RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/M/25
22 September 2000
(00-3795)
Committee on Subsidies
and Countervailing Measures
MINUTES OF THE REGULAR MEETING
HELD ON 9-10 MAY 2000
Chairman:  Mr. Jan Söderberg (Sweden)
1. The Committee on Subsidies and Countervailing Measures held a regular meeting on 9-
10 May 2000.
2. The Committee adopted the following agenda:
Page
A. INTERNATIONAL GOVERNMENTAL ORGANIZATIONS - REQUEST FOR
OBSERVER STATUS  BY COMESA .......................................................................................2
B. NATIONAL LEG ISLATI ON.....................................................................................................3
1. Review Of Notifications Of New Or Amended Legislation Or Regulations Not
Previously Reviewed By The Committee (Including Supplemental Notifications
Of Existing Provisions Not Previously Reviewed): ................................................................3
(i) Argentina - G/ADP/N/1/ARG/1/Suppl.3 & 4-
G/SCM/N/1/ARG/ 1/Suppl.3 & 4
(ii) Australia - G/ADP/N/1/AUS/2/Suppl.1-
G/SCM/N/1/AUS/2/Suppl.1
(iii) Estonia - G/ADP/N/1/EST/1-G/SCM/N/1/EST/1(iv) India - G/ADP/N /1/IND/2/Suppl.2-
G/SCM/N/1/I ND/2/Suppl.2
(v) Kyrgyz Rep. - G/ADP/N/1/KGZ/1-G/SCM/N/1/KGZ/1
(vi) Thailand - G/ADP/N/1/THA/4-G/SCM/N/1/THA/4
2. Continuing Review Of Previously Reviewed Notifications ...................................................3
EEC - G/ADP/N/1/EEC/2/Suppl.1& 2
G/SCM/N/1/EEC/2/Suppl.1& 2
C. STATUS REPORT ON SU BSIDY NOTIFI CATIONS .............................................................4
D. S
UBSIDIES – 2000 U PDATING NOTIFICATIONS (G/SCM/N/60/..) ...............................................6
- Hong Kong, China G/SCM/N/60/HKG
- Macau, China G/SCM/N/60/MACG/SCM/M/25
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E. SUBSIDIES – 1999 UPDAT ING NOTIFIC ATIONS................................................................6
- Chile G/SCM/N/48/CHL
- Latvia G/SCM/N/48/LVA
- Macau, China G/SCM/N/48/MAC- Norway G/SCM/N/48/NOR
- Poland G/SCM/N/48/POL
- Turkey G/SCM/N/48/TUR
F. SUBSIDIES – 1998 NEW AND FULL NOTIFIC ATIONS ......................................................7
- Cyprus G/SCM/N/38/CYP
- Macau, China G/SCM/N/38/MAC
G. SUBSIDIES – 1997 UPDAT ING NOTIFIC ATIONS................................................................7
- Czech Republic G/SCM/N/25/CZE
H. PERMANENT GROUP OF EXPERTS –
 ELECTION OF AN EXPERT.................................8
I. REVIEW OF THE OPERAT ION OF ARTI CLE 27.6...............................................................8
J. SEMI-ANNUAL REPORTS OF COUNTERVAILI NG ACTI ONS .........................................8
K. NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING
ACTI ONS ........................................................................................................................ .........10
L. QUESTIONS POSED BY ICELAND REGARDING THE 1999 UPDATING
NOTIFICATION OF THE EU ROPEAN C0MMU NITIES.....................................................10
M. OTHER BU SINESS ............................................................................................................... ..13
N. DATE OF NEXT RE GULAR MEETING ...............................................................................13
O. ELECTION OF OFFICE RS .....................................................................................................13
A. INTERNATIONAL GOVERNMENTAL ORGANIZATIONS - REQUEST FOR
OBSERVER STATUS BY COMESA
3. By letter dated 29 October 1999, the Common Market for Eastern and Southern Africa
(COMESA) requested observer status in various Councils and Committees of the WTO, including theSCM Committee.  The Chairman reminded the Committee that pursuant to the procedures adopted by
the General Council, circulated in Annex 3 of document WT/L/161, requests for observer status are to be
considered on a case-by-case basis by each WTO body to which a request had been addressed, taking into
account such criteria as the nature of the work of the organization concerned, the nature of its
membership, the number of WTO Members in the organization, reciprocity with respect to access to
proceedings, documents and other aspects of observership, and whether the organization had been
involved in the past with the work of the GATT.
