RESTRICTED  WORLD TRADE  
ORGANIZATION  G/SCM/M/48 
30 March 2004 
 (04-1421) 
Committee on Subsidies 
and Countervailing Measures  
 
 
 
MINUTES OF THE REGULAR MEETING 
HELD ON 28 OCTOBER, 1 AND 8 DECEMBER 2003 
 
Chairperson: Ms. Olga Lozano (Colombia)1 
Vice Chairman: Mr. Naoshi Hirose (Japan) 
  
1. The Committee on Subsidies and Countervailing Measures (the "Committee") held a regular 
meeting on 28 October, 1 and 8 December 2003.   
2. The proposed agenda for this meeting was circulated to Members in document 
WTO/AIR/2196.  Before asking whether any Memb er wished to raise any item under "other 
business", the Chairperson
 raised two brief points.  First, with regard to item O "Working Party on 
Subsidy Notifications – Chair's Report on 27 Octobe r Meeting" she recalled that it was her feeling 
that the Committee could actually adopt a decision concerning the revision of the agreed subsidy 
notification format in document G/SCM/6.  Therefor e, she proposed that item O be amended to read 
"Working Party on Subsidy Notifications:  (i) Chai r's Report on the 27 October Meeting;  and (ii) 
Committee Decision on Adoption of the Revised Notifi cation Format."  This amendment was without 
prejudice to the substance of the actual discussion th at would take place under the item.  Furthermore, 
in light of the fact that some Members, includi ng non-resident Members not present at the Committee 
meeting, may not have been aware of this item until recently, she said that it was her intention to 
propose the adoption of that revised notification format on an ad referendum  basis, that is, on the 
condition that no objection was receive d within a certain time-period.2  Second, she recalled the 
statement of her predecessor concerning one outstanding matter of Committee business.  The October 2002 Committee meeting remained suspended w ith respect to the review of the legislative 
notification of Chinese Taipei.  As the former Chairm an had stated at the Spring 2003 meeting of the 
Committee, the Committee's fall 2002 meeting would r esume once there was an overall resolution of 
this issue and this was without prejudice to an y Member's views as they were expressed at the 
Committee's fall 2002 meeting.   
3. The Chairperson
 asked whether any delegation wished to raise any matter under "other 
business".  There were no issues raised under this item. 
4. The Committee therefore adopted  the following agenda: 
                                                      
1 The Vice Chairman of the Committee, Mr. Hirose, presided over the Committee's discussions of, and 
decisions relating to, Colombia's export subsidy programmes under item N "Article 27.4 Process". 
2 As indicated in paragraph 213, as no objections were received within that time period, the revision 
was adopted and circulated in document G/SCM/6/Rev.1 G/SCM/M/48 
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 Page
 
A. ARMENIA – REVIEW OF NEW LEGISLATIVE NOTIFICATION .......................................................3  
B. CHINA – REVIEW OF NEW LEGISLATIVE NOTIFICATION ............................................................3  
C. CZECH REPUBLIC – REVIEW OF NEW LEGISLATIVE NOTIFICATION ...........................................4  
D. EUROPEAN COMMUNITIES  – REVIEW OF NEW LEGISLATIVE NOTIFICATION ............................4  
E. MEXICO – REVIEW OF NEW LEGISLATIVE NOTIFICATION .........................................................4  
F. PAKISTAN – REVIEW OF NEW LEGISLATIVE NOTIFICATION ......................................................4  
G. PERU – REVIEW OF NEW LEGISLATIVE NOTIFICATION ..............................................................5  
H. CHINA - REVIEW OF PREVIOUSLY REVIEWED NOTIFICATIONS ..................................................5  
I. SEMI-ANNUAL REPORTS OF COUNTERVAILING ACTIONS (ARTICLE 25.11) ..............................6  
J. NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING ACTIONS .............................7  
K. EFFECT OF MEMBERSHIP ENLARGEMENT ON TRADE REMEDIES CURRENTLY IN 
FORCE IN THE EUROPEAN COMMUNITIES :  TEN QUESTIONS – ITEM REQUESTED BY 
THE UNITED STATES ...................................................................................................................7  
L. SUBSIDY NOTIFICATIONS ..........................................................................................................12  
M. TRANSITION REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF ACCESSION OF 
THE PEOPLE 'S REPUBLIC OF CHINA TO THE WORLD TRADE ORGANIZATION .........................12  
N. ARTICLE 27.4  PROCESS .............................................................................................................22  
O. WORKING PARTY ON SUBSIDY NOTIFICATIONS – (I) CHAIR 'S REPORT ON 
27 O CTOBER MEETING ;  AND (II) COMMITTEE DECISION ON ADOPTION OF THE 
REVISED NOTIFICATION FORMAT .............................................................................................38  
P. CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM SCM  ANNEX  VII(B)  
(G/SCM/110) .................................................................................................................... ........40  
Q. PERMANENT GROUP OF EXPERTS – ELECTION OF EXPERTS ....................................................40  
R. OTHER BUSINESS ......................................................................................................................41  
S. DATE OF NEXT REGULAR MEETING .........................................................................................41  
T. ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7)...........................41  
 
5. The Chairperson  stated that items A-G on the Committee' s agenda dealt with the review of 
new notifications of countervailing duty legisl ation and/or regulations, in accordance with the 
procedures adopted by the Committee at its special  meeting in April 1996 (contained in document 
G/SCM/W/293).  Item H dealt with the previously re viewed legislative notification of China.  As 
indicated in the airgram, due to the volume of materi al involved, delegations we re asked to bring their 
own copies of the notifications.  The Chairperson re called that questions concerning new notifications 
of legislation were to have been submitted to the Member concerned and the Secretariat no later than 
three weeks before this meeting, that is, no later than 2 October 2003.  As provided for in the agreed 
procedures, Members receiving written questions were to respond orally to timely-submitted 
questions during the Committee's meeting.  They were  also to subsequently submit written versions of 
their answers to all written questions received.  She reminded Members that follow-up questions 
could be asked in the Committee meeting.  If a Member posed a follow-up question and wanted to 
receive a written answer, the follow-up question had to be submitted in writing no later than  G/SCM/M/48 
 Page 3 
 
 
 7 November 2003.  Written answers to all written questi ons were to be submitted to the Secretariat no 
later than 8 January 2004.  Certain of the notif ications referred to on the Committee's agenda, and 
questions posed with respect to their review, had also been on the agenda of the autumn 2003 meeting 
of the Committee on Anti-Dumping Practices, and aspects of certain of them had been considered at that meeting.   
A. A
RMENIA – REVIEW OF NEW LEGISLATIVE NOTIFICATION  
6. With respect to the new notification of Armenia  (G/ADP/N/1/ARM/1-G/SCM/N/1/ARM/1), 
the Chairperson  noted that the representative of Armenia wa s not in the room.  In view of this, the 
examination of this item was suspended .  When the Committee's regular meeting reconvened the 
examination of this item on 1 December 2003, the Chairperson noted that Armenia was not 
represented at that meeting either.  There we re no questions or comments from delegations.  
7. The Committee took note  of the statement made.  
B. CHINA – REVIEW OF NEW LEGISLATIVE NOTIFICATION  
8. With respect to the new legislative notification of China  (G/SCM/N/1/CHN/1/SUPPL.2), the 
Chairperson  noted that the United States (G/SCM/Q1/CHN/27) and Japan (G/SCM(Q1/CHN/31) had 
submitted written questions in adva nce of the meeting and that Chin a had submitted written responses 
to the United States' questions.  Japan's questions we re received late.  In addition, questions put to 
China by Mexico, in document G/SCM/Q1/CHN/29, had been included in the documents for the Committee's meeting.  However, Mexico's questi ons related to China's previously reviewed 
notification, not the new notification on the age nda for the Committee's meeting.  The deadline for 
questions on previously reviewed notifications was 11 September 2003, and as Mexico's questions 
were received after that date, China was under no obli gation to provide answers to those questions for 
the Committee meeting.  Written answers to Mexico 's questions should be submitted no later than 
8 April 2004, for consideration at the Committee's re gular meeting in 2004.  With that introduction, 
she gave the floor to the delegate of China to respond to the questions put to that delegation. 
9. The delegate of China
 thanked the United States for its questions on China's subsidies and 
countervailing legislation.  China's written repli es were circulated in document G/SCM/Q1/CHN/34. 
10. The delegate of the United States  thanked China for the answers to  its questions.  He said that 
the United States appreciated the effort made and recognized that it was a long and difficult process to 
implement a countervailing duty regi me.  However, as a general matter, the United States had always 
been concerned about due process, specifically, ma king sure that parties had an ability to access 
information and to be able to comment upon the releva nt issues in a meaningful and timely fashion.  
The United States wished to emphasize that point.  Transparency was another key issue for the 
United States.  The United States believed that it was ve ry important for all the interested parties to be 
absolutely certain of what the procedures were a nd what the rules were for obtaining confidential and 
non-confidential information.  The delegate of the United States said that he felt that China had not 
answered its question six on the issue of a like produc t.  The delegate asked whether interested parties 
other than consumers and producers would be perm itted to comment.  Secondly, with respect to 
question seven, the United States was a little con cerned about how products would be excluded from 
the scope of the investigation.  The United St ates was uncertain as to how the like product group 
would be diminished and how that like product gr oup would then match up with the products under 
investigation on the subsidy or the dumping side.  Finally, on question twenty-eight, the delegate of 
the Unites States stated that the answer that non-confidential information would be provided some 
time between the initiation and the final determinati on was somewhat vague.  It was a rather lengthy 
period of time and, in the US' view, the in formation should be provided as soon as reasonably G/SCM/M/48 
Page 4  
 
 possible.  Normally, the United States would consider that to be a day or two rather than some time 
within the span of several months.  Written fo llow-up questions posed by the United States were 
circulated in writing in document G/SCM/Q1/CHN/37. 
11. The delegate of Japan
 recalled that his delegation had submitted written questions to China 
contained in document G/SCM/Q1/CHN/31.  He stated  that the questions had been submitted after the 
deadline, so it was understandable that the Chin ese delegation had not had enough time to reply to 
them.  Nonetheless, Japan would be looking forwar d to receiving written answers to its questions.  
Japan reserved the right to make follow-up questi ons after having examined those replies.   
12. The Committee took note  of the statements made and concluded its review of this 
notification, subject to any written follow-up questions from delegations. 
C. CZECH REPUBLIC – REVIEW OF NEW LEGISLATIVE NOTIFICATION  
13. With respect to notification of the Czech Republic  in document G/SCM/N/1/CZE/2, there 
were no written or oral questions.  
14. The Committee took note  of the statement made and conclude d its review of this notification. 
D. EUROPEAN COMMUNITIES  – REVIEW OF NEW LEGISLATIVE NOTIFICATION   
15. Regarding the notification of the European Communities  (G/ADP/N/1/EEC/2/SUPPL.4- 
G/SCM/N/EEC/2/SUPPL.4-G/SG/N/1/EEC/2/SUPPL.1), there were no written or oral questions.   
16. The Committee took note  of the statements made and concluded its review of this 
notification. 
E. MEXICO – REVIEW OF NEW LEGISLATIVE NOTIFICATION  
17. Regarding the notification of Mexico (G/ADP/N/1/MEX/1/SUPPL.2 & 
CORR.1-G/SCM/N/1/MEX/1/SUPPL.1 & CORR.1-G/SG/N/1/MEX/1/SUPPL.1 & CORR.1), written 
questions had been received from Chile (G /SCM/Q1/MEX/3), the European Communities 
(G/SCM/Q1/MEX/1) and the United States (G/SCM/Q1/MEX/2 and /4).   
 
