RESTRICTED
WORLD TRADE G/SCM/M/14
29July1997
ORGANIZATION(97-3211)
Committee onSubsidies
andCountervailing Measures
MINUTES OFTHE MEETING HELD
ON1-2MAY 1997
Chairman: Ms.M.Slade (New Zealand)
1. TheCommittee onSubsidies andCountervailing Measures ("theCommittee") helditsregular
meeting on1-2May1997.
2. TheCommittee adopted thefollowing agenda:
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A. Observers -International intergovernmental organisations 3
B. Review ofcountervailing dutylegislation and/or regulations (Article 32.6) 4
-Neworamended texts:
(i) Benin (G/SCM/N/1/BEN/1)
(ii) Fiji(G/SCM/N/1/FJI/1)
(iii) Guatemala (G/ADP/N/1/GTM/2 -G/SCM/N/1/GTM/2)
(iv) Indonesia (G/ADP/N/1/IDN/2 -G/SCM/N/1/IDN/2)
(v) India (G/ADP/N/1/IND/2/Suppl. 1-G/SCM/N/1/IND/2/Suppl. 1)
(vi) Japan (G/ADP/N/1/JPN/2/Corr. 2&Suppl. 1-
G/SCM/N/1/JPN/2/Corr. 2&Suppl. 1)
(vii) Liechtenstein (G/ADP/N/1/LIE/1 -G/SCM/N/1/LIE/1)
(viii) Singapore (G/ADP/N/1/SGP/2 -G/SCM/N/1/SGP/2)
(ix) Thailand (G/ADP/N/1/THA/3 -G/SCM/N/1/THA/3)
(x) Uganda (G/ADP/N/1/UGA/2 -G/SCM/N/1/UGA/2)
Continuing review ofpreviously reviewed notifications (Article 32.6):
(i) European Community
(ii) Canada
(iii) Israel
(iv) NewZealand
(v) United States
C. 1995 newandfullnotifications (Article 25.1oftheSCM Agreement and 5
Article XVI:1 ofGATT 1994):
(i) Brunei Darussalam (G/SCM/N/3/BRN)
(ii) Cameroon (G/SCM/N/3/CMR)
(iii) Chile (G/SCM/N/3/CHL andCorr. 1)G/SCM/M/14
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(iv) Côted'Ivoire (G/SCM/N/3/CIV)
(v) Cyprus (G/SCM/N/3/CYP)
(vi) Fiji(G/SCM/N/3/FJI)
(vii) Ghana (G/SCM/N/3/GHA)
(viii) Iceland (G/SCM/N/3/ISL)
(ix) India (G/SCM/N/3/IND/Suppl.2)
(x) Israel (G/SCM/N/3/ISR andCorr. 1)
(xi) Mexico (G/SCM/N/3/MEX)
(xii) Pakistan (G/SCM/N/3/PAK)
(xiii) Poland (G/SCM/N/3/POL)
(xiv) Romania (G/SCM/N/3/ROM)
(xv) Senegal (G/SCM/N/3/SEN)
(xvi) Slovenia (G/SCM/N/3/SVN)
(xvii) SriLanka (G/SCM/N/3/LKA)
(xviii) Uganda (G/SCM/N/3/UGA)
(xix) Uruguay (G/SCM/N/3/URY)
D. 1996 updating notifications (Article 25.1oftheSCM Agreement and 10
Article XVI:1 ofGATT 1994):
(i) Brazil (G/SCM/N/16/BRA/Suppl. 1)
(ii) Brunei Darusalaam (G/SCM/N/16/BRN)
(iii) Cameroon (G/SCM/N/16/CMR)
(iv) Chile (G/SCM/N/16/CHL andCorr. 1)
(v) Cyprus (G/SCM/N/16/CYP)
(vi) European Community (G/SCM/N/16/EEC andSuppl. 1)
(vii) Fiji(G/SCM/N/16/FJI)
(viii) Iceland (G/SCM/N/16/ISL)
(ix) Indonesia (G/SCM/N/16/IDN)
(x) Israel (G/SCM/N/16/ISR andCorr. 1)
(xi) Korea (G/SCM/N/16/KOR)
(xii) Liechtenstein (G/SCM/N/16/LIE)
(xiii) Norway (G/SCM/N/3/NOR)
(xiv) Poland (G/SCM/N/16/POL)
(xv) Romania (G/SCM/N/16/ROM andSuppl. 1)
(xvi) Senegal (G/SCM/N/16/SEN)
(xvii) Singapore (G/SCM/N/16/SGP)
(xviii) Uruguay (G/SCM/N/16/URY andSuppl. 1)
(xix) Zambia (G/SCM/N/16/ZMB)
E. Semi-annual reports ofcountervailing dutyactions (Article 25.11) 11
F. Notifications ofpreliminary andfinalcountervailing actions (Article 25.11) 12
G. Subsidies notifications -possible modification inperiodicity 12
H. Follow-up toSingapore Ministerial Declaration 13G/SCM/M/14
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I. Notifications bycountries intransformation (Article 29.3): 14
(i) Hungary (G/SCM/N/9/HUN/Suppl. 1)
(ii) Romania (G/SCM/N/9/ROM andSuppl. 1)
J. Permanent Group ofExperts -election ofanewExpert 14
K. Procedures forarbitration under Article 8.5 14
L. Formats forupdates ofArticle 8.3notifications 14
M. Informal Group ofExperts -Status Report 15
N. Honduras -non-inclusion inAnnex VII 15
O. Recommendation ofWorking Group onNotification Obligations andProcedures 15
P. Other business: 16
(i) United States -alleged subsidies byKorea toHanbo Steel
(ii) European Community -counter-notification asperArticle 25.10
Q. Election ofofficers 18
R. Dateofnextregular meeting 18
A. Observers -International intergovernmental organisations
3. TheChairman recalled that,under theprocedures adopted bytheGeneral Council forobserver
status forinternational intergovernmental organizations (WT/L/161, Annex 3),requests forobserver
status weretobeconsidered onacase-by-case basis byeachWTO body towhich arequest hadbeen
addressed, taking intoaccount suchcriteria asthenature ofthework oftheorganization concerned,
thenature ofitsmembership, thenumber ofWTO Members intheorganization, reciprocity withrespect
toaccess toproceedings, documents andother aspects ofobservership, andwhether theorganization
hadbeeninvolved inthepastwiththework oftheGATT. Atitsmeeting on7February, theGeneral
Council hadnoted thattheIMFandtheWorld Bank hadbeengiven observer status inWTO bodies
pursuant totheAgreements between theWTO andthese twoinstitutions. With regard toother
internationalintergovernmentalorganizations,theGeneralCouncilhadagreed:(a)thattheorganizations
which already hadobserver status intheGeneral Council onanadhocbasisbegranted observer status
immediately; (b)thatforinternational intergovernmental organizations whose requests hadnotyet
beenconsidered theChairman would conduct consultations; (c)toinvite theother WTO bodies to
proceed inasimilar way. Asindicated indocument G/SCM/W/414 andsupplement 1,theACPGroup,
FAO, IMF, OECD, UNCTAD, andWorld Bank hadrequested observer status inthisCommittee.