4. At its meeting on 7 February 1997, the General Council agreed, with regard to international
intergovernmental organizations,  (a)  that the organizations which already had observer status in theG/SCM/M/25
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General Council on an  ad hoc  basis be granted observer status immediately;  (b) that for international
intergovernmental organizations whose requests had not yet been considered the Chairman would
conduct consultations;  and (c) invited the other WTO bodies to proceed in a similar way.
5. The Chairman noted that COMESA had not previously attended meetings of the Committee
as an observer, and that the Chairs of the ot her bodies in which COMESA had requested observer
status were consulting with Members concerning the request.
6. The Chairman proposed that the Committee direct the Chairman to conduct consultations on the
request for observer status of COMESA, and to report back to the Committee at the appropriate time.
7. The Committee so decided.
B. NATIONAL LEGISLATION
1. Review Of Notifications Of New Or Amended Legislation Or Regulations Not
Previously Reviewed By The Committee (Including Supplemental Notifications OfExisting Provisions Not Previously Reviewed):
8. The Chairman noted that all of the notifications listed under this agenda item, and the
questions posed with respect to their review, had also been on the agenda of the Committee on Anti-
Dumping Practices, and that all of were considered at that meeting.
9. No Member raised any comments or questions in respect of the notifications under this
agenda item.
2. Continuing Review Of Previously Reviewed Notifications
10. Concerning the EC's previously-reviewed notific ation, the only notification under this agenda,
the Chairman noted that the EC had not yet subm itted written answers to the questions posed by
Brazil.
11. The representative of the EC stated, in respect of the questions, that his delegation was
continuing to consider them and would answer th em in writing in due course.  As the EC had
indicated at the Committee's previous meeting, it would be encouraged to answer the questions
speedily if Brazil met its obligation to notify subsidies more speedily than in the past, given that
Brazil had made no notification since its 1996 update.  The EC understood that Brazil would submit afull notification in the ensuing 6 to 8 weeks, and the EC would provide written answers to questions in
due course..
12. The representative of Brazil stated that Brazil was finishing collecting information for its
subsidy notification, which would be presented at the end of the first semester of 2000.
13. The written questions concerning the notification under review can be found in the following
document:
G/SCM/Q1/EEC/19 (Submitted by Brazil)No replies have yet been received from the EC.
14. The Chairman informed the Committee that in order for a previously reviewed notification of
legislation to appear on the agenda of the Committee's regular meeting in November 2000, writtenG/SCM/M/25
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questions needed to be submitted to the Secretariat, and to the Member whose notification was in
question, no later than 21 September 2000.
15. The Chairman also drew to the Committee's attention document G/SCM/W/424, circulated on
17 April 2000, which lists all documents containing the written questions and answers concerning
legislation considered by the Committee since it started the process of review in July 1995, and notesthose questions which had not been answered in writing.  Some of these questions might simply have
been overlooked, some were directed to Members that had not participated actively in the Committee.
16. The Chairman noted that in February 2000, he and the Chair of the Committee on Anti-
dumping Practices had written directly to the repr esentatives of Members with outstanding questions,
and that some responses to questions were subsequently submitted to the Secretariat.  These responses
were reflected in document G/SCM/W/424.  The Chairman considered that at this point it was a
matter for the Members who had not yet received answers to the questions that they had posed topursue the matter with other Members.
17.  The Committee took note of the statements made.
C. STATUS REPORT ON SUBSIDY NOTIFICATIONS
18.  The Chairman recalled that at the Committee's previous meeting, in November, the
Committee had held a lengthy discussion concerning the status of subsidy notifications.  That
discussion was based on a paper prepared by the Secretariat at the request of the Committee
(G/SCM/23), which reported on the status of subsidy notifications since the coming into force of the
SCM Agreement.  The Secretariat had since circulated an update of this paper in document
G/SCM/26.
