RESTRICTED
WORLD TRADE G/SCM/Q2/EEC/4/Suppl.1
24September 1996
ORGANIZATION(96-3775)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Follow upQuestions from theUNITED STATES Regarding theNew
andFullNotification oftheEUROPEAN COMMUNITY1
Supplement
Thefollowing communication wasreceived 13September 1996fromthePermanent Mission
oftheUnited States.
_______________
Questions
Community-wide Programmes
1. Regarding USQuestion 5.D
Initsoralresponse, theECindicated thatthemeasures referred toherewereincorporated
initsnotification ofstructural fundinitiatives. Could theECidentify andclarify which ofthe
individual initiatives authorized byArticle 11ofCouncil Regulation 4253/88 areincluded under
itsnotification ofstructural fundmeasures, andwhere theidentifying information orreference
maybefound inthenotification itself?
2. Regarding USQuestion 5.Y
Could theECclarify whether tradeassociations are(potential) beneficiaries ofassistance under
thisprogramme? Areindustrial clean-up operations everfunded through suchassistance and,
ifso,would itbeforclean-up operations which commercial enterprises would otherwise be
obligated tofund? Initsoralresponse, theECindicated thatitwould further investigate and
provide additional information.
AllMember States
3. Regarding USQuestion 1
Withrespect toeachoftheMember Statenotifications, theECindicated thatitwould respond
inwriting tothegeneric USquestion about whether allMember State-contributed assistance
under theCommunity structural fundmeasures wasreported.
1G/SCM/N/3/EEC.G/SCM/Q2/EEC/4/Suppl.1
Page2
4. Regarding assistance toagriculture
Infollow-up toareply provided bytheECtoKorea, theECindicated inresponse toa
subsequent question bytheUnited States thatallmeasures which werenon-specific within the
agricultural sector wereconsidered byitnottobespecific within themeaning ofArticle 2of
theAgreement. Could theECconfirm inwriting thatthisisitsposition? Ifso,could itprovide
additional views orinformation astotheexistence ofother subsidies specific to"certain
enterprises" within theagricultural sector ofanyrelevant granting authority within the
Community ’sterritory thatwould, therefore, fallwithin thenotification requirements ofthe
Agreement?
Belgium
5. Regarding USQuestions 3.A.andB
Inbothinstances, theUnited States inquired whether assistance under thesemeasures relieved
firms oflegal/statutory obligations forwhich theyotherwise would beliable --orassisted them
inmeeting suchobligations --which webelieved tobethecase. Iftrue,itwould betheUS's
viewthatsuchassistance metthenotification requirement ofArticle 25oftheAgreement. Could
theECplease clarify andcomment?
France
6. Regarding USQuestion 2
TheECindicated initsoralresponse thatitwould supply further information inwriting
regardingassistancetoAirbusIndustrieanditsconsortiummembersinrelationtothenotification
requirements ofArticle 25oftheAgreement andArticle XVIofGATT 1994. Inparticular,
itwasourimpression thattheECindicated initsoralresponse that,initsview, royalty-based
financing ofthedevelopment ofcommercial products could noteverbeconsidered asubsidy
within themeaning oftheAgreement. Isourunderstanding correct and/or could theECplease
elaborate infurther detail thebasis foritsviews inthisregard? (Note: Thisquestion would
apply toallinstances inwhich theUSinquired about assistance toAirbus andtheECindicated
thatitwould supply further information andviews inwriting.)
Germany
7. Regarding USQuestion 3.A
Initsoralreply, theECreferred tothe"special circumstances" associated withtheoperations
oftheTreuhandanstalt asareason, inpart, fornotnotifying loanguarantees orother forms
ofassistance provided bythisentity. Without contesting suchspecial circumstances, the
United States requests thattheECfurther elaborate itsviews onhowthisexcludes such
assistance fromthenotification requirements oftheWTO or,otherwise, thatitprovide the
relevant notification information.
Italy
8. Regarding USQuestion 12
Could theECclarify further itsviewthattheprogrammes identified inA,B,C,D,HandJ
oftheUSquestion arenotregionally specific? Ifenterprises located inaparticular regionG/SCM/Q2/EEC/4/Suppl.1
Page3
areexplicitly permitted toreceive moregenerous subsidy benefits under anational programme
byvirtue oftheirbeing located inthatregion, notwithstanding thattheprogramme mayprovide
some level ofbenefits toenterprises throughout thenation, isittheEC’sviewthatsuch
regionally-targeted subsidy benefits donotconstitute aregional subsidy?
9. Regarding USQuestion 12.N
IntheCommittee discussion, theECindicated thatitdidnotknowwhat"Riconversider" referred
to,andcould nottherefore reply totheUSquestions without additional information. Based
oninformation available tous,weunderstand thatRiconversider isanentity which was
established in1984 toorganize retraining programmes forsteelworkers, attherequest of
both/either theECSC through Article 56(2)(b) and/or companies. Although wearenotaware
ofRiconversider supplying funds tocompanies forretraining purposes, neither dowehave
anyinformation bywhich tojudge whether anyfeeswhich Riconversider might charge forits
retraining programmes confer abenefit. While theUnited States isnotnecessarily oftheview
thattheactivities ofRiconversider constitute anotifiable subsidy within themeaning ofthe
Agreement, wewould appreciate learning theEC’sviews inthisregard.
10. Regarding USQuestion 12.Y
Initsoralreply, theECindicated thatitdidnotconsider benefits under thisprogramme to
becontingent upon export performance because theprogramme dealt withpotential exports,
notactual exports. TheUnited States asked whether itwaspossible toreceive assistance under
theprogramme ifanenterprise didnotexport. Could theECelaborate itsviewandexplanation
infurther detail, andcomment onthemanner inwhich theprogramme isjudged tobecompatible
withtheAgreement ’sstandard fordefacto export subsidies?
11. Regarding USQuestion 12.DD
Initsoralreply, theECindicated thattheUSquestion wastoogenerally phrased topermit
ittoidentify theprogramme inquestion. Inreply, theUnited States indicated that,according
toitsinformation, therelevant background andauthority forthisprogramme isLaw306/66.
Could theECplease provide additional information about thisprogramme andexplain why
itwasnotconsidered appropriate toinclude initssubsidy notification?
Portugal
12. Regarding USQuestion 5
During theCommittee review, theUnited States reiterated itsobservation thatthenotification
inmany instances failed toprovide information onthebackground andauthority ofthesubsidy,
asrequired bytheAgreement. Could theECsupply theappropriate information inthisregard
inrespect toPortugal ’ssubsidies?
13. Regarding USQuestion 12
TheUnited States orally requested theECtoprovide further clarification anddescription of
thisprogramme, e.g., whether and/or howtwotypes ofaidwere being offered under the
programme.G/SCM/Q2/EEC/4/Suppl.1
Page4
Spain
14. Regarding USQuestion 11.E
Initsoralreply, theECindicated thatthere wasnoexport performance requirement, perse,
which enterprises havetomeetinorder toreceive benefits under thisprogramme. However,
theUnited States understands thatunder theterms oftheauthorizing legislation andregulations,
thetaxdeductions maybeclaimed onlyiftheforeign investment forwhich thedeductions are
claimed isdirectly related totheinvesting company ’sexport activities. Could theECcomment
further onthis?