WORLD TRADE
ORGANIZATIONG/SCM/N/38/SLV
G/SCM/N/48/SLVG/SCM/N/60/SLV
G/SCM/N/71/SLV
10 January 2002
(02-0104)
Committee on Subsidies
and Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1 of the
GATT 1994 and Article 25 of the SCM Agreement
EL SALVADOR
The following communication, dated 21 December 2001, has been received from the
Permanent Mission of El Salvador.
______________
Pursuant to Article XVI, paragraph 1, of the General Agreement on Tariffs and Trade
(GATT) 1994 and in accordance with Article 25 of the Agreement on Subsidies and Countervailing
Measures, El Salvador hereby submits a new and full notification of the following programme.
1. Description
Drawback of 6 per cent on the f.o.b. value of exports, payable to Salvadoran or foreign
natural or legal persons that own firms exporting or marketing Salvadoran goods and services outside
the Central American region.
2. Period covered by the notification
As from 1 June 2001.
3. Policy objective and/or purpose of the subsidy
To stimulate exports of Salvadoran goods and services outside the Central American region,
with a view to diversifying domestic production fo r the foreign market and to achieving employment-
generating sustainable economic growth, along wi th the transfer of technology and investments.
4. Background and authority for the subsidy
Background
The damage to the domestic infrastructure resu lting from the armed conflict in El Salvador
during the 1980s and early 1990s severely impacted production sectors, investment and export
development.  Following the signing of the Peace Accords, it was necessary for El Salvador to launchG/SCM/N/38/SLV, G/SCM/N/48/SLV,
G/SCM/N/60/SLV, G/SCM/N/71/SLV
Page 2
the aforementioned scheme under a policy geared towards promoting investments and exports and
offsetting the costs generated by the conflict.
Moreover, because El Salvador is a developing and open economy dependent on
traditional exports such as coffee and sugar, it has been seriously affected by the decline in
international prices of these commodities over the years, resulting in worsening terms of trade and
requiring the implementation of instruments to diversify the country's export production capacity.
The earthquakes that hit El Salvador in 2001 ha ve increased the need for jobs.  According to
ECLAC, total losses amounted to US$1,603 million, i.e. 12 per cent of GDP and 55 per cent of
exports in 2000.  In the aftermath of the catastrophe, El Salvador was faced with the need to improvethe welfare of its people, and especially those most severely affected by the quakes.  In creating
opportunities to maintain and raise employment levels, the benefits deriving from the drawback
scheme are therefore essential for the country's economic and social development.
Legislation
Law on the Revival of Exports
Legislative Decree No. 460 of 15 March 1990, published in the Official Journal (No. 88,
Vol. 307) of 18 April 1990, as amended by Legislative Decree No. 749 of 19 April 1991, published inthe Official Journal (No. 95, Vol. 311) of 27 May 1991;  Legislative Decree No. 181 of
18 December 1997, published in the Official Journal (No. 239, Vol. 337) of 22 December 1997, and
Legislative Decree No. 534 of 13 January 1999, published in the Official Journal (No. 21, Vol. 342)
of 1 February 1999.
Regulations of the Law on the Revival of Exports
Executive Decree No. 68 of 27 November 1990, pub lished in the Official Journal (No. 269,
Vol. 309) of 27 November 1990, as amended by Executive Decree No. 43 of 29 April 1993, published
in the Official Journal (No. 19, Vol. 319) of 26 May 1993.
5. Form of the subsidy (i.e. grant, loan, tax concession, etc.)
Drawback of 6 per cent on the f.o.b. value of exports.
6. To whom and how the subsidy is provided (whe ther to producers, to exporters, or others;
through what mechanism;  whether a fixed or fluctuating amount per unit;  if the latter, how
determined).
This incentive benefits Salvadoran or foreign natural or legal persons that own firms which
export or market Salvadoran goods and services outside the Central American region and which
comply with the requirements laid down in the Law on the Revival of Exports and its Regulations.
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount
budgeted for that subsidy (indicating, if possible, the average subsidy per unit).  Where
provision of per unit subsidy information (for the year covered by the notification, the
previous year, or both) is not possible, a full explanation.G/SCM/N/38/SLV, G/SCM/N/48/SLV,
G/SCM/N/60/SLV, G/SCM/N/71/SLV
Page 3
Total Amounts Refunded Under the 6 Per Cent Drawback Scheme
(In Millions of Dollars)
January-December
1998January-December
1999January-December
2000January-June
2001
11.9 11.4 13.8 6.5
Total Exports Eligible/Not Eligible under the 6 Per Cent Drawback Scheme
(In Millions of Dollars)
EXPORTSJanuary-
December
1998January-
December
1999January-
December
2000January-
June
2001
Eligible 199.1 190.7 231.4 108.2
Not eligible 2,242 2,319.3 2,719.1 1,355.9
Total 2,441.1 2,510 2,950.5 1,464.1
8. Duration of the subsidy and/or any other time-limits attached to it, including date of
inception/commencement.
Indefinite.  It will be adjusted to the international obligations undertaken by El Salvador, and
in particular to the WTO Subsidies Agreement.
9. Statistical data permitting an assessment of the trade effects of the subsidy.  The specific
nature and scope of such data is left to the judgement of the notifying Member.  To the extent
possible, relevant and/or determinable, however, it is desirable that such information include
statistics of production, consumption, imports and exports of the subsidized product(s) or
sector(s).
COMPARATIVE TABLE
(In Millions of Dollars)
SCHEME 1998 1999 2000
(a) World exports 5,429.400 5,594.300 Not available
(b) Salvadoran exports 2,446.1 2,497.5 2,950.5
(c) b / a 0.045% 0.044% Not available
(d) Salvadoran exports eligible for 6%
drawback199.1 190.7 231.4
(e) d / a 0.0036% 0.0034% Not available
Source:  International Monetary Fund, Central Reserve Bank, Ministry of Economy.
__________