18. Mexico's written responses to written questi ons posed by Chile can be found in document 
G/SCM/Q1/MEX/10.  Mexico's written responses  to written questions posed by the European 
Communities can be found in document G/SCM/Q1/M EX/5.  Mexico's written responses to written 
questions of United States can be found in G/SCM/Q1/MEX/8 and /9.   
19. The Committee took note  of the statements made and concluded its review of this 
notification, subject to any follow-up questions. 
F. PAKISTAN – REVIEW OF NEW LEGISLATIVE NOTIFICATION  
20. With respect to the notification of Pakistan  (G/ADP/N/1/PAK/2/SUPPL.2-
G/SCM/N/1/PAK/2/SUPPL.2), there were no written or oral questions. 
21. The Committee took note  of the statement made and conclude d its review of this notification.  G/SCM/M/48 
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 G. PERU – REVIEW OF NEW LEGISLATIVE NOTIFICATION  
22. Regarding the legislative notification of Peru, the Chairperson  noted that the European 
Communities had submitted written questions and that  Peru had responded in writing, in documents 
G/SCM/Q1/PER/19 and Add.1, and /21, respectively.  The European Communities submitted written follow-up questions, which can be found in docum ent G/SCM/Q1/PER/23.  The answers to those 
questions can be found in document G/SCM/Q1/PER/24. 
23. The United States had also submitted written questions, in document G/SCM/Q1/PER/20.  
Peru's written responses to these questions can be found in document G/SCM/Q1/PER/25.  
24. The Committee took note
 of the statements made and concluded its review of this 
notification. 
H. CHINA - REVIEW OF PREVIOUSLY REVIEWED NOTIFICATIONS  
25. The Chairperson  stated that the United States had submitted questions in document 
G/SCM/Q1/CHN/25, concerning a previously reviewed notification of China.  Written answers to those questions were circulated in G/SCM/Q1/CHN /30.  She asked whether any Member wished to 
pose follow-up questions, or have any other comments.  
26. With reference to China's r esponse to the United States G/SCM/Q1/CHN/30, the delegate of 
the United States
 stated that his delegation wished to advise the delegation of China that the reference 
in the question should be to Article  22.2 rather than Article 23.2. 
27. The Chairperson  thanked the United States for that clarification and Members for replies 
given.  She reminded Members that they should s ubmit follow-up questions in writing to the Member 
whose legislation is concerned, and to the Secretar iat, no later than 7 N ovember 2003.  All written 
questions concerning the notifications reviewed in this Committee's meeting that were received by 
that date were to be answered in writing.  Those written answers should be submitted to the 
Secretariat no later than 8 January 2004.   
28. She informed Members that the new legislative notification of Jordan, document 
G/SCM/N/1/JOR/2, would be on the agenda of the April 2004 Committee meeting.  Pursuant to the 
procedures for review of notifications of legisla tion adopted by the Committee, in order for a new 
notification of legislation to appear on the agenda  of the fall meeting, it must circulate in three 
languages no later than 11 March 2004.  As a practi cal matter, in light of translation requirements, 
notifications of legislative text received after 31 Ja nuary 2004 would be unlikel y to be translated in 
time to meet that deadline.  The Secretaria t would inform Members of any additional new 
notifications to be considered at that meeting in mid-March 2004.  The deadline for submission of 
questions regarding new notifications of legislati on for next fall's meeting would be 1 April 2004.   
However, Members were encouraged to submit their questions as early as possible, and Members receiving questions were encouraged to submit wr itten answers in advance of the meeting to the 
extent possible.  Pursuant to the Committee's procedur es for review of notifications of legislation, in 
order for a previously reviewed notification of legi slation to appear on the agenda of the Committee's 
regular meeting in April 2004, questions regarding such notification had to be submitted to the 
Secretariat, and to the Member whose notification w as in question, no later than 11 March 2004.  As 
is its practice, the Secretariat would issue a reminde r of relevant deadlines for this Committee, and the 
other Rules Committees (Anti-dumpi ng Practices and Safeguards).   G/SCM/M/48 
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 29. Finally, the Chairperson expressed her continui ng concern over the failure of some Members 
to submit any notification at all concerning legisl ation or regulations rele vant to countervailing 
measures.  For many, if not most, of these Member s, it was likely that a single nil notification, 
indicating that there was no such legislation or regu lation currently in effect, would be all that was 
required.  This seemed to be a relatively si mple matter.  For those Members who conduct 
countervailing duty investigations  but had not yet notified their legislation, it was obviously 
important, from the point of view of all Members, that such legislation be notified, in the interest of transparency and better understanding. She encouraged  Members who have not yet done so to make 
their notification of legislation promptly. 
30. The Committee took note
 of the statements made.  
I. SEMI-ANNUAL REPORTS OF COUNTERVAILING ACTIONS (ARTICLE 25.11) 
31. The Chairperson  reminded Members that a request for semi-annual reports for the period 
1 January – 30 June 2003, to be submitted not later than 29 Augus t 2003, was circulated to the 
Members in G/SCM/N/98.  As was unfortunately almost always the case, a number of the semi-annual reports were received late.  She reminded Me mbers that semi-annual reports were always due 
at the end of August for the period January throug h June of the current year, and at the end of 
February for the period July through December of th e previous year.  She urged all Members to take 
the necessary steps to submit these notifications on time.  Particularly for those Members who have 
taken no actions, these notifications should be purely a matter of routine, as all that was required is a 
one-sentence letter stating that no actions have been taken.   
32. Members who had submitted semi-annual reports of  countervailing actions were identified in 
paragraph 1 of document G/SCM/N/98, Add. 1.  These Members were:  Argentina
; Australia ;  Brazil ;  
Canada ; Costa Rica ; European Communities ; Latvia ; New Zealand ; Peru ; United States  and 
Venezuela .  To the extent possible, the semi-annual reports  had been translated and circulated to the 
Committee, and were included in the documents ma de available for the Committee meeting.  In 
addition to the Members who had submitted semi-annual reports of countervailing actions, 
37 Members, listed in paragraph 2 of documen t G/SCM/N/98/Addendum 1, notified the Committee 
that they did not take any countervailing acti ons.  While Members who take actions appeared 
generally to comply with this requirement, ther e remained a significant number of Members who had 
not responded to the request for semi-annual reports, and had therefore failed to comply with this 
important requirement set forth in Article 25.11 of  the Agreement.  These Members were identified in 
document G/SCM/N/98/Addendum 1, at paragraph 3.   
33. The Chairperson asked whether any Member had comments or questions concerning the 
semi-annual reports of Argentina , Australia , Brazil , Canada , Costa Rica , the European Communities , 
Latvia , New Zealand , Peru , the United States  and Venezuela . 
34. The delegate of Colombia  stated that, in document G/SCM/N/98/CRI, Costa Rica reported 
that on 25 April 2003 it initiated an investigation against palm olein and margarine for puff-pastry 
originating from Colombia.  Her delegation expressed Co lombia's concern due to the fact that in that 
investigation the consultations provided for in Artic le 13 of the SCM Agreement were not held.  The 
delegate of Colombia requested that the Costa Ri can authorities consider the possibility of respecting 
this right which all Members have and that they pr ovide for an opportunity to reach a mutually agreed 
solution.  The question was subsequently circulated in writing in document G/SCM/W/528. 
35. On a preliminary basis, the delegate of Costa Rica  stated that, under Resolution No. 001/2003 
dated 7 January 2003, the Colombian Government wa s formally invited to hold consultations.  The  G/SCM/M/48 
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 document was provided to the Ambassador of Colomb ia in Costa Rica in due course in order to 
comply with the provisions of Article 13.   
36. The Committee took note  of the statements made. 
J. NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING ACTIONS  
37. The Chairperson  stated that lists of the notifications  of preliminary and final countervailing 
duty actions received by the Committee were circul ated to the Committee in documents G/SCM/N/97 
and /100-103.  Since the last meeting of the Co mmittee, preliminary and final countervailing actions 
had been notified by the European Communities  and the United States .  There were no questions or 
comments on these notifications.  
38. The Committee took note  of the statement made. 
K. EFFECT OF MEMBERSHIP ENLARGEMENT ON TRADE REMEDIES CURRENTLY IN FORCE IN 
THE EUROPEAN COMMUNITIES :  TEN QUESTIONS – ITEM REQUESTED BY THE 
UNITED  STATES  
39. The Chairperson  stated that the United States had requested inclusion of this item on the 
agenda.  The United States had submitted written ques tions to the European Communities, circulated 
in a double-symbolled document:   G/ADP/W/435 – G/SCM/W/526.  In a letter from the European 
Communities dated 13 October 2003, the European Communities had indicated that it would provide 
answers to the United States questions, and proposed that the questions be dealt with only in the 
Committee on Anti-Dumping Practices.  
40. The delegate of the United States  stated that this issue had b een discussed in the other Rules-
related Committees.  The United States was aware th at the European Communities had sent a letter to 
the Secretariat stating that it did not intend to answ er the questions posed by the United States in the 
Committee, as it had already done so in the Committee on Anti-Dumping Practices.  The United States agreed that it was best to avoid repetition; so the US delegation would confine itself to a brief overview of the issue.  As background, a useful su mmary of the discussion of this topic, of the spring 
meeting of the Committee on Anti-Dumping Practices, was contained in the minutes of that meeting, 
document G/ADP/M/24, beginning at page 9.  Fu rther, at the Committee on Anti-Dumping Practices 
which had taken place in the week of 20 Octobe r 2003, the European Communities had handed out 
informal written answers to the questions posed by the United States.  Delegations which did not 
obtain a copy at that time should direct requests to  the European Communities.   Because these sources 
were available to Members, the United States would be brief in its description of the issue and the 
potential problems which caused the United Stat es to raise these questions to the European 
Communities.   
41. As discussed in the spring meeting of the Committee on Anti-Dumping Practices, the 
European Communities had announced a policy with r espect to the effective expansion of the EC 
membership from 15 Member States to 25 Member States, which was scheduled to occur on 1 May 2004.  With the expansion of the European  Communities, the Commission announced that any 
trade remedies in place by the ten acceding countries would automatically be terminated.  This was, of 
course, a welcome announcement.  However, the Commission also announced that they would be 
replaced by the far more numerous trade remedies cu rrently in effect in the EC-15.  The geographic 
coverage of the EC trade current remedies would be  stretched to encompass the new territory.  The 
obvious problem that this proposed policy raised  was that anti-dumping and countervailing duties 
were being imposed in these countries and protecti on was offered to the domestic industry in those G/SCM/M/48 
Page 8  
 
 countries with no determination ever being made that those domestic industries were suffering 
material injury.  This policy no t only raised questions about the EC's definitive measures but also 
about its numerous price undertakings.  The Eur opean Communities said that it may conduct reviews 
of the injury determinations underlying its trade remedies but only if the exporters can produce facts 
about the financial conditions of thei r competitors in the EU-25.  In a ddition to this high threshold, the 
European Communities warned that, any time an e xporter requests a review of the injury to the 
domestic industry in the EC-25, the Commission woul d also self-initiate a review of the exporters' 
level of duty which may increase as a result.  Clearly, even if an exporter believed that the facts likely 
show that the EU-25 was not suffering material inju ry, in the face of this policy it must think very 
carefully about the possible repercussions of ask ing the European Communities to review.  This 
proposed policy raised a number of issues which were  the focus of the US questions to the European 
Communities.  The United States hoped the European  Communities would re-examine this proposed 
policy.  The United States invited Members with an in terest in this issue to discuss the answers to US 
questions which the European Communities had recently provided. 
42. The delegate of the European Communities
 thanked the United States for its continuing 
systemic interest on the impact of enlargement on countervailing measures in force in the European 
Communities.  He stated that the European Commun ities was very happy that there appeared to be a 
consensus to avoid repetition and he would theref ore limit his intervention to highlight the main 
points of the EC approach.  As of the day of enlarg ement, there would be an automatic application of 
the existing EU-15 anti-dumping and anti-subsidy measu res in the new Member States.  At the same 
time, existing anti-dumping and anti-subsidy measur es in the individual new Member States would 
lapse.  There would be additional possibilities for interested parties to request reviews of anti-
dumping and anti-subsidy measures in force in th e new EU-25, provided th at they would have 
evidence that enlargement generated changed circumst ances to an extent that those measures were no 
longer appropriate for the market situation in  the EU-25.  This approach was entirely business as 
usual  and corresponded to the approach in previous rounds of enlargement.  It was transparent: a 
notice would be published in the Official Journal and the European Communities had put up a website 
dealing exclusively with this issue.  The European Communities had established a special 
enlargement helpdesk for experts available to d eal with questions from economic operators on the 
impact of enlargement on trade defence.  In a nutshel l, the EC approach was as  follows:  the European 
Communities did not want to reinvent the wheel, a nd the same approach as in previous rounds of 
enlargement would be applied.  The European Comm unities could also reassure Members that in this 
round of enlargement, the effects of enlargemen t on trade defence instruments would be managed 
properly.  The European Communities was ready to  answer any further questions Members might 
have. 
43. The delegate of Korea  recalled that this issue had been discussed in the framework of the 
Committee on Anti-Dumping Practices.  For the record , Korea wished to reiterate its concern.  The 
European Communities had made it clear during the Committee's meeting that the countervailing 
measures currently applicable in the 15 Member St ates of the European Union would automatically 
and immediately be applicable in the new acceding Members States.  Korea seriously doubted how the European Communities could extend the measures to  the new Member States without running foul 
of its obligations under the SCM Agreement, includi ng those under Article 10, which stipulated that 
countervailing measures should be a pplicable only under circumstances provided for in Article VI of 
GATT 1994.  First of all, the injury determinati ons which served as the b asis for the outstanding 
countervailing measures could not constitute a vali d basis to extend those measures to the new 
Member States.  Secondly, the geographically exte nded countervailing measures to be applied after 
the enlargement could not possibly be considered to have met the standing requirement or the 
initiation requirement as provided for in Article 11  of the SCM Agreement.  Besides, the ongoing 
investigations conducted by the EC on the basis of current Member States could not support the 
application of countervailing measures c overing enlarged EU membership.    G/SCM/M/48 
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 44. Korea was of the view that the only way to overcome the problem of lack of parallelism 
between the scope of the investigation and the application of the measu res was to first conduct 
individual reviews on the basis of the EU-25 geograp hical scope of all the outstanding countervailing 
measures including provisional ones, as well as ongoing investigations; and, secondly, to postpone the 
extended EU-wide application of the outstanding co untervailing measures pending completion of such 
reviews.  The alternative suggested by the European Communities, that is, the "changed 
circumstances" review under Article 21.2 of the Agreement, could not be the solution. 
45. The delegate of Australia  stated that, in addition to the US questions, her delegation was 
interested in whether the Eur opean Communities could provide the modalities that it implemented 
during the last enlargement and which were re ferred to in two EC documents cited by the 
United States in document G/SCM/W/526.  The EC  documents noted that exporters may request a 
suspension of measures on the basis that injury would not be likely to recur.  The Australian delegate 
asked whether the European Communities could el aborate on:  the procedures envisaged; the 
evidentiary requirements relating to this reques t; whether the burden of proof would be on the 
exporter; and how the extension of the trade de fence measures would not automatically vary the 
subsidization and inju ry determinations. 
46. The delegate of the United States  expressed his delegation's appreciation to the European 
Communities for their brief response in their statement to the Committee.  He stated that the European 
Communities had noted in their statement that this procedure was business as usual .  One Member 
adding on ten new other Members was hardly business as usual  in the view of the US delegate.  The 
United States also appreciated the EC attempts to  resolve this issue through an establishment of a 
helpdesk.  The United States wished to repeat its  earlier appreciation to the European Communities 
for its general policy of terminating the count ervailing duty orders in place by the new acceding 
Member States as a theoretical matter.  As a prac tical matter, looking through the semi-annual reports, 
the United States noted that only one new accedi ng Member State had reported countervailing duty 
actions, Latvia, and that Latvia's only counterva iling duty action was against another newly acceding 
Member State, Poland.  As a final note, the Un ited States had filed formal questions with the 
Committee and with the Committee on Anti-Dumping Pr actices.  The United States looked forward to 
the European Communities filing formal respons es.  The United States might pose follow-up 
questions when those formal responses were received. 
47. The delegate of the European Communities  stated that, while he did not want to repeat the 
answers which the European Communities had given to follow-up questions in the Committee on 
Anti-Dumping Practices, he considered that it was a ppropriate to provide a brief reply to them since 
the follow-up questions put in the Committee on Anti- Dumping Practices had been reiterated.  With 
respect to the follow-up questions from the United States,  he stated that it was correct that only one of 
those new Member States currently had a counter vailing duty measure in place, but the European 
Communities wanted to note that new Member St ates had several other tr ade defence measures in 
force, currently 51, which would lapse and this shou ld also be seen in connection with the approach 
that the European Communities applied in the area of countervailing measures.  With regard to the 
form of filing of any responses to questions, th e European Communities thought that the approach 
taken in making those replies available to all Members was sufficient.  As the United States had suggested, every WTO Member who had not received a copy of the replies could contact the EC directly and the European Communities w ould be happy to provide them again. 
48. Concerning the follow-up questions put by Australia, the delegate of the European 
Communities first dealt with the issue of the suspen sion of countervailing measures.  He gave a brief 
outline of how this instrument was applied in the European Communities.  The principle of 
suspension of countervailing duties was that a si gnificant, exceptional and obvious change on the 
domestic market would require an urgent interventio n in terms of suspension of currently applicable G/SCM/M/48 
Page 10  
 
 countervailing duties.  The changes were of temporar y nature; this was tied in with the normal time 
span of a suspension which is nine months.  The changes had to be urgent and obvious and must not 
justify a complete abolition of the measures.  In te rms of procedure, the delegate of the European 
Communities stated that suspension investigations  were initiated by the Commission.  Interested 
parties could apply to the Commission for a suspension of countervailing duties but they would not 
have a right to have that investigation initiate d.  In practice, parties would have to bring prima facie  
evidence relating to the conditions fo r the suspension of the countervailing duties, that is, changes in 
the Community market which were urgent, obvious and temporary and evidence that there was no 
recurrence of injurious subsidization in case of a suspension.  In the investigation, the Commission 
would obtain data from the Community industry and other economic operators.  In this regard, the 
most recent data would be taken into account.  Such  investigations were conducted in the shortest 
possible period of time.  In the EC practice, this meant in a few weeks.  In case of a decision to 
suspend, the market would be closely monitored afterwards and a reinstatement of measures would 
occur automatically after nine months, or after a maximum of 21 months.  This was a rather swift 
instrument but it was rarely used.  The changes had to  be of a temporary nature and, in view of that, 
the relevance of the instrument in case of enlargemen t, would appear to be relatively limited.  With 
regard to the issue regarding the impact of review s to injury on anti-dumping and subsidy margins, the 
European Communities had already explained in the Committee on Anti-Dumping Practices that the 
change in circumstances due to enlargement might lead  to a change in the injury picture, but it might 
also lead to a change with regard to dumping a nd subsidization.  Therefore, such reviews and 
reassessments would have to cover both aspects. 
49. Concerning the statements by the Korean de legation, he stated that the European 
Communities did not believe that, generally speaking,  the findings made in previous investigations 
were not valid any more to the enlarged Community.  To the contrary, as a hypothesis, in particular in 
macro-economic terms, the addition of GDP would only amount to between 5 to 10 per cent.  It would 
not be very practical to start a whole review of all the measures in force, since reviews are a rather 
time-consuming and resource consuming process.  It mi ght not be in the interest of all interested 
parties to reply to questionnaires being sent around fo r no particular reason.  If there was a specific 
reason which pointed to a "change in circumstan ces", then the European Communities would be 
entirely open to initiate a review.  The European Co mmunities did not want to discourage reviews; the 
European Communities encouraged economic operators to come with prima facie evidence in case 
there was a feeling that the original fi ndings were not appropriate any more. 
50. The delegate of the United States
 asked the European Communitie s to provide the reasons for 
its apparent unwillingness to provide formal written an swers to its formal written questions on this 
particular issue so that they could be circulated to all Members and in particular to non-resident 
Members who might have an interest in this issue. 
51. The delegate of the European Communities  stated that his delegation had made the replies 
widely available in the Committee on Anti-Dump ing Practices that took place in the week of 
20 October 2003.  The European Communities woul d be able to do the same again for anybody who 
wished to ask them.  The European Communities was obviously expecting that those replies were 
recorded in the minutes of the Committee on Anti-Dump ing Practices.  He stated that the European 
Communities would be perfectly happy for them to  be included in the minutes of the Committee in 
such a way that they could be circulated to all Members. 
52. The Chairperson  asked whether the European Commun ities agreed that the responses be 
included in the minutes but not circulated in an official document. 
53. The delegate of the European Communities  stated that the United States had circulated the 
questions as a "working" document.  The delegate stated that the European Communities felt that  G/SCM/M/48 
 Page 11 
 