4. TheCommittee tooknoteoftheobserver status oftheIMFandtheWorld Bank. TheCommittee
further decided togrant regular observer status toUNCTAD andtheFAO, onthebasisthattherewould
bereciprocity withrespect todocuments, proceedings andother aspects ofobservership.G/SCM/M/14
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5. With respect totherequest bytheOECD, therepresentatives ofBrazil andIndia indicated
thatfurther reflection wasneeded before observer status wasgranted.
6. Therepresentative ofCanada emphasized thatobserver status wasimportant toencourage
transparency andpolicy coherence among international organisations. However, given thatthestatus
oftheWTO intheArrangement onOfficially-Supported Export Credits hadnotyetbeenresolved
andgiven thelinkages between thework ofthatgroup andthatoftheCommittee, thematter should
berevisited atthenextregular meeting oftheCommittee.
7. Therepresentative ofThailand concurred andrequested theChairman andtheSecretariat to
organise consultations withtheOECD onthematter.
8. TherepresentativeofKoreastatedthat,giventheimportanceoftheOECDgroupinadministering
certain provisions oftheSCM Agreement, theWTO musthaveobserver status thereandconsultations
were thuscalled for;meanwhile, theOECD could continue toattend theCommittee 'smeetings on
anadhocbasis.
9. Therepresentative ofArgentina agreed thatfurther thought wasrequired, andstressed the
importance oftheprinciple ofreciprocity intheresolution ofthismatter.
10. Therepresentative oftheUnited States concurred withtheprevious interventions, andin
particular those ofCanada andKorea, andhoped thatacommitment tocooperation could beusedto
build towards regular observer status.
11. Therepresentative ofSriLanka supported theprevious interventions onthematter.
12. Therepresentative oftheECsupported theprevious interventions onthematter, inparticular
those ofCanada, Korea andtheUnited States.
13. TheChairman proposed that,given theconsensus among Members, theCommittee deferaction
ontheOECD 'srequest toallow timeforconsultations. Inthemeanwhile, theOECD would continue
tohaveadhocobserver status.
14. TheCommittee sodecided.
15. Turning totheACPGroup 'srequest, theChairman indicated thattheACPGroup hadrequested
observer status inseveral WTO bodies andthattheChairmen ofthose bodies were consulting with
Members regarding therequest. TheChairman proposed toconduct similar consultations withrespect
totheACP Group 'srequest forobserver status inthisCommittee.
16. TheCommittee sodecided.
B. Review ofcountervailing dutylegislation and/or regulations (Article 32.6) -Neworamended
texts
17. TheCommittee agreed thatsince alllegislations ontheagenda, withtheexception ofthose
ofBenin andIsrael, hadbeen reviewed intheCommittee onAnti-Dumping Practices on
28-29 April 1997, there wasnoneedtoduplicate thatdiscussion.
18. Thequestion regarding Benin 'snotification canbefound inthefollowing document:
G/SCM/Q1/BEN/1 (Submitted bytheUS)G/SCM/M/14
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19. Theanswer provided byBenin canbefound inthefollowing document:
[NOANSWERS HAVE YET BEEN PROVIDED BYBENIN]
20. Thequestions regarding Israel'snotification canbefound inthefollowing documents:
G/SCM/Q1/ISR/1 (Submitted bytheUS)
G/SCM/Q1/ISR/2 (Submitted bytheEC)
G/SCM/Q1/ISR/3 (Submitted byJapan)
G/SCM/Q1/ISR/5 (Follow-up questions submitted byTurkey)
21. Theanswers provided byIsrael canbefound inthefollowing documents:
G/SCM/Q1/ISR/4 (ToUS,ECandJapan)
G/SCM/Q1/ISR/6 (Tofollow-up questions from Turkey)
22. TheChairman reminded Members thatallquestions asked orally atthismeeting forwhich
written answers were desired were tobesubmitted inwriting totheMember whose legislation was
concerned andtotheSecretariat nolaterthan26May1997, andthatwritten answers were tobe
submitted nolaterthan30June1997.TheChairman further recalled thatinorder forapreviously
reviewed notification oflegislation toappear ontheagenda oftheCommittee 'snextregular meeting
on23-24 October 1997, questions weretobesubmitted totheMember whose legislation wasconcerned
andtotheSecretariat nolaterthan12September 1997.
