RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/489
8 February 2002
(02-0650)
Committee on Subsidies and
Countervailing MeasuresOriginal:  Spanish
MEMBERS' DIFFICULTIES IN MAKING SUBSIDY NOTIFICATIONS, AND
THE PLANNED SUBSIDY NOTIFICATION SEMINAR
Reply to Questions in Document G/SCM/W/473 of 18 December 2001
Paper Submitted by Mexico
The following communication, dated 6 February 2002, has been received from the Permanent
Mission of Mexico.
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B. QUESTIONS CONCERNING DIFFICULTIES IN NOTIFYING
1. Does your government face resource constraints in trying to make subsidy notifications?
If so, what are the major bottlenecks in the notification system of your government?  Is the
problem primarily an insufficient number  of staff to handle the notifications, or is it more a
question of insufficiently trained  staff?
Reply
Indeed, there are or there can be resource constraints owing both to a shortage of staff and
insufficient training.
2. Depending on your answer to question 1, above, if the notification questionnaire format
could be simplified, would this make a difference to your government's ability to make therequired subsidy notifications?
Reply
Yes.
3. Balancing your government's needs for as simp le a format as possible against its needs
to be able to understand other Members' notifications when it reviews them, how much
simplification could be introduced without sacrificing transparency?
Reply
While it is impossible for us to say exactly "how much", it would be worth reviewing certain
requirements, particularly those involving quantification and statistical information with regard to
programmes and their effects.G/SCM/W/489
Page 2
4. Considering the notification format itself, and the concepts underlying it as found in
SCM Articles 1-3, in your government's experience, do individuals responsible for making
notifications have difficulties understanding the requirements due to the language used in the
Agreement to define "subsidy", "specificity", etc.?
Reply
Indeed, those responsible for making notifications may find it difficult to determine whether a
programme should be notified on the basis of the definitions provided for "subsidy" and "specificity"
in the SCM Agreement.
For example, do these individuals believe that subsidies are in the nature of cash grants
only, and do not encompass revenue foregone via tax and duty incentives?
Not to that extent, but yes, it can be difficult to identify or gather sufficient information to
determine whether a given programme effectively operates as a tax or tariff incentive granted
specifically in accordance with Article 2 of the SCM Agreement.
Could some sort of explanation be introduced into the questionnaire format to make
more clear the scope of measures that are subject to notification?
We think that this would be very useful.
How might such an explanation be worded?
A manual or illustrative list might be drawn up and provided in annex, with examples of
different types of programmes (e.g.  programmes involving tax incentives and/or tariff incentives), onthe basis of the notified programmes operating in various Member countries.
5. Does your government experience general problems due to the formatting requirements
of the notification questionnaire?
Reply
Generally speaking, limited human and economic resources, in particular for the supply,
monitoring and updating of information on programmes that may exist and should be notified.
In particular, does your government maintain any pre-existing information that
addresses the substance of the notification questionnaire, but does not correspond to the
questionnaire's format?
No.
If so, what are the specific problems that your government encounters when it tries to
format the information as required by the questionnaire?  If the information were to be notified
in its pre-existing format, could it nevertheless be keyed to the data elements of the subsidy
questionnaire?
--G/SCM/W/489
Page 3
6. In reviewing other Members' notifications, would your government find it problematic
to review information that was formatted in a way other than the way foreseen in the subsidy
questionnaire, but that comprehensively ad dressed the substantive elements of the
questionnaire?
Reply
No, if the substantive elements are in fact addressed.
How important would it be for this information to be keyed or coded to the
questionnaire format?
The real advantage is the uniformity.
7. Does your government maintain any info rmation about its subsidy or incentive
programmes on official web sites?
Reply
Yes, as a rule, information on international trade policy, programmes and negotiations are
maintained on official web sites.
How much would your notification of subsidies be simplified if such information could
be submitted in its pre-existing format?  As a reviewer of notifications, what sorts of limits
should there be to the substitution of information from web sites for completed notification
questionnaires?
Care should be taken to ensure that a simple reference to a web site does not become the only
means of complying with this requirement, without satisfying the essential requirements.
Would references to web sites be a useful supplement to substantive information
provided in a notification?