19.  The Chairman believed that it would be useful for the Committee to consider where things
stood on subsidy notifications in the light of this updated report, particularly in view of the discussion
that had been held at the last meeting.  The Chairman pointed out that since the update was circulated,
Canada had submitted its 1999 update.  Nevertheless, this did not change the overall conclusions that
could be drawn regarding the status of subsidy notifications.  In particular, compliance with the
subsidy notification obligation continued to be extr emely poor and deteriorating with each new cycle.
Once again the Committee was in a situation in which the deadline for a new update was rapidly
approaching, and yet the vast majority of Members, including a significant group of major trading
countries, had not as of that date submitted their updating notifications for 1999, and only four
Members had by then submitted their 2000 updates.  Thus, Members as a whole were becoming
tardier and tardier in notifying, which greatly reduced the usefulness of the information once it was
finally notified.  Moreover, the tardiness of the vast majority of Members' notifications certainly
removed any incentive for those few Members who did notify on time to continue to do so.  Mostfundamentally, compliance with the notification obligations had been agreed to by all Members and
was the clear obligation of all Members.  Yet the statistics made clear that many Members were
chronically ignoring this most central of the noti fication obligations under the SCM Agreement.  The
Chairman was therefore afraid that the subsidy notification system under the Agreement was in real
danger of collapsing entirely in the near future, and thus asked Members once again what theCommittee could do, pragmatically, to improve the situation.
20.  In this regard, the Chairman recalled some aspects of the discussion previous meeting on this
subject and in particular the idea that having discussed the issue in great detail at that time, some
improvements in notification compliance could be expected in the weeks and months thereafter.
Unfortunately, however, no such improvements had mate rialized.  The Chairman also recalled that the
Committee had had a very lengthy discussion on a proposal concerning the frequency of notifications,
in an effort to reduce for all Members the burden of notifying.  In that discussion, constraints onG/SCM/M/25
Page 5
human and financial resources were identified by a number of Members as the fundamental reason for
their difficulties in notifying their subsidies.  The discussion of that proposal had not resulted in a
consensus, however, and the Chairman believed that Members might need more time to reflect on it.
21.  Some interim solution needed to be found immediately, however.  The Chairman proposed, to
deal with the immediate problem, that each Member that was not fully up to date on its notificationobligations undertake a commitment to bring itself fully up to date, including for its 2000 update, in
the very near future, i.e., before the end of the summer break.  Given that some Members never had
made even a new and full notification for 1995, let alone for 1998 or any update period, the Chairman
suggested that each Member with more than one notification due should have the option of making a
single "best efforts" notification covering all of the time periods for which it owed a notification,
putting most emphasis on the most recent periods so  that Members had up-to-date information.  Under
such an approach, in most cases what would be required beyond the basic description of each subsidywould be statistics on outlays or amounts budgeted for each year covered by the notification, as well
as descriptions of any changes in the notified subsidy programme (e.g., any changes in how it
operated, to whom it was paid, etc.) during the course of the covered period.
22.  The Chairman believed that the right forum to pursue a longer-term solution to this problem
was the Committee's Working Party on Subsidy Notifications.  While this Working Party had not metrecently because there had been nothing for it to do, it still existed and was the natural place for this
issue to be considered in a systematic way.  The Chairman proposed therefore that a meeting of the
Working Party be scheduled in conjunction with the Committee's fall regular meting, and in the
meantime invited Members to submit proposals for consideration by the Working Party.
23.  The Chairman invited the comments, and especially sought the support, of Members
concerning these proposals, i.e., first, to catch up on all outstanding notifications in the way that he
had proposed, and second, to convene the Working Party on Subsidy Notifications to consider
whether a pragmatic solution could be found to the problem of compliance with the subsidy
notification obligations.
24. The representative of Australia stated that Australia had submitted a composite notification
through fiscal year 1998-1999, containing information through 30 June 1999.  Depending on how the
periods covered by the data in the notification corresponded to the notification cycle, this notification
might be considered Australia's update for 2000 as well.  Australia noted that the delay in presenting
its notification was due to the fact that Australia had for the first time included information on
subnational programmes, and that collecting the information on those programmes had been time-
consuming.
