RESTRICTED  
  
G/SCM/M/121  
 
2 February 2023  
(23-0740) Page: 1/31 
Committee on Subsidies and Countervailing Measures    
 
MINUTES OF THE REGULAR  MEETING  
HELD ON 25 OCTOBER 2022  
CHAIR: MS KERRLENE WILLS (GUYANA)  
1. The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 25 October 2022, convened in WTO/AIR/SCM /46 dated 14 October 2022. The meeting 
was held in person and virtually via Interprefy.  
2. The Chair reiterated her request to delegations to provide their up -to-date contact details by 
email to the Secretariat, so that it can update its contact details list,  currently contained in document 
RD/SCM/4/Rev.18.  
3. The Committee adopted the following agenda:  
1   NATIONAL LEGISLATION  ................................ ................................ .........................  2 
1.1   Review of notifications of new or amended legislation or regulations  
not previously reviewed by the Committee (including Supplemental  
Notifications of existing provisions not previously revi ewed)  ................................ ......... 2 
1.1.1    Brazil (G/ADP/N/1/BRA/3/Suppl.19 – G/SCM/N/1/BRA/2/Suppl.21 – 
G/SG/N/1/BRA/3/Suppl.12) and (G/SCM/N/1/BRA/2/Suppl.22)  ................................ 2 
1.1.2    Canada (G/ADP/N/1/CAN/4/Suppl.5 - G/SCM/N/1/CAN/4/Suppl.4 - 
G/SG/N/1/CAN/3/Suppl.3)  ................................ ................................ .......................... 3 
1.1.3    Colombia (G/SCM/N/1/COL/2)  ................................ ................................ .......... 3 
1.1.4    United Kingdom (G/ADP/N/ 1/GBR/1/ Suppl. 13 -  
G/SCM/N/1/GBR/1/ Suppl. 12 - G/SG/N/1/GBR/1/ Suppl. 12, 
G/ADP/N/1/GBR/1/ Suppl. 14 - G/SCM/N/1/GBR/1/ Suppl. 13 - 
G/SG/N/1/GBR/1/ Suppl. 13, AND G/ADP/N/1/GBR/1/ Suppl. 15 - 
G/SCM/N/1/GBR/1/ Suppl. 14 - G/SG/N/1/GBR/1/ Suppl. 14) ................................ .......4 
1.2   Review of notifications of new or amended legislation or  
regulations with outstanding written questions  ................................ ............................. 4 
1.2.1    Saint Kitts and Nevis (G/ADP/N/1/KNA/1 – G/SCM/N/1/KNA/1)  ...................... 4 
2   NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE  
NOTIFICATIONS PREVIOUSLY REVIEWED BY THE COMMITTEE  ................................ ...... 4 
A. WRITTEN QUESTIONS CONCERNING PREVIOUSLY REVIEWED  
LEGISLATIVE NOTIFICATIONS:  ................................ ................................ ....................  4 
2.1   Cameroon (G/ADP/N/1/CMR/2 – G/SCM/N/1/CMR/2 – G/SG/N/1/CMR/2)  ......... 4 
B. OUTSTANDING WRITTEN FOLLOW -UP QUESTIONS CONCERNING  
PREVIOUSLY REVIEWED LEGISLATIVE NOTIFICATIONS POSED UNDER  
THIS AGENDA ITEM AT PREVIOUS COMMITTEE MEETI NGS:  ................................ ............ 5 
2.2   European Union (G/ADP/N/1/EU/3/Suppl.2 - G/SCM/N/1/EU/2/Suppl.2  
and G/ADP/N/1/EU/3/Suppl.3 - G/SCM/N/1/EU/2/Suppl.3)  ................................ .......5 
2.3   Ghana (G/ADP/N/1/GHA/2 - G/SCM/N/1/GHA/2 - G/SG/N/1/GHA/2)  ................ 5 G/SCM/M/121  
 
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  3   SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS  
(ARTICLE  25.11) – G/SCM/N/392 AND G/SCM/N/392/ SUPPL. 1 ................................ ... 6 
4   PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS:  
NOTIFICATIONS (ARTICLE 25.11)  ................................ ................................ ..............  12 
5   ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR  
THE ELIMINATION OF EXPORT SUBSIDIES  ................................ ................................ . 13 
6   IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS  
AND OTHER INFORMATION FLOWS ON TRADE MEASURES UNDER  
THE SCM AGREEMENT ................................ ................................ ................................ . 14 
7   PERMANENT GROUP OF EXPERTS  ................................ ................................ ...........  18 
8   RECENT DISCRIMINATORY SUBSIDIES POLICIES AND MEASURES OF  
THE UNITED STATES – ITEM REQUESTED BY CHINA  ................................ ....................  18 
9   SUBSIDIES AND OVERCAPACITY – ITEM REQUESTED BY AUSTRALIA,  
CANADA, THE EUROPEAN UNION, JAPAN, THE UNITED KINGDOM,AND  
THE UNITED STATES  ................................ ................................ ................................ .. 21 
10   SUBSIDY TRANSPARENCY AND CHINA'S PUBLICATION AND INQUIRY  
POINT OBLIGATIONS UNDER CHINA'S PROTOCOL OF ACCESSION – ITEM  
REQUESTED BY AUSTRALIA, CANADA, THE EUROPEAN UNION, JAPAN,  
THE UNITED KINGDOM, AND THE UNITED STATES  ................................ ......................  25 
11   PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF  
NEW AND FULL SUBSIDY NOTIFICATIONS – ITEM REQUESTED BY  
AUSTRALIA, CANADA, THE EUROPEAN UNION, J APAN, THE UNITED KINGDOM,  
AND THE UNITED STATES  ................................ ................................ ...........................  27 
12   OTHER BUSINESS  ................................ ................................ ................................  29 
12.1   India – countervailing duty investigation on the importation of  
saturated fatty alcohols from Indonesia  ................................ ................................ ...... 29 
12.2   The Chair's statements on the election of the new Vice -Chair  
and the ongoing consultations in the General Council and  
the Council for Trade in Goods regarding WTO reform and  
improving the functioning of the WTO Committees  ................................ ......................  30 
13   DATE OF NEXT REGULAR MEETING  ................................ ................................ .......  31 
14   ANNUAL REPORT OF THE COMMITTEE ON SUBSIDIES  
AND COUNTERVAILING MEASURES TO THE COUNCIL FOR TRADE IN GOODS  
(ARTICLE 32.7 ) ................................ ................................ ................................ ..........  31 
 
1  NATIONAL LEGISLATION  
1.1  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)1 
1.1.1   Brazil (G/ADP/N/1/BRA/3/Suppl.19 – G/SCM/N/1/BRA/2/Suppl.21 – 
G/SG/N/1/BRA/3/Suppl.12) and (G/SCM/N/1/BRA/2/Suppl.22)  
4. No written or oral questions were posed with respect to these notifications.  
5. Brazil  indicated that the first notification was regarding general rules to be followed in all three 
types of trade remedy investigations. The second notification in document 
G/SCM/N/1/BRA/2/Suppl.22 contained the new decree on subsidi es investigations and 
countervailing measures which was a major development in Brazil's internal trade remedies policy. 
 
1 Relevant deadlines for written questions and written answers regarding the notifications of legislation 
reviewed in the October 2022 meeting can be found in section 1 of document G/ADP/W/509 - G/SCM/W/586 - 
G/SG/W/255.  G/SCM/M/121  
 
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  It improved Brazil's domestic proceedings aligning them with international best practices, the 
recommendations of the Committee and the WTO jurisprudence. It also harmonized Brazil's 
countervailing measure processes with those that have been followed in anti -dumping proceedings 
since 2013 fostering coherence and predictability. Brazil had worked hard to notify it in a timely and 
compete ma nner as per its commitment to transparency. Brazil looked forward to receiving 
Members' feedback either at the Meeting or bilaterally afterwards.  
1.1.2   Canada (G/ADP/N/1/CAN/4/Suppl.5 - G/SCM/N/1/CAN/4/Suppl.4 - 
G/SG/N/1/CAN/3/Suppl.3)  
6. The written question and r eply can be found in documents:  
• G/ADP/Q1/CAN/20 - G/SCM/Q1/CAN/20 – G/SG/Q1/CAN/4 – question from 
Hong Kong,  China  
• G/ADP/Q1/CAN/21 - G/SCM/Q1/CAN/21 – G/SG/Q1/CAN/5 – reply to from 
Hong Kong,  China2 
7. Canada  noted that it had enacted legislative and regulatory amendments in June 2022 to 
strengthen and improve access to its trade remedy system. Accordingly, first, anti -circumvention 
investigations may now be initiated where evidence discloses a reasonable indi cation that 
circumvention is occurring. Additional discretion is also provided for circumvention to be found where 
a change in trade patterns has been caused by the imposition of duties.  
8. Second, massive importation inquiries will now be conducted by the C anadian International 
Trade Tribunal ("CITT") in all anti -dumping and countervailing duty investigations, consistent with 
Article 10.6 of the Anti -Dumping Agreement, such an inquiry might result in retroactive duties. 
Changes were also made to provide that  foreign governments will be notified of a properly 
documented complaint, no later than seven days before the initiation of an anti -dumping 
investigation and 20 days before the initiation of a subsidy investigation.  
9. Third, trade unions would have the abil ity to file global safeguard complaints. Concurrent 
policy changes also provide trade unions with the right to file anti -dumping and countervailing duty 
complaints. In addition, injury assessments will now include greater consideration of workers' 
interest s. For example, impacts on terms and conditions of employment, such as hours worked, 
pension levels, training and safety, are now factors that the CITT may consider when assessing 
injury or threat of injury to the domestic industry in safeguard, anti -dumpi ng and countervailing 
duty inquiries.  
10. Finally, expiry reviews of all anti -dumping and countervailing duty orders will now be initiated 
within five years of such an order being made without the need for the CITT to first issue an expiry 
review notice and i nvite stakeholder comments as to whether an expiry review is warranted. The 
CITT has the ability to terminate any expiry review when it is not supported by domestic producers.  
11. Hong Kong, China  looked forward to receiving Canada's written replies.  
1.1.3   Colombia (G/SCM/N/1/COL/2)  
12. No written or oral questions were posed with respect to this notification.  
 