Yes, if it contributes to a better understanding of the scope of the programmes.
8. Concerning General Rule 6, which requires that  notification of subsidies provided "to
specific products or sectors" be organized on a product- or sector-specific basis, does this rule
pose problems for your government when notifying subsidies that are provided on a horizontal,rather than a product- or sector-specific basis?
Reply
Yes, we think that it could pose problems.
What are the specific steps and difficulties in preparing sector- or product-specific
information for subsidies provided on a horizontal basis?
It is difficult to obtain suitable and/or sufficient information on specific products or sectors,
particularly for the developing countries, which generally face greater human and economic resource
constraints.G/SCM/W/489
Page 4
9. Does this rule present problems for notification of subsidies that are provided on a
product- or sector-specific basis (e.g., some agricultural subsidies)?
Reply
It is difficult to obtain suitable and/or sufficient information on specific products or sectors,
particularly for the developing countries, which generally face greater human and economic resource
constraints.
10. Would a redrafting of General Rule 6 to ref er to subsidies "provided on the basis of
specific products or sectors" help to resolve this  problem?  (The idea would be to clarify that
programme-based information, rather than product- or sector-specific information would berequired for subsidies provided on a horizontal basis, which product- or sector-specific
subsidies would continue to need to be notified on that basis.)
Reply
Yes, it would be useful.
11. Would such a redrafting pose problems for the review of subsidy notifications, and if so,
what would those problems be?
Reply
It may not solve the problem when what is required is quantitative or statistical data on the
programmes and their effects (items 7 and 9 of the questionnaire format).
12. To what extent does the general requirement to provide statistical information on the
trade effects of notified subsidies (chapeau of item 9) impede or delay the presentation of
subsidy notifications?
Reply
This requirement can, indeed, delay the presentation of subsidy notifications, or in some
cases, it may even be impossible to meet owing to the lack of statistical information permitting an
evaluation of the effects of the notified programmes.  Many developing countries often lack the
economic resources to develop and update the information systems needed to comply properly with
requirements of this kind.
13. To what extent does the need to compile the specific kinds of statistical information
referred to in items 9(a) and 9(b) impede or delay the presentation of subsidy notifications?
Reply
As we have said, this requirement can delay the presentation of subsidy notifications, or in
some cases, it may even be impossible to meet owing to the lack of recent and disaggregated
statistical information permitting an evaluation of the effects of the notified programmes.  Manydeveloping countries often lack the economic resources to develop and update the information
systems that would be required.
14. How important is this statistical information about other Members' subsidies to your
government when reviewing subsidy notifications?G/SCM/W/489
Page 5
Reply
All available statistical information can be useful.
Could these reporting requirements be made less stringent in some manner?
Perhaps, but the basic problem in many cases the lack of resources needed to prepare the
required statistical information.
If so, how?
--
15. Does your government find, in preparing subs idy notifications, th at there is conceptual
overlap or redundancy in some of the information elements as currently drafted?
--
16. If your government believes there to be overlap, how might this be eliminated?  What
drafting improvements might be introduced to clarify such situations, while preserving the
substantive requirements of Article 25 from which the questionnaire is drawn?
--
17. Do the requirements to provide information on the policy objective or purpose of the
subsidy, its background and authority, and to whom and how it is provided pose significant
difficulties to your government in preparing its subsidy notifications?
Reply
No, generally speaking this is not where the problem lies.  More problematic is the gathering
of information on the de facto operation of the programme and its effects.
How might these requirements be simplified?
--
18. Does the requirement to furnish an explanation where a particular element of
information cannot be provided pose particular difficulties to your government in preparing its
notifications?  If so, is there a way to simplify this requirement while preserving its substantive
content?
--
19. Is there sufficient flexibility in item 7 of the subsidy questionnaire (information on the
amounts of subsidies provided) for your government to be able to notify such information
without undue difficulty?
Reply
No.  Owing to the problems mentioned in our previous replies, we consider that this could be
one of the most difficult requirements to meet properly in a notification.G/SCM/W/489
Page 6
If not, is there a way to simplify this requirement while preserving its substantive
content?