25. The representative of the United States stated that the United States was preparing a
consolidated notification for 1999 and 2000, which would be submitted shortly.  As had Australia, the
United States had begun to notify subfederal subsidies.  The United States welcomed Australia's
providing this information.  In the view of the United States, the subsidy notification issue was a
transparency obligation, not one with a great legal impact, which went to the heart of the WTO's
credibility.  The Chairman's remarks were very much on point.  As time passed, the more difficult theissue became, and the less credible the SCM Agreement became.  A report by the United States textile
industry to the US government was an example of this.  This report pointed to the SCM Agreement as
one area where all Members, including the United States, were not meeting their obligations.  The
United States remained very committed to meeting all of its WTO obligations, including those under
the SCM Agreement.  The United States as other Members was subject to political pressures, and thedanger was that if the obligation to notify subsidies were allowed to slide, this could pave the way for
other obligations to be similarly treated.  Thus, the United States supported the Chairman's proposals
to return to work on how to rationalize the notification process.  The United States was committed to
working creatively with its partners to find ways particular for least developed countries to perhapsG/SCM/M/25
Page 6
have a less burdensome way to meet their obligations.  The current situation was unsustainable and
could have negative implications elsewhere.
26. The delegate of Egypt indicated that Egypt could go along with the Chairman's proposal, and
recalled that it was Egypt that had requested the initial factual paper concerning compliance with
notifications.  Egypt found useful the TBT Committee's example of holding a workshop to deal withdeveloping country concerns.  At the TBT workshop, the idea was to put all of the developing
countries' problems on the table for discussion, to identify what the resource and other constraints
were and to try to identify realistic solutions.  Such an approach might be useful, either in the
Working Party itself or in an informal session.  The problem of notifications was becoming something
of a loop, and as the Chairman had said, the degree of compliance was becoming worse every day.
27. The delegate of Malaysia stated that Malaysia was one of the Members that had notifications
outstanding, that the work was still ongoing in the capital, and that he would again contact his capital.
He noted that it was a useful suggestion that each Member with more than one notification
outstanding could make a single notification, with more emphasis on the most recent year, and that
this would be something that Malaysia could perhaps endeavour.
28. The representative of the EC welcomed the Chairman's suggestions, and agreed that the
notification process was breaking down.  The issue needed to be addressed quickly and decisively.
The EC had made many interventions on this subject, and agreed with the United States that he
credibility of the Agreement was at stake.  It was crucial to meet these objections.  The EC had made
a proposal the previous year that was intended to facilitate the notification process, but it had not met
with agreement.  The EC was happy to examine any other proposals.
29. The delegate of Canada welcomed the proposals to catch up on outstanding notifications, and
to reactivate the Working Party.
30. The Committee agreed to the Chairman's proposals, and took note  of the statements made.
D. SUBSIDIES – 2000 U PDATING NOTIFICATIONS (G/SCM/N/60/..)
31. The Chairman noted that only two updating notifications for 2000 were received in time to be
placed on the agenda, from Hong Kong, China and Macau, China, and that both were nil notifications.
32.  No comments or questions were raised in respect of either notification.
E. SUBSIDIES – 1999 UPDATING NOTIFICATIONS
33.  The questions concerning the notification of Chile can be found in the following document:
G/SCM/Q2/CHL/12 (Submitted by the United States)
No replies have yet been received from Chile.
34. The questions concerning the notification of Norway can be found in the following document:
G/SCM/Q2/NOR/7 (Submitted by the United States)
Answers to these questions can be found in the following document:
G/SCM/Q2/NOR/8 (To the United States)G/SCM/M/25
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35. The questions concerning the notification of Turkey can be found in the following document:
G/SCM/Q2/TUR/13 (Submitted by the United States)
Answers to these questions can be found in the following document:
G/SCM/Q2/TUR/14 (To the United States)
36. No questions were posed in respect of the notifications of Latvia; Macau, China; or Poland.
37. The Chairman reminded Members that any question raised orally at the meeting for which a
written answer was desired should be sent in writing to the Member concerned and to the Secretariat
by 29 May 2000, and that written answers to all such questions should be submitted no later than
10 July 2000.
38. The Committee took note of the statements made.
F. SUBSIDIES – 1998 NEW AND FULL NOTIFICATIONS
39. The Chairman recalled that in the fall of 1999, the Committee had held the last of the special
meetings to review the 1998 new and full notifications, and that it was decided at that time that any
further such notifications to be received would be reviewed at the regular meetings of the Committee,
subject to the same timing for circulation and for written questions and answers as were in effect forthe special meetings.  Since that time, two 1998 new and full notifications – from Cyprus and Macau,
China, had been received in time to be placed on the agenda of this meeting.