2 Circulated on 3 November 2022.  G/SCM/M/121  
 
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  1.1.4   United Kingdom (G/ADP/N/1/GBR/1/ Suppl. 13 - G/SCM/N/1/GBR/1/ Suppl. 12 - 
G/SG/N/1/GBR/1/ Suppl. 12, G/ADP/N/1/GBR/1/ Suppl. 14 - 
G/SCM/N/1/GBR/1/ Suppl. 13 - G/SG/N/1/GBR/1/ Suppl. 13, AND 
G/ADP/N/1/GBR/1/ Suppl. 15 - G/SCM/N/1/GBR/1/ Suppl. 14 - 
G/SG/N/1/GBR/1/ Suppl. 14) 
13. Written questions  and replies  with respect to the notification in document 
G/ADP/N/1/GBR/1/Suppl.13 - G/SCM/N/1/GBR/1/Suppl.12 - G/SG/N/1/GBR /1/Suppl.12 can be 
found in:  
• G/ADP/Q1/GBR/7 - G/SCM/Q1/GBR/7 - G/SG/Q1/GBR/9 – questions from the United States  
• G/ADP/Q1/GBR/8 - G/SCM/Q1/GBR/8 - G/SG/Q1/GBR/10 – replies to the United  States3 
14. The United Kingdom  referred to its statement made at the meeti ng of Committee on 
Safeguards indicating that it would provide its written answers as per the agreed procedures. In 
addition, the United Kingdom recalled that the notifications would be reviewed also at the Committee 
on Anti -Dumping Practices.  
15. The Committe e took note  of the notifications, questions, and statements.  
1.2  Review of notifications of new or amended legislation or regulations with outstanding 
written questions  
1.2.1   Saint Kitts and Nevis (G/ADP/N/1/KNA/1 – G/SCM/N/1/KNA/1)  
16. Written questions regarding this notification were posed and can be found in document:  
• G/ADP/Q1/KNA/1 – G/SCM/Q1/KNA/1 – questions from the United States  
17. Saint Kitts and Nevis was not present at the time. Oral answers were not provided at the 
meeting, nor had written answers been received to date.  
18. The Committee took note  of the notification and questions.  
2  NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE4 
A. WRITTEN QUESTIONS CONCERNING PREVIOUSLY REVIEWED LEGIS LATIVE 
NOTIFICATIONS:  
2.1  Cameroon (G/ADP/N/1/CMR/2 – G/SCM/N/1/CMR/2 – G/SG/N/1/CMR/2)  
19. Written questions with respect to this notification can be found in:  
• G/ADP/Q1/CMR/5 – G/SCM/Q1/CMR/5 – G/SG/Q1/CMR/5 – questions from the 
United  States  
20. Cameroon  was not present at the time. Oral answers were not provided at the meeting, nor 
had written answers been received to date.  
 
3 Circulated on 2 December 2022.  
4 Relevant deadlines for written follow -up questions and written answers regarding the notifications of 
legislation reviewed in the April 2022 meeting can be found in section 1 of document G/ADP/W/509 - 
G/SCM/W/586 - G/SG/W/25 5. G/SCM/M/121  
 
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  B. OUTSTANDING WRITTEN FOLLOW -UP QUESTIONS CONCERNING PREVIOUSLY 
REVIEWED LEGISLATIVE NOTIFICATIONS POSED UNDER THIS AGENDA ITEM AT 
PREVIOUS COMMITTEE MEETINGS:  
2.2  European Union (G/ADP/N/1/EU/3/Suppl.2 - G/SCM/N/1/EU/2/Suppl.2 and 
G/ADP/N/1/EU/3/Suppl.3 - G/SCM/N/1/EU/2/Suppl.3)  
21. The written follow -up questions can be found in document:  
• G/ADP/Q1/EU/15 - G/SCM/Q1/EU/15 – follow -up question s from the Russian Federation  
22. The European Union  did not wish to take the floor on this agenda item.  
23. The Russian Federation  noted that it would be more appropriate to discuss its questions at the 
meeting of the Committee on Anti -Dumping Practices.  
2.3  Ghana ( G/ADP/N/1/GHA/2 - G/SCM/N/1/GHA/2 - G/SG/N/1/GHA/2)  
24. Written follow -up questions were posed regarding this notification and can be found in 
document:  
• G/ADP/Q1/GHA/3 - G/SCM/Q1/GHA/3 - G/SG/Q1/GHA/3 – Submitted by the United States  
25. The Chair noted that the notification and the questions would be taken up in the Committee 
on Anti -Dumping Practices.  
26. Ghana  was not present at the time. Oral answers were not provided at the meeting, nor had 
written answers been received to date.  
27. The Chair, recalling the Committee's agreed procedures, informed Members that for new 
legislative notifications to be placed on the agenda of the spring 2023 meeting, they should be 
circulated in all three languages by 20 March 2023. Shortly after that date, the Secr etariat would 
circulate a document informing Members of all legislative notifications to be reviewed at the next 
meeting. Pursuant to paragraph 8 of document G/SCM/W/293/Rev.1, all unanswered written 
questions pertaining to new legislative notifications re viewed at the meeting, as well as the subject 
notifications, shall automatically be retained on the agenda of the next Committee meeting and on 
the agendas of subsequent Committee meetings until written answers are submitted.  
28. The Chair also recalled that t he legislative notification from Iceland would be considered under 
the first agenda item of the next meeting of the Committee. Written questions concerning that 
notification as well as any other new legislative notifications for the spring 2023 meeting of the 
Committee should be submitted to the Member concerned and to the Secretariat by 11 April  2023.  
29. In order to place previously -reviewed legislation on the agenda of the spring meeting for 
further review, written questions must be submitted to the Member c oncerned and the Secretariat, 
not later than 20 March 2023; and written answers to such questions must be submitted to the 
Member concerned and the Secretariat, not later than 17 April 2023. The Secretariat would circulate 
the usual triple -symbolled docume nt containing all the relevant deadlines shortly after the meeting.5 
30. The Chair expressed concern that some Members had yet to submit any notification concerning 
legislations. She underlined the importance of these notifications in terms of transparency an d 
recalled that for many Members all that would be required was a single nil notification. For any 
Members that conducted CVD investigations but had not yet notified their legislation, it was all the 
more important for the Committee to have the opportunity  to review and ask questions about that 
legislation. Therefore, the Chair encouraged all Members that had not yet made a legislative 
notification to do so as promptly as possible.  
31. The Chair referred to the document G/SCM/N/18/Add.57 which contained the lat est revision 
of the list of authorities competent to initiate and conduct investigations within the meaning of 
Article  25.12 of the SCM Agreement and invited all Members with such an authority to submit the 
 