C. 1995 newandfullnotifications (Article 25.1oftheSCM Agreement andArticle XVI:1 of
GATT 1994)
23. ThequestionsregardingBruneiDarussalam'snotificationcanbefoundinthefollowingdocument:
G/SCM/Q2/BRN/1 (Submitted bytheEC)
24. Theanswers provided byBrunei Darussalam tothese questions canbefound inthefollowing
documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYBRUNEI DARUSSALAM]
25. Thequestions regarding Cameroon 'snotification canbefound inthefollowing documents:
G/SCM/Q2/CMR/1 (Submitted bytheEC)
G/SCM/Q2/CMR/2 (Submitted bytheEC)
G/SCM/Q2/CMR/3 (Submitted bytheUS)
G/SCM/Q2/CMR/4 (Submitted byJapan)
26. Theanswers provided byCameroon tothesequestions canbefound inthefollowing documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYCAMEROON]
27. Thequestions regarding Chile'snotification canbefound inthefollowing documents:
G/SCM/Q2/CHL/1 (Submitted byKorea)
G/SCM/Q2/CHL/2 (Submitted bytheUS)
G/SCM/Q2/CHL/3 (Submitted byCanada)G/SCM/M/14
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G/SCM/Q2/CHL/4 (Submitted byJapan)
G/SCM/Q2/CHL/5 (Follow-up questions submitted bytheUS)
28. Theanswers provided byChile tothese questions canbefound inthefollowing documents:
G/SCM/Q2/CHL/6 (Toallquestions)
29. Thequestions regarding Côted'Ivoire 'snotification canbefound inthefollowing documents:
G/SCM/Q2/CIV/1 (Submitted bytheEC)
G/SCM/Q2/CIV/2 (Submitted bytheUS)
G/SCM/Q2/CIV/3 (Submitted byJapan)
30. Theanswers provided byCôte d'Ivoire tothese questions canbefound inthefollowing
documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYCÔTED'IVOIRE]
31. Thequestions regarding Cyprus 'notification canbefound inthefollowing documents:
G/SCM/Q2/CYP/1 (Submitted bytheEC)
G/SCM/Q2/CYP/2 (Submitted byArgentina)
G/SCM/Q2/CYP/3 (Submitted bytheUS)
G/SCM/Q2/CYP/4 (Submitted byJapan)
G/SCM/Q2/CYP/6 (Follow-up questions submitted bytheUS)
32. Theanswers provided byCyprus canbefound inthefollowing document:
G/SCM/Q2/CYP/5 (Tosome ofthequestions submitted bytheEC)
G/SCM/Q2/CYP/7 (ToArgentina, Japan andtheUnited States)
33. Thequestions regarding Fiji'snotification canbefound inthefollowing documents:
G/SCM/Q2/FJI/1 (Submitted bytheEC)
G/SCM/Q2/FJI/2 (Submitted bytheUS)
34. Theanswers provided byFijicanbefound inthefollowing document:
G/SCM/Q2/FJI/3 (Toallquestions)
35. Thequestions regarding Ghana 'snotification canbefound inthefollowing document:
G/SCM/Q2/GHA/1 (Submitted bytheEC)
36. Theanswers provided byGhana tothese questions canbefound inthefollowing documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYGHANA]
37. Thequestions regarding Iceland 'snotification canbefound inthefollowing documents:
G/SCM/Q2/ISL/2 (Submitted bytheEC)
G/SCM/Q2/ISL/3 (Submitted byArgentina)G/SCM/M/14
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G/SCM/Q2/ISL/4 (Submitted bytheUS)
G/SCM/Q2/ISL/5 (Submitted byJapan)
38. Theanswers provided byIceland canbefound inthefollowing document:
G/SCM/Q2/ISL/6 (Toallquestions)
39. Thequestions regarding India'snotification canbefound inthefollowing document:
G/SCM/Q2/IND/6 andCorr. 1 (Submitted byJapan)
40. Theanswers provided byIndia canbefound inthefollowing document:
G/SCM/Q2/IND/7 (ToJapan)
41. Thequestions regarding Israel'snotification canbefound inthefollowing documents:
G/SCM/Q2/ISR/2 (Submitted bytheEC)
G/SCM/Q2/ISR/3 (Submitted byPoland)
G/SCM/Q2/ISR/4 (Submitted byArgentina)
G/SCM/Q2/ISR/5 (Submitted byTurkey)
G/SCM/Q2/ISR/6 (Submitted byKorea)
G/SCM/Q2/ISR/7 (Submitted bytheUS)
G/SCM/Q2/ISR/8 (Submitted byJapan)
Theanswers provided byIsrael tothese questions canbefound inthefollowing documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYISRAEL]
42. Thequestions regarding Mexico 'snotification canbefound inthefollowing documents:
G/SCM/Q2/MEX/2 (Submitted bytheEC)
G/SCM/Q2/MEX/3 (Submitted byPoland)
G/SCM/Q2/MEX/4 (Submitted byArgentina)
G/SCM/Q2/MEX/5 (Submitted byTurkey)
G/SCM/Q2/MEX/6 (Submitted byKorea)
G/SCM/Q2/MEX/7 (Submitted bytheUS)
G/SCM/Q2/MEX/8 (Submitted byCanada)
G/SCM/Q2/MEX/9 (Submitted byJapan)
G/SCM/Q2/MEX/10 (Follow-up questions submitted bytheUS)
43. Theanswers provided byMexico canbefound inthefollowing document:
G/SCM/Q2/MEX/11 (Toallquestions)
44. Thequestions regarding Pakistan 'snotification canbefound inthefollowing documents:
G/SCM/Q2/PAK/2 (Submitted bytheEC)
G/SCM/Q2/PAK/3 (Submitted byArgentina)
G/SCM/Q2/PAK/4 (Submitted bytheUS)
G/SCM/Q2/PAK/5 (Submitted byJapan)G/SCM/M/14
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45. Theanswers provided byPakistan canbefound inthefollowing document:
G/SCM/Q2/PAK/6 (Toallquestions)
46. Thequestions regarding Poland 'snotification canbefound inthefollowing documents:
G/SCM/Q2/POL/1 (Submitted byArgentina)
G/SCM/Q2/POL/2 (Submitted byTurkey)
G/SCM/Q2/POL/3 (Submitted bytheUS)
G/SCM/Q2/POL/4 (Submitted byJapan)
G/SCM/Q2/POL/6 (Follow-up questions submitted bytheUS)
47. Theanswers provided byPoland canbefound inthefollowing document:
G/SCM/Q2/POL/5 (Toallexcept USfollow-up questions)
[NOANSWERS HAVE YET BEEN PROVIDED BYPOLAND TOTHE FOLLOW-UP
QUESTIONS FROM THE US]
48. Thequestions regarding Romania 'snotification canbefound inthefollowing documents:
G/SCM/Q2/ROM/1 (Submitted byArgentina)
G/SCM/Q2/ROM/2 (Submitted byTurkey)
G/SCM/Q2/ROM/3 (Submitted bytheUS)
G/SCM/Q2/ROM/4 (Submitted byJapan)
49. Theanswers provided byRomania tothesequestions canbefound inthefollowing documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYROMANIA]