40. Concerning the notification of Cyprus, written questions had been posed by Korea, and could
be found in document G/SCM/Q2/CYP/8.  The deadline for written answers was 28 March 2000, but
no written answers had been submitted by Cyprus.  In addition, the Cyprus Mission had indicated that
Cyprus was not able to send a delegation to attend the meeting.  The Chairman thus proposed that the
Committee postpone the review of this notification until the Committee's fall 2000 regular meeting.
41. The Committee so decided.
42. No comments or questions were raised in respect of the new and full notification of Macau,
China, a nil notification.
43. The Chairman reminded the Committee that, in addition to the notification of Cyprus, any
newly-submitted 1998 new and full notifications circulated in all three languages by 26 June 2000
would be on the agenda for review at the Committee's fall regular meeting, and that written questions
concerning those notifications should be submitted by 24 July and written answers by 25 September,
in accordance with the timing previously agreed by the Committee.
44. The Committee took note of the Chairman's statement.
G. SUBSIDIES – 1997 UPDATING NOTIFICATIONS
45. No questions or comments were raised concerning the only notification under this agenda
item, that of the Czech Republic.G/SCM/M/25
Page 8
H. PERMANENT GROUP OF EXPERTS – ELECTION OF AN EXPERT
46. The Chairman recalled that the term of office of one Member of the Permanent Group of
Experts expires each year, and that, as indicated in document G/SCM/25, the term of office of
Mr. Robert Martin was expiring in spring 2000.  Accordingly, at this meeting the Committee should
elect a new expert to replace Mr. Martin.
47. Korea had suggested two individuals to fill this seat on the PGE, Mr. Hyung-Jin Kim and
Mr. Doo-Sik Kim.  Subsequently, Korea withdr ew the nomination of Mr. Doo-Sik Kim.  The
Chairman therefore proposed that the Committee elect Mr. Hyung-Jin Kim to the Permanent Group of
Experts, for a term of five years.
48. The Committee so decided.
I. REVIEW OF THE  OPERATION OF ARTICLE 27.6
49. The Chairman recalled that at its previous regular meeting, the Committee had taken up the
review of the operation of Article 27.6 of the SCM Agreement, which was mandated in the same
Article to take place five years after the entry into force of the WTO Agreement.  Article 27.6
establishes a mechanism for determining whether a developing country Member has reached export
competitiveness in a given product, for the purpose of the transition period applicable to the export
subsidies of developing country Members.  While the Committee had had a useful initial discussion ofthis provision at the fall meeting, the Committee had asked that this item be retained on the agenda of
future meetings so that the review could continue.
50. Some of the points raised at the Committee's previous meeting in this context were that the
Committee had no experience in using this provision, that it might be useful to look at the definition
of a product under Article 27.6 (i.e., as an HS sect ion heading) as some Members view this definition
as quite broad, and that it might be useful for the Committee to consider as well other aspects of the
operation of Article 27.6.  The Chairman sought any further views of Members concerning this
review.
51. No Member raised any comments or questions concerning the review.
52. The Committee concluded the review of the operation of Article 27.6.
53. The delegate of the United States requested confirmation that concluding the review of this
provision would not preclude the question of its operation from being placed back on the agenda of
future meetings if it was useful or relevant to do so.
54. The Chairman confirmed that this was correct.
J. SEMI-ANNUAL REPORTS OF COUNTERVAILING ACTIONS
55. The Chairman recalled that a request for semi-annual reports for the second half of 1999, to
be submitted not later than 29 February 2000, had been circulated to Members in G/SCM/N/56, dated10 January 2000.  Unfortunately, there continued to be problems of compliance, as a number of these
reports were received after the deadline, and a majority of Members had submitted no report at all.