5 Relevant deadlines can be found in Section 1 of document G/ADP/W/510 - G/SCM/W/587 - G/SG/W/256.  G/SCM/M/121  
 
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  required notification pursuant to Article 25.12 o f the SCM Agreement, or to review and update as 
necessary their previously -submitted notifications.  
32. The Committee took note  of the notifications, questions, and statements.  
3  SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ARTICLE  25.11) – 
G/SCM/N/392 AN D G/SCM/N/392/ SUPPL. 1 
33. Before taking up the semi -annual reports submitted by Members, the Chair referred to her 
email dated 17 October 2022 and recalled that the Secretariat would make a presentation about the 
new Trade Remedies Data Portal, which was an on line tool that would provide enhanced access to 
the upgraded databases on anti -dumping and countervailing duty actions.  
34. The Chair recalled that document G/SCM/N/392 and G/SCM/N/392/Suppl.1 had invited all 
Members to submit their semi -annual reports under A rticle 25.11 of the SCM  Agreement of 
CVD actions taken during the period 1 January through 30 June  2022. 
Document  G/SCM/N/392/Add.1/Rev.1 provided the current status of Members' reporting for that 
period. Paragraph 1 of the document listed those Members re porting CVD actions during the period. 
Paragraph 2 listed Members that had notified having taken no CVD action during the period. 
Paragraph 5 of the document listed the 47  Members that had submitted a one -time notification that 
they had no investigating au thority, had taken no countervailing actions to date, and did not 
anticipate taking any such actions in the foreseeable future.  
35. One-time notifications served a useful transparency function, as they assisted non -active 
Members to meet their notification req uirements in a streamlined way. Any eligible Member that had 
not already done so thus was urged to submit a one -time notification. The Secretariat was ready to 
assist any Member in this regard.  
36. Unfortunately, as listed in paragraphs 3 and 4 of the document , a number of Members had 
not submitted their semi -annual reports. The Chair urged those Members to submit their reports as 
soon as possible.  
37. No comments or questions were raised concerning the semi -annual reports of Australia, 
Canada, China, Colombia, Tür kiye, and the United Kingdom.  
38. On the semi -annual report of Brazil , Indonesia  requested Brazil to reconsider the subsidy 
margin calculation and to take into consideration the statements made by the Government of 
Indonesia at the public hearing meeting.  
39. With respect to the provision of nickel ore for less than adequate renumeration  ("LTAR"), 
Indonesia reiterated that the Government of Indonesia had never entrusted or instructed any 
mandate to the nickel ore producers to sell the nickel ore at LTAR to the downstream industry. As 
such, neither of the Indonesian nickel ore producers co uld be considered as a public body or a 
government -entrusted body within the meaning of the SCM Agreement.  Indonesia also recalled the 
opinion of the Panel and Appellate Body in US – Export Restraints  (DS194), which had determined 
that export restraints di d not constitute a financial contribution under the SCM Agreement.  
40. With respect to the provision of coal and coke for LTAR, Indonesia indicated that the 
Government of Indonesia did not maintain any obligation upon domestic coal producers concerning 
sales a nd transaction price to Indonesian stainless -steel industries.  
41. With respect to the provision of land for LTAR, Indonesia stated that it was important to 
correctly define the nature of ownership of the land. In principle, individual ownership of the land 
was acknowledged in Indonesia. As also presented during the verification visit, Indonesia Morowali 
Industrial Park had acquired the pieces of land from local people through independent negotiation 
with the previous landowners who were private parties. The G overnment of Indonesia only provided 
land administrative services through the local land office to formalize the rights over the land. The 
Nilai Jual Objek Pajak (NJOP) represented the benchmark of land price for the purpose of land tax 
collection. NJOP in  a certain area was established and adjusted by the local government revenue 
office taking into account the prevailing land price in the area. NJOP did not constitute the benchmark 
price for the land transaction; therefore, there was no countervailable iss ue over the land.  G/SCM/M/121  
 
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  42. Brazil  requested Indonesia to send its statement in written form which would be taken into 
consideration, accordingly. Brazil also indicated that it had received Indonesia's views in the case 
file which would be taken into consideration in its final determinatio n. It also thanked Indonesia for 
attending the hearing meeting.  
43. On the semi -annual report of the  European Union , Türkiye  expressed its concerns over the 
partial interim review proceeding on rainbow trout. The European Commission published a disclosure 
and two additional disclosure documents. Türkiye submitted its views regarding the additional final 
disclosure on 27 September 2022. In the second additional final disclosure dated 6 October 2022, 
however, the European Commission had neither accepted the point s raised by Türkiye nor provided 
any reasons for the rejection of its arguments. The points raised by Türkiye were crucial and it was 
the duty of an investigating authority to examine and respond to the requests of the interested 
parties. Türkiye, therefor e expected the European Commission to examine its arguments during the 
course of the review procedure.   
44. Indonesia  reiterated its concerns over the countervailing duties applied by the European Union 
against Indonesian stainless steel cold -rolled products.  According to Indonesia, the European Union 
misinterpreted the Indonesian mining policies as a financial contribution and neither the mandate to 
process the raw material domestically nor the export restriction of raw minerals should be 
interpreted as a fin ancial contribution. This was contrary to the prevailing dispute settlement practice  
such as in the panel in United States – Export Restraints  which had concluded that an export restraint 
could not constitute government entrustment or direction for the pro vision of goods in accordance 
with Article 1.1(a)(1)(iv) of the SCM Agreement.  
45. The European Union deviated from Article 1.1(a)(1) of the SCM Agreement by taking the 
cross-country financing as a form of countervailable subsidy. It was also wrong to use Art icle 11 of 
the ILC Articles on State Responsibility for International Wrongful Acts in interpreting 
Article  1.1(a)(1) of the SCM Agreement to broaden the definition of "a government", although the 
term was clear and did not allow another interpretation tha t there was a dual government. Indonesia 
also recalled the opinion of the Appellate Body in India – Patents (US)  that set a guideline concerning 
interpretation by stating that "principles of interpretation neither require nor condone the imputation 
into a treaty of words that are not there or the importation into a treaty of concepts that were not 
intended".  
46. By invoking an interpretation that "by a government" in Article 1.1(a)(1) of the 
SCM Agreement might include an attribution to other governments (the G overnment of China) in 
provision of subsidies, the investigating authority had not only extended the meaning of the term, 
but also added words that were not there or not intended. In this respect, Indonesia argued that the 
"cross -country subsidy" concept i nduced by the investigating authority violated the Article 1.1(a)(1) 
of the SCM Agreement.  
47. Indonesia believed that all Members, including the European Union, had to adhere to the 
existing rules and procedures of the SCM Agreement in applying countervailab le duties. It stood 
ready to seek redress on this issue in case the European Union would decide to maintain its measure 
despite the obvious violation of the SCM Agreement.  
48. Indonesia also commented on the countervailing duty investigation by the European Un ion on 
fatty acid products. Indonesia noted that on 24 August 2022, KLK Emmerich GmBH, which was a 
sampled European company, had submitted its letter to the Commission expressing its opposition 
to the imposition of anti -subsidy measures against imports of fatty acids from Indonesia since the 
imposition would be against the interests of the company and the European Union. On 
3 October  2022, the petitioner had submitted its letter to the Commission informing that they had 
decided to withdraw their complaint. The withdrawal of the complaint by the petitioner would mean 
that no complainant existed in the investigation and any injury examined by the investigating 
authority would not be representative. Indonesia requested the European Union to clarify why the 
investigation had not been terminated yet.  
49. China  reiterated its concerns over the European Union's distortive interpretation of the 
SCM Agreement. The European Union had departed from the clear text of the SCM Agreement in 
several countervailing duty investiga tions by evoking cross -border subsidies, a concept that was not 
derived from the SCM Agreement, but rather created by the European Union. Article 1.1(a)(1) of G/SCM/M/121  
 
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  the SCM Agreement clearly referred to a financial contribution by a government or any public body  
within the territory of a Member. In cross -border subsidy, however, the European Union accepted 
normal practices of overseas investment activities, such as non -binding bilateral economic 
cooperation in country A and country B, overseas investments made by private corporations in 
country A to country B, and finances secured by such corporations in the banks in country A in 
overseas investments, as a subsidy. By this logic, any normal bilateral cooperation and overseas 
investment could be treated as subsidies and be subject to countervailing measures. Such practices 
clearly depar ted from the basic principles of the SCM  Agreement and the European Union's actions 
were inconsistent with the SCM  Agreement. Such actions would not only affect the legitimate interest 
of corporations and Members involved disrupting normal bilateral econom ic cooperation and 
overseas investments, but also would be detrimental to the sustainable and inclusive global 
economic growth. China requested the European Union to correct its problematic practices, 
terminate all measures concerning cross -border subsidiz ation and stop conducting similar 
investigations.  
50. In response to Türkiye, the European Union  noted that since the investigation on trout was 
still ongoing it would not be able to go into details. The European Union appreciated the cooperation 
by the Govern ment of Türkiye throughout the investigation and had fully taken into consideration 
the submissions and the arguments that had been put forward. It would continue to engage with 
the Government of Türkiye until the end of the proceeding. The European Union was fully confident 
that its decisions were fully in line with the rules of its basic CVD legislation as well as the WTO rules 
and jurisprudence. If the Government of Türkiye disagreed with the final decision, it could challenge 
the regulations either befo re the European courts or before the WTO. The detailed explanations on 
whether and how the European Union took into account the arguments submitted by the Government 
of Türkiye, would be contained in the definitive regulation.  
51. In response to Indonesia's c omments regarding the investigation on cold -rolled stainless steel, 
the European Union referred to its final regulation, where all the points raised by Indonesia were 
addressed. The final regulation was very detailed with over 150 pages which was a record in terms 
of legal briefing. In that regulation, the European Union explained the applicable rules that were 
underpinning the decision leading to the imposition of the definitive measures. The European Union 
was confident that those measures were fully in l ine with both the domestic and WTO rules. It also 
referred to an ongoing challenge before the European courts about those measures in which all those 
points have been mitigated reiterating its confidence that the decision would withstand the 
judgments of t he European courts.  
52. In response to the case on fatty acids, the European Union stated that it would not comment 
on the specifics of that investigation as it had been initiated very recently and was still ongoing. The 
European Union invited the Government o f Indonesia to submit all of its presentations in the context 
of that proceeding. The European Union would take them into account and if Indonesia did not agree 
with the final decision, they could be readdressed either through the European courts or WTO.  
53. Noting that China's comments were linked to Indonesia's statement on the cold -rolled 
stainless steel case, the European Union reiterated that it was confident that those measures were 
fully in line with the European Union and WTO rules. There were several o ngoing cases on those 
measures before the European courts, the first of which was at an advanced stage in the 
General  Court of the European Union. The European Union was confident that its measures would 
withstand the legal scrutiny and of course it would fully implement the judgments.  
54. On the semi -annual report of India , Malaysia  expressed its concerns regarding the ongoing 
countervailing duty investigation concerning saturated fatty alcohols originating from Malaysia, 
Indonesia, and Thailand for which the Directorate -General of Trade Remedies ("DGTR") issued the 
disclosure statement on 22 September 2022. Based on its submission to the DGTR, Malaysia 
reiterated that the pertinent issues and the alleged programmes would require further examination 
and reconsi deration.  
55. According to Article 15.5 of the SCM Agreement "[i]t must be demonstrated that the subsidized 
imports are through the effect of subsidies causing injury within the meaning of this Agreement. The 
demonstration of a causal relationship between the  subsidized imports and the injury to the domestic 
industry shall be based on an examination of all relevant evidence". Countervailing measures should 
not be imposed unless it was determined that there were subsidized imports, injury to domestic 
industry a nd a causal link between the subsidized imports and the injury. However, Malaysia was G/SCM/M/121  
 