 
 those questions did not arise in the course of a le gislative notification; therefore, the particular 
procedures for legislative notifications did not a pply.  The European Co mmunities felt that they 
provided responses, included in writing, to those qu estions.  He stated that he took note of the 
questions and would report them back to relevant authorities. 
54. The delegate of the United States  stated that he would appreciate a clarification either from 
the Chairperson or the Secretariat with respect to  the procedures of the Committee with respect to 
formally submitted questions to the Committee, in  particular, whether Members were formally 
entitled to receive written answers. 
55. The delegate of Korea  stated that, in Korea's eyes, th e arguments given by the European 
Communities did not provide any justification for th e European Communities to act in violation of 
their obligations under WTO rules, including the SCM Agreement.  Korea recognized the rights of 
Members to respond to changed circumstances, in this case enlargement.  Korea acknowledged that it 
was legitimate, but if a Member anticipated any violation of obligations in responding to changed 
circumstances, that Member should take measures to avoid this anticipated  violation.  This was 
especially the case when it came to a responsible Member of the WTO. 
56. The delegate of Australia  thanked the European Communities for answering some of the 
questions posed by her delegation.  Australia ask ed again about the previous enlargement and the 
modalities that the European Communities used at that time because Australia recalled that in 
discussions with the European Communities in the Committee on Regional Trade Agreements, a 
number of concerns had been raised which remain ed unresolved.  Australia was asking whether there 
was any clear view on what the modalities were last time. 
57. The Chairperson  gave the floor to the Secretariat to reply to the US question.   
58. The Secretariat stated that it would seem that under the Rules of Procedure of the Committee, 
representatives were entitled to give oral statements during a meeting, a summary of which, at the representatives' request, might be reflected in the r ecords, or in the minutes of the meeting.  That 
being said, it had been shown that in other speci al procedures adopted by the Committee, such as 
those for legislative notifications and subsidy no tifications, a written exchange of questions and 
answers greatly facilitated delegates' work. 
59. The Chairperson
 thanked the Secretariat for that clarifi cation.  She stressed that, in her view, 
putting answers in writing would greatly facilitate the Committee's work.   
60. The delegate of the European Communities  apologised to the delegate of Australia for having 
missed one out of the three questions, the question relating to the modalities of the previous round of 
enlargement.  He stated that th e European Communities published a no tice in the Official Journal in 
February 1995 inviting all interested parties to request a review on the basis of "changed 
circumstances", taking into consideration that th e "changed circumstances" was the enlargement of 
the European Communities.  The European Communities was ready to open a review for any party 
which had requested it.  However, the European  Communities never received any review requests on 
that basis.  For further information on the previous  modalities, the EC delegate referred to the minutes 
of the Committee on Anti-Dumping Practices' meeting of 1995 which is contained in G/ADP/M/2, at 
paragraphs 66 and following. 
61. The delegate of the United States  appreciated the additional info rmation just provided by the 
European Communities.  He express ed the US' regret that answers to the US written questions were 
not going to be formally circulated. G/SCM/M/48 
Page 12  
 
 62. The Committee took note
 of the statements made.  
L. SUBSIDY NOTIFICATIONS  
63. The Chairperson  recalled that a special session for the review of 2003 new and full subsidy 
notifications had taken place on 27  October 2003, and that, in accordance with the procedures adopted 
by the Committee in May 2003, two more such special sessions would be convened, in conjunction 
with the spring and fall 2004 Committee meetings.  However, ther e were several subsidy notifications 
from earlier years (1998-2001) which were on the agenda for review at the Committee.   
64. The first such notification on the agenda was Brazil 's 2001 new and full notification, which 
could be found in document G/SCM/N/71/BRA.  Th is was a double-symbolled document, and the 
2003 new and full portion of the notification woul d be up for review at the special spring 2004 
session.  However, with respect to the 2001 notifica tion, no written questions had been received.  She 
asked whether any Member would have any comme nts or questions with respect to Brazil's 
notification. 
65. The delegate of the United States  indicated that his delegation would most likely have 
questions with respect to Brazil's 2003 subsidy notification. 
66. The notification of Bulgaria  was a multiple-symbolled document:  G/SCM/N/25, /38, /48, /60 
and /71/BGR, which could be reviewed at the same time.  No written or oral questions were received 
on any of these notifications.   
67. Iceland  had multiple notifications, which could also be reviewed together.  Those 
notifications were contained in documents G/SCM/N/48/ISL/Rev. 1, G/SCM/N/60/ISL and G/SCM/N/71/ISL.  The United States had posed writ ten questions, and that Iceland had responded to 
those questions in documents G/SCM/Q2/ISL/7 a nd 8, respectively.  There were no additional 
questions or comments. 
68. The final 2001 new and full notification on th e Committee's agenda was the "nil" notification 
of Myanmar
,  which could be found in document G/SCM/N/71/MMR.   This document was a double-
symbolled document.  The 2003 new and full notifi cation that it also contained would be up for 
review at the special spring 2004 session.  However, with respect to the 2001 notification, no written 
or oral questions had been received.   
69. The Chairperson  stated that any written follow-up qu estions were to be submitted to the 
Member concerned and to the Secretariat no later than 7 November 2003.  Written responses to any 
such questions were to be submitted to the Memb er concerned and to the Secretariat no later than 
8 January 2004. 
70. The Committee took note  of the statements made and concluded its review of the 
notifications. 
M. TRANSITION REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF ACCESSION OF THE 
PEOPLE 'S REPUBLIC OF CHINA TO THE WORLD TRADE ORGANIZATION  
71. The Chairperson  recalled that paragraph 18 of the Protocol of Accession of the People's 
Republic of China to the World Trade Organization pr ovided that all subsidiary bodies, including this 
Committee, "which have a mandate covering Ch ina's commitments under the WTO Agreement or 
[the] Protocol shall, within one year after acces sion ... review, as appropria te to their mandate, the  G/SCM/M/48 
 Page 13 
 
 
 implementation by China of the WTO Agreement and of the related provisions of [the] Protocol."  
China was to provide relevant information in adva nce of the review, including information specified 
in Annex 1A to the Protocol.  China could also  raise issues relating to any reservations under 
Section 17 or to any other specific commitments made by other Members in the Protocol, in subsidiary bodies which had a rele vant mandate.  The Chairperson said that this Committee had to 
report the results of the review promptly to the C ouncil for Trade in Goods.  Re view was to take place 
after accession in each year for eight years, with a fi nal review in year 10 or at an earlier date decided 
by the General Council.  
72. The Chairperson said that there were no pro cedures set out for the conduct of the transition 
review in the Protocol, except that China was to provide relevant informa tion in advance of the 
review.  In this regard, the Chairperson noted that  Annex 1A specified China was requested to provide 
information on the following to this Committee in  accordance with Article 18.1 of its Accession 
Protocol:  "Pricing Policies":  (a) "application of ex isting or any other price controls and the reason for 
their use";  and (b) "pricing mechanisms of Chin a's state trading enterprises for exported products".  
She said that China had submitted a notification in this respect on 24 October 2003, which had been 
circulated as document G/SCM/N/104. 
73. The Chairperson noted that the delegations of  the European Communities, Mexico and the 
United States had submitted questions and comments in  the context of the transition review, which 
had been circulated in documents G/SCM/Q2/CHN /4-6.  Before proceeding to these questions, the 
Chairperson opened the floor for any general comments from Members. 
74. The delegate of the United States
 recognized China’s efforts over the past year as it worked to 
fashion a countervailing duty and subsidies regime that  was transparent, subject to the rule of law and 
in compliance with WTO rules.  He stated that th is process was, however, not complete and that, in 
the spirit of the Transitional Review Mechanism ("TRM"), they were taking the opportunity to 
highlight areas where further improvements could be  made.  To assist in making this review as 
productive as possible, the United States had also submitted written questions.  The United States 
noted that written questions and answers were the mo st practical and appropriate form of accurately 
transmitting technical information.  It further note d that it was in the interests of all Members, 
including China, to promote a free exchange of in formation through the mechanisms provided by the 
WTO, including the TRM.   
75. The United States applauded China’s ongoing effo rts to establish and complete the legal 
framework of its countervailing duty regime pr ior to imposing measures.  China had issued 
Ministerial rules on industry injury investigations, as well as judicial rules on hearing countervailing 
duty appeals.  Nonetheless, gaps remained in this le gal structure, including in the areas of interim and 
expiration reviews, rules and procedures on access to non- confidential information, and undertakings.   
76. The United States noted that China had notifie d many of its counter vailing duty laws and 
regulations to the WTO.  Other such laws and regul ations, including those concerning judicial review 
of countervailing duty measures, had not been notif ied.  The delegate of the United States recalled 
that notification of such laws and regulations w as required by the WTO, specifically, Article 32.6 of 
the Subsidies Agreement, to in crease the transparency of Members’ countervailing duty regimes, 
including the judicial review process.  The United States therefore expected China to notify, to the 
SCM Committee, all laws and regulations that had a bearing on countervailing duty investigations and 
reviews.   
77. China had informed the SCM Co mmittee that the roles played by the Ministry of Foreign 
Trade and Economic Cooperation and the State Economic and Trade Commission were now subsumed under the Ministry of Commerce.  The role of the State Council Tariff Commission was 
still not completely clear, however.  Nor did it app ear that China had issued regulations governing the G/SCM/M/48 
Page 14  
 
 actions of the Tariff Commission in countervailing duty investigations or reviews.  The United States 
urged China to clarify the oversight role of th e State Council Tariff Commission, including when it 
may exercise discretion in the course of an investigat ion.  The United States further encouraged China 
to establish procedures for publicising the Tari ff Commission’s decisions in countervailing duty 
actions.   
78. In the area of subsidies, the delegate of th e United States stated that the United States was 
disappointed with China’s failure to submit its a nnual subsidy notification, required under Article 25.1 
of the Subsidies Agreement.  In fact, China had not  made an Article 25.1 notification since joining the 
WTO nearly two years ago.  The United States urged China to submit a new and full notification of its subsidies as soon as possible and, in any event, Chin a should immediately notify what it could, even if 
such a notification was not comprehensive.  By no t participating in the notification process, China 
undermined the transparency that Members had work ed hard to develop and hampered the ability of 
Members to confirm that China was complying w ith its obligations under the Subsidies Agreement 
and its Protocol of Accession.   
79. In the view of the United States, an exampl e of the uncertainty that China’s lack of 
notification fostered concerned subsidies provide d to certain state-owned enterprises which were 
running at a loss.  According to China’s Protocol of  Accession, this subsidy was to end in 2000.  The 
representative of China had told the SCM Committee th e previous year that the programme had been 
eliminated in 2001.  However, the delegate of the United States stated that, according to recent 
Chinese press reports, the Government was currently  working to eliminate this programme.  He 
explained that by providing more detailed info rmation on the programme, such as the decrees that 
ended or would end the programme at the central an d local levels, China would help dispel confusion 
among other Members concerning the status of these subsidies.   
80. The United States welcomed Chin a’s efforts to increase the transparency of its countervailing 
duty regime and to bring it into conformity with WTO rules and urged China to do the same with 
regard to its subsidies.  The United States stated  that it wished to foster mutual cooperation and 
understanding on this front thro ugh multilateral mechanisms, such  as a TRM process, and through 
bilateral technical exchanges.   
81. Finally, the United States asked that the Co mmittee’s TRM report to the Council for Trade in 
Goods reflect not only the discussion under the TR M agenda item but also the earlier discussion with 
regard to China’s CVD laws and regulations and China’s subsidy practices that had not yet been 
notified.  It further requested that all the releva nt minutes, Members’ questions and China’s responses 
be appended to, or referenced in, the report.
3   
82. The Chairperson  thanked the United States for its statem ent and invited other delegations to 
make comments.  She reminded the Committee that the questions raised by Mexico, the European 
Communities and the United States in the transiti on review context could be found in documents 
G/SCM/Q2/CHN/4, 5 and 6, respectively.  The delega te of China was invited to take the floor to 
respond to the questions and comments that they had received.   
83. The delegate of China  thanked the Chairperson for giving the floor to address the Committee 
on the implementation of China’s commitments and to  respond to the questions raised by Members in 
                                                      
3 As indicated in the minutes of agenda item B,  the Committee reviewed, through the exchange of 
questions and answers referred to there, Ch ina's new legislative notification (document 
G/SCM/N/1/CHN/1/Suppl. 2).  As indicated in the minutes of agenda item H, the Committee reviewed, through the exchange of questions and answers referred to there,  China's previously reviewed legislative notification 
(document G/SCM/N/1/CHN/Suppl.1).  G/SCM/M/48 
 Page 15 
 
 
 that meeting with regard to subsidies and count ervailing measures in the past year within the 
framework of paragraph 18 of China’s Protocol of Accession.   
Part I – Implementation of the Agreement and China’s commitments.    
84. The delegate of China stated that China had submitted relevant information to the Committee 
prior to the meeting pursuant to the requirement of Annex I(A) of the Protocol on China’s Accession.4  
Since last year, China had notified five minister ial rules and regulations on countervailing measures, 
namely: provisional rules on initiati on of countervailing investigations5; provisional rules on public 
hearings of countervailing investigations6; provisional rules on qu estionnaires of countervailing 
investigations7; provisional rules on on-the-spot insp ection in countervailing investigations8; and rules 
on investigations and the determination of indu stry injury in countervailing investigations.9 
85. China stated that on 11 September 2002, the Supreme People’s Court had adopted the 
provisions on questions relating to the application of law in adjudicating administrative countervailing 
cases, which had come into force on 1 January 2003 , in an effort to further explain acceptance and 
hearing of the administrative countervailing cases by the People’s Court.  It added that these would be notified to the WTO according to the notification procedures.   
86. The delegate of China said that in the p ast year China had initiated no countervailing 
investigations. 
Part II – Responses to Members’ questions.    
87. The delegate of China mentioned that some ques tions had reached them just one day ahead of 
the meeting.  She said that this was not only inc onsistent with WTO practice, but also extremely 
unhelpful for making meaningful accurate and appropr iate responses, thus undermining the value and 
the necessity of the TRM exercise.  However, in th e spirit of cooperation, China had tried to address 
these questions in the best possible manner.   
88. First, with regard to the question of granting of  subsidies at a national and a sub-national level 
to enterprises, she stated that Ch ina had terminated all export subsidies.  For example, at present, 
China maintained no subsidies or subsidy schemes in  the textile industry, which was in conformity 
with China’s accession commitments.  The China National Textile Industry Council referred to in the 
questions had not engaged in any wo rk related to subsidy schemes.  The delegate of China stressed 
that the reports were not true.  Since accession to the WTO, China had embarked upon extensive 
efforts in the collection of subsidy information.  A number of difficulties had been encountered during 
the process, including the partial understanding of the WTO notification requirements by local officials, under-performance of the domestic info rmation collection system and varied criteria on 
statistics.  Measures were being taken to address these issues, both on the national and sub-national 
level, for example, the strengthening of the communi cations between ranks of officials, briefings by 
WTO experts, and the translation of the t echnical cooperation handbook on WTO notification 
requirements.  China was vigorously pushing forward wo rk but that they were not in a position to give 
a specific timeframe for the completion of it.   
                                                     
 
4 Circulated in document G/SCM/N/104. 
5 Circulated in document G/SCM/N/1/CHN/1/Suppl.1. 
6 Circulated in document G/SCM/N/1/CHN/1/Suppl. 1. 
7 Circulated in document G/SCM/N/1/CHN/1/Suppl. 1. 
8 Circulated in document G/SCM/N/1/CHN/1/Suppl. 1. 
9 Circulated in document G/SCM/N/1/CHN/1/Suppl. 2. G/SCM/M/48 
Page 16  
 