Members were well aware of the applicable deadlines for submission of semi-annual reports – semi-
annual reports were always due at the end of February for the period July through December of the
previous year, and at the end of August for the peri od January through June of the current year.  Given
this, it should be a simple matter to ensure that this routine task was completed in a timely fashion.G/SCM/M/25
Page 9
56. Members who had submitted semi-annual reports were identified in paragraph 1 of document
G/SCM/N/56 Addendum 1, dated 27 April 2000. To the extent possible, the semi-annual reports had
been translated and circulated to the Committee, an d were included in the documents made available
for this meeting.
57. In addition to the six Members who had submitted semi-annual reports, 38 Members listed in
paragraph 2 of document G/SCM/N/56 Addendum 1 had notified the Committee that they did not take
any countervailing actions during the period in question.  In addition, Haiti, Latvia and Mauritius had
submitted such reports too late to be included in that document.  Paragraph 3 of that document listed
the 62 Members (not including Haiti, Latvia, Mauritius or Japan, which was incorrectly included in
paragraph 3) that had made no notification.  A corrected and revised version of the document would
be circulated in the near future.  With respect to notifications of no action, there was no good
explanation for some Members' failure to make this notification in a timely fashion.  All that wasrequired if a Member took no action during a given period was to send a one sentence letter stating
that fact to the Chairman or the Secretary of the Committee before the end of February, and another
such letter before the end of August.  Particularly for Members that did not conduct countervail
investigations, it seemed that it should not be difficult to establish a routine for making these simple
notifications.
58. The Committee then turned to the review  of the semi-annual reports submitted.
59. No questions or comments were raised in respect of the semi-annual reports of Canada,
Egypt, the EC, South Africa, or the United States.
60. Concerning the semi-annual report of Chile, th e representative of the EC noted in respect of
Chile's investigation concerning milk powder, that Chile had notified that a provisional measure had
been applied on 29 December 1999, which the EC understood to mean that the deadline for a
definitive decision was 29 April 2000.  The EC wished to know whether such a decision had been
taken.
61. The representative of Chile stated that he did not have the information requested, but that that
information would be provided as soon as possible.
62. The representative of the United States stated  that his delegation was interested in the same
information when it became available.
63. The Chairman reminded Chile that this information should be submitted to the Secretariat for
circulation to Members.
64. The representative of Chile stated that, as provided by the Agreement, when any definitive
measure is applied it must be notified to the Committee.
65. Concerning Argentina's report of measures in force, the representative of the EC noted that
Argentina's measure on olive oil from the EC was due to expire on 2 July 2000, and that the EC
understood that the domestic industry in Argentina would have had to request an extension of the
measure by 2 April 2000.  The EC had received no notification that such a request had been made,
and therefore sought confirmation that that the measure would expire on 2 July.
66. The representative of Argentina stated that he would provide an answer to the EC as soon as
possible.
67. The Committee took note of the statements made.G/SCM/M/25
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K. NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING ACTIONS
68. The Chairman noted that lists of the notifications of preliminary and final countervailing
actions received by the Committee had been circul ated to the Committee in documents G/SCM/N/55,
57, 58, 59 and 61.  Preliminary and final actions had been notified by Australia, Chile, the European
Communities, and the United States.
69. As with other notification requirements, there appe ared to be a lack of full compliance in this
area, as some Members who had submitted semi-annual reports indicating actions in progress had not
submitted reports of preliminary or final actions taken.  An important aspect of the Committee's task
was its role in monitoring and discussing actions taken by Members.  If Members did not comply with
their obligations to notify, the Committee was prevented from accomplishing its goal of considering
Members' actions under the Agreement.
70. No Member made any comment concerning any of the notified actions.
71. The Committee took note of the Chairman's statements.
L. QUESTIONS POSED BY ICELAND REGARDING THE 1999 UPDATING
NOTIFICATION OF THE EUROPEAN C0MMUNITIES
72. The Chairman noted that this item appeared on the agenda at the request of the Iceland, as the
1999 updating notification of the EC would not be on the agenda for review by the Committee until
the next regular meeting, due to the notification's having been submitted late, as well as delays in its
translation.