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  not clear on the basis of the proposed imposition of subsidy margins outlined by the DGTR for the 
remaining alleged programmes, and it was of the view that the imposition  of subsidies margin under 
remaining legislative programmes would be inconsistent with Article 15.5 of the SCM Agreement, as 
there would be no causal link between the alleged subsidized imports and the injury suffered by the 
petitioner.  
56. Malaysia also indic ated that the findings of the DGTR had not reflected submissions or evidence 
provided by the Government of Malaysia or the cooperating Malaysian producers and exporters. In 
addition, India had not provided sufficient time and opportunity for interested par ties to provide 
their comments to the disclosure document. The Government of Malaysia had received the disclosure 
statement via email from the DGTR on 22  September 2022 and had been given time to respond by 
27 September  2022.  
57. According to Article  12.8 of t he SCM Agreement, "[t]he authorities shall, before a final 
determination is made, inform all interested parties of the essential facts under consideration, which 
form the basis for the decision whether to apply definitive measures. Such disclosure should t ake 
place in sufficient time for the parties to defend their interests". Based on this, Malaysia concluded 
that all the facts that had rendered the allegation of subsidized imports of saturated fatty alcohols 
from Malaysia were non -existent. Therefore, any  injury claimed by the domestic industry in India 
should not be linked to unsubsidized imports from Malaysia. Thus, for these reasons, Malaysia 
requested India to immediately terminate the investigation.  
58. In response, India stated that it had noted Malaysi a's concerns which would be conveyed to 
the DGTR for appropriate action.  
59. On the semi -annual report of the  United States , the Russian Federation  reiterated its 
concerns about certain practices of the Department of Commerce ("USDOC"), which had gained 
system ic nature since all or some of those practices were being applied in every investigation 
concerning Russian products.  
60. The Russian Federation noted that the USDOC countervailed purchases of certain products by 
Russian exporters which had nothing to do with  subsidization. The USDOC considered the entities 
selling those products as public bodies due to alleged meaningful control over them by the State. In 
its analysis, the USDOC had examined the level of shares in the entity owned by the State, presence 
of State officials in its managing bodies, and involvement of the entity in State policies. The outcome 
of examining these factors has become the basis for its other determinations. Those factors would 
not prove that the State actually was controlling the entit y. Establishing their presence would not 
equal to an illustration that the entity possessed, exercised and was vested with governmental 
authority, which was vital for public body determination. The exact presence of governmental 
authority has never establi shed by the USDOC. As a result, it designated the entities as public bodies 
contrary to the WTO jurisprudence, which would make its determinations on subsidization 
inconsistent with Article 1 of the SCM Agreement.  
 
61. The Russian Federation also noted the US DOC's determination of de facto  specificity in cases 
in which there was actually no specificity. It stated that the USDOC looked at the number of 
recipients of the alleged subsidy and compared it to the whole number of enterprises in the 
jurisdiction of th e granting authority and determined that the recipients were limited in number. 
Commercial realities in the economy in question, as well as the absence of any plan or scheme 
limiting the number of recipients, have been disregarded in those determinations. Such methodology 
would enable establishing de facto  specificity almost by default implying that the subsidy would be 
specific in absolutely all cases when it was not used by every economic operator. This would be a 
too-loose interpretation of Article 2 of the SCM Agreement.  
62. Noting that these were just some of the USDOC's practices which were a matter of systemic 
concerns, the Russian Federation referred to its previous statements in the Committee. It reminded 
the United States of the requirements of the SC M Agreement and WTO jurisprudence, which had to 
be strictly observed. The Russian Federation also noted that the USDOC had also used those 
practices in the countervailing duty investigation regarding imports of phosphate fertilizers from the 
Russian Federa tion. The investigation had resulted in a countervailing measure which was currently 
under an administrative review. The Russian Federation urged the United States to use the review 
to bring that measure into conformity with its WTO  obligations.  G/SCM/M/121  
 
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  63. The Europe an Union  expressed its concerns regarding the administrative review and 
Section  129 proceeding of anti -subsidy measures on ripe olives from Spain. The USDOC had issued 
its preliminary determinations in the third administrative review, as well as in the dom estic 
proceeding concerning the implementation of the WTO Panel Report in the Olives Case, in 
Section  129 proceeding. With respect to the Section 129 proceeding, the European Union drew the 
United States' attention to its submission filed on 11 October 202 2. The European Union was 
concerned that the preliminary determination did not appropriately address the recommendation of 
the WTO Panel, in particular, as regards panel findings on pass -through. The European Union was 
also concerned that no steps have bee n taken so far to make the necessary legislative changes to 
fully comply with the WTO ruling. The European Union requested the United States to provide 
information as to the plans to implement any specific actions on that issue.  
64. The European Union expected  that the recommendations of the WTO Panel would be fully and 
timely implemented by the expiration of the reasonable time for compliance as agreed by the parties. 
This was all the more important as the non -compliant measures were still in place and the exp orting 
producers were burdened with yearly administrative reviews, the third of which was currently 
ongoing, while the fourth one had already been initiated.  
65. China  referred to its previous statements about the Export Buyer 's Credits Program noting 
that the Export -Import Bank of China has never offered those credits to the importers in the 
United  States. In addition, the petitioners have never provided substantial evidence to prove that 
the Chinese companies or their importers in the United States had benefited from this program. The 
United States should stop applying rules of Adverse Facts Available ("AFA") to increase the 
countervailing duties on Chine se products.  
66. China recalled that according to Article 12.7 of the SCM Agreement, preliminary and final 
determinations might be made on the basis of the facts available, only if an interested Member or 
interested party refused access to, or otherwise would not provide, necessary information within a 
reasonable period or would significantly impede the investigation. In the CVD investigations against 
Chinese products, the Chinese responding companies and their importers made their best efforts to 
provide the e vidence which was enough to prove that the importers had never received 
Export  Buyer 's Credits, while the allegations done by the petitions regarding this program were 
nothing more than unfounded conjectures and simple assertions, without substantial evide nce. For 
that reason, the USDOC should not ignore the sufficient evidence submitted by Chinese companies 
and their importers and presume that the Export Buyer 's Credits Program existed and has been used 
by Chinese companies and their importers. The evidenc e provided by Chinese companies and their 
importers has shown the facts more available than the conjectures and presumption made by the 
USDOC and petitioners. China also noted that the fact that importers did not use this program had 
been repeatedly confir med by domestic judicial decisions in the United States.  
67. According to Article 12.11 of the SCM Agreement, the investigating authorities shall take due 
account of any difficulties experienced by interested parties, in particular small companies, in 
supplyin g information requested, and shall provide any assistance practicable. In the United States' 
countervailing duty investigations, the importers of the Chinese responding companies had made 
their best to cooperate in the proceedings and submitted the notariz ed affidavits and other evidence 
to prove that they had never received the Export Buyer 's Credits directly or indirectly from China. 
The USDOC, however, kept asking for massive financial information from the importers, many of 
which were small companies, c reating massive burden of proof on the Chinese responding companies 
and their importers, disregarding the requirement of Article 12.11 of the SCM Agreement.  
68. China urged the United States to treat the Export Buyer 's Credits Program fairly and 
objectively, a nd to proceed with its countervailing duty investigation consistent with the 
SCM Agreement correcting its investigation practice accordingly.  
69. In response to the European Union's comments with respect to ripe olives from Spain, 
the United States  noted that the USDOC  was currently conducting the third administrative review of 
the countervailing duty order covering the period 2020 and had issued the preliminary results on 
30 August  2022, calculating preliminary countervailing duty rates between 4.58% and 8.32% . The 
final results of the review were scheduled to be announced on 5 January 2023 with the possibility 
that this date could be extended. Since the proceeding was still ongoing, the United States would 
not be able to provide further details. However, it re iterated that interested parties, including the G/SCM/M/121  
 
