RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/EEC/22
15 June 2000
(00-2384)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English/
Spanish
SUBSIDIES
Replies to Questions posed by ICELAND1
Regarding the Updating Notification of the EUROPEAN COMMUNITIES2
The following communication, dated 29 May 2000, has been received from the Permanent
Delegation of the European Commission.
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Question 1
The total amount of the subsidies to the fi sheries sector, notified for the year 1998 is
around Ptas 35 billion or US$200 million.  Is this figure a combination of both subsidies granted
by the EC and the Spanish Government?  If not, what is the total amount of the subsidies
granted to the fisheries sector in Spain?
Reply
The figure is a combination of both subsidies granted by the European Commission and the
Spanish Government.
Question 2
Individual compensatory premiums of Ptas  85.45 million are notified.  Could the EC
explain what is meant by individual compensatory premiums?
Reply
The individual compensatory premiums fall within the scope of socioeconomic measures and
are granted to workers affected by the reorganization of the fishing fleet (definitive stoppage through
scrapping or exportation of the vessel), designed to compensate temporarily inactive workers in their
search for new employment.  They are also linked to financial aid for those workers making the
transition from fisheries to employment in another sector.
                                                     
1 G/SCM/Q2/EEC/21
2 G/SCM/N/48/EEC/Add.13G/SCM/Q2/EEC/22
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Question 3
Over Ptas 25 billion are notified as shipbuilding, a further Ptas 1.7 billion as
modernization of the fleet and Ptas 495 million as definitive stoppage.  Does this mean that the
fleet is growing in tonnage, capacity and/or number of vessels?
Reply
The amount does not correspond to the figure notified to the WTO which is twenty-four
(24) million, seven hundred and seventy-two thousand Ptas and not twenty-five (25) billion Ptas as
stipulated in the question.  Furthermore, under the long-term orientation programme, Spain reduced
its fishing fleet by one quarter between the year s 1992 and 1998, in terms of tonnage, power, capacity
and number of vessels.  This has led to large numbers of job losses in Spain, which is well known to
have the highest unemployment rate in the European Union.
Question 4
A total of Ptas 4.8 billion are notified as transfer to Autonomous Communities under the
reorganization and renovation of the fishing fl eet programme.  Could the EC please elaborate
further on this transfer?
Reply
The transfers to Autonomous Communities are part of the overall total of aid granted by the
Spanish Government.
Question 5
According to a newly released OECD report (ARG/FI/(99)3/REV/3), dated
21 February 2000, "The Impact on Fisheries Resources Sustainability of Government Financial
Transfers", direct payments and cost reducing tr ansfers in the fisheries sector, granted within
the EC in 1997 (Table 3, pp.15) amounted to 8 p er cent of the value of the total landed value of
the catch of the EC Member States.  The same percentage figure applies to Spain which landed
more than one third of the total landed value of the EC Member States.
Reply
The figures are not comparable, since the notification to the WTO covers aid granted in the
year 1998 and the OECD report refers to the 1996 and 1997 figures.  The categories of aid are alsodifferent in the OECD report.
Question 6
According to Article 6.1(a) of the Agreement on Subsidies and Countervailing Measures,
subsidies exceeding 5 per cent of the value of the product, according to paragraph 2 of
Annex IV of the Agreement, are considered causing serious prejudice and therefore having
adverse effects.
Reply
This provision ceased to exist on 31 December 1999.G/SCM/Q2/EEC/22
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Question 7
It is stated in the notification that the notified subsidies to the fishing sector have no
effect on trade.  How does the EC come to th is conclusion?  How is the non-effect on trade
assessed?  How can, for instance, reorganization of the fishing fleet, paid by subsidies, outlinedin question No. 3, not affect trade and competition?
Reply
It is stated that the "special aid to shipowners affected by the stoppage of fishing" has no
effect on trade.  This programme aims to compensate shipowners who cannot fish during certain
periods.
There is no available information on the effect that other fisheries subsidies have on trade,
although it should be pointed out that most of the aid is aimed at reducing the fishing capacity and
therefore it is unlikely that it could have a negative effect on trade.
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