50. Thequestions regarding Senegal 'snotification canbefound inthefollowing documents:
G/SCM/Q2/SEN/1 (Submitted bytheEC)
G/SCM/Q2/SEN/2 (Submitted bytheUS)
G/SCM/Q2/SEN/3 (Submitted byJapan)
51. Theanswers provided bySenegal tothese questions canbefound inthefollowing documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYSENEGAL]
52. Thequestions regarding Slovenia 'snotification canbefound inthefollowing documents:
G/SCM/Q2/SVN/3 (Submitted byPoland)
G/SCM/Q2/SVN/4 (Submitted bytheUS)
53. Theanswers provided bySlovenia canbefound inthefollowing document:
G/SCM/Q2/SVN/5 (Toallquestions)G/SCM/M/14
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54. Thequestions regarding SriLanka 'snotification canbefound inthefollowing documents:
G/SCM/Q2/LKA/2 (Submitted bytheEC)
G/SCM/Q2/LKA/3 (Submitted byArgentina)
G/SCM/Q2/LKA/4 (Submitted bytheUS)
G/SCM/Q2/LKA/5 (Submitted byJapan)
55. Theanswers provided bySriLanka canbefound inthefollowing document:
G/SCM/Q2/LKA/6 (Toallquestions)
56. Thequestions regarding Uganda 'snotification canbefound inthefollowing document:
G/SCM/Q2/UGA/1 (Submitted bytheEC)
57. Theanswers provided byUganda canbefound inthefollowing document:
G/SCM/Q2/UGA/2 (TotheEC)
58. Thequestions posed regarding Uruguay 'snotification canbefound inthefollowing documents:
G/SCM/Q2/URY/1 (Submitted bytheEC)
G/SCM/Q2/URY/2 (Submitted byJapan)
59. Theanswers provided byUruguay tothesequestions canbefound inthefollowing documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYURUGUAY]
60. TheChairman reminded theMembers thatwould likeawritten response totheiroralquestions
orwould liketoposefollow-up questions thatthese questions weretobesubmitted inwriting tothe
notifying Member andtotheSecretariat within twoweeks, i.e.,by16May1997, andthatwritten
answers were duewithin sixweeks, i.e.by13June 1997.
61. TheChairman noted thatsome Members hadnotyetsubmitted written answers toquestions
regarding theirnewandfullnotifications. Inparticular, answers hadbeendueby18October 1996
from Brazil, Costa Rica, andtheUnited States. Further, Venezuela hadnotyetresponded toaset
offollow-up questions posed bytheEC.
62. Therepresentative oftheECfound thewritten responses toquestions extremely disappointing
andnotmade inatimely manner. Responses sometimes contradicted theoralreplies given inmeetings
andwerenotalways satisfactory. Thiswasamatter ofsome concern andMembers lateinsubmitting
responses should think seriously about theirnotification obligations.
63. Therepresentative ofNorway supported theEC'sstatement.
64. TheChairman encouraged Members which hadnotyetsubmitted responses tore-double their
efforts. Asregarded thestatus of1995 newandfullnotifications, theCommittee hadreviewed 72
notifications todate. Twofurther notifications --those ofBulgaria andCuba --hadbeenreceived,
butcould notbecirculated before thedeadline of23February 1997. While thereview of72notifications
wasquite anachievement, more than50Members hadyettosubmit 1995 newandfullnotifications,
which hadbeendueon30June1995.G/SCM/M/14
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65. TheChairman proposed thatthenotifications ofBulgaria, Cuba, andSouth Africa, aswell
asanyothernotificationswhichcouldbecirculatedtotheCommitteeby15September1997,bereviewed
atthenextregular meeting inOctober. Questions regarding those notifications weretobesubmitted
bothtothenotifying Member andtotheSecretariat nolaterthan6October 1997.
66. TheCommittee sodecided.
67. TherepresentativeofNorwaysuggestedthattheCommitteeconsiderchangingthepresentreview
procedure toafullywritten oneforthenextround ofreviews. Bothquestions andresponses could
besubmitted inwriting wellinadvance, sothatthetimeinCommittee could beusedmore fruitfully.
Norway invited discussion onthisproposal, suggesting thatthematter could beplaced ontheagenda
forthenextregular meeting.
68. Therepresentatives ofAustralia, Korea andThailand supported Norway 'ssuggestion.
69. Therepresentative oftheECwaswilling todiscuss ways ofstreamlining thereview process.
However, notifications aimed atencouraging transparency andreview wereinherently time-consuming.
Thepresence ofexperts fromcapitals wasalsoimportant inencouraging transparency. IftheCommittee
were toswitch toafullywritten procedure andtheexperts remained inthecapitals, timely review
would become evenmoreunlikely. Perhaps Members could beencouraged tomake theiroralresponses
moreconcise andwritten onesmoredetailed. TheECagreed withNorway intheory, butwasconcerned
thatwithanentirely written procedure thesemeetings would become merely formalistic. TheECwould
perhaps provide comments inwriting regarding Norway 'srecommendation.
70. Therepresentative ofNewZealand agreed withNorway, butalsoaccepted theEC'spoint of
viewthatthequestion ofwhoattended these meetings wasimportant.
71. Therepresentative oftheUnited States found Norway 'ssuggestion deserving ofconsideration,
butcould notindicate hisdelegation 'sfinalposition. Transparency wasthecentral issue, andabalance
hadtobestruck between having current andcomplete information andhaving adialogue which everyone
understood.
72. Therepresentative ofArgentina welcomed theNorwegian proposal andwaswilling toexplore
waysofimproving theCommittee 'swork. However, hisdelegation would notliketoseethesemeetings
reduced toaformalistic procedure. There wasaneedtostrike abalance, tohavelesstimeconsumption
andgreater exchange ofviews onspecifics inaflexible manner.
73. TheChairman suggested thatMembers givesome thought toNorway 'srecommendation and
return toitattheOctober meeting.
74. Therepresentative ofNorway thanked thedelegations thathadsupported hissuggestion and
agreed withtheECthatthereview must beameaningful exercise.
D. 1996 updating notifications (Article 25.1 oftheSCM Agreement andArticle XVI:1 of
GATT 1994)
75. TheChairman indicated thatmany oftheupdating notifications which appeared ontheagenda
were double-symbolled documents thatwere identical tothenewandfullnotifications thathadjust
beenreviewed. Itwould thusbeassumed thatanyquestions regarding those notifications hadalready
beenposed.Writtenquestionshadbeenposedwithrespectto4oftheremaining8updatingnotifications,
those ofBrazil, Indonesia, Korea, andtheEC.G/SCM/M/14
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76. Thequestions regarding Brazil 'snotification canbefound inthefollowing document:
G/SCM/Q2/BRA/7 (Submitted byJapan)
77. Theanswers provided byBrazil tothese questions canbefound inthefollowing documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYBRAZIL]
78. Thequestions regarding Indonesia 'snotification canbefound inthefollowing document:
G/SCM/Q2/IDN/7 (Submitted byJapan)
Theanswers provided byIndonesia canbefound inthefollowing document:
G/SCM/Q2/IDN/9 (ToJapan)
79. Thequestions regarding Korea 'snotification canbefound inthefollowing documents:
G/SCM/Q2/KOR/10 andCorr. 1 (Submitted bytheEC)
G/SCM/Q2/KOR/11 (Submitted byJapan)
80. Theanswers provided byKorea tothese questions canbefound inthefollowing documents:
[NOANSWERS HAVE YET BEEN PROVIDED BYKOREA]
81. Thequestions regarding theEC'snotification canbefound inthefollowing document:
G/SCM/Q2/EEC/11 (Submitted byJapan)
82. Theanswers provided bytheECcanbefound inthefollowing document:
G/SCM/Q2/EEC/12 (Toquestions submitted byJapan)
83. TheChairman indicated thatwritten responses toanywritten questions weretobesubmitted
within sixweeks, i.e.by13June1997.TheChairman alsopointed outthatwhile the1996updating
notification hadbeendueon30Junelastyear, only41Members hadsubmitted notifications todate.
84. Therepresentative oftheUnited States apologised forthedelay andexplained thatoneofthe
reasons forthiswastheirintention toinclude some additional programmes inthenotification. He
would discuss thematter withtheappropriate officials todetermine whether, inlightofthedelay, it
might notbeadvisable tosubmit whatever wasready andinclude therestinasupplement.
85. TheChairman asked allMembers toensure thattheirupdating notifications weresubmitted
assoonaspossible.
E. Semi-annual reports ofcountervailing dutyactions (Article 25.11)
86. TheChairman stated thatArgentina, Australia, Brazil, Canada, theEC,Mexico, NewZealand,
theUnited States andVenezuela hadsubmitted semi-annual reports. Further, 34Members hadnotified
theCommittee thattheyhadnottaken anycountervailing actions during theperiod inquestion.
Indonesia, SriLanka, Tanzania, andIndia hadalsorecently informed theCommittee ofthesame.
However, 69members hadnotresponded totherequest forsemi-annual reports. Thecontinuing failureG/SCM/M/14
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ofMembers tosubmit semi-annual reports inatimely fashion limited theCommittee 'sability toconsider
thesubstance ofthose notifications.
87. Therepresentative ofAustralia stated thatthereweresome discrepancies intheirsemi-annual
report, inthesection oncountervailing duties inthefinalcolumn which listed thedateonwhich the
current review hadbeen initiated. Inanumber ofcases, reviews hadinfactbeen initiated, and
appropriate corrections would bemade tothereport.
88. Therepresentative ofArgentina queried theUnited States onthefourreviews -namely those
ofactions onsteel, leather, OCTGs, andwool -listed initsreport withrespect toArgentina. Could
theUnited States inform Argentina astothestatus ofthose reviews andtheprojected dates forthe
conclusion ofthesame?
89. Therepresentative oftheUnited States stated thattheUSDepartment ofCommerce hadissued
apreliminary determination on25April 1997 torevoke thecountervailing dutyorders inrespect of
thefourproducts. Aprecise dateforthefinaldetermination could notbegiven, butgiven thatthe
bulkoftheanalysis tookplace prior tothepreliminary determination, afinaldetermination would be
made inthenearfuture.
F. Notifications ofpreliminary andfinalcountervailing actions (Article 25.11)
90. Nomatters were raised under thisitem.
G. Subsidies notifications -possible modification inperiodicity
91. TheChairmanstatedthatthenotificationexercisehadprovedtobeaheavyburdenondelegations
andtheresult hadbeendelays innotification. Consequently, theCommittee hadbeenracing totry
andcomplete onereview before thenextonecame along. Ininformal discussions, some delegations
hadqueried whether thesystem would notwork more smoothly ifanewandfullnotification were
required every second yearandupdating notifications were eliminated. Notonlywould theburden
ondelegations bereduced thatway,buttheCommittee would alsohavealonger period tocomplete
itsreview. However, some delegations hadqueried whether amendment oftheAgreement would be
required and,ifso,whether thatwould beappropriate.
92. Therepresentative ofJapan wondered whether, intheproposed arrangement, aSpecial Session
would alsobeheldevery second year, inwhich casetheburden ondelegations would notreally be
reduced.Asfortheupdatingnotification,JapanwouldliketounderstandwhichaspectsexactlyMembers
haddifficulties with. Periodicity didnothavetobemodified inawaythatcontradicted theAgreement,
andthecorrect approach would betoexplore ways andmeans forMembers tobetter observe WTO
requirements.
93. Therepresentative oftheECstated thatexperience hadshown thatatleastthree meetings of
theCommittee inSpecial Session wereneeded toadequately review newandfullnotifications. Itwould
beanadvantage toshifttoasystem ofbiennial notifications, where Members would berequired to
notify oneyearandthenhaveoneyearinwhich nonotification wasrequired, which theycould use
toreview thenotifications thathadbeensubmitted theprevious year.
94. TherepresentativeofSwitzerlandemphasisedtheimportanceoftransparency,butacknowledged
theburden thatthepreparation ofnotifications created fordelegations. Switzerland supported theidea
ofanewandfullnotification every twoyears, butwaswilling toexplore other suggestions thatwent
inthesame direction.G/SCM/M/14
Page13
95. Therepresentative ofHong Kong expressed concern overthelatecompliance ornon-compliance
ofMembers vis-à-vis notifications, andurged Members torenew theirefforts tonotify iftheyhad
notyetdone so.Hong Kong considered thatasolution hadtobeidentified inlightofthereasons
fornon-notification, andwould thusappreciate afrank discussion ofthereasons fornon-notification.
TheCommittee would havetoensure thatthereform exercise didnotjeopardise theobjectives ofthe
Agreement byweakening thesurveillance mechanism. Withregard totheChairman 'sproposal, while
ithalved thenumber ofnotifications required, itincreased thefrequency withwhich newandfull
notifications were required.
96. TherepresentativeofAustraliabelievedthattheideaofabiennialnotificationshouldbeexplored
further. Transparency should, however, becarefully preserved, andamendment ofsubstantive -as
opposed toprocedural -aspects oftheAgreement would cause concern.
97. Therepresentative ofKorea favoured modifying theperiodicity ofnotifications todecrease
theburden ondelegations. Since theupdating notification wasalmost identical tothenewandfull
notification, itwasnotsouseful. Members should study allpossibilities, including amendment of
theAgreement.
98. Therepresentative ofMexico queried whether, iftheCommittee began amending theAgreement
defacto through suchadecision, theintegrity oftheAgreement would bepreserved.
99. TherepresentativeofArgentinastatedpreliminarilythattheCommitteeshouldexaminealternative
methods,includingmechanismsthatmightimprovethenotificationandreviewprocess,andnotconclude
rightaway thattheproblem layintheperiodicity ofnotifications.
100. Therepresentative oftheUnited States stated thatnotification wasoneofthecornerstones of
theAgreement. Regarding updating notifications, there wasverylittleincremental work insimply
copying thenewandfullnotification totheupdating notification, butiftheobligation wastoidentify
changes inthesubsidy programmes, itwasamore difficult exercise. Onealsohadtoexplain to
programme administrators whattheruleswere, whycompliance wasnecessary andevenadvantageous,
andsoon.Itwould berational tohaveseparate segments oftimetoprepare andtoreview, instead
ofdoing bothatthesame time, aswasthecasenow. TheUnited States was,however, reluctant to
consider proposals thatimplied amending theAgreement.
101. Therepresentative ofNorway needed toreflect further ontheproposal tohaveanewandfull
notification every twoyears andtoeliminate updating notifications. Atthispoint, Norway believed
thatthisarrangement would decrease theburden oncapitals andactually increase surveillance.
102. Therepresentative ofCanada agreed thatupdating notifications added todelegations 'burden
andthebestapproach would betobeaspragmatic aspossible. Intaking stock oftheexperience so
far,practical solutions would perhaps emerge.
103. TheChairman sawaclearinterest onthepartofMembers inexploring ways toimprove the
notification andreview process without compromising transparency, andsuggested thattheCommittee
continue toreflect onthematter.
H. Follow-up toSingapore Ministerial Declaration
104. TheChairman stated thattheSingapore Ministerial Declaration hadrecognised theparticular
situation ofdeveloping country Members andthefactthatcompliance withnotification andlegislation
obligations would require substantial efforts onthepartofMembers. Theefforts ofMembers ofthe
Committee andoftheSecretariat inimplementation assistance inthecontingent trade remedies areaG/SCM/M/14
Page14
hadbeendiscussed intheCommittee onAnti-Dumping Practices earlier thatweek. However, aneed
alsoexisted toprovide further assistance regarding multilateral subsidies matters.
105. Therepresentative oftheECindicated thattheyhadundertaken anumber ofseminars innon-EC
countries, which involved either advising investigating authorities onhowtoconduct countervailing
investigations orfamiliarising officials withthesubsidies disciplines andremedies contained inthe
Agreement. Their efforts hadsofarbeenconcentrated ondeveloping countries andCentral andEastern
European countries seeking accession totheWTO, sometimes inconjunction withtheWTO. The
ECwasinterestedinexpandingitstechnicalcooperationactivities,particularlytoleastdevelopedcountry
Members. Such action would begreatly facilitated bythecooperation oftheWTO Secretariat.
106. Therepresentative oftheUnited States stated thattheyhadoutlined anumber ofefforts and
initiatives thattheUnited States hadtaken inthisareaintheCommittee onAnti-Dumping Practices,
including programmes organised byUSAgency forInternational Development.
107. Therepresentative ofKorea announced aseminar being organised fordeveloping countries
bytheKorean government incooperation withtheWTO forfourweeks from 26May1997. This
seminar would dealwithvarious WTO agreements, mainly those administered bytheRules Division,
andMembers 'rights andobligations under those agreements. Asecond course wasindevelopment.
108. TheChairman proposed thattheCommittee jointheCommittee onAnti-Dumping Practices
inexpressing support forthetraining efforts oftheSecretariat intherulesareaandthatitencourage
support provided byMembers, whether through financial contributions orassistance inkind, forthe
Secretariat 'sefforts inthisregard.
109. TheCommittee sodecided.
I. Notifications bycountries intransformation (Article 29.3)
110. Nomatters were raised under thisitem.
J. Permanent Group ofExperts -election ofanewExpert
111. TheCommittee elected Mr.A.V.Ganesan ofIndia toserve asamember ofthePermanent
Group ofExperts.
K. Procedures forarbitration under Article 8.5
112. TheChairman stated that,while draftprocedures forarbitration under Article 8.5hadbeen
developed more thantwoyears agoandtheissue discussed extensively, nofinalagreement hadbeen
reached. Thedisagreement wasoverdraftlanguage thatforesaw thepossibility foranarbitration body
nottoconsider issues thatwere notraised during theCommittee review oftheoriginal notification,
ifthearbitration body wasnotsatisfied withtheexplanation regarding whytheissues hadnotbeen
raised atthetime. Atinformal consultations on4February 1997, theChairman hadproposed toleave
ittothearbitration bodyitselftodetermine whether ornotissues notraised during Committee review
could beomitted fromthescope ofanarbitration. Consultations hadbeenheldonthatbasis, buthad
notledtoagreement, andwould thuscontinue withaviewtofinding asolution asquickly aspossible.
L. Formats forupdates ofArticle 8.3notifications
113. TheChairman stated thattheWorking Party onSubsidy Notifications, atitsmeeting of
3February 1997, haddiscussed theChairman 'sproposal of12September 1996foraformat forupdatingG/SCM/M/14
Page15
notifications under Article 8.3.Anon-paper which builtontheideaofademinimis reporting threshold
hadbeenreceived fromsome delegations (G/SCM/W/409). Theproposed approach would establish
atwo-part basis forreporting information, thefirstpartbeing based ontheamount ofassistance per
project andthesecond being based onthelevelofaidintensity perproject. Unlike theChairman 's
proposal,updatingnotificationsasenvisagedinthenon-paperwouldprovideproject-specificinformation
withrespect toapre-determined number ofprojects andalsocertain averages withrespect toallprojects
collectively.
114. Therepresentatives ofCanada, theEC,Korea, andtheUnited States considered thatthenon-
paper provided agood basis fordiscussion andthatitshould beconsidered bytheWorking Party.
115. TheChairperson stated thatdelegations appeared toseesome value inanopportunity tostudy
thenon-paper inmore detail inthecontext ofaforthcoming meeting oftheWorking Party onSubsidy
Notifications, andwould suggest thattheincoming Chairman convene suchameeting.
M. Informal Group ofExperts -Status Report
116. TheChairman indicated thattheGroup hadhelditsfirstmeeting inNovember 1995 andhad
metninetimes todate. Itwasintheprocess ofdrafting itsreport totheCommittee, which would
describetheGroup'sdiscussionsandalsocontainmethodologicalrecommendations.TheGroupexpected
tofinalise thereport inthenearfuture andtothencirculate ittotheCommittee forconsideration.
117. Therepresentative ofJapan requested that,astheGroup 'sreport would inevitably contain very
technical anddetailed comments onsubsidies, sufficient opportunity beprovided forMembers toclarify
therecommendations andreasoning ofthereport.
118. TheCommittee tooknoteofthestatements made.
N. Honduras -non-inclusion inAnnex VII
119. TheChairman stated that,regarding thestatus ofHonduras inAnnex VIIoftheAgreement,
oneideasuggested ininformal consultations hadbeenthattheCommittee might somehow beableto
taketheunique situation ofHonduras intoaccount ifHonduras weretomake arequest foranextension
ofitstransition period relating toexport subsidies pursuant toArticle 27.4oftheAgreement. Various
informal discussions hadoccurred regarding thepossible further development ofthisapproach butthese
discussions hadnotadvanced tothestage where aproposal could bemade totheCommittee. The
Chairman would inform theincoming Chairman regarding thestatus ofthose discussions, andwas
confident thathewould consult further onthematter andbring aproposal totheCommittee.
O. Recommendation ofWorking Group onNotification Obligations andProcedures
120. TheChairman indicated thattheWorking Group onNotification Obligations andProcedures
hadspent asubstantial amount oftimereviewing theissue ofapossible overlap between thesubsidy
notification requirements ofArticle 25oftheSCM Agreement andthose oftheAgreement on
Agriculture. TheChairman oftheGroup hadultimately proposed acommon format fornotifications
tothetwoCommittees (G/NOP/W/15), buttheWorking Group could notrecommend itsadoption.
Rather, theWorking Group hadrecommended thattheCouncil forTrade inGoods request thatthis
Committee andtheCommittee onAgriculture consider themodified notification formats proposed "with
aviewtoachieving greater coherence andefficiency inthenotification system", which theCouncil
hadsubsequently done.G/SCM/M/14
Page16
121. Therepresentative oftheUnited States considered thatthemodified format proposed bythe
Working Group hadvalue inreference tothediscussions oftheCommittee concerning means of
streamlining notification requirements. While theSCM Agreement andtheAgreement onAgriculture
created different legalobligations withrespect totheprovision ofinformation, totheextent thatthere
wasasubstantive overlap interms ofthekinds ofprogrammes implicated bybothAgreements, the
Committee should endeavour tofindwaysofconsolidating thereporting requirements, thusalleviating
unnecessaryburdensonMembers.TheUnitedStatesurgedthattheCommitteegivecarefulconsideration
tothematter.
122. TheCommittee tooknoteoftheUSstatement.
P. Other business
(i) United States -alleged subsidies byKorea toHanbo Steel
123. Therepresentative oftheUnited States stated that,inJanuary ofthisyear,Hanbo Steel-Korea 's
second-largest steelmaker -filedforbankruptcy protection afteritsdebts hadreached alevelofnearly
fivetrillion won, orapproximately 22times thecompany 'sshareholder equity. Itappeared thatthis
extraordinary levelofindebtedness wasincurred mainly tofinance theconstruction ofanewsteelmill
atTangjin, onAsan Bay,which heunderstood wasexpected toaddanother 9million tonsofannual
steelmaking capacity oncethefacility wascompleted. TheUnited States brought thismatter tothe
Committee 'sattention because ithadconcerns thattheGovernment ofKorea mayhaveauthorized or
taken actions tobuild andsustain thisfacility which called intoquestion certain rulesandprovisions
oftheAgreement.
124. First, according toHanbo 'sownfinancial statements, asizeable portion oftheHanbo Group 's
long-term debthadbeenfinanced atapparently lowratesofinterest thatmayhavebeenmade possible
onlyasaresult ofeither explicit orimplicit guarantees provided bythegovernment. Second, itseemed
thatthegovernment-owned Korea Development Bank wasHanbo 'ssecond largest creditor, holding
about $1billion inloans andcontinuing tolendtothecompany pastthepoint atwhich itshould have
beenclear thatHanbo wasoverextended andnotacommercially reasonable credit risk. Third, the
United States hadtaken noteofstatements made byofficials ofother banks inKorea thattheybegan
andcontinued tolendtoHanbo primarily because thegovernment had"approved" theconstruction
oftheTangjin steelmillandvarious government officials hadindicated thatthegovernment would
takethenecessary steps toensure completion ofthemill'sconstruction. Fourth, since Hanbo 's
bankruptcy filing, there hadbeen numerous reports indicating thattheKorean Government was
considering orhadtaken financial measures designed tokeepthecompany afloat either through the
assumption ofcertain debts orthecoverage ofcertain operating expenses, orthrough capital infusions
intothebanking system inorder tosustain further lending toHanbo andshield thecompany 's
subcontractors from financial disaster. Inthisregard, henoted thattheKorea Electricity Power
Corporation wasapparently continuing tosupply theTangjin facility withelectricity, notwithstanding
thatitwasreportedly owed 20billion wonforpower supplied toHanbo inthefirstquarter ofthis
year. Healsounderstood thatthegovernment hadplans toconstruct significant port, railandother
transportation facilities intheAsan Bayvicinity which would beusedprimarily, ifnotexclusively,
bytheHanbo steelmill.
125. TheUnitedStatesrecognizedthat,totheextentthatitsunderstandingofthesituationwascorrect,
perhaps notallofthesedevelopments implicated therulesandobligations oftheSubsidies Agreement.
Bankruptcy protection lawsandgovernment measures designed tosafeguard theintegrity ofacountry 's
economic andfinancial infrastructure werecommon features ofmostmarket economies. Furthermore,
heappreciated thatthiswasasensitive domestic political matter forKorea, andthattherewereseveral
inquiries andinvestigations nowpending.G/SCM/M/14
Page17
126. Ontheotherhand,notwithstandingallthathadhappened,theTangjinfacilityhadnowreportedly
resumed "normal operations". Itwasevident thatthisfacility would nothaverecovered, noreven
existed, without theactive involvement oftheKorean Government. TheUnited States wasstudying
thematter closely, andhadraised itsconcerns withtheKorean authorities onseveral occasions. It
wasgrateful thatKorea hadshown awillingness toaddress anumber ofspecific questions which were
provided bilaterally lastweekinaneffort toclarify itsunderstanding ofthesituation. TheUnited States
urged Korea tobemindful ofitsinternational obligations inaddressing thismatter, andfullyreserved
itsrights under theSubsidies Agreement andanyother relevant agreement pending itsevaluation of
these issues andanyclarifications which theGovernment ofKorea mayprovide.
127. Therepresentative ofKorea stated, asapreliminary response, thattheauthorization, ifany,
tobuildandsustain theTangjin facility could notbeargued interms relevant totheAgreement. Further,
therepresentative wasunaware ofanygovernment action tosustain thefacility. IftheHanbo Group
hadreceived anyloanatrelatively lowratesofinterest, itwould havebeenaforeign currency loan
provided byprivate banks andnotrelated toagovernment guarantee, which inanyevent hadnotexisted
inthiscase. Although theKorea Development Bankwasagovernment-invested development financial
institution, thegovernment didnotintervene inthebank'soperations orlending activities. Allloans
toHanbo bytheKDB hadbeenmade attheprevailing commercial rates.
128. With regard totheUS'reference totheKorean Government 'sapproval oftheconstruction
oftheTangjin steelmill, therepresentative ofKorea didnotunderstand what kindofapproval the
USwasreferring toorhowitcould constitute asubsidy under theAgreement. Ifthere hadbeenany
approval andthatapproval hadprovided some kindofassurance tothebanks, thathadbeen an
unintentional effect andnottheresponsibility ofthegovernment. Korea didnotthink thatitwas
necessary torespond totheUS'contention thatthegovernment would takethenecessary stepstoensure
completion oftheconstruction ofthemill, given asitwasbased onanassumed fact.
129. Therespresentative ofKorea further stated thattheKorean Government hadnottaken and
wouldnottakefinancialmeasuresonbehalfofHanbo,andanymeasurestobetakenwouldbedetermined
bythecreditor banks andbankruptcy court. TheKorean Government would notadopt anymeasures
thatwere inconsistent withtheWTO Agreements, including theSCM Agreement.
130. TherepresentativeoftheUShopedthattheKoreanGovernmentwouldnotbetakinganyfinancial
measures withrespect toHanbo thatmight cause serious prejudice tothetrade interests ofaMember,
andurged Korea tocontinue toconsult withtheUnited States onabilateral basis. TheUnited States
alsohoped thattheinformation thatKorea wastoprovide would alleviate theUSconcerns inthematter.
131. Therepresentative ofJapan stated that, given their question regarding Korea 'supdating
notification, Japan wished tofollow theexchanges between theUSandKorea, andrequested Korea
torespond toJapan'squestion inarelevant manner.
(ii) European Community -counter-notification asperArticle 25.10
132. Therepresentative oftheECinformed theCommittee thatthecounter-notifications thatthe
EChadintroduced under Article 25.10 inthelastregular meeting inOctober 1996 hadledinsome
casestoanotification being made. TheEChadrecently sentoutcounter-notifications tosomecountries,
andhoped toreceive responses inareasonably short period oftime.
133. TheCommittee tooknoteoftheEC'sstatement.G/SCM/M/14
Page18
Q. Election ofofficers
134. The Committee elected Mr. Gilles Gauthier ofCanada asChairman, and
Mr.JoseLuisPerez Gabilondo ofArgentina asVice-Chairman, oftheCommittee.
R. Dateofnextregular meeting
135. TheChairman recalled thatbydecision oftheCommittee regular meetings would normally
beheldinthelastweek ofApril andOctober. However, given thenumber ofdaysthatwould be
needed forthemeeting oftheCommittee onAnti-Dumping Practices andrelated meetings, itwas
proposed thatthenextregular meeting beheldintheweek of20October 1997.
136. TheCommittee sodecided.