 89. Second, on the question on the requirements for a company to be considered a foreign direct 
investment enterprise devoted to exports and inco me tax exemptions or rebates granted to such 
enterprises, the delegate of China stated that Ar ticle 3 of the Law of the PRC on Wholly Foreign-
owned Enterprises stipulated that the establishment of a wholly foreign-owned enterprise shall be 
conducive to the development of China’s national eco nomy.  The State encouraged the establishment 
of wholly foreign-owned enterprises with export or ientation and adoption of advanced technology.  
Article 17 stipulated that wholly foreign-owne d enterprises shall pay taxes in accordance with 
relevant state regulations and may enjoy preferen tial treatment of tax reduction or redemption.  
Paragraphs 7 and 8 of Article 75 of the Rules of Implementation of the Income Tax Law of the PRC 
for Enterprises with Foreign Investment and Foreign Enterprises stipulated that after expiration of the 
period of income tax exemption and the reduction the foreign investment enterprises whose export 
volume for a year exceeded 7 per cent of their produ ction for the same year were entitled to a 50 per 
cent rebate of the normal rate of income tax as provided by tax law.  The enterprises located in special economic zones, or economic and technology devel opment zones, or any other exporting enterprises 
that already enjoyed an income tax rate of 15 per cen t, would pay income tax at the rate of 10 per cent 
if they also met the above requirements.  The cons istency of this provision with the SCM Agreement 
was currently being reviewed.   
90. Third, on the question on the export performance requirement in the Wholly Foreign-Owned 
Enterprises Law for wholly foreign-owned enterprises to  be eligible for tax breaks, China noted that 
there were three laws governing foreign investment  enterprises, namely the Law on Chinese Foreign 
Equity Joint Ventures, the Law on Chinese Forei gn Contractual Joint Ventures, and the Law on 
Wholly Foreign-Owned Enterprises.  Among these three laws, only the Law on Wholly Foreign-
Owned Enterprises used to contai n the requirement on export performance.  As part of the 
preparations for joining the WTO in October 2000, Article 3.1 of the Law on Wholly Foreign-Owned Enterprises was amended as follows: the establishment of a wholly foreign-owned enterprise shall be 
conducive to the development of China’s national eco nomy.  The State encouraged the establishment 
of wholly foreign-owned enterprises with export or ientation and adoption of advanced technology.  
The original provision, that the establishment of a foreign invested enterprise must adopt advanced 
technology or export all or most of  its products, had been replaced.   
91. Fourth, on the question about alleged informati on provided by the web site of the Shanghai 
Foreign Investment Centre, the delegate of China st ressed that the web site of the so-called Shanghai 
Foreign Investment Centre was not a government  web site and information it posted was not 
authoritative and did not have binding power.  She stated that Members could get access to the 
relevant laws and regulations th rough the government designated journal:  the China Foreign Trade 
and Economic Cooperation Gazette. 
92. Fifth, on the question on alleged different  prices for energy, transport, water and 
telecommunications suggested in the information fro m the above said web site, the delegate of China 
said that she would like to make some clarificat ions in this regard, although the source of the 
information remained unclear.  She stated that th ere was no such practice as different pricing for 
energy, water, power, transportation and teleco mmunications between state-owned enterprises and 
other types of enterprises.  The practice of multip le pricing for one commodity or service had been 
entirely eliminated in China.  State pricing and government guidance pricing only applied to goods and services, regardless of the ownership of the ente rprises.  Enterprises of all types, including state-
owned enterprises, foreign investment enterprises a nd foreign enterprises in China were treated on an 
equal footing in the process of determining government pricing and guidance pricing. 
93. Sixth, on the question on the new scheme of the VAT redistribution system for copper 
production, the delegate of China noted that questions in this regard had already been addressed in the 
TRM of the Committee on Market Access on 20 October 2003.  China felt it preferable not to repeat 
those responses in the Committee m eeting due to the limited time.  G/SCM/M/48 
 Page 17 
 
 
 94. Seventh, on price control and government guidance pricing, the delegate of China stated that 
China had reduced the scope of products and ser vices and the government price control and that 
vegetable oil had been lifted from the list of Anne x 4 of China’s Accession Protocol in 2001.  She 
further stated that China had not, and did not, plan to expand the scope of pr oducts in services subject 
to state pricing or guidance pricing and that any changes to the scope of these products and services 
would be published in the China Foreig n Trade and Economic Cooperation Gazette. 
95. Before giving the floor to another colleague in  the Chinese delegation, the delegate of China 
said that she hoped that the information provided prio r to the meeting and the explanation she had just 
made would help facilitate the review.  She inv ited her colleague to provide additional comments 
concerning other comments or statements. 
96. The delegate of China thanked the United Stat es for the interest it had shown in the TRM 
process and for its recognition of the progress that China had made in the field of subsidies and 
countervailing measures.  Before re sponding to the points raised in the US statement, he noted that 
although the points contained in the statement we re presented as “general comments”, those points 
were actually like questions, so, in effect, they had a list of questions.  He encouraged the US to have 
posed those questions in a list in advance of the m eeting, so as to facilitate China’s preparations for 
making appropriate responses.   
97. The delegate of China stated that there were a number of points contained in the US 
statement.  Concerning the request for making written replies to the questions raised by the relevant 
Members, he noted that under paragraph 18 of Ch ina’s Accession Protocol, the only requirement was 
for China to provide the information, including the information specified in Annex I(A) of the 
Protocol, in advance of the review.  He stated th at China had already provi ded such information in 
writing to this Committee prior to the convocation of the meeting10 and, in addition, the statement 
which had just been made by the head of the Ch inese delegation would also be made available in 
written form after the meeting to interested Memb ers.  China believed that the information just 
referred to in written form, plus the oral responses to  the replies it had made during the meeting, were 
already sufficient for warranting a meaningful an d effective review, as well as an exchange of 
information.  He stated that to request otherwise would not only be inconsistent with the mandate of 
paragraph 18, but also place an unfor eseen and undue burden on China.   
98. The delegate of China noted that there was anot her procedural request contained in the last 
paragraph of the statement by the US, namely to reflect China’s CVD laws and regulations on 
Chinese subsidy practices which had not yet been not ified in the TRM report of the Committee to the 
Council for Trade in Goods, as well as that the re levant minutes, Members’ questions and China’s 
responses be appended or referenced in  that report.  The delegate of China stated that he wished to 
consult his colleagues from the US as to the lega l basis for such a requ est before China made 
appropriate responses to this request. 
99. The delegate of China wished to address othe r questions, such as the request for not only 
legislative notifications, but also subsidy notificati ons.  He emphasized that China also attached great 
importance to making such notifications because it was their view, and they believed that it was also 
the view shared by many, that making such notifi cations was conducive to the sharing of information 
and also for improving the transparency of the domestic processes of different countries.  China 
wished to reaffirm its commitment to fulfilling its notification obligation. 
100. The delegate of China said that there had been a question concerning the gaps that remain in 
China’s legal structure, for example, in the areas of interim and expiration reviews in the field of 
                                                      
10 Annex 1A information circulated in document G/SCM/N/104. G/SCM/M/48 
Page 18  
 
 countervailing measures.  He pointed out that, so  far, China had not initiated any countervailing 
investigations but that China was, however, in the pr ocess of making such legislation just in case such 
an investigation might be initiated in the future.  He stressed that delegates could be reassured that 
China would honour its commitments in the WTO and c ontinue to bring its legislation in line with 
WTO rules, including in the field of countervailing investigations.   
101. Regarding the role of the Tariff Commission of the State Council of China, the delegate of 
China noted that this question had been repeated a number of times both in the Committee on Safeguards and in the Committee on Anti-Dumping Practic es.  He stated that the role of the Tariff 
Commission was quite clear, as referred to, or provided  for, in the three regulations that China had so 
far promulgated, namely the regulations on an ti-dumping investigations, the regulations on 
countervailing investigations and the regulation on safeguards.  The role, to put it simply, was for the 
Tariff Commission to make determinations on the rates of the anti-dumping, countervailing or 
safeguards duty on the proposal of the former MOFTEC, now MOFCOM.  He added that the duty 
rates that it decided would not exceed the proposed  rate of MOFCOM.  He believed that this had 
already been made quite clear by China.   
102. The delegate of China noted the question c oncerning subsidies provided to certain state-
owned enterprises running at a loss.  He confirmed that it was established policy to eliminate such 
subsidies provided to state-owned enterprises running at a loss.  He noted that allegations had been 
made in the US statement that, according to some  recent Chinese press reports, the Government was 
still in the process of eliminating this programme in stead of terminating the whole programme by the 
year 2002.  He requested the US delegation to pr ovide China with more detailed information with 
regard to these press reports, such as the source of the reports, the time when the reports had been 
published and the sectors, industries or enterprises which were involved in such reports, so as to 
facilitate China’s efforts in making a ppropriate responses to the question. 
103. The delegate of China concluded that he c ould not see any further questions in the US 
statement and hoped that his responses would be satisfactory to the US.   
104. The representative of the European Communities
 stated that, at the last TRM exercise, his 
delegation had raised four distinct issues:  complia nce of subsidy notifications ; export subsidies; price 
controls, in particular vis-à-vis  state-owned enterprises; and, finally, countervailing duty laws and 
regulations.  He stated that, since last year, a lot of progress had been made concerning one of those four items – the countervailing duty law and regul ations – and he thanked China for providing 
legislation, implementing regul ations and replying extensivel y to Members’ questions.   
105. He noted, however, that with regard to the othe r three items, there were even more concerns 
regarding the compliance of China with WTO rules than one year ago.  This was a rather disappointing situation.  Many of these concerns had b een created by a lack of transparency.  He had 
taken careful note of China’s reaffirmation of its commitments to abide by its transparency 
obligations.  However, he stressed that words would have to be followed by deeds.  He further noted 
that two years after China’s accession to the WT O, delegations were still waiting for a subsidy 
notification, despite the fact that a decent subsidy notification had already been produced by China in 
the context of the accession process.   
106. The representative of the European Communities stated that whether or not WTO Members 
complied with notification obligations was not just an academic question.  As an example, he referred to the issue of possible subsidies to the copper i ndustry.  He noted that replies to EC questions 
concerning this particular issue had not been gi ven at the meeting.  These were very specific 
questions, asking for information in the subsidy notif ication format, information that had certainly not 
been requested in this format in other Committees.  G/SCM/M/48 
 Page 19 
 
 
 107. Turning back to the example of copper, the representative of the European Communities 
noted that a severe distortion of international trad e with regard to the supply of copper scrap, which 
was input for refined copper, had taken place toward s smelters and refiners in China.  Detailed 
research, in which the EC had had to resort to  web sites because there was no other information 
available, had revealed that the reasons for this  shift were schemes which apparently constituted 
subsidies.  The very purpose of notification obligati ons, however, was to ensure transparency from the 
start and an imbalance regarding transparency as it currently existed was highly unsatisfactory.  
Furthermore, he noted that, while they had listened carefully to statements that export subsidies were 
a thing of the past and that a preferential prici ng for state-owned firms had ended, they still had 
difficulties with reconciling this with  commercial reality.  Commercial r eality was also reflected in the 
way certain information was being provided to economic  operators.  He stressed  that, again, this was 
an issue of transparency.  He further noted that th ey did not have any official information provided by 
China in the required format and that that was why they had to resort to information from different 
sources.  Again, he stressed, this was an i ssue of transparency which had to be addressed. 
108. The representative of the European Communiti es carefully noted the statement that under 
certain provisions of Chinese laws, income tax advantages were contingent upon export volumes 
exceeding certain thresholds.  The European Comm unities held the view that this was a clear 
indication of export contingency within the meaning of Article 3 of the Subsidies Agreement and they 
encouraged China quickly to finali ze its analysis with regard to WTO compliance of those provisions. 
109. In conclusion, the delegate of the European Co mmunities stated that the situation with regard 
to the three items that he had mentioned was highl y unsatisfactory and he strongly encouraged China 
to not only continue, but to increase, its efforts in this area.   
110. The delegate of Mexico  thanked China for the answers provi ded to their questions, which he 
thought would be very useful.  He noted that many  of the questions Mexico had posed, and which had 
been replied to, referred to technical or sector-speci fic issues.  Therefore, he thought it appropriate for 
China to provide Mexico with written answers, as requested in their document, and if possible to 
attach the relevant legislative instruments to enab le a better understanding.  He noted that this would 
avoid Mexico posing additional questions.   
111. The delegate of the United States  wished to continue the dial ogue with respect to the US 
statement and China’s response.  He thanked Chin a for its statement with respect to its subsidy 
programmes and thought that it would be helpful for all delegations to gain a greater appreciation for 
the programmes involved.  He expressed an interest in obtaining a copy of the written statement that 
had been read by the head of Chinese delegation.  The United States wished to echo the comments of 
the European Communities with resp ect to benefits that are contin gent upon export performance.  The 
United States shared the view that these were expor t subsidies potentially in violation of Article 3 of 
the Subsidies Agreement and took note of China’s agre ement to eliminate such subsidies in the course 
of their accession.   
112. Secondly, the United States took note of Ch ina’s commitment to provide a subsidy 
notification.  The delegate of the United States said that he understood the difficulties of providing 
such a notification and working w ith sub-federal governments and he empathized with the difficulties 
that he felt sure China was having.  However, he felt the need to echo the comments of the European 
Communities that concrete actions would ha ve to be taken in this respect.   
113. The delegate from the United States said that his delegation would appr eciate further details 
being provided in the meeting with respect to the new VAT scheme.  He thought that some subsidy 
issues had been raised and, as he had not been in the Market Access Committee meeting, he would 
appreciate if further details could be pr ovided in the SCM Committee meeting.   G/SCM/M/48 
Page 20  
 
 114. Finally, with respect to the subsidies to stat e-owned enterprises running at a loss, the delegate 
of the United States said that, if he was not mistak en, this programme had been described in China’s 
accession documents.  He questioned whether it was other Members’ responsibility to point out to 
China a programme that China itsel f had previously described to the WTO.  The United States 
confirmed that they had a press report from which they had gained the information used in their 
statement.  This press report, entitled “Finance Minist ry overhauls state enterprise subsidies to comply 
with WTO rules”, was dated 20 September 2003.  Th e United States stated that they would happily 
provide China with a copy of the press article at the end of the meeting.  However, the delegate of the 
United States again emphasized that, in the view of  the United States, it was not their responsibility to 
hunt for programmes and bring them to China’s atten tion.  He stated that the notification obligation 
was an exercise in transparency that all delega tions had undertaken.  He admitted that it was a 
difficult exercise and that all delegations had suffere d difficulties.  He therefore encouraged China to 
move forward as rapidly as it could.   
115. The Chairperson
 thanked the United States for its statement.  She recalled to the delegate of 
the United States that China had asked  for clarification on the legal b asis for the requests made by the 
United States with regard to general comments.   
116. The delegate of the United States  replied that it was his understanding that this was a part of 
the normal TRM process that had been followed the previous year. 
117. The Chairperson  thanked the United States for the clarification, and offered the floor to Japan. 
118. Japan  stated that it would like to share the c oncerns raised by the United States and the 
European Communities because their industry, especially the smelti ng copper industry, had a very 
keen concern about the issue of the VAT redistributi on system scheme.  It had been very difficult for 
Japan to get relevant information about this schem e and, for this reason, Japanese industry had grave 
concerns about this issue.  This had meant th at the Japanese Government had been requested to 
provide cooperative assistance to the copper industry.  In this sense, Japan would appreciate any 
information China could give on this issue.  
119. The delegate of China  thanked the delegates from the Eur opean Communities, Japan, Mexico 
and the United States for the follow-up questions and o ffered to respond to some of the questions that 
had been raised.  Concerning the notification obligati on of China, China stated that it was very serious 
about fulfilling its notification obligations and that it was in the process of improving its notification 
system so as to be up to the standard set by the WTO.   
120. On other specific issues, the delegate of China noted that the question regarding the so-called 
VAT redistribution scheme for scrap copper had been  raised by both the European Communities and 
Japan.  He wished to make some small clarifica tions.  On this scheme, starting from 2000, China had 
started to introduce the policy of refining part of  the income of value added tax for the imported 
copper for some of the state-owned copper smelters  and refineries.  After China’s accession to the 
WTO in December 2001, it had modified this policy to  make it consistent with the principle of 
national treatment.  Starting from 2002, the scope of this policy had been extended to cover all 
enterprises regardless of their ownership types.  He therefore considered that China had already 
brought this policy in line with the WTO require ment.  Regarding other follow-up questions, both 
China's policy and practice was to eliminate export s ubsidies, and, thanks to the efforts that it had 
made in recent years, China believed that it ha d already brought its system in line with WTO 
requirements.   
121. The delegate of China noted that Mexico had made a request for provision of written replies 
to questions under the TRM agenda item.  He stated that the r easons for not accepting this request had 
already been given at the meeting.  To make such  written replies, in China’s view, would be going  G/SCM/M/48 
 Page 21 
 