Perhaps, but the real problem is that in many cases, compliance with quantitative
requirements could call for additional resources which not all Members would find it easy to come up
with.
C. QUESTIONS PERTAINING TO THE SUBSIDY NOTIFICATION SEMINAR
1. Concerning the number and nature of pa rticipants in the seminar, how many
individuals in your government have day-to-day responsibility for gathering information about
subsidies and for preparing and submitting subsidy notifications based on that information?  Ifmore than one, please describe the differen ces in these individuals' responsibilities.
Reply
There is no particular service or official that it is responsible specifically, on a daily basis, for
gathering information on subsidies and preparing notifications, but rather, there is a service
responsible for multilateral issues relating to dumping, subsidies and countervailing measures, and
safeguards (currently made up of two people) which, among its many other functions, handles
commitments to the SCM Committee including, where applicable, the gathering of information and
the preparation and/or updating of subsidy notifications.
2. Would it be sufficient for your government to have two participants in the seminar?  If
not, why not, and how many participants would be optimal from your government's point of
view?
Reply
Yes.
3. Would two days be a sufficient/appropriate length for the seminar?  If not, what would
be more appropriate?
Reply
No, at least four days.
4. Would the following schedule be appropriate:  First session:  detailed presentation of the
basic definitions in Articles 1, 2 and 3 of the SCM Agreement, and presentation of the subsidy
notification obligations in the light of these definitions.  Second session:  Presentations by
Members concerning the specific problems they experience in preparing subsidy notifications.
Third session:  Information-sharing and brainstorming among Members as to possible practical
solutions for the identified problems (ways to coordinate and streamline gathering and
formatting of subsidy information).  Fourth session:  Follow-up steps to ensure that information
shared and lessons learned would be retained and implemented.  (It has been emphasized thatto be effective, such follow-up should be immediate and intensive.)  Ideas suggested to date have
included establishment of informal contacts am ong capital-based officials, planning of future
focused technical assistance activities, etc.G/SCM/W/489
Page 7
Reply
Yes, but we think that each session should last at least one day.
5. Does your government normally send capital-based representatives to the Committee's
regular meetings?  If not, why not?
Reply
Yes, economic resources permitting.
6. Does your government view this subsidy noti fication seminar as an important event in
improving its ability to understand the subsidy rules, and to make subsidy notifications in a
complete and timely manner?  (That is, does your government view the seminar as a priority
event for its participation?)
Reply
Yes.
Does your government plan to send capital-based participants to the seminar?  If so,
how many and what are their functions?  If not, why not?
No, lack of budgetary resources.
7. In the view of your government, would financial sponsorship only of participants from
least-developed country Members be appropriate?  If not, why not?
Reply
No.  There are many developing countries wh ich, although not least-developed countries, also
find it very difficult to cover the expense of participating in this type of seminar, and are unable to
attend them in spite of their importance.
What other objective criteria for eligibility for financial sponsorship could be developed
that might be more appropriate?
An appropriate criterion might be the interest a country has expressed in the discussion of the
subjects in question and an evaluation of its participation in the work of the Committee.
8. If your government would be prevented from sending participants to the seminar due to
financial constraints, what is the minimum level of financial sponsorship that would make it
possible to send participants (e.g., airfare only, airfare and subsistence for the days in Geneva,etc.)?
Reply
Air travel and subsistence.
9. Assuming that it is not possible to finance the seminar out of existing trust funds in the
WTO (a possibility currently being explored), and assuming a total budget of approximately
CHF 225,000, would your government consider  making a donation to finance it?G/SCM/W/489
Page 8
Reply
No.
If so, how much would your government be in a position to contribute?
--
10. If the seminar were financed by earmarked contributions from individual Members,
and there were a surplus in the budget for the seminar (due to fewer than expected participants
from Members eligible for financial sponsorship,  however they might be identified), how should
any such surplus be disposed of?  Two possible  options have been discussed (i) returning the
surplus to the sponsors on a pro-rata basis; or (ii) making the surplus available on a first-come,
first-served basis to other developing countr y Members.  Are there other, more appropriate,
options?
Reply
Option (ii) appears to us to be the most appropriate in that the surplus could contribute to
increasing the participation of Members in the seminar.
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