73. Before replying to the questions posed by Iceland, the representative of the EC stated that his
delegation wished to raise a few points concerning Iceland's compliance with the SCM Agreement
concerning notification of fishery subsidies.  Icel and's most recent updating notification, that for 1999,
contained information only through 1997, rather than 1998 as required, and appeared to omit some
important subsidies to fishing.  In fact, it reported only two small programmes for fisheries
(amounting to less than $500,000), and did not mention other programmes of much more significance,
such as certain tax deductions for fishers, which had been identified in other fora and must be much
larger than the notified programmes.  The EC might pursue this issue through Article 25.10, andrequest full notification of this scheme at a later date.
74. The written questions of Iceland concerning the EC's notification can be found in the
following document:
G/SCM/Q2/EEC/21 (Submitted by Iceland)
The answers to these questions can be found in the following document:
G/SCM/Q2/EEC/22 (To Iceland)
75. The delegate of Iceland thanked the representative of the EC for the answers that the EC had
provided, and wanted immediately to revert to the EC's opening statement, concerning Iceland's tax
deductions for fisheries.  The reason that Iceland had not notified this was that in Iceland's view it wasnot covered by the Agreement.  Nevertheless, Icel and took note of the EC's statement, and the EC's
opinion would be transmitted to Reykjavik for consideration by the experts there.
76. The question of fish subsidies, which was of great interest to Iceland, had been to that point
mainly dealt with in the Committee on Trade and Environment, and not frequently in the SCMG/SCM/M/25
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Committee.  In the CTE discussions, there had been considerable support for the elimination of trade
distorting and environmentally harmful subsidies to fisheries, and most Members who declared
support for addressing this issue had considered it to be a rules issue, which should be taken up in the
SCM Committee.  Therefore in the Seattle preparations, the question had been treated as a rules issue,
and in Seattle a near-consensus had been reached on this issue, as reflected in the subsidies andcountervailing measures section of the final draft of the Ministerial Declaration.  Everything had
collapsed in Seattle, and thus there was no agreement on how to proceed from there, but to be faithful
to the opinion of Members, the issue should be accommodated in the SCM Committee.
77. The question was how to do this.  This issue in the SCM Committee would be a different
issue than it was in the CTE.  In the SCM Committee, it would become more a technical/legal/rule
issue, whereas in the CTE it was more political.  Iceland was asking the Committee to take a further
look at the issue, at the Committee's next meeting.  In Iceland's opinion, for example, the notifications
of fishery subsidies lacked detail and comprehensiven ess, as in respect of the requirement to identify
the trade effects of subsidies.  Certain Members indicated that their subsidies had no trade effects.  It
would not be expected that Members would admit to such effects, and therefore it fell to other
Members to prove that they existed.  This was just one awkward part of the notification process.
78. In Iceland's view, the Committee could address various questions in respect of fishery
subsidies, for example:
• What are fishery subsidies?
• Which such subsidies are truly trade distortive?
• Which such subsidies truly contribute to overcapacity and overfishing?
• Which disciplines under the SCM Agreement need to be clarified and strengthened
regarding fishery subsidies?
• Which provisions of the SCM Agreement apply specifically to fishery subsidies?
• To what extent could fishery subsidies with adverse effects (particularly serious
prejudice) be identified?
• Are the notifications concerning fishery subsidies transparent enough?
The issue of fishery subsidies had not been dealt with in a detailed manner.
79. The representative of Canada recalled that the draft Ministerial Declaration had identified
fishery subsidies " inter alia" as an area to be considered.  There were other relevant sectors that also
should be addressed, and Canada was willing to look at subsidies in the context of overall multilateral
trade negotiations.  Shipbuilding was one such other area of interest.  A number of issues, such as
transparency, were generic issues and thus should not be limited to the context of fishery subsidies.
80. The representative of the United States was in terested in seeing the written replies from the
EC to the questions raised by Iceland.  For about the past year, the United States in its own questions
concerning other Members' notifications had been focusing on fishery subsidies, and in the subsidy
notification that the United States was about to submit, it had amplified the section on US fishery
subsidies.  The United States looked forward to receiving questions from other Members concerningthese subsidies.  The United States was very intere sted in looking more closely at Iceland's idea, and
was happy to participate in a richer discussion of this topic.  This Committee was not a negotiating
body, but the issue did deserve closer attention by the Committee.