 
 beyond the mandate of paragraph 18 of the Accession Pr otocol of China.  He stated, however, that it 
was China’s intention and practice to provide all th e information necessary for a very meaningful and 
effective review under this agenda item.  He said th at China had kept open th e channels of bilateral 
consultations with Members concerned and assured the Committee that China would provide very 
ample and adequate opportunities for the exchange of re levant information requested by the Members.   
122. The delegate of the European Communities  thanked the delegation of China for its replies to 
some of their follow-up questions, in particular on the VAT scheme.  He thanked the delegation of 
China for its statement that this scheme had been m odified in order to comply with national treatment 
obligations.  However, he noted that the question put  by his delegation had been somewhat different.  
The European Communities was interested in unde rstanding how this programme worked, what the 
subsidy actually was, and to whom the subsidy was provided.  The delegate of the European 
Communities stated that his delegation was still lacki ng any information with regard to this type of 
information.  He strongly encouraged China to provide information on that scheme in the format 
which was set out for Article 25 subsidy notifications.  He noted that an almost brand new version of 
the notification format was contained in a room document at the meeting.11  He asserted that his 
delegation would be flexible and not insist that every piece of information be put under the correct 
heading.  They were principally interested in -- and again this was not merely an academic question, 
but rather a question of high economic importance for EC industry  -- receiving information about how this subsidy programme worked.  He added that the European Communities would appreciate 
such information as soon as possible.   
123. The delegate of Mexico
 thanked China once again.  He noted China’s explanations on 
information that they would be able to give Mexi co as well as China’s offer of a bilateral meeting 
with different delegations.  The dele gate of Mexico wished to make it clear to China that it was ready 
to meet with them on a bilateral basis, if that could help solve the problem.  The Mexican delegate 
believed that this would be a very  useful way of moving forward.  
124. The delegate of China  thanked all delegations that had spoken for their interventions and for 
the positive observations made during the meeting.  He  stated that China's experts were sensitive to 
the questions raised during the discussion in wh ich China was beginning to make constructive new 
exchanges and discussions with Members, both in and out of the context of the TRM.  However, he thought that the questions had to be exhausted at  some point and that the bilateral context – the 
technical context – could also be used.  China s uggested that the inquiry point set up in MOFCOM 
would also be an important source of inform ation to address the concerns of Members.  
125. The Committee took note
 of the statements made.  
126. Turning to the Committee's report on the transiti onal review, the Chairperson noted that there 
were no guidelines for the report contained in the Protocol.  Following the review at last October's regular meeting, the Chairperson, acting on his ow n responsibility, had prepared a brief, factual 
report, with references to the documents concerned,  and attaching the portion of the minutes of the 
meeting which related to the tr ansitional review.  The Chairper son asked Members whether this 
procedure should be followed again. 
127. The Committee so agreed
.12 
                                                      
11 Subsequently circulated in document G/SCM/6/Rev.1. 
12 This report was circulated in document G/SCM/111. G/SCM/M/48 
Page 22  
 
 N. A
RTICLE 27.4  PROCESS  
128. At the 28 October 2003 session of the meeting, the Chairperson recalled that the transition 
periods for certain export subsidy programmes of  certain developing country Members had been 
extended in 2002, for calendar year  2003, through the decisions adopt ed by the Committee pursuant to 
Article 27.4 of the Agreement.  Under Article 27.4,  the Committee was only authorized to grant such 
extensions one year at a time, on the basis of consultations with the Members concerned.  The 
Article 27.4 decisions taken by the Committee in 2002 could be broadly divided into two categories:  
first, the so-called "fast-track" decisions, adopted  pursuant to the procedures in G/SCM/39 and, in 
respect of Colombia, paragraph 10.6 of the Doha Ministerial Decision on Implementation-Related 
Issues and Concerns;  and second, the decisions based on Article 27.4 alone.  She recalled that all of 
the decisions (that is, the "fast-track" decisions as well as those based on Article 27.4 alone) contained 
standstill and transparency obligations which the Co mmittee had to review in 2003.  Thus, agenda 
item N.1 provided for Committee review of transparency and standstill in respect of all of the 
decisions taken (that is, fast-track and those based on Article 27.4 alone).  Concerning this review, 
many of the Article 27.4 notifications were dual- symbolled documents that also contained the 2003 
new and full subsidy notifications of the Members co ncerned.  Largely for this reason, many of the 
questions posed concerning the notifications had been  circulated in two document series (that is, the 
G/SCM/Q2 series for questions on new and full subsid ies notifications in the context of Articles 25 
and 26, and the G/SCM/Q3 series for the Article 27.4 process).  The review of the notifications in the G/SCM/N/99 document series for the purposes of Artic le 27.4 was legally distinct from, and without 
prejudice to, the Committee's norma l transparency review, pursuant to Article 26, of the 2003 new 
and full subsidies notifications in document seri es G/SCM/N/95.  The review of 2003 new and full 
subsidy notifications submitted pursuant to Article 25 general transparency obligation was subject to 
special procedures adopted by the Committee at it s May 2003 meeting.  These special procedures 
envisaged a series of three special meetings, in conjunction with the Committee's autumn 2003 
regular meeting, and Spring and Fall 2004 regular m eetings.  The dual-symbolled notifications that 
the Committee was reviewing in the Committee meeti ng in the context of the Article 27.4 process 
would also appear on the agenda of the Spring 2004 special meeting, as 2003 new and full notifications, for the normal transparency review, an d of course might be subject to further questions 
from Members in that context.  
129. The Chairperson also noted that in addition to  the Article 27.4 review, the agenda of the 
Committee's meeting, in item N.2, also envisaged Committee decisions in resp ect of the continuation 
of extensions for eligible programmes of certain  developing country Members for 2004.  This item 
was intended to address in particular the continuation of the fast-track extensions, as foreseen in the 
procedures in G/SCM/39.  As provided in paragra ph 1(e) of those procedures, through the end of 
2007, and "subject to annual reviews … to verify that the transparency and standstill requirements … 
are being fulfilled, Members of the Committee shall agree to continue the extensions".  Thus, for 
those fast-track extensions where the Committee's review in respect of standstill and transparency 
appeared to have been satisfactorily completed,  the Chairperson intended to propose that the 
Committee take decisions to continue the extensions  for calendar year 2004.  In accordance with the 
fast-track procedures, the Committee's decisions to c ontinue the extensions for a further year, calendar 
year 2004, would be on the same basis and subject to the same requirements as the original decisions.   
130. Because Colombia was one of the Members with fast-track extensions, and thus was on the 
agenda under this item, the Chairperson as ked the Vice-Chairman of the Committee, 
Mr. Naoshi Hirose, to preside over the part of the discussion pertaining to Colombia, in the three 
sessions of the Committee meeting (28 October, 1 and 8 December 2003).  Given this, to avoid 
having to change chairmanship more than once, sh e suggested that the Committee first review all of 
the notifications concerning fast-track extensions  based on the procedures in G/SCM/39, and then 
consider the proposed decisions to continue tho se extensions, where it appeared that the Committee  G/SCM/M/48 
 Page 23 
 
 
 had completed its review of transparency and st andstill to Members' satisfaction.  Then the Vice 
Chairman would take the chair, for the discussion of  all issues relating to Colombia's two fast-track 
extensions.  After that, she would return to the ch air for the Committee's review of the notifications 
pertaining to the non-fast-track extensions.   
131. The Committee so agreed . 
132. Turning to the transparency and standstill revi ew of the fast-track extensions based on the 
G/SCM/39 procedures, the Chairperson recalled that those procedures called for annual updating 
notifications to be provided by the Members concer ned, and reviewed by the Committee, to verify 
that the standstill and transparency requirements in  respect of the programmes were being met.  
Members would recall that pursuant to the pr ocedures, the Committee undertook an extensive 
transparency process in 2002, involving notificati ons as well as exchanges of written questions and 
answers, to determine whether the programmes fo r which extensions had been requested met the 
eligibility criteria of the procedures.  At the Committee's Spring 2003 meeting, Members agreed on 
deadlines for the submission of the 2003 required upd ating notifications, as well as for the exchange 
of questions and answers, for the purposes of the 2003 review by the Committee.   
133. All of the Members with fast-track extensions  had submitted notifications, and there had been 
an exchange of written questions and answers.  A ll of these notifications had been, as well, open for 
discussion at informal consultations held on 17 Octo ber 2003.  On the basis of the relatively smooth 
progress of the review process, and the relatively fe w questions and comments that had been raised, 
the Chairperson was confident that  the Committee would be in a position to complete its review of 
most, if not all, of the notifications that were submitted in a timely manner pertaining to the "fast-
track" decisions.  To the extent that this was th e case, the Committee would be in a position to take 
the decisions called for in the G/SCM/39 procedures , to continue the extensions for calendar year 
2004, on the same basis and subject to the same re quirements as the original decisions.  She invited 
Members to make any statements concerning the Comm ittee's review, either of a general nature, or in 
respect of a particular programme.  She proposed then to go through the extensions programme by 
programme (with the exception of those of Colombia  which would be taken up separately by the Vice 
Chairman) for any specific comments Members wished to make.   
134. The delegate of the United States  expressed his delegation's appr eciation to the Chairperson 
and to the Secretariat as well as the countries that were seeking the continuation of their extensions 
for, for the most part, providing timely notificatio ns and prompt responses to the questions that had 
been raised.  The United States thought that the pr ocess had been working well in terms of both the 
transparency and substantial aspects of the Co mmittee's work, and was pleased to approve the 
decisions of the vast majority of those programmes at the Committee's meeting.  In fact, there were 
only two programmes that the United States had identif ied where it would need further information in 
respect of a few small technical issues before being able to take a decision. 
135. The first such programme was that of Papua New Guinea ("Section 45 of the Income Tax"), 
for which the notification had arrived too late to be  reviewed and considered for decision at the 31 
October Committee meeting.  The delegate noted that under the G/SCM/39 mechanism, 
paragraph 3(a), updating notifications  should follow the agreed format for subsidy notifications under 
Article 25 of the SCM Agreement.  He asked the Secretariat to contact Papua New Guinea and share 
with relevant authorities the agreed format in the hope that the Committee would receive a revised 
notification.   
136. The second programme for which the United St ates hoped to receive further information  was 
Fiji's programme relating to "Export Processing Factor ies Scheme", also know as the "Tax Free Zone 
Factories Scheme".  The United States had follow- up questions relating to the responses provided by G/SCM/M/48 
Page 24  
 
 Fiji in document G/SCM/Q2/FJI/8- G/SCM/Q3/FJI/12 of 1 October 2003 to questions raised by the 
European Communities.   
137. The delegate of the European Communities
 echoed the US appreciation for all the efforts that 
had been made to make this process work smoothly.  His delegation was also grateful for the remarks 
made by the Chairperson at the start of this item, namely that the timetable for review under 
Article 25 of new and full subsidy not ifications was slightly different from the timetable for review of 
Article 27.4 notifications.  Therefore, questions in re gard to some of these issues could still be raised 
under the Article 25 process.  His delegation unders tood the US concerns with respect to the 
programmes of Papua New Guinea and Fiji, and would be ready to return to these two matters at a 
later stage. 
138. The Chairperson  thanked the European Communities and the United States for their 
interventions, and expressed her gr atitude to all Members for the c onstructive way in which they had 
dealt with this process.  The Committee completed its mandated standstill and transparency review in 
respect of the following programmes:  
Antigua & Barbuda  
•         Fiscal Incentive Act Cap 172 (December 1975)  
•         Free Trade and Processing Zone Act No. 12 of 1994  
Barbados  
•         Fiscal Incentive Program  
•         Export Allowance  
•         Research & Development Allowance  
•         International Business Incentives  
•         Societies With Restricted Liability 
Belize  
•         Fiscal Incentives Act  
•         Export Processing Zone Act  
•         Commercial Free Zone Act  
•         Conditional Duty Exemptions Facility under Treaty of Chaguaramas  
Costa Rica  
•         Duty Free Zone Regime  
•         Inward Processing Regime  
Dominica  
•         Fiscal Incentives Program  
Dominican Republic  
•         Law No. 8-90 to "Promote the Establishment of  New Free Zones and Expand Existing Ones"  
El Salvador  
•         Export Processing Zones and Marketing Act, as amended  
Fiji 
•         Short-Term Export Profit Deduction 
•         The Income Tax Act (Film Making and Audio Visual Incentive Amendment Decree 2000)  
Grenada  
•         Fiscal Incentives Act No. 41 of 1974  
•         Statutory Rules and Orders No. 37 of 1999  
•         Qualified Enterprises Act No. 18 of 1978  
Guatemala  
•         Exemption from Company Tax, Customs Duties and Other Import Taxes for Companies 
under Special Customs Regimes   G/SCM/M/48 
 Page 25 
 
 
 •         Exemption from Company Tax, Customs Duti es and Other Import Taxes for the Production 
Process Relating to Activities of Managers and Users of Free Zones  
•         Exemption from Company Tax, Customs Duti es and Other Import Taxes for the Production 
Process of Commercial and Industrial Enterprises Operating in the Industrial and free Trade 
Zone  
Jamaica  
•         Export Industry Encouragement Act  
•         Jamaica Export Free Zone Act  
•         Foreign Sales Corporation Act  
•         Industrial Incentives (Factory Construction) Act  
Jordan  
•         Partial or Total Exemption from Income Tax of Profits Generated from Exports under Law 
No. 57 of 1985, as amended  
Mauritius  
•         Export Enterprise Scheme  
•         Pioneer Status Enterprise Scheme  
•         Export Promotion  
•         Freeport Scheme  
Panama  
•         Official Industry Register  
•         Export Processing Zones  
St. Kitts and Nevis  
•         Fiscal Incentives Act No. 17 of 1974  
St. Lucia  
•         Fiscal Incentives Act No. 15 of 1974  
•         Free Zone Act, No. 10 of 1999  
•         Micro and Small Scale Business Enterprises Act, No. 19 of 1998  
St. Vincent & Grenadines  
•         Fiscal Incentives Act No. 5 of 1982, as amended  
Uruguay  
•         Automotive Industry Export Promotion Regime   
 