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  European Union and the Government of Spain, could submit comments to the record of the 
proceeding which would be considered properly.  
70. With respect to the European Union's comments on the ongoing litigation co ncerning that 
case, on 14  September  2022, the United States Court of International Trade had upheld the USDOC's 
finding and its second remand determination that grants under the basic payment scheme of Pillar  1 
of the Common Agricultural Policy or BPS prog ramme, were de facto  specific, and that Section  771.B 
of the Tariff Act of 1930, the special agricultural provision of the United States countervailing duty 
law applied. In its secondary remand determination, the USDOC had continued to countervail certain 
subsidy programmes provided to growers in addition to the processers of olives. The period to appeal 
this decision had not yet lapsed and since it was an ongoing litigation the United States would 
hesitate to comment further.  
71. The United States also indicat ed that the USDOC was conducting a Section 129 proceeding to 
comply with the recommendations and rulings of the Dispute Settlement Body Panel in DS577. On 
23 September 2022, the USDOC had issued its preliminary Section 129 determination where it had 
found that the BPS programme was de facto  specific, and that Section 771.B continued to apply to 
the case. In addition, the USDOC had preliminarily revised the subsidy rate of one of the mandatory 
respondents pursuant to the DSB findings. The United  States expec ted to release the final 
Section  129 determination in early 2023. Noting that this was an ongoing proceeding, the 
United  States referred the European Union to the preliminary decision memoranda where the USDOC 
had explained its findings in more detail.  
72. In response to China, the United States noted that the USDOC only used AFA when it was fully 
justified, consistent with the United States' law and its WTO obligations and when there was a failure 
on the part of the responding companies or the government to fu lly respond to the questionnaires 
to the best of their ability.  With respect to the export buyer's credit programme, the USDOC has 
repeatedly explained that the Government of China ("GOC") had never fully provided the requested 
information needed to analys e the programme. Specifically, the GOC had failed to provide the 
relevant legal measures for the programme as well as the list of third -party banks which was 
necessary to fully understand the nature and operation of the programme. The GOC's decision to 
withhold this information impeded and prevented a complete verification of that programme.  
73. In response to China's comments regarding certain decisions made by the United States Court 
of International Trade, the United States noted that the decisions of the Co urt on that programme 
had been mixed to date. Nevertheless, the USDOC has developed supplemental questionnaires to 
request additional financial information from Chinese companies in certain instances where those 
respondents voluntarily provided certified s tatements from all of their customers in the United States 
indicating that they had not used the programme. In certain cases, this information was deemed 
sufficient for the USDOC to find that the programme had not been used by the responding 
companies. In other cases where company respondents did not provide complete and full responses, 
the USDOC continued to find that the programme has been used because the attempts by the 
company respondents were insufficient to overcome the myriad gaps that existed in th e record due 
to the GOC's refusal to provide requested and necessary information. The USDOC has reiterated in 
recent decisions that the GOC was a critical party in providing the necessary documentation 
regarding the operation of that programme and without such information, the GOC's 
non-cooperation would continue to significantly impede the USDOC's investigation.  
74. China  stated that in every countervailing duty investigation the USDOC emphasized that the 
GOC had not cooperated enough with respect to the Expor t Buyer 's Credits Program. The purpose 
of AFA was to fill the information gaps not to punish the cooperating parties. In each case the GOC 
has tried its best to fill out the government questionnaire for this programme providing the relevant 
information fro m banks as well as the laws and regulations. The USDOC, however, has ignored that 
cooperation. China reiterated that although the Chinese responding companies and their importers 
provided enough information to prove that they had never benefited from this programme the 
USDOC has applied AFA methodology to ignore their information, which was unacceptable.  
75. The European Union  thanked the United States for its explanations and looked forward to 
following further developments on the implementation of the panel o utcome as well as the 
administrative reviews.  G/SCM/M/121  
 
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  76. With respect to the semi -annual report of Viet Nam , Indonesia  expressed concerns over the 
imposition of an anti -circumvention measure by Viet Nam on the importation of cane sugar from 
Indonesia. This measure wa s preceded by the imposition of countervailing and anti -dumping duties 
against importation of cane sugar from Thailand on 16 June 2021. Viet Nam had initiated an anti -
circumvention investigation on 21 September 2021 and imposed an anti -circumvention measur e via 
Decision No. 1514/QD -BCT. The measure was composed of a countervailing duty (4.65%) and an 
anti-dumping duty (42.99%) against the imports of cane sugar from Indonesia.  
77. Indonesia requested clarification from Viet Nam on how the imposition of counterv ailing and 
anti-dumping duties would be justified by relevant WTO Agreements. Article 10 of the 
SCM Agreement clearly states that "countervailing duties may only be imposed pursuant to 
investigations initiated and conducted in accordance with the provision s of this Agreement…" In this 
regard, Indonesia requested Viet Nam to explain the absence of an anti -subsidy investigation and 
the determination of a 4.65% countervailing duty.  
78. Indonesia also noted that although one of the mandatory requirements was the ev idence of 
injury to Viet Nam 's domestic sugar industry, the facts presented by the Vietnamese Authority had 
showed a significant increase in net profit, revenue, return on assets, price, and other economic 
indicators of the Vietnamese domestic industry dur ing the period of investigation. Based on those 
facts, Indonesia was of the view that Viet Nam 's domestic industry was extraordinarily healthy and 
accordingly requested Viet Nam to clarify (1) the basis in determining injury for domestic industry, 
while fe w integral economic indicators had showed significant increase during the POI; and (2) the 
consistency of the injury determination with Article 15 of the SCM Agreement. Indonesia also 
indicated that it would reserve its right to undertake all necessary act ions to protect and safeguard 
its legitimate interests as provided by the WTO rules.  
79. In response, Viet Nam  stated that it had conducted the relevant anti -circumvention 
investigation in an objective and transparent manner in compliance with its domestic laws and 
international commitments. Accordingly, it had informed Members of the investigation in full 
compliance with Article 16.4 of the Anti -Dumping Agreement and articl e 25.11 of the SCM Agreement 
in its relevant semi -annual reports. The investigation was to determine whether there was a 
circumvention of existing  anti-dumping and countervailing duties on the imports of sugar from 
Thailand. According to the final determin ation, one of the companies was eligible for the exclusion 
from the imposition of anti -circumvention measures. Other Indonesian producers or exporters were 
not eligible due to significant inconsistence or misleading information in the questionnaire respons es. 
Viet Nam noted that the final determination included a detailed analysis on each participating 
Indonesian producer or exporter. Viet Nam was also open to further bilateral exchange with 
Indonesia.  
80. With respect to semi -annual reports that the Committee  had not previously reviewed due to 
late submission and circulation, neither comments were made, nor questions were posed by any 
Member.  
81. The Committee took note  of the semi -annual reports, the statements made, the questions 
posed, and the answers provided . 
4  PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: NOTIFICATIONS 
(ARTICLE 25.11)  
82. The Chair reported that since the Committee's April 2022 regular meeting, notifications under 
Article 25.11 of the SCM Agreement with respect to preliminary and final CVD ac tions had been 
received from Australia, Brazil, Canada, the European Union, India, Mexico, Türkiye, the 
United  Kingdom, and the United States. Those notifications were listed in documents G/SCM/N/391; 
G/SCM/N/393; G/SCM/N/394; G/SCM/N/395/Rev.1; G/SCM/N/39 6; and G/SCM/N/397. Since the 
document G/SCM/N/397 was circulated, Australia, the European Union and India had submitted such 
a notification which would appear in the next list to be circulated by the Secretariat.  
83. The European Union  expressed its concerns regarding the expiry review investigation by 
China  on potato starch  from the European Union. The Ministry of Commerce of China ("MOFCOM") 
had ignored the Commission 's duly justified request not to initiate the expiry review. As explained 
in detail during the pre -initiation consultations held in September 2022, which was followed by G/SCM/M/121  
 