81. The Chairman noted that he understood Iceland to have made a formal proposal that fishery
subsidies be inscribed on the agenda of the fall meeting of the Committee.G/SCM/M/25
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82. The representative of Malaysia wanted to ponder a bit longer on this question as he had been
taken by surprise by the discussion.  The question of fishery subsidies was one of many issues that
had been discussed in the context of Seattle.  He was not sure that Malaysia could agree to its being
on the agenda of the next meeting.  It was being discussed in the CTE and for the time being it should
stay there.
83. The Chairman recalled that it was the right of any Member to put any item on the agendas of
the Committee's future meetings, and that placing something on the agenda in no way prejudged the
discussion of it by the Committee.  He had simply want ed to take note of the fact that there had been a
formal proposal from Iceland.
84. The representative of Canada understood Iceland' s position.  As the delegate of Malaysia had
stated, a whole host of issues had been discussed in the context of Seattle, and not just in the area of
subsidies.  Even in the subsidies area, various Members had wanted a variety of issues to bediscussed.  Canada was not in a position to agree to discuss this issue at the Committee's next
meeting.  It clearly was the prerogative of all Members to inscribe discussion items on the agenda of a
meeting, and this issue would be dealt with at the next meeting if it was on the agenda for that
meeting.
85. The representative of Norway stated that Norway was very interested in discussing the issue
in the SCM Committee.  It was up to any Member to  propose agenda items for the next meeting, and
this was not subject to consensus as such.  Fishery subsidies could be usefully discussed in the SCM
Committee.  This did not mean, however, that Members were about to embark on negotiations, but
just that discussion would be useful.
86. The representative of Japan was not in a position to agree or disagree concerning the new
agenda item for the fall meeting.  Concerning Iceland's comments on the pre-Seattle text, whenever
any subsidy was discussed by the Committee, such discussion should only be in respect of the
objectives of the SCM Agreement.
87. The representative of Australia was interested in Iceland's comments, although Australia had
not been prepared for a discussion at this meeting.  The issues were important and should be discussed
somewhere in the WTO.  The Committee's ability to discuss issues relied on consensus.  Members
had the right to put items on the agenda for discussion, however.
88. The representative of Canada stated that the agenda item for the fall meeting should be
framed in the pre-Seattle language, that is, the discussion should be about trade distorting subsidies,
"including, inter alia ," fishery subsidies.
89. The Chairman noted that it was up to Members to frame their own requested agenda items as
they wished, and concerned Members should contact the Secretariat if they wished other such items to
be added to the agenda for the next meeting.
90. The representative of New Zealand stated that his delegation had an interest in the issue and
was willing to constructively engage in future discussions.  He noted that, as had been said, it was the
prerogative of any Member to inscribe items on the agendas for future meetings.
91. The delegate of Malaysia took note of the fact that all Members had the right to inscribe any
item on the agenda, but noted that there had never been agreement on the language proposed on this
issue in the draft Ministerial Declaration.  Therefore he hoped that the use of this language could be
avoided.
92. The representative of Korea supported Japan's position.G/SCM/M/25
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93. The Committee took note of the statements made.
M. OTHER BUSINESS
94. No Member raised any item under this agenda item.
N. DATE OF NEXT REGULAR MEETING
95. The Chairman recalled that the Committee had previously agreed that its regular meetings
normally would be held in the last week of April and the last week of October, in conjunction with the
regular meetings of the Committee on Anti-dumping Practices.  As the Anti-dumping Committee
meetings would take up the entire week of 30 October 2000, the next regular meeting of this
Committee, along with the agreed meeting of the Working Party on Subsidy Notifications would be
held on Monday-Wednesday 6-8 November 2000.
O. ELECTION OF OFFICERS
96. The Committee elected Mrs. Usha Dwarka-Canabady (Mauritius) as Chairperson, and
Mr. Hiromi Yano (Japan) as Vice Chairperson, of the Committee.
97. The meeting was adjourned.
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