139. The Chairperson  stated that it would not be possible to complete the review of the one 
programme each of Fiji (Export Processing Factories Scheme) and Papua New Guinea (Section 45 of the Income Tax) during the Committee's 28 October session.  She stated that those Members who had 
questions on either of these programmes should subm it them to the Secretariat by 7 November 2003, 
with the replies provided by 21 November 2003.  When the Committee had concluded its review of 
those programmes of Fiji and Papua New Guinea, she would be able to propose, for them, draft 
decisions for adoption by the Committee.  The meeting was therefore suspended
 in respect of the 
transparency and standstill review of the fast-tr ack extensions requested by Fiji and Papua New 
Guinea for the Export Processing Factories Scheme and Section 45 of the Income Tax programmes, 
respectively. 
140. The Chairperson proceeded to the second age nda sub-item under item N, which concerned the 
fast-track continuation decisions pursuant to the procedures in G/SCM/39.  A draft decision text was available in the room for each of the fast track extensions for which the Committee had completed its 
review and thus appeared to be in a position to take a decision to continue the extension for 2004, as 
foreseen in the procedures in G/SCM/39.  The text of the draft decisions was the same as the generic 
text that had been sent to Members by fax on 14  October 2003, and discussed at the 17 October 2003 
open-ended informal consultations.  In preparin g the so-called "generic" fast-track text, the 
Chairperson had carried out some initial consultations with Members most directly concerned, so that G/SCM/M/48 
Page 26  
 
 the 14 October 2003 text transmitted to all Member s already took into account the interests and 
concerns of a broad range of interested Members.  As a result of this process, and particularly given 
the constructive informal discussions by the whole Committee, it was her firm belief that the proposed 
text reflected a consensus which could form th e basis of the decisions to be proposed.   
141. The Chairperson briefly introduced the text.  In general terms, the attempt was to ensure that 
what was being done was to continue, on the sam e basis and terms and conditions, the fast-track 
extensions that were granted in 2002.  This was explicitly in accordan ce with the fast-track 
procedures, and the drafting mirrored the text of those procedures as much as possible.   
142. Turning to the details, each decision document would be an Addendum to the corresponding 
decision taken in 2002.  Next, in the text itself, th e first two paragraphs stated the legal basis for the 
continuation decisions, namely that, like the original fast-track extensions, the continuations were as 
provided for in the G/SCM/39 procedures, which the Ministers at Doha had directed the Committee to apply.  The third paragraph and its  footnote referred to the documents submitted to date in respect of 
the extension and continuation.  The fourth para graph simply recalled that the Committee, in the 
context of the original extension, considered th e Member in question to have met the eligibility 
criteria of the procedures.  In other words, this  was not a new conclusion as to eligibility, as the 
procedures called for that assessment only once, in th e context of the original extension.  The fifth 
paragraph indicated that the Member concerned conf irmed that the programme had not been modified 
since the beginning of 2003  
so as to make it more favourable in te rms of scope, covera ge and intensity 
of benefits than it was on 1 September 2001, the date which served as the baseline for the standstill 
commitment.  The sixth paragraph established the basi s of the extension decision, namely the review 
undertaken by the Committee, pursuan t to the procedures, of the info rmation provided by the Member 
in the context of the transparency and standstill requirements.  The final, operative paragraph, 
mirrored the language of the procedures by stati ng that the Committee "agrees" to "continue" the 
extension for calendar year 2004, and then simply re iterated what that extension was, using exactly 
the same language as in the original extension deci sions.  The final sentence was intended to preserve, 
in respect of the continuation, the terms and condition s and other provisions of the original extension.  
Again, this emphasized that the decision was a con tinuation of the original extension, not a stand-
alone decision.  
143. The Chairperson indicated her in tention to ask the Committee to take the proposed decisions 
set forth in the room documents to continue the extensions for calendar year 2004 for the programmes 
in question, and then to open the floor for any st atements for the record.  She emphasized that this 
approach was entirely without prejudice to any su spended items and to the respective positions of 
delegations.  The review of standstill and transpar ency obligations in respect of those programmes 
remained before the Committee, as did the ques tion of eventual Committee decisions concerning 
continuation of the respective extensions.  The purp ose of the suspension was simply to provide the 
Committee with some additional time to resolve the outstanding issues.  She stated that both she and 
the Vice Chairman would remain in very close co ntact with the delegations  concerned, and would 
convene informal consultations as necessary, to reac h a speedy resolution of all issues so that all 
reviews could be completed.   
144. The Committee approved  the decisions to continue the extensions of the transition period for 
the following programmes  (the document symbols of the decision documents are shown in parentheses): 
Antigua & Barbuda  
•
         Fiscal Incentive Act Cap 172 (December 1975) (G/SCM/50/Add.1) 
•         Free Trade and Processing Zone Act No. 12 of 1994 (G/SCM/51/Add.1) 
  G/SCM/M/48 
 Page 27 
 
 
 Barbados  
•         Fiscal Incentive Program (G/SCM/52/Add.1) 
•         Export Allowance (G/SCM/53/Add.1) 
•         Research & Development Allowance (G/SCM/54/Add.1) 
•         International Business Incentives (G/SCM/55/Add.1) 
•         Societies With Restricted Liability(G/SCM/56/Add.1) 
Belize  
•         Fiscal Incentives Act (G/SCM/57/Add.1) 
•         Export Processing Zone Act (G/SCM/58/Add.1) 
•         Commercial Free Zone Act (G/SCM/59/Add.1) 
•         Conditional Duty Exemptions Facility unde r Treaty of Chaguaramas (G/SCM/60/Add.1) 
Costa Rica  
•         Duty Free Zone Regime (G/SCM/61/Add.1) 
•         Inward Processing Regime (G/SCM/62/Add.1) 
Dominica  
•         Fiscal Incentives Program (G/SCM/63/Add.1) 
Dominican Republic  
•         Law No. 8-90 to "Promote the Establishment of New Free Zones and Expand Existing Ones" 
(G/SCM/64/Add.1) 
El Salvador  
•         Export Processing Zones and Marketing Act, as amended (G/SCM/65/Add.1) 
Fiji 
•         Short-Term Export Profit Deduction (G/SCM/66/Add.1)13 
•         The Income Tax Act (Film Making and Audio Vi sual Incentive Amendment Decree 2000)    
(G/SCM/68/Add.1) 
Grenada  
•         Fiscal Incentives Act No. 41 of 1974 (G/SCM/69/Add.1) 
•         Statutory Rules and Orders No. 37 of 1999 (G/SCM/70/Add.1) 
•         Qualified Enterprises Act No. 18 of 1978 (G/S CM/71/Add.1) 
Guatemala  
•         Exemption from Company Tax, Customs Duties and Other Import Taxes for Companies 
under Special Customs Regimes (G/SCM/72/Add.1) 
•         Exemption from Company Tax, Customs Duti es and Other Import Taxes for the Production 
Process Relating to Activities of Managers and Users of Free Zones (G/SCM/73/Add.1) 
•         Exemption from Company Tax, Customs Duti es and Other Import Taxes for the Production 
Process of Commercial and Industrial Enterprises Operating in the Industrial and free Trade 
Zone (G/SCM/74/Add.1) 
Jamaica  
•         Export Industry Encouragement Act (G/SCM/75/Add.1) 
•         Jamaica Export Free Zone Act (G/SCM/76/Add.1) 
•         Foreign Sales Corporation Act (G/SCM/77/Add.1) 
•         Industrial Incentives (Factory Construction) Act (G/SCM/78/Add.1) 
                                                      
13 With respect to Fiji's  "Short-term Export Profit Deduction"  programme, the Chairperson recalled 
that footnote 2 of the decisi on clarified that, as was the case for the or iginal decision (G/SCM/66), this decision 
did not cover Fiji's Export Finance Facility ("EFF") and Export Credit Ratio ("ECR") programmes. G/SCM/M/48 
Page 28  
 
 Jordan  
•
         Partial or Total Exemption from Income Tax of Profits Generated from Exports under Law 
No. 57 of 1985, as amended (G/SCM/79/Add.1) 
Mauritius  
•         Export Enterprise Scheme (G/SCM/80/Add.1) 
•         Pioneer Status Enterprise Scheme (G/SCM/81/Add.1) 
•         Export Promotion (G/SCM/82/Add.1) 
•         Freeport Scheme (G/SCM/83/Add.1) 
Panama  
•         Official Industry Register (G/SCM/84/Add.1) 
•         Export Processing Zones (G/SCM/85/Add.1) 
St. Kitts and Nevis  
•         Fiscal Incentives Act No. 17 of 1974 (G/SCM/90/Add.1) 
St. Lucia  
•         Fiscal Incentives Act No. 15 of 1974 (G/SCM/87/Add.1) 
•         Free Zone Act, No. 10 of 1999 (G/SCM/88/Add.1) 
•         Micro and Small Scale Business Enterprises Act, No. 19 of 1998 (G/SCM/89/Add.1) 
St. Vincent & Grenadines  
•         Fiscal Incentives Act No. 5 of 1982, as amended (G/SCM/91/Add.1) 
Uruguay  
•         Automotive Industry Export Promotion Regime  (G/SCM/92/Add.1)   
145. The Chairperson thanked Members for their cons tructive participation in the review process 
and in the adoption of these decisions by the Committee.   
146. The delegate of the European Communities  stated that the Committee was one of the most, if 
not the most, productive in the WTO in terms of decisions taken.  The European Communities was very pleased that so many decisions had been taken at the Committee's regular meeting and congratulated all Members concerned.  There was just one remark the European Communities wanted 
to make for the record:  in several of the notifi cations, and in answers to questions the European 
Communities had raised, it was clear that benefits under the programmes concerned were scheduled to 
extend beyond the transitional period for the eliminat ion of all export subsidies provided in document 
G/SCM/39.  The European Communities suggested that this matter be given careful attention by the 
Committee.  It was clear that the procedures in G/SCM/39 did not apply to any extension beyond 2007.  It was also clear that the extensions th e Committee had granted at the Committee's meeting 
were of the transitional period for the eliminati on of export subsidies.  The European Communities 
anticipated returning to this issue in 2004. 
147. The delegate of the United States
 stated that the European Communities had raised a very 
good point: to encourage Members benefiting from ex tensions to outline how they were going about 
phasing out the programmes that they had in place.  The United States realized that it was not a legal 
obligation under G/SCM/39 but wished to avoid any sort of implementation problems.  The 
United States would be following with interest any kind of comments Members could offer with 
respect to plans that they had for the phase-out of the programmes. 
148. The Chairperson  thanked the United States and th e European Communities for their 
interventions.    G/SCM/M/48 
 Page 29 
 
 
 149. On 28 October 2003, the meeting was then suspe nded in respect of the Committee's review of 
one remaining programme each of Fiji and Papua New Guinea.14   
150. The Vice Chairman took the Chair for the discu ssion of Colombia's fast-track extensions, 
beginning with the review of Colombia's sta ndstill and transparency and other commitments 
undertaken in the extension decisions adopted in  December 2002 pursuant to the procedures in 
G/SCM/39 and paragraph 10.6 of the Minister ial Decision on Implementation (G/SCM/93 and 
G/SCM/94).  In this connection, on the basis of in formal consultations that  he had been conducting 
with interested delegations, and the recent excha nge of written questions and answers, he was aware 
that there remained concerns on the part of certain Members relating to this review.  He also was  
aware that any such concerns would have a beari ng on discussion by the Committee of draft decision 
language that could be used for th e continuation of those extensions.  
151. The Vice Chairman stated that, in the first part  of the discussion, he would invite substantive 
comments and questions on the notification and ot her information provided by Colombia, but would 
not be seeking views as to the question of contin uation decisions in respect of Colombia's two 
programmes.  Rather, he would take up that qu estion in the second part of the discussion.   
152. He recalled that Colombia's notification was contained in G/SCM/N/COL/99, which had been 
submitted on 30 June 2003, the deadline establis hed by the Committee.  Although no written 
questions concerning Colombia's notification were  received by the 30 September 2003 deadline, some 
had been received since then.  In particular, on 10 October 2003, Colombia provided written answers 
(in document G/SCM/Q3/COL/21) to certain oral questions that had been posed in informal 
consultations.  On 14 October 200 3, Ecuador submitted written questions to Colombia in document 
G/SCM/Q3/COL/22, and, on 23 October 2003, Co lombia provided written answers in document 
G/SCM/Q3/COL/23.  Subsequently, Peru s ubmitted written questions and Ecuador submitted 
additional written questions, circulated in documen ts G/SCM/Q3/COL/24 and 25, respectively.  The  
written questions submitted concerned both of Colomb ia's programmes for which extensions had been 
granted in 2002.   
153. The Vice Chairman had been conducting informal  consultations with the interested Members 
to clarify the situation in respect of the review of  Colombia's notification.  On the basis of those 
consultations, as well as the exchange of written ques tions and answers, he was aware that certain 
substantive issues remained outstanding in respect of  the programmes, at least some of them having to 
do with the terms and conditions of the decision taken in 2002. 
154. He opened the floor for any comments on Colombia 's programmes, first with regard to the 
"Free-Zone Regime" (G/SCM/93) and subsequently  with respect to the "Special Import-Export 
System for Capital Goods and Spare Parts (SIEX)" (G/SCM/94). 
155. The delegate of Ecuador  thanked the Chairman for the c onsultations which he had conducted 
and, for the Members' information, he stated that they were still ongoing at the time of the meeting.  
He believed that, with further dialogue, the Committ ee would be able to come to a resolution on the 
two programmes.   
156. The delegate of Colombia  expressed gratitude to Ecuador for its constructive comments.  
Colombia wished to achieve sufficient clarification of  Peru and Ecuador's questi ons and to be able to 
resolve any issues relating to the extensio n of those programmes as soon as possible. 
                                                      
14 The meeting subsequently resumed on 1 December 2003.  See para. 164. G/SCM/M/48 
Page 30  
 
 157. The delegate of Bolivia
 stated that her delegation was also part of this process of 
consultations because Bolivia had a speci al interest in these two programmes. 
158. The delegate of Venezuela  stated that Venezuela also w as participating actively and had 
shown its interest in certain ques tions submitted by Ecuador and Peru. 
159. The Vice Chairman  thanked all delegations for their constructive engagement in this 
important process.  He felt that there was goodwill on the part of all delegations concerned to reach a 
satisfactory resolution, which would allow the Co mmittee to complete its review of Colombia's 
notification.  Once the review was completed, the Committee would be in a position to consider 
decisions to continue the extensions concerned, fo r calendar year 2004, as foreseen in, and subject to 
the same terms and conditions as, the original deci sions adopted in 2002.  Given that the process had 
not yet reached that point, he intended to suspend th e meeting with respect to Colombia's review to 
allow time for the development of any additional in formation and for bilateral contacts, as well as for 
informal consultations that he intended to convene at an appropriate time.  
160. Before concluding the discussion, the Vice Chairman  stated that the decisions adopted in 
2002 in respect to Colombia's two programmes fo resaw the continuation of the extensions for 
calendar 2004, subject to the transparency, stands till and other commitments undertaken by Colombia 
in the decisions.  In this connection, on 14 October 2003 on his own responsibility and without 
prejudice to any Member's substantive views, he had se nt to all Members, by fax, a draft decision text 
for continuations for Colombia, in three languages.   As was the case for the original fast-track 
extension decisions taken in 2002 for Colombia, the Colombia-specific draft continuation text 
mirrored as closely as possible the generic text used for the other fast-track extension decisions, while 
also reflecting the particularities of the 2002 extens ion decisions that were taken in respect of 
Colombia.  Given the substantive concerns that ha d been expressed by some Members in the review 
of Colombia's two programmes, and the suspension of the meeting in respect of that review, it was the 
Vice Chairman's impression that the Committee was not in a position to adopt continuation decisions 
in respect of Colombia's two programmes at the Comm ittee meeting.  In light of this, he proposed that 
the Committee not undertake an in-depth paragraph- by-paragraph discussion of the Colombia-specific 
draft decision text.   
161. However, and without prejudice to the position of  any Member or to any eventual Committee 
action, there were differences between this draft text  and the generic text that the Committee had used 
in the fast-track continuation decisions adopted ear lier in the Committee meeting.  As far as the 
Colombia-specific draft was concerned, the few n ecessary differences, reflecting the particularities of 
the original extension decisions in respect of Colo mbia's programmes, were the following.  First, the 
third paragraph recalled verbatim the specific additi onal commitments of Colombia in paragraph 10 of 
the original decisions in G/SCM/93 and /94.  Second , in the fourth paragraph there was a reference to 
paragraph 10.6 of the Ministerial Decision on Implem entation.  This paragraph was identical to the 
one appearing in the extension decisions concerni ng Colombia adopted in 2002, and reflected the 
particular basis of Colombia's request and extensi on.  The third difference in wording, in the fifth 
paragraph, beginning "Recalling", also mirrored ex actly the corresponding language in the original 
decisions adopted in 2002.  The fourth difference appeared in the paragraph beginning "Taking note that...".  The square brackets were introduced  to indicate that the generic wording might  need to be 
modified and expanded upon to take into account Co lombia's particular circumstances.  The fifth 
difference appeared in the paragraph beginning "On the basis".  The reference was not only to the 
procedures in G/SCM/39 but also to paragraph 10 of the original decision which also referred to the 
Committee's review.  In addition, at the end of th e paragraph there was a reference to the additional 
obligations undertaken by Colombia which also were subject to review  by the Committee.  The final, 
operative paragraph was identical to that in the generic text.  G/SCM/M/48 
 Page 31 
 