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  written comments, the European Union's programs under investigation namely  the common 
agricultural policy basic payments scheme ("CAP") and greening scheme were not specific. The 
payments made under the CAP voluntary couple  support were negligible and MOFCOM had failed to 
conduct a pass -through analysis required under Article 11.3 of the SCM  Agreement in both the 
original investigation and the previous expiry review. In addition, the injury indicators showed  a 
positive development, and the domestic industry did not seem to be suffering injury due to the 
allegedly subsidized imports nor was it  likely that such injury would recur. The recent WTO panel 
ruling and the DS577 case on the Spanish olives, confirmed the non -specificity of the CAP direct 
payments as well as the need to conduct a pass -through analysis. The Panel concluded that the 
United  States had erroneously found that the European Union's basic payment scheme subsidies 
were targeted at olive producers and that the pass -through to processors  was not demonstrated. In 
a similar anti -dumping and anti -subsidy case regarding imports of refin ed sugar, the Canadian 
authorities had concluded in March 2022 that decoupled support to farmers under the CAP was 
non-specific and non -actionable and therefore not countervailable. In this regard, the measures 
imposed by MOFCOM were unfounded and should b e discontinued. The European Union also noted 
that it would  cooperate in the expiry review investigation providing thorough replies to show once 
again that the CAP decoupled payments were not specific and not countervailable. Given the complex 
nature of t he questionnaires, the different government levels involved in the reply and the need to 
translate the reply, the European Union expected MOFCOM to grant a deadline extension upon the 
Commission's request.  
84. In response, China  recalled that the expiry revie w had been initiated upon the domestic 
industry's application on 15 September 2022 and no preliminary or final determination had been 
made so far. As the investigating authority of China, MOFCOM was obliged to review the application 
and to  initiate  an inve stigation in accordance with the law, if the requirements  were met. Following 
the application, the investigating authority had invited the European Union for consultations and 
after examining the claims and evidence as well as the comments of the European Union during 
consultation, the investigating authority had considered that the conditions for initiation existed in 
accordance with the Chinese law and the WTO rules. The interested parties had registered to 
participate in the investigation and the Europea n Commission had also submitted its comments. 
China encouraged the interested parties to cooperate with the review as the complete and the 
accurate information would be the most important basis for the determination. During the 
investigation, the Chinese a uthority would properly protect the interest of the parties, provide a mple 
opportunities to submit information and comments, take all the comments into serious consideration 
and make an objective final determination in accordance with Chinese laws and WTO rules.  
85. The Committee took note  of the notifications and statements made.  
5  ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR THE ELIMINATION OF 
EXPORT SUBSIDIES  
86. The Chair recalled that Members that had been granted extensions under Article 27.4 pursuant 
to the procedures in WT/L/691 were required, under paragraph 2(c) of the procedures, to submit 
transparency notifications in respect of each year of the final two -year phas e-out period, i.e., 
calendar years 2014 and 2015. The deadline for the notification pertaining to 2014 was 
30 June 2015. A reminder to this effect had been circulated in document G/SCM/N/290/INF.  
87. Antigua and Barbuda, Belize, Costa Rica, Dominica, Dominican  Republic, El Salvador, 
Guatemala, Jamaica, Jordan, Mauritius, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, and 
Saint Vincent and the Grenadines had submitted these notifications, which had been circulated in 
the G/SCM/N/290 series.  
88. Furthermore, g iven that 2015 was the final year of the two -year phase -out period pursuant 
to the previously mentioned procedures, the Members with extensions needed to have completed 
the elimination of their export subsidies by 31 December 2015. They also had to provide  a final 
transparency notification in respect of calendar year 2015 not later than 30 June 2016. A reminder 
concerning that final round of Article 27.4 –related notifications had been circulated in document 
G/SCM/N/299. The  Secretariat circulated a room doc ument indicating the current status of 
notifications and of actions reported by Members with extensions under Article  27.4.6 
 
6 RD/SCM/36/Rev.6.  G/SCM/M/121  
 
- 14 - 
 
  89. To date, 15 of the beneficiary Members out of a total of 19 had submitted their final 
transparency notifications which had been ci rculated in the G/SCM/N/299 series. The Chair reminded 
other four Members with extensions, namely, Barbados, Fiji, Panama, and Uruguay to submit their 
final transparency notifications as soon as possible. The deadline for the elimination of the export 
subsidies had been more than six years earlier while for submitting the final notification had been 
almost six years earlier. She emphasized the importance for the system that both the Members 
benefit from extensions complete their compliance with the correspo nding substantive and 
transparency obligations.  
90. New Zealand  strongly emphasized the importance of notifications under this agreement and 
its key role in enhancing transparency. New Zealand requested to keep this item on the agenda until 
all notifications w ould become complete and encouraged those Members to submit their outstanding 
notifications before the next meeting.  
91. The United States  echoed New Zealand's comments noting that this was very important as it 
reflected the agreement between developed and dev eloping Members as an ideal solution to a 
difficult problem.  It also urged the remaining four Members to provide their final transparency 
notifications.  
92. The Chair noted that the Committee would revert to that issue at the next meeting.  
93. The Committee took n ote of the statements made.  
6  IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT  
94. The Chair recalled that since the request of the Chairman of the Trade Policy Review Body in 
spring 2009, the Committee had been discussing, at formal and informal meetings, "ways to improve 
the timeliness and completeness of notifications and other information flo ws on trade measures". 
The substance of those discussions was reflected in the minutes of the previous meetings.  
95. The Chair recalled that at Committee's April 2022 meeting a number of Members had indicated 
their willingness to continue discussions on ways t o improve timeliness and completeness of 
notification obligations under the SCM Agreement, with the notification of subsidies being the most 
fundamental. In this regard, there were two topics to cover under this agenda item, (i) the status 
of Members' noti fications of subsidies and (ii) the United States' proposal regarding a written process 
for questions and answers under Articles 25.8 and 25.9 of the SCM Agreement.  
96. Regarding the status of subsidy notifications, the Chair noted that the Secretariat had 
prepared and updated a background note at the request of Members, providing a snapshot of the 
level of compliance with the various notification obligations under the SCM Agreement since 1995, 
the most recent of which had been circulated in document G/SCM/W/54 6/Rev.13.  
97. The Chair noted that in September 2022 she sent individual reminder letters to the delegations 
of those Members who had at least one pending new and full subsidy notification. In those letters, 
she had requested those delegations to submit their  pending notifications as soon as possible 
encouraging them to seek technical assistance from the Secretariat if needed.  
98. Despite all the efforts and calls, compliance with the obligation to notify subsidies 
unfortunately remained significantly low and the  chronic low compliance with this fundamental 
transparency obligation constituted a serious problem in the proper functioning of the Agreement. 
Eighty -nine Members had not yet made their 2021 new and full subsidy notification. 
Seventy -six Members had not m ade their 2019 new and full subsidy notification, although the 
deadline was more than three years earlier. Further, sixty -five Members still had not made their 
2017 notifications, which were due five years earlier. Many of those Members either had never 
notified or had done so only in the distant past.  
99. The Chair invited the Members that had not yet submitted their 2021 notifications to provide 
an update to the Committee on their progress in preparing those notifications. No such delegation 
took the floor.  G/SCM/M/121  
 
- 15 - 
 
  100.  The Chair urged Members that had not yet submitted their notifications to do so and recalled 
that the Secretariat continued to be available for enquiries about compliance with notification 
obligations. The Secretariat had assisted many Members in the past and Members finding themselves 
unable to comply with their obligations were encouraged to consult the Secretariat.  
101.  The United Kingdom  thanked the Secretariat for its continued work in monitoring compliance 
with notification obligations. Reiterating the im portance of notifications for the effective functioning 
of the SCM Agreement, the United Kingdom expressed it concerns over the low number of 
notifications. The United Kingdom also recalled that the agenda item referred to not only the 
timeliness but also the completeness of notifications; therefore, Members could not be considered 
to have met their obligations if their notification omitted a large proportion of their subsidies. For 
example, the support provided through state enterprises was generally not b eing notified, despite 
OECD research showing that this type of support was both common and could have a significant 
impact on markets. The United Kingdom found it difficult to believe that none of that support would 
qualify as a subsidy that should be noti fied under the SCM Agreement. It recognized that completing 
notifications was a resource -intensive exercise; however, attempting to monitor unnotified subsidies 
was also an extremely resource -intensive exercise. The United Kingdom would view timely and 
complete notifications as a way of ensuring that all Members, and not only those with the resources 
to conduct detailed research, would be able to make use of the SCM Agreement and to assess 
potential trade effects of subsidies. It thanked all Members who had  submitted their 
2021 notifications calling on those who had not to do so as soon as possible and to include the full  
range of  relevant subsidies. The United Kingdom also encouraged Members to seek support from 
the Secretariat where needed indicating that it would welcome reflections from Members on ways to 
improve the notification regime . 
102.  New Zealand  was of the view that timely and complete notifications were crucial to ensuring 
an enhanced transparency and effective monitoring within the WTO and the globa l trading system. 
It was concerned that the numbers of notifying Members had fallen considerably in recent years and 
the chronic non -compliance represented a serious problem for the proper functioning of the 
SCM Agreement. New Zealand appreciated that capacity constraints —and particularly as a result of 
COVID -19 and other ongoing pressures — could impact Members' ability to complete this resource -
intensive process. However, it encouraged Members experiencing such difficulties to reach out , so 
that the Committee could consider how Members or the Secretariat could assist best.  
103.  Australia  continued to attach considerable importance to the transparency of subsidy 
programs. The notification of subsidies was a key obligat ion under the SCM Agreement and the 
chronic low compliance with this obligation was of continuing and deep concern. It acknowledged 
the existence of genuine capacity constraints, but many non -notifying Members had the capacity to 
provide subsidies which bo th puzzled and concerned Australia. It appreciated the Chair's efforts to 
seek clarification from those Members that had not notified on the status of their efforts to comply 
with their obligation which would identify and help Members to understand whether , for example, 
there were capacity constraints. That would also assist the Committee to consider how individual 
Members or the Secretariat could assist those Members. Australia remained open to assist other 
Members in that area. Australia also noted that t he more Members did not notify, the more the 
uncertainty for all exporters in being able to compete fairly in international markets, which underpins 
the SCM Agreement.  
104.  Canada  reiterated the importance of complying with the notification requirements of the 
SCM Agreement and continued to be concerned that the number of Members completing subsidy 
notifications remained well below full compliance and has been decreasing over recent years. The 
number of notifying Members has fallen from a high of 67% in 2013, to  a low of 42% in 2021 which 
was a very concerning trend. The recent report on Subsidies, Trade and International Cooperation 
by the WTO, OECD, World Bank and IMF, along with other recent analysis undertaken by the OECD, 
has also highlighted the low level o f compliance with WTO notification requirements, and raised 
concerns about the resulting limits on information available on subsidy programs. Canada 
acknowledged that compiling notifications could be resource -intensive and required substantial 
coordination  between multiple levels of government. It also encouraged Members to make their best 
efforts to fulfil their notification requirements and support this fundamental transparency exercise.  
105.  The European Union  stated that following 16 months from the 30 June 2021 deadline for 
2021 new and full subsidy notifications, 89 Members had not yet made their notifications. It also 
recalled the work of the four international organizations highlighting the issue of subsidies G/SCM/M/121  
 
