RESTRICTED
WORLD TRADE G/SCM/Q2/EEC/13
27June1997
ORGANIZATION(97-2648)
Original: English Committee onSubsidies
andCountervailing Duties
SUBSIDIES
Request from theUNITED STATES
totheEUROPEAN COMMUNITIES Pursuant toArticle 25.8oftheAgreement
Thefollowing communication, dated 23June1997, hasbeenreceived from thePermanent
Mission oftheUnited States.
_______________
Paragraph 8ofArticle 25oftheAgreement onSubsidies andCountervailing Measures (“the
Agreement ”)states that“[a]ny Member may, atanytime, make awritten request forinformation on
thenature andextent ofanysubsidy granted ormaintained byanother Member ...orforanexplanation
ofthereasons forwhich aspecific measure hasbeenconsidered asnotsubject totherequirement of
notification. ”
Pursuant tothisprovision, theUnited States hereby requests thattheEuropean Community
(“EC”)provide information onthenature andextent ofcertain foreign exchange rateguarantee payments
made toBelgian enterprises which supply aircraft components toAirbus Industrie. TheUnited States
hasreason tobelieve thatthisexchange rateguarantee scheme mayconstitute asubsidy meeting the
notification requirements ofArticle 25.2oftheAgreement. Accordingly, theUnited States requests
theECtonotify, ataminimum, theinformation required byparagraph 3ofArticle 25,asfurther
elaborated intheagreed questionnaire format (G/SCM/6) adopted bytheCommittee onSubsidies and
Countervailing Measures. Should theECconsider thisscheme asnotbeing subject totherequirement
ofnotification, theUnited States would expect afullexplanation oftheEC’sreasons and,inanyevent,
would respectfully request thattherelevant information beprovided intheinterest oftransparency.
Based ontheinformation available tous,theUnited States understands thatthree companies,
Sonaca, Asco andEurair, supply components toAirbus Industrie through an“associate member ”of
theAirbus consortium known asBelairbus. Aspartofthese transactions, theGovernment ofBelgium
andcertain Belgian regional governments reportedly haveprovided payments tothethreefirms inorder
tocover thedifference between actual foreign exchange ratesandaguaranteed rate. Thespecific rate
atthewhich theguaranteed exchange rateisestablished hasvaried, apparently, depending upon the
aircraft programme involved andthevolume ofaircraft produced forwhich partshavebeensupplied.
Item(j)oftheIllustrative ListofExport Subsidies, contained inAnnex ItotheAgreement,
identifies asanexport subsidy those exchange riskprogrammes provided bygovernments orspecial
government-controlled institutions “atpremium rates which areinadequate tocover thelong-term
operating costs andlosses oftheprogrammes. ”Inthisregard:
./.G/SCM/Q2/EEC/13
Page2
- Arethethreecompanies noted above charged premiums inreturn fortheirparticipation
intheguarantee programme? Ifso,inwhatamount?
- Doother companies alsoparticipate inthisprogramme and,ifso,which ones? What
arethepremium ratescharged these other participants?
- When wasthisprogramme initiated, andwhatisitsscheduled termination date,ifany?
- Since theprogramme ’sinception, inwhich years havethegovernment orgovernments
earned aprofit ontheguarantee activities? Inwhich years havetheyincurred aloss?
- What provisions orsteps havebeentaken toensure thatthepremiums charged will
adequately cover theprogramme ’slong-term operating costs andlosses?
- Isthere anyprivate sector organization inBelgium which provides similar foreign
exchange rateguarantees totheabove-mentioned companies, toBelairbus, ortoother
companies? Ifso,which organization(s) andonwhatterms?
- Foreachyearthattheprogramme hasbeeninexistence, whatare(i)theamount of
funds which havebeenprovided toBelairbus companies under theprogramme; and
(ii)thedollar amount ofaircraft components provided toAirbus byBelairbus?
- Ifourunderstanding oftheprogramme iscorrect, what istherationale forvarying
theleveloftheguaranteed exchange ratebyAirbus aircraft typeandnumber ofaircraft
sold?
Insubmitting thisrequest, theUnited States notes thatparagraph 9ofArticle 25requires
Members which receive suchinformation requests to“provide suchinformation asquickly aspossible
andinacomprehensive manner, andshallbeready, upon request, toprovide additional information
...[and] sufficient details toenable theother Member toassess theircompliance withtheterms of
thisAgreement. ”Insofar assimilar requests forthisinformation havebeenmade through bilateral
contacts onseveral previous occasions dating backtoOctober 1996, theUnited States would expect
theECtobeinaposition toprovide aresponse within theimmediate future.