 
 162. The Vice Chairman recalled that he was not seek ing comments or questions about the draft, 
as he believed that this would be premature, and stat ed that he would remain in close contact with the 
interested delegations, with a view to reconveni ng the Committee at the earliest possible moment on 
this issue.   
163. The meeting was suspended  with respect to the review of Colombia's standstill and 
transparency and other commitments undertaken in  the extension decisions adopted in December 
2002 pursuant to the procedures in G/SCM/39 and paragraph 10.6 of the Ministerial Decision on 
Implementation (G/SCM/93 and G/SCM/94).   
164. When the Committee's regular meeting re-c onvened on 1 December 2003, the Chairperson  
recalled that all of the decisions (that is, the "fast-t rack" decisions as well as those based on 
Article 27.4 alone) contained standstill and transp arency obligations which the Committee had to 
review in 2003.  Under agenda item N.1, at the 28 October 2003 session of the meeting, the Committee had completed its standstill and transparen cy review in respect of almost all of the 
decisions, with the exception of one programme of  Fiji, one programme of Papua New Guinea and 
two programmes of Colombia.  These were the programmes for which the Committee's Review as 
continuing.  In addition to the Ar ticle 27.4 review, the meeting's agenda, in item N.2, also envisaged 
Committee decisions in respect of the continuation of  extensions for eligible programmes of certain 
developing country Members for 2004.  Thus, for t hose fast-track extensions where the Committee's 
review in respect of standstill and transparency w as satisfactorily completed, the Committee had taken 
decisions to continue the extensions for calenda r year 2004.  Given that Fiji's and Papua New 
Guinea's answers to questions had only been receive d a few days before the Committee meeting, the 
Chairperson did not intend to propose any decisions in respect of the remaining programmes of these 
two Members concerned, but she did hope that the Committee would be able to satisfactorily 
complete its review thereof.  She intended agai n to suspend the meeting with respect to any 
Committee decisions for Fiji and Papua New Guinea, and to resume the meeting on 
8 December 2003. 
165. In regard to Fiji's notification contained in document G/SCM/N/99/FJI, the Chairperson 
recalled that the United States had submitted writte n questions since the 28 October meeting and that  
answers had been received, in documents G/SCM/Q3/FJI/14 and /15.   
166. The delegate of the United States
 expressed his delegation's appreciation to Fiji for providing 
the answers to the United States' questions.  The answers were detailed and also contained some 
legislation which the United States had requested.  B ecause of the complexity of the information, the 
United States was not yet prepared to comment on the answers that had been provided.  The 
United States intended to review the answers whic h it had received to see whether it had any follow-
up questions. 
167. Turning to Papua New Guinea's notification contained in document G/SCM/N/99/PNG, the 
Chairperson  recalled that this notification was only r eceived on 17 October.  Thus, not only had it 
missed the 30 June 2003 deadlin e, it had also come in after th e deadlines for both written questions 
and written replies.  The Committee therefore had not ha d the agreed interval of  time, or the chance to 
engage in the agreed written question and answer pr ocess, in respect of this notification before its 
28 October 2003 meeting.  Since then, the United States had posed written questions and Papua New 
Guinea had submitted its response, which was in th e agreed subsidy notification format and which 
also constituted a supplement to its notifi cation.  These could be found in documents 
G/SCM/Q3/PNG/6 and /7.    
168. The delegate of the United States  expressed his delegation's appreciation to Papua New 
Guinea for the Article 25 notification that it provided on 25 November 2003.  The United States had G/SCM/M/48 
Page 32  
 
 not yet had an opportunity to begin reviewing the notif ication, and therefore, as it had in the review of 
Fiji's programme, the United States reserved the right  to pose follow-up questions in respect of the 
programme of Papua New Guinea. 
169. Based upon this exchange, and given that no ques tions remained outstanding, the Chairperson
 
stated that it was her sense that the Committee ha d completed its required transparency and standstill 
review in respect of the programmes of Fiji and Papua New Guinea, subject to any follow-up 
questions.  It was therefore her intention to pr opose, at the resumed session of the Committee on 
8 December, as foreseen in the fast-track proce dures, that the Committee adopt decisions for the 
programmes concerned to continue the extensions fo r a further year, calendar year 2004, on the same 
basis and subject to the same requirements as the original decisions, and taking into account the 
discussions in the Committee meeting. 
170. The meeting was suspended  in respect of the Committee's review of the programmes of Fiji 
and Papua New Guinea.15 
171. The Vice Chairman  of the Committee took the Chair for the Committee's discussion of 
Colombia's fast-track extensions.  He intended firs t to report on the review of Colombia's standstill 
and transparency and other commitments undertak en in the extension decisions adopted in 
December 2002 pursuant to the procedures in G/SC M/39 and paragraph 10.6 of the Ministerial 
Decision on Implementation (G/SCM/93 and G/SCM/94) .  Second, he intended to briefly summarize 
his impression of where the Committee stood in resp ect of Colombia's programmes and the additional 
steps to be taken.  Finally, purely for the inform ation of Members, he would recall the situation in 
respect of the draft decision texts for Colombia.  He  stated that it was not his intention to open the 
floor for discussion on any of these three points.  Rath er, following his report, he would suggest that 
the Committee suspend this meeting, and resume it on 8 December.   
172. On the review of the notification and informa tion provided by Colombia, since the 28 October 
meeting, Ecuador had posed further written questi ons, in documents G/SCM/Q3/COL/26 and 27, and 
Colombia, in documents G/SCM/Q3 /COL/28 and /29, had provided written answers to these, as well 
as to questions posed by Peru on 27 October.   
173. As for where the Committee stood and further step s to be taken, on the basis of informal 
consultations that he had been conducting with interested delegati ons, and the exchange of written 
questions and answers following the 28 October meeting, the Vice Chairman commended all of the 
delegations involved for their construc tive participation in this valuable transparency exercise.  It was 
his impression that there was goodwill on the part of all delegations concerned to reach a satisfactory 
resolution, which would allow the Committee to complete  its review of Colombia's notification.  After 
completing the review, the Committee would be in a position to consider deci sions to continue the 
extensions concerned, for calendar year 2004, as foreseen, and subject to the terms and conditions , in 
the original decisions adopted last year.   
174. Given that the process had not yet reached that  point, the Vice Chairman intended to suspend 
the meeting with respect to Colombia's review  to allow delegations additional time to seek a 
resolution.  On the issues that were pending in th is respect, he had met on numerous occasions with 
the delegations concerned to seek clarification as to where they were in their bilateral contacts.  On 
the one hand, they all had assured him that their contacts were continuing, including at very high 
levels back in capitals.  On the other hand, he w as informed that unfortunately these issues had not yet 
been fully resolved.  He had assured all of those de legations that he was ready to assist them in any 
                                                      
15 The meeting subsequently resumed on 8 December.  See para. 180.  G/SCM/M/48 
 Page 33 
 
 
 way that he could, should they find it useful.  He also encouraged all of them to redouble their 
bilateral efforts, and to think as creatively as possibl e concerning solutions.  Time was very short, and 
Members had to make every effort to make progress in this matter.   
175. Third, as for the any draft decision text for th e programmes of Colombia, given the concerns 
that had been expressed by some Members in the review of Colombia's two programmes, and the 
suspension of the meeting in respect of that re view, it seemed that the Committee was not yet in a 
position to adopt continuation decisions in respect of Colombia's two programmes.   
176. The Vice Chairman recalled that the decisions adopted in 2002 in respect those programmes 
foresaw the continuation of the extensions for cal endar 2004, subject to the transparency, standstill 
and other commitments undertaken by Colombia in the decisions.  In this connection, on 14 October, 
on his own responsibility and without prejudice to any Member's substantive views, he sent to all 
Members, by fax, a draft decision text for continua tions for Colombia, in three languages.  As was the 
case for the original fast-track extension decisions  taken in 2002 for Colombia, the Colombia-specific 
draft continuation text mirrored as closely as possible the generic text used for the other fast-track 
extension decisions, while also reflecting the partic ularities of the 2002 extension decisions that were 
taken in respect of Colombia.  He recalled that, at the 28 October session, he had briefly introduced 
that draft text on Colombia's programmes.  That w as without prejudice to the position of any Member 
or to any eventual Committee action, to simply poi nt out the differences between this draft text and 
the generic text that the Committee had used in the other fast-track continuation decisions.  He stated 
that it was his intention to fax a revised draft decision text out to all Members for purposes of 
transparency, and again without prejudice to th e position of any Member or to any eventual 
Committee action.  He said that he was confident th at this draft text would reflect the particular 
concerns of certain delegations and trusted that it would be positi vely received by WTO Members.   
177. Given these considerations, it did not seem that  the Committee could productively consider 
details of legal drafting.   
178. The Vice Chairman intended to remain in close contact with interested delegations, before 
reconvening the meeting, and asked Members to be r eady to join him for informal consultations.   
179. The meeting was suspended with respect to  the review of Colombia's standstill and 
transparency and other commitments undertaken in  the extension decisions adopted in December 
2002 and adoption of continuation decisions in  respect of Colombia's two programmes. 
180. When the meeting reconvened on 8 December 2003, the Chairperson  asked whether Members 
had any additional questions or comments with respect to Fiji's "Export Processing Factories/Export 
Processing Zones Scheme".   
181. The delegate of the United States  drew Members' attention to footnote 2 of the draft decision 
G/SCM/67/Add.1.  He stated that, during the course of the Committee's review, several other 
programmes had come to light about which the Un ited States had questions.  The United States would 
be asking those questions in the appropriate forum and not in this session of the Committee meeting.  
Therefore, the United States wanted to make clear that the Committee's review and any decision that 
it took at the Committee meeting with respect to this programme applied solely to the Export Processing Factories/Export Processing Zones Scheme.  
182. The Chairperson
 thanked the United States for this clar ification and asked whether there were 
any comments or questions regarding Papua New Gu inea's  "Section 45 of the Income Tax".  There 
were no comments.  The Chairperson thanked Member s for their constructive participation in this G/SCM/M/48 
Page 34  
 
 review process and stated that it was her sense that  the Committee could confirm the completion of its 
required transparency and standstill review in r espect of the programmes of Fiji and Papua New 
Guinea. 
183. The Chairperson stated that the Committee thus  was in a position to consider adopting the 
decisions to continue for 2004 the fast-track exte nsions pursuant to the procedures in G/SCM/39 for 
these two programmes.  The text of the draft decision wa s the same as the text that formed the basis of 
the other fast-track continuation decisions adopted at the Committee's meeting of 28 October 2003.  In 
the case of the decision pertaining to Fiji's "Export Processing Factories/Export Processing Zones Scheme", the Chairperson noted that footnote 2 had been added at the request of some Members to 
clarify that, although questions and answers had b een exchanged concerning Fiji's Duty Suspension 
Scheme programme, that programme was not part of the programme covered by the continuation 
decision.    
184. The Committee agreed
 to continue the extensions for (the document symbols of the decision 
documents are shown in parentheses):  
Fiji 
•         Export Processing Factories/Export Processing Zones Scheme (G/SCM/67/Add.1) 
Papua New Guinea  
•         Section 45 of the Income Tax (G/SCM/86/Add.1) 
185. The Chairperson  thanked Members for their constructive participation in the review process 
and in the adoption of those decisions by the Committee and opened the floor for any statements.   
186. The Vice Chairman  took the Chair for the discussion of Colombia's fast-track extensions.  He 
proposed first to take up the review of Colombia's  standstill and transparency and other commitments 
undertaken in the extension decisions adopted in December 2002.  Second, he intended to introduce 
the draft decision texts relating to Colombia's pr ogrammes, and to propose that the Committee adopt 
these decisions.  Thereafter, he intended to ope n the floor for any statements for the record.    
187. On the basis of informal consultations th at he had been conducting with interested 
delegations, and the further recent exchange of wr itten questions and answers concerning Colombia's 
two programmes between the 28 October meeti ng and the resumed 1 December 2003 sessions, the 
Vice Chairman commended all of the delegations invol ved for their constructive participation in this 
review process.  No further written questions  had been received since the resumed session on 
1 December 2003 and all written answers had been ci rculated to Members.  He asked whether he 
could assume that the Committee had completed its  review of the two programmes which are the 
Free-Zone Regime (G/SCM/93) and the Special Im port-Export System for Capital Goods and Spare 
Parts (SIEX) (G/SCM/94).   
188. As there were no requests for the floor, the Vice Chairman thanked all delegations and, as the 
Committee had completed its review of the two prog rammes of Colombia, he proposed turning to the 
draft decision text for the continuation of the extension for these two programmes.   
189. The Vice Chairman recalled that the decisi ons adopted in 2002 with respect to those 
programmes foresaw the continuation of the extens ions for calendar year 2004, subject to the 
transparency, standstill and other commitments undert aken by Colombia in the decisions, and again 
recalled the draft text for Colombia's programmes, which he had introduced at the 28 October meeting 
under his own responsibility and without prejudice to any Member's substantive views or any eventual  G/SCM/M/48 
 Page 35 
 
 
 Committee action.  He recalled that the proposal in respect of Colombia had not, as of the 28 October 
or 1 December 2003 sessions of the Committee, attracted a full consensus.  
190. Since that time, the Vice Chairman had continued to be in close contact with the interested 
delegations, through bilateral contact s and plurilateral consultations, a nd the delegations also had been 
consulting among themselves almost continuously .  During these various processes, a number of 
additional proposals had been made as to the possible basis for decisions to be taken.  All of these 
proposals had served a very useful purpose in clar ifying the situation and the positions of the 
respective delegations, and had played a very constr uctive role in the process.  On 4 December 2003, 
the Vice Chairman had faxed out a revised draft of  Colombia-specific decision language, again on his 
own responsibility, based on his intensive and construc tive consultations with interested delegations.  
This was without prejudice to the position of an y Member or to any eventual Committee action.  
Those texts contained certain langua ge in square brackets as there remained at that time various 
options that were still under consideration in capitals .  He was pleased to report that there had been 
significant further developments since then which allowed him to prepare a new text without any bracketed language.  He had conve ned open-ended informal consultations during the morning of 
8 
December 2003 to discuss the situation and an updated ve rsion of the text had been discussed at that 
time.  The document that was in the room for consideration during the Committee meeting reflected 
the discussion held in those informal consultations  and additional informal contacts among interested 
Members.   
191. The Vice Chairman introduced this revised dr aft text, pointing out the differences between 
this draft text and the draft text introduced at  the 28 October session.  He noted that paragraph 
numbers had been added in each decision.  Regard ing the draft decision on the Free Zones programme 
(draft G/SCM/93/Add. 1), paragraph 2 was new and si mply stated Colombia's obligation to eliminate 
all export subsidies.  Paragraphs 3-7 had been in  the draft of 14 October 2003 but had simply been 
reordered for logic of presentation.  Paragraph 8 w as new and was a reaffirmation by Colombia of its 
commitments undertaken in the original (2003) exte nsion decision as well as the commitments to be 
undertaken in the 2004 continuation decision.  Pa ragraph 9 was new and referred to a schedule for 
legislative amendment schedule which Colombia pr esented in respect of the Free Zones programme.  
Copies of the schedule were available in the room.16 Paragraph 9 indicated the end date for that 
legislative process, namely 31 December 2004.  Paragraphs 10, 11 and 12 were not new.  
Paragraph 11 had new language at  the end pertaining to transp arency. Paragraph 13 was new and 
stated the obvious, namely that the continuation w as only in respect of the subsidies subject to the  
original extension decision.  Finally, paragraph 14 si mply stated that this decision had no implications 
for decisions by the Committee in respec t of programmes of other Members.   
192. With respect to the "Special Import-Export System for Capital Goods and Spare Parts" 
(SIEX) draft decision, the Chairman stated that the first 8 paragraphs were identical to those in the 
Free Zone draft text.  Paragraph 9 dealt with the VAT  deferral aspect of the SIEX programme and, in 
particular, contained a commitment by Colombia th at for all projects approved under the programme 
on or after the date of the Committee's decision,  payment of the VAT should occur no later than 
31 December 2006, with an explanatory footnote con cerning the word "projects".  To this end, the 
decision provided that Colombia should implement, no later than the date of the decision, the legal 
and/or regulatory or other reforms required, such that the period permitted for payment of deferred 
VAT could not extended beyond 31 December 2006 for such projects.  Finally, for projects approved 
prior to the date of the decision, payment of deferre d VAT had to occur not later than five years after 
the grant of the deferral.  There was a footnote explai ning that the date of the deferral was the date of 
importation for purposes of th e decision.  Paragraphs 10, 11 and 12 were the same as their 
                                                      