- 16 - 
 
  transparency. The European Union acknowledged the difficulties caused by the COVID -19 pandemic 
noting that Members should not hide behind that continuing excuse and had to meet their reporting 
obligations. Lack of information would not only hamper future work on subsidies but also undermine 
the SCM Ag reement itself. This was not a voluntary exercise, but rather an obligation for all 
Members. It was a crucial aspect of the work of the Committee so that Members could see the type 
and level of subsidies being granted by their trading partners and how thos e might affect 
international trade. The European Union hoped that those Members who had not yet notified could 
catch up with their overdue notifications.  
106.  The United States  thanked the Secretariat for the report and echoed all the previous Members 
that comm ented on that issue. It specifically highlighted the comments by the United Kingdom 
regarding the completeness of notifications noting that Members had seen issues in the past where 
a Member might notify one or two programs when there were many more. Looki ng at completeness 
would be difficult, but it was something that Members would need to confront. The United States 
also reiterated Canada's comment on the decreasing trend in the number of notifications questioning 
how lower Members would go before making real substantial progress in addressing that issue.  
107.  Norway  underlined the need for continuous dialogue on the completeness of notifications. 
Members needed to confront that issue when having the reform discussion which would be brought 
forward by the Chair in the last agenda item.  
108.  With respect to the second topic  under this agenda item, the Chair recalled that at the 
Committee's April 2022 regular meeting, a number of Members had indicated their willingness to 
continue discussions on the proposal from the United States regarding procedures for questions and 
answer s under Articles 25.8 and 25.9 of the SCM  Agreement.7 
109.  The United States  recalled its formal proposal that written answers to initial questions under 
Article 25.8 be provided within 60 days and that follow -up questions be answered in writing in 
30 days. Although it continued to believe that mandatory deadlines would be preferable, it had 
proposed that Members simply agree to make their best efforts to submit written responses within 
60 days and responses to follow -up questions within 30 days. The Un ited States had also accepted 
that the deadlines of 90 days and 60 days might also be more preferable. Pursuant to comments 
received, it had also recognized that more time might be needed to consult with sub -central 
governments. Its recent experience with answering Article 25.8 questions posed to the United States  
at the last meeting had reinforced the appropriateness of the changes made.   
110.  There was nothing extraordinary about the proposal because it mirrored the existing practice 
of providing answers to qu estions on regular notifications and reflected the practice most Members 
were following when answering Article  25.8 questions.  With the increasing recognition of the need 
for greater transparency, as evidenced by the report issued by the World Bank, IMF, W TO and OECD, 
the United States hoped that Members could move this simple proposal forward and would not hide 
behind legal technicalities.  
111.  India noted that the United States' revised proposal sought to ensure that responses by 
Members under Article 25.9 of the SCM Agreement would adhere  to the timeline of 60 days from 
the date of request to provide written responses for information sought  by Members and 30 days to 
provide written replies to follow -up questions. India had also discussed the proposal bilateral ly with 
the United States not to fix these deadlines as firm deadlines but as  best-endeavour  objectives.  
Keeping in view the difficulties for developing and least -developed Members facing capacity 
constraints, India reiterated its suggestion to revise the timelines on the best endeavour basis for a 
period of 90  days for initial questions and 60  days for follow -up questions.  
112.  Canada  reiterated its support for the proposal. The subsidy notification process along with the 
information requests contemplated under  Articles 25.8 and 25.9 of the SCM Agreement were 
fundamental to ensuring transparency objectives. The proposal provided valuable guidance that 
would bring greater predictability and transparency to the question -and-answer process. This item 
had been discu ssed at the Committee for a number of years and the United States had suggested a 
number of changes to the proposal with a view of addressing concerns raised by other Members. 
 
7 G/SCM/W/557/Rev.4.  G/SCM/M/121  
 
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  Canada encouraged Members to reflect on the proposal and the suggested changes p ut forward by 
the United States with a view towards reaching an agreement on this item.  
113.  The United Kingdom  reiterated its support for the proposal noting that timely and complete 
responses to information requests were essential to the effective functioning  of the SCM Agreement. 
The proposal struck a good balance between improving transparency and avoiding placing  
unreasonable burdens on Members, given legitimate limitations on some Members' capacity. The 
United Kingdom welcomed the United States efforts to respond to Members' concerns and the 
engagement of India and others with the proposal. It also encouraged other Members to continue 
to engage constructively by highlighting any specific issues that they had and further suggestions 
on how those could be add ressed.  
114.  Brazil  referred to the discussion on the report by the WTO, OECD, IMF and the World Bank on 
subsidies and reiterated its support for the proposal. One of the conclusions of the report was that 
lack of transparency remained one of the biggest challe nges when dealing with subsidies 
multilaterally. As part of a broader commitment to levelling  both the industrial and the agriculture 
international playing fields , Brazil was enthusiastic about the promotion of transparency in new and 
full subsidy notifica tions.  
115.  The European Union  referred to its previous statements in support for the proposal which 
presented practical ways to make transparency commitment more meaningful without creating 
unreasonable burdens. Transforming oral replies, which already requir ed preparation, to written 
responses would significantly improve the transparency with very little additional effort. The 
European Union reiterated its support for the proposal encouraging other Members to do the same.  
116.  New Zealand  referred to its previous statements and remained supportive of the proposal 
which recognized Members' potential capacity constraints without creating unreasonable burdens. 
The best efforts framing as well as the language referencing to consultation with sub -central 
governments wer e helpful in this regard. It appreciated the United States' effort to respond to 
concerns raised and encouraged all Members to engage constructively.  
117.  Australia  supported the proposal noting that it mirrored current and longstanding practice 
within the Comm ittee. At the heart of the proposal was the requirement to have a written reply so 
that the information provided could be properly understood by other Members. There were 
arguments that this would be inconsistent with Article 25 of the SCM Agreement. Artic le 25.9 did 
not prevent Members from developing and agreeing on a practice to deal with these requests for 
information. Australia recalled that the Committee had previously reached agreement on both the 
notification requirements, the frequency of notificat ions and the approach on the review of subsidy 
notifications. The proposal would improve the clarity in the Committee's procedures and practice 
and would facilitate improved transparency and understanding of Members' subsidy programs. The 
proposal also pro vided best endeavours guidance on timeliness in replies. The revisions made 
addressed the concerns expressed by some Members acknowledging time pressures relating to 
consultation with sub -central governments. Australia requested that this item remained on the 
agenda for further discussion at the next meeting.  
118.  Chinese Taipei  reiterated its support for the proposal.  
119.  The Russian Federation  welcomed the discussions aimed at improving timeliness and 
completeness of notifications and other information flows on trade measures. The exchange between 
Members could be enhanced for mutual benefits and without facing any unreasonable burden on 
them. As for the proposal, the Russian Federation noted that the text had not be changed. Therefore, 
it remained concerned as also expressed at the previous meetings. The time needed to prepare the 
replies might differ depending on various factors, such as comple xity of the questions and number 
of authorities involved. For that reason, the deadline for the replies could not be mandatory. In 
addition, periods of 60 and 30 days would be too short, even as a reference point. The proposal 
might be further developed ta king into account those concerns and bearing in mind what had been 
stated by Members at the previous meetings. The Russian Federation remained ready for further 
discussions.  
120.  Japan  reiterated its support for the proposal noting that transparency and notific ation 
obligations were fundamental to the WTO system and compliance with them would be in the interest G/SCM/M/121  
 
