please provide all the relevant in formation in accordance with Article 25 of the 
Subsidies Agreement. 
  • Assistance provided to paper compani es for locating facilities inside Kunsan 
industrial area/estates 
 • Low-interest loans or other assist ance for paper companies for overseas 
forest/timberland development under the ‘O verseas Resources Development Business 
Act’ 
 • Loans to paper companies under the Industrial Base Fund  • Aid provided to paper companies under the Export Industry Facility Loans 
programme 
 • Korea Asset Management Corporation (KAMCO) purchase of Shinho paper company 
bad debts 
 • Industrial Bank of Korea loans to Kyesung paper  • "Workout" programmes provided to Shinho and Kyesung paper  
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