16 Subsequently circulated in document G/SCM/93/Add.1/Suppl. 1. G/SCM/M/48 
Page 36  
 
 counterparts in the Free Zones draft decision and paragraph 13 was essentially the same as 
paragraph 13 in that draft.  Para graph 14 was specific to the SIEX decision and was meant to reflect 
the fact that the decision did not have implications  for questions of legal in terpretation on issues of 
timing pertaining to subsidies. Paragraph 15 was iden tical to paragraph 14 of the Free Zone draft.  
These drafts had been elaborated on the basis of a very intensive process of informal consultations 
and the Vice Chairman firmly believed that they represented the basi s for consensus that 
accommodated the interests of all Members.   
193. With respect to the "Special Import-Export System for Capital Goods and Spare Parts 
(SIEX)", the representative of Colombia stated that  several delegations had asked about the approval 
process and use of authorizations.  He explained th at the approval procedure entailed the presentation 
of investment programmes and export programmes which were the fruit of these investments so as to 
be entitled to the benefits of the programme, i.e. foregoing import duties on capital goods and deferral 
of VAT.  To get the approval of such programmes,  the private sector had to take on some export 
commitments, and then both the government and the private investors had a great deal of incentive to 
import the capital goods rapidly so as to be able to  fulfil the export requirements.  In other words, 
these were not mere vague commitments, they we re commitments signed with guarantees.  If an 
investor were not to fulfil the commitments, this  would entail the immediate payment of a guarantee 
taken on by an insurance company.  In this sen se, the private sector also had all the incentives 
necessary to import rapidly in order to be able to  fulfil the commitments which they had signed and 
which were supported by insurance companies.  Imports based on authorizations which had been 
granted prior to 8 December 2003 already would have  been made, or if that was not the case, then 
those imports would be made in the first few months  of 2004.  Those were the clarifications that 
Colombia wanted to give in respect of questions that some delegations had posed to his delegation 
during the informal consultations held during the morning of 8 December 2003. 
194. The delegate of the United States
 expressed his delegation's appreciation to Colombia for the 
explanation of the SIEX programme. 
195. The delegate of the European Communities  also expressed his delegation's appreciation for 
the extremely helpful clarification.  
196. The Committee adopted  the following decisions in respect of the programmes of Colombia :   
• Free Zone Regime (G/SCM/93/Add. 1, including Suppl. 1, containing the legislative 
schedule)  
• Special Import-Export System for Capital Goods and Spare Parts (SIEX) (G/SCM/94/Add. 1) 
197. The delegate of Ecuador  thanked the Vice Chairman for all the work that had been done in the 
informal consultations which had taken place in  November and December 2003.  His delegation 
considered that the very objective, impartial a nd constructive way the Chair had led these meetings 
made it possible for Ecuador to be in a position to jo in in the consensus so as to go through with the 
decisions on Colombia.  He stated that Ecuador had invested a lot of time in these informal 
consultations but, as the Ambassador of Colombia said, these efforts had been very fruitful.  He 
thanked other Members involved in the process. 
198. The delegate of Peru  thanked the Vice Chairman for th e way the consultations had taken 
place and Colombia for the explanations given on the SIEX programme.    G/SCM/M/48 
 Page 37 
 
 
 199. The delegate of Venezuela  thanked the Chair for his efforts to achieve the appropriate 
conditions for the Committee to be able to adopt  the decisions on the two Colombian programmes.  
His delegation also thanked the efforts of the other de legations which had participated in this process;  
the Secretariat for all its efforts; and the Colombia n delegation for the flexibility to give guarantees 
which were in line with the obligations under the SCM Agreement.   
200. The delegate of Bolivia  joined those who had congratul ated the Vice Chairman for the 
brilliant way in which he had led the consultations.  Bolivia also wished to express its satisfaction 
with the content of these decisions which were the result of efforts made by Members, and in particular, Colombia in making the required clar ifications in this annual review process.   
201. The delegate of the European Communities
 also congratulated all th ose concerned, especially 
the delegation of Colombia and the other Andean delegations, the Chai rperson, the Vice Chair and the 
Secretariat.  For the record, his delegation attached particular importance to the final sentences starting as follows "No inferences ..." of both the deci sions taken with respect to Colombia.  He stated 
that these sentences were important both in case an y cross interpretation were attempted between 
these decisions and other decisions which perhaps did not have all the fullness of the wording of these 
decisions.  It was also important to underline that it could not be assumed that any particular approach 
the Committee followed in these decisions would neces sarily be the appropriate path to follow in 
other cases because each case had its own particul arities, so the European Communities attached 
importance to those particular sentences.   
202. The representative of Colombia thanked the Vice Chairman for hi s wonderful job of 
chairmanship on this issue.  He also thanked all Andean colleagues because their delegations had been 
able to work in a very positive fashion.  In 2003, their delegations had done a lot of technical and very 
objective work, which helped them to develop a goo d dialogue.  Colombia th anked all the delegates 
from the Andean countries for their understanding, a nd their very serious and professional work.  He 
also thanked the Secretariat.  He thanked all the other Members and, in particular those who were 
most involved in this work  
which had shown a lot of flexibilit y in reaching an agreement.   
203. The Vice Chairman  thanked all delegations for their work during this very long process.  He 
had felt during the consultations a vast amount of goodwill and a constructive approach and, even if 
the substance of the issues was very complicated, each delegation i nvolved had a very large stake in 
this process.  He also thanked the Secretaria t, especially Ms. Morgan, Ms. Hainsworth and 
Mr. Do Prado, for helping the Committee and a ll Members to put this together.  Without the 
professional assistance of these three individuals in th e Secretariat, the decisions would never have 
been achieved. 
204. At the 28 October session of the regular meeting, the Chairperson resumed the Chair of the 
Committee for the Committee's discussion of th e Article 27.4 "non-fast-track" decisions.   
205. With respect to the required transparency and st andstill review of the extensions of non-fast-
track decisions, the Chairperson recalled that, pur suant to Article 27.4, the Committee had granted 
extensions for certain programmes of four Members on the basis of a "one plus two" approach, with 
the "one" being an extension for calendar 2003 a nd the "two" being the final two year phase-out 
period referred to in Article 27.4.  Pursuant to  the decisions, the Committee was called upon to carry 
out a review of standstill and transparency commitme nts of these decisions taken last year, in respect 
of 2003.  She recalled that the four Members w ith programmes that were extended for 2003 on the 
basis of Article 27.4 alone were Barbados, El Salv ador, Panama and Thailand.  She pointed out that 
there had been no written questions posed in resp ect of any of these programmes during the period 
following the 30 June 2003 deadline for the submission of updating notifications.  She stated that a very useful and constructive ex change of views had taken place at the 17 October 2003 informal G/SCM/M/48 
Page 38  
 
 consultations with respect to the review of tr ansparency and standstill in connection with these 
extensions.  For the purposes of the Committee's review, she invited comments in respect of: 
Barbados (G/SCM/N/99/BRB)  
•
         Export Grant and Incentive Scheme (G/SCM/95)  
•         Export Rediscount Facility (G/SCM/96) 
•         Export Credit Insurance Scheme (G/SCM/97)  
•         Export Finance Guarantee Scheme (G/SCM/98) 
El Salvador (G/SCM/N/99/SLV)  
•         Export Reactivation Law (G/SCM/99) 
Panama (G/SCM/N/99/PAN)  
•         Tax Credit Certificate (G/SCM/100) 
Thailand (G/SCM/N/99/THA)  
•         Industrial Estate Authorit y of Thailand (G/SCM/101) 
•         Board of Investment Programme (G/SCM/102) 
206. There were no comments or questions raised.   
207. The Chairperson  proposed that the Committee conclude the review of those notifications.  
She noted that the Committee's understanding in resp ect of these programmes seemed to be that, with 
the expiry of the one-year extension on 31 December 2003, the final two-year phase-out period 
provided for under Article 27.4 would begin for each of these programmes on 1 January 2004.   
208. Concerning the 2004 Article 27.4 notifications a nd review, the Chairperson proposed that, for 
2004, the Committee follow the same deadlines and procedures as had been used in 2003.  In 
particular, she proposed that the required notifica tions in respect of all programmes covered by 
Article 27.4 extensions, which included those progra mmes in the final two-year phase-out period, be 
submitted not later than 30 June 2004.  She further proposed that any questions pertaining to such 
notifications be submitted by 1 September 2004, and that answers be submitted by 6 October 2004.   
The review of transparency and standstill thus would take place at the Committee's fall regular 
meeting.  She asked whether this proposal was acceptable Members.   
209. The Committee took note  of the statements made and agreed  to proceed accordingly. 
O. WORKING PARTY ON SUBSIDY NOTIFICATIONS – (I) CHAIR 'S REPORT ON 27 OCTOBER 
MEETING ;  AND (II) COMMITTEE DECISION ON ADOPTION OF THE REVISED NOTIFICATION 
FORMAT  
210. The Chairperson  recalled that the Working Party on Subsidy Notifications had met on 
27 October 2003.  The purpose of the meeting was to continue the discussion on further possible steps 
to facilitate notification by Members.  The Ch airperson recalled that she had drawn Members' 
attention to the list compiled by the Secretariat on the capital-based officials with the responsibility of 
subsidy notifications.  She stated that it was exp ected that that list would serve Members' capital-
based officials to get in touch with their c ounterparts, as necessary, to better understand the 
notification procedure and to improve the quality of  subsidy notifications.  She asked Members to 
inform the Secretariat (Ms. Hainsworth or Mr. Yano) of any updates or additions to the list.  In this 
connection, the Chairperson reported to Members that Guatemala had kindly offered that its officer in 
charge of notifications could act as a kind of  "regional hub".  The United States had also kindly offered to have the officials on their list availabl e to help other countries with the notification, in 
terms of offering advice and assistance over the tele phone or even to arrange a visit to another 
Member to assist with the preparation of a subsidy notification.  The European Communities had  G/SCM/M/48 
 Page 39 
 
 
 expressed its willingness to offer advice to foreign no tification-related officials, as necessary, on an 
ad hoc basis.  She thanked these delegations for thei r kind offer and asked Members to let the 
Secretariat (Ms. Hainsworth or Mr. Yano) know if  any other Members intended to follow those good 
examples.  
211. The Chairperson stated that she continued the discussion on possible steps to facilitate 
notification, particularly on the possibility of amending the notification format.  She stated that 
Members seemed to be close to agreeing on the re vision of the format.  She mentioned that she had 
made available the latest draft as faxed to Member s in June 2003 and took into account the comments 
made in the Working Party on Subsidy Notificati ons' meeting on 27 October 2003.  In particular, a 
footnote had been added to indicate that the doc ument replaces G/SCM/6 and was without prejudice 
to the legal obligations in the SCM Agreement.  Sh e asked whether Members agreed on this draft.   
212. As there were no requests to take the floor, the Chairperson stated that the revision would be 
adopted ad referendum , that is, unless any Member communicated its  objection in paper by Friday, 
7 November. 
213. The Committee so agreed .17   
214. The delegate of the United States  said that his delegation wished to offer a suggestion with 
respect to the continuing work of the Working Part y on Subsidy Notification.  In the US' view the 
Working Party had accomplished many things, in term s of the timing of the notifications, and during 
the Committee meeting with respect to the revision of the notification format.  The United States 
questioned whether Members should continue with the Working Party at this point.  The United States 
would be willing to consider con tinuing with the Working Party provided additional new approaches 
that would be worthwhile pursuing were proposed by Members.  Absent specific proposals to explore 
particular approaches, the United States considered  that the work of the Working Party should be 
discontinued for the time being. 
215. The delegate of Chile  said that her delegation agreed with the United States regarding the 
Working Party's work and achieveme nts.  However, she stated that an end to this Working Party 
should not be decided so quickly.  It was true that new approaches were needed.  Members should 
have another opportunity, at least until the next meeti ng, so they could all think this through and see 
in what way the Working Group could be used.  If th e Committee came to the conclusion that this was 
not possible, then it would be a good idea to put an end to it. 
216. The delegate of Costa Rica  supported what the delegate from Ch ile had said.  It was important 
and necessary to keep this Working Party alive fo r the time being.  The Committee should have the 
opportunity to see what other issues the Working Party could look into.   
217. The delegate of the European Communities  agreed with previous speakers that the main task 
that the Working Party had was to work on subsidy notification formats, and that this objective would 
be achieved.  He stated that the European Communities could go either way on the issue being 
discussed.  However, if the Committee were unable to find new topics, the delegate pointed out that it 
would not be efficient just to k eep the Working Party a live for the sake of having a Working Party. 
218. The delegate of the United States  stated that his delegation did not disagree with Chile and 
Costa Rica in the sense that, if there were additiona l new ideas that would be worthwhile pursuing, the 
                                                      
17 As no objections were received by that time, th e revision was adopted and circulated in document 
G/SCM/6/Rev. 1. G/SCM/M/48 
Page 40  
 
 United States would be willing to go forward.  Ab sent new ideas, his delegation questioned whether it 
would be productive to move in that direction. 
219. The Chairperson
 thanked Members for their interventi ons.  She said that, in the Working 
Party's meeting of 27 October 20 03, she had asked Members to help her identify the areas where the 
Working Party could focus its work.  However, sh e had not received much guidance from delegations 
on that.  She said that there was some interest by some Members that the Working Party continue its 
work.  Therefore, as far as the following meeting of  the Working Party was concerned, she suggested 
that it be convened only if there was a new cont ribution or a document from Members which would 
allow Members to touch upon a matter in the Work ing Group.  She said that this would be an 
incentive to all Members to think productivel y about new ideas for the Working Party.   
220. The Committee took note  of the statements made and agreed  to proceed accordingly.   
P. CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM SCM  ANNEX  VII(B)   
221. The Chairperson  recalled that pursuant to the Doha Ministerial Decision on Implementation-
Related Issues and Concerns (document WT/MIN(01) /17, para. 10.1), Ministers had agreed that 
Annex VII(b) to the Agreement incl udes the Members that are listed th erein until their GNP per capita 
reaches US$1,000 in constant 1990 dollars for thr ee consecutive years.  She stated that, as of 
1 January 2003, the methodology set forth in G/SCM/38, Appendix 2 applies.  As foreseen in that document, the Secretariat had circulated, in doc ument G/SCM/110, updated calculations on the basis 
of the appropriate World Bank data.  As indicat ed in the 14 October 2003 fax to Members, for 
transparency, Secretariat staff members had give n an explanation of the methodology applied and 
were prepared to answer any technical questions on the application of the agreed methodology in 
calculating the results for 2000 and 2001.  This had occurred at the 17 October 2003 informal 
consultations.  
222. The Secretariat would circulate the next update, covering 2002, when the data concerned were 
received from the World Bank, which would most likely occur around mid-2004.   
223. The Committee took note
 of the Chairperson's statement.  
Q. PERMANENT GROUP OF EXPERTS – ELECTION OF EXPERTS  
224. The Chairperson  recalled that the Committee had to elect an expert to replace 
Professor Flores, with a five-year term from 2003-2008.   She also recalled that, as of the deadline for 
submitting suggestions, two suggestions were receive d.  Subsequently, as she informed Members in 
her fax dated 11 July 2003, Mr. Jorge Castro-Berni eri, who was elected to the PGE for the term 2001-
2006, resigned from the PGE upon taking a position in the WTO Secretariat.  She stated that, on the 
basis of the procedures agreed at the Committee' s 8 May 2003 regular meeting, and the procedures 
outlined in the 11 July 2003 fax, Members agreed  to elect both Mr. Yuji Iwasawa and Mr Terence 
Stewart to the Permanent Group of Experts.  As had occurred in the past in similar circumstances, the 
issue of which of these expert's terms would expire  in 2006, and which woul d expire in 2008, had 
been resolved by drawing lots w ithin the Permanent Group of Experts.  As a result of the drawing of 
lots, Mr. Iwasawa assumed the term until spri ng 2008 and Mr. Stewart a ssumed the term until 
spring 2006.   
225. The Committee took note  of the Chairperson's statement.  G/SCM/M/48 
 Page 41 
 
 
 R. OTHER BUSINESS  
226. There were no items raised under "Other Business". 
S. DATE OF NEXT REGULAR MEETING  
227. The Chairperson  stated that the Committee agreed at its meeting of 21 February 1995 that 
regular meetings normally would be held in the last week of April and the last week of October.  She 
stated that the Committee on Anti-Dumping Practi ces had the same schedule, as did the Safeguards 
Committee.  In order to accommodate all three bodies ' meetings, she proposed that the next regular 
meeting of the Committee be in the week of 26 April 2004.   
228. The Committee so agreed . 
T. ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7) 
229. The Committee adopted  its annual report.  The report wa s subsequently circulated in 
document G/L/655 and Corr.1. 
230. The meeting was adjourned . 
__________