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  of all Members. Members should make an appropriate and timely notification in accordance with the 
SCM Agreement.  
121.  The Chair stated that it appeared that Members wished to continue discussions on those issues 
at the next regular meeting of the Committee.  
122.  The Committee took note  of the statements made.  
7  PERMANENT GROUP OF EXPERTS  
123.  The Chair recalled that the term of Mr Jaemin  Lee expired last spring and the Committee could 
not finalize the election process at the previous meeting as some Members contacted the previous 
Chair of the Committee indicating that they would not be able to join consensus. Unfortunately, no 
progress co uld be reported since the last meeting of the Committee. The Chair stated that the 
Committee would be informed on any developments that might arise in due course.  
124.  China  expressed its regret that some Members had reservations on China's nominee and 
therefor e the Committee could not reach a consensus. China had been very serious and responsible 
in nominating an independent expert with extensive knowledge and abundant practical experiences 
in the fields of subsidies and trade relations. Indeed, China's nominee  was the only candidate for 
the current vacancy. That was an effort of China as a firm supporter of the multilateral trading 
system to support all WTO activities, including the work of the Committee. At previous occasions, 
China had expressed its willingne ss to listen to the reservations of any Members and try to address 
their concerns in an open and constructive manner. It remained open to such dialogue and would 
continue to support the Chair's endeavours to fill the vacancy of the PGE as soon as possible.  
125.  The Committee took note  of the statements made.  
8  RECENT DISCRIMINATORY SUBSIDIES POLICIES AND MEASURES OF THE 
UNITED  STATES – ITEM REQUESTED BY CHINA8 
126.  China  recalled that the United States had enacted a series of discriminatory and distortive 
industrial subsidies measures. On 9 August 2022, the United States enacted the CHIPS Act of 2022, 
which would provide for semiconductor investment and production subsidi es with an amount of as 
much as USD 78 billion. In addition, on 16 August 2022, it enacted the Inflation Reduction Act 
of 2022, providing subsidies as much as USD 369 billion for clean energy and climate resilience. 
While the objectives of those legislatio ns were laudable, the means of implementation could 
potentially defeat their purposes. In addition, they might run afoul of WTO principles and rules, 
impair the legitimate rights and interests of other Members, and distort international trade and 
investmen t. Indeed, since the enactment of the relevant legislations, a number of projects under 
consideration in other WTO Members had been either cancelled or put on hold, and potentially 
redirected to the United States in anticipation of those subsidies. The Mem bers concerned had 
expressed their serious concerns in this regard.  
127.  For example, Section 103 of the CHIPS Act of 2022 on the semiconductor incentives explicitly 
required a covered entity to disengage certain business activities with specified WTO Members i n 
order to get the benefit under the program. If implemented, this discriminatory requirement would 
very likely lead to treatment towards certain semiconductor products destined for those specified 
WTO Members less favourable than similar products destined  for other WTO Members. This would 
lead to a violation of the MFN under the GATT Article I. In addition, it would amount to a quantitative 
restriction of the exportation of certain semiconductor products which would be in violation of the 
General Eliminati on of Quantitative Restrictions under the GATT Article XI. Moreover, those 
semiconductor incentives could cause adverse effects to the interest of other Members, in particular 
causing serious prejudice by displacing or impeding the exports of a like produc t of the Member from 
a third country market. Last but not least, the specific domestic content requirements of "critical 
manufacturing industry" in Section 103, would make any incentives provided in consideration of 
 
8 China's questions to the United States submitted pursuant to Article 25.8 of the SCM Agreement can be 
found in d ocuments G /SCM/Q2/USA/88 and 89. The written replies submitted by the United States were 
circulated on 12 January 2023 in documents G/SCM/Q2/USA/90 and 91, respectively.  G/SCM/M/121  
 
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  these criteria domestic -content continge nt subsidy, which would be prohibited under Article 3.1(b) 
of the SCM Agreement.  
128.  Section 13401 of the Inflation Reduction Act of 2022 ("IRA") would provide subsidies to 
consumers for the purchase of electric vehicles ("EV"). It would limit the place of ext raction or 
process of critical minerals, the place of component manufacture or assembly, and the place of 
vehicle assembly to the United States, countries that had signed free trade agreements with the 
United States, or North America, as a precondition for  the tax credit. It also explicitly excluded the 
application of relevant products from "foreign entity of concern", which would constitute 
discrimination against certain other WTO Members. These would lead to a violation of the 
United  States' obligation un der the GATT Article I. It would also accord to imported EVs treatment 
less favourable than that accorded to like domestically -assembled EVs, which would make EVs 
manufactured and assembled in the United States more likely to enjoy tax credits constituting  
discrimination against like EVs produced in and imported from other WTO Members. This would lead 
to a violation of the United States' obligation under the GATT Article III. In addition, Section 13401 
made access to a consumption subsidy contingent on the purchaser choosing a domestically 
manufactured and assembled EV, and required that the percentage of the value of the components 
contained in the battery manufactured or assembled in North America would be equal to or greater 
than the applicable percentage . It would constitute a form of prohibited subsidy according to 
Article  3.1(b) of the SCM Agreement.  
129.  China had submitted to the United States two lists of written questions about the subsidies 
policies and measures pursuant to Article 25.8 of the SCM Agre ement, in documents 
G/SCM/Q2/USA/88 and G/SCM/Q2/USA/ 89. It looked forward to the replies from the United States 
as soon as possible, in accordance with Article 25.9 of the SCM Agreement.  
130.  China also stated that the discriminatory and distortive subsidies p olicies and measures 
enacted by the United States tended to violate the basic principles of the WTO, i.e., 
non-discrimination, and free and fair trade. They also betrayed a practice of double standard, that 
the United States insisted other Members to rein in industrial subsidies on the one hand; and then 
lavishly doled out subsidies for its own domestic industries. In addition, while the United States 
made use of WTO -incompatible subsidies to stimulate its domestic semiconductor industry, it also 
wielded a monopolistic hand to suppress the development of semi -conductor industries from other 
Members, by abusing export control and exercising extra -territorial jurisdictions over non -US origin 
goods from other Members. Those measures combined, were termed b y the United States as, 
"Executing a Modern American Industrial Strategy". According to China, the United States' strategies 
represented a wilful disregard for multilateral trading system and the global commons, an act of 
bullying and coercion, and a mind -set of zero -sum game, reminiscent of that of the cold war. If left 
unchecked, such practices would disrupt the stability of the global industrial chains and supply 
chains, and seriously undermine the collective efforts of all Members to jointly promote glo bal 
economic recovery and tackle global challenges.  
131.  China called on the United States to play its leading role to make positive contributions to 
build the global industrial chains and supply chains, to make them stable and resilient, open and 
inclusive, an d beneficial to all stakeholders and to the global economy. It also suggested having an 
honest and informed discussion about such practices in the Committee and other relevant WTO 
forums. It was Members' duty to act together and rise up to the common chall enges of the present 
time such as climate issues and economic resilience. However, China was of the view that those 
challenges could not be met, by way of unilateralism or protectionism, or at the cost of the rule -
based multilateral trading system. Policy measures undermining multilateral rules and distorting 
international supply chains would defeat themselves in the end.  
132.  The Russian Federation  expressed its systemic concerns about the lamentable  state of 
WTO compliance of certain subsidy policies of the Un ited States, namely the Inflation Reduction Act. 
The Act would envisage higher renewable electricity production credits if the taxpayer could certify  
that any steel, iron or manufactured  product which was a component of a qualified  facility, had been 
produ ced in the United States. In such a case, the amount of credit would be increased by  10 %. 
The Russian Federation stated that such preference could not comply with the rule prohibiting 
subsidies contingent on the use of domestic over -imported goods, which,  therefore, would violate 
Article 3 of the SCM Agreement. In accordance with the Act, taxpayers who would place in service 
a new clean vehicle would be allowed to get a tax credit  in case the vehicle met certain local content 
requirements, for example, wit h respect to its battery. A certain percentage of the value of the G/SCM/M/121  
 
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  components contained in such battery must be manufactured or assembled in North America which 
would also violate Article 3 of the SCM Agreement. According to the Russian Federation, the Inf lation 
Reduction Act illustrated  a shameless  attitude of the United States to its WTO obligations. It should 
be recalled that the international trade rules had been created to be obeyed. WTO compliance was 
pivotal  to secure international trade which should  benefit  all Members. WTO inconsistent measures, 
which would undermine this effort, had to be avoided.  
133.  The United States  thanked China for its intervention and noted that the submission of 
Article  25.8 questions on programmes that were only months old and have not yet provided a single 
dollar to anyone was extraordinary. The Article 25.8 mechanism was never used in that manner in 
the past. Nevertheless, in parallel to the normal practices of most Members as well as its proposal 
to that end, the United State s would give the questions their due consideration and provide written 
answers.  
134.  It was clear to the United States that China had the complete text of the two laws without 
having to ask which was a kind of transparency that the United States would like to h ave in China. 
It reiterated that China rarely published the legal measures that established and implemented its 
subsidy programs in the MOFCOM Gazette, although it was obligated to do under its Protocol of 
Accession. Sometimes, subsidy -related legal measur es that were cited in other legal measures, were 
not even made public which was an astounding practice that a few Members followed. The 
United  States questioned what could be done to analyse whether the legal measures establishing 
and implementing China 's subsidy programs were consistent with China's WTO obligations while 
they were not made public. According to the United States, when one Member was not adhering to 
its transparency obligations, it would undermine the entire rules -based trading system becaus e there 
would be no way of monitoring whether the agreed obligations were being followed and, enforcing 
them, if they were not. The United States reiterated that it would provide answers to China's 
questions calling on China to adhere to its transparency o bligations so that all Members would have 
the same opportunity that China had benefited from.  
135.  With respect to the IRA, the United States stated that the law had been published and was 
publicly available. The publication and public availability of its lega l measures establishing and 
implementing support programs stood in stark contrast to support programs in China. The 
United  States recalled that the establishing and implementing legal measures of support programs 
in China were often, if not usually, not pu blished in the MOFCOM Gazette, and sometimes not even 
made publicly available and not even available via China 's WTO inquiry point.  
136.  With regards to the IRA, the United States noted that all Members shared an urgent need to 
increase investments in clean ene rgy technologies to seriously combat the climate crisis, as well as 
to address supply chain issues. The IRA would be a key tool for the United States to meet those 
critical objectives. The transportation sector