./.RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/456
28 June 2001
(01-3243)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
FOLLOW-UP QUESTIONS AND COMMENTS CONCERNING
PROPOSALS ON IMPLEMENTATION-RELATED ISSUES
REFERRED TO THE COMMITTEE IN THE 15 DECEMBER 2000
DECISION OF THE GENERAL COUNCIL
Comments of Cuba, Dominican Repu blic, Honduras, India, Indonesia,
Malaysia, Pakistan, Tanzania, Uganda and Zimbabwe concerning
Chairman's Non-Paper of 11 June 2001
The following communication, dated 26 June 2001, has been received from the Permanent
Missions of Cuba, Dominican Republic, Honduras, India, Indonesia, Malaysia, Pakistan, Tanzania,
Uganda and Zimbabwe.
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A. PROPOSAL OF SWITZERLAND (G/SCM/W/450)
'Some extension of the two consecutive calendar year period’ is a rather inadequate response
to the issue. We feel that this averment in the Swiss proposal does not say enough and we
would have preferred a stronger acceptance of this concern which developing countries have
been raising since a long time
We can perhaps accept the proposal to introduce certain criteria for the re-inclusion of a
developing country whose exports fall below the threshold of 3.25 per cent.  While we are willing to
accept the Swiss suggestion that firstly, the share in the world market of the concerned product should
fall under 3 per cent and, secondly, the drop below this mark should be over a period of two
consecutive calendar years before export subsidies could then again be introduced.
However, if the drop in world share has been steep and sudden, and if the share in the world
market of the concerned product falls to 1.5% or below, then this period should be limited to one year
only.
Finally, we can accept this proposal, provided that the extension from 2 to 5 years, of the
period in article 27.6, is accepted.
B. OTHER ELEMENTS .
(a) The definition of a "product" is not clear, we assume that, since the negotiations were taken in
the English language, then the most closer definition to the intention of the negotiators is"section heading" which means a group of chapters. We are therefore not clear as to the basis
of arriving at what has been termed as 'the working assumption'.G/SCM/W/456
Page 2
(b) It is not acceptable that only countries listed in the current Annex VII will be eligible for this
proposal. The proposal has been made keeping the interest of all developing countries in mind
which may have to go through such a situation.  Article 27.6 does not restrict this provision to
only Annex VII countries.
(c) We have explained innumerable times that the existing period of 2 years in the Article 27.6 is
not enough to establish the export competitiveness of a developing country.   We therefore
reiterate that this period be extended to 5 years.
(d) The period for determining the existence of export competitiveness cannot be the same as the
period for determining loss of export competitiv eness.  To reach export competitiveness and
to lose export competitiveness are two different situations, and therefore cannot be treated inthe same way.  In developing countries, to reach export competitiveness in a given product
can take several years, on the contrary they can lose export competitiveness in one day.  The
concept of symmetry is therefore neither justified nor appropriate.
(e) We can accept that once export competitiveness is lost, the calculation of the share of world
trade in the product should be automatically performed 2 years later to monitor the situation.
This calculation can be done by the Secretariat.
(f) We would appreciate more clarification on the issue of the calculation to determine export
competitiveness as the trigger for the 8 year phase-out.
Other questions to clarify.
1&2 If export competitiveness is lost after the end of the eight-year phase-out period, or during this
period, what happens?  We think that in this case, the country should be allowed to reintroduce theincentives until it reaches export competitiveness again.  Once, it reaches the export competitiveness,
the ensuing phase out period can be somewhat less than the initial period of 8 years.
3. Yes, as this proposal is focused to address the instability of the situation of the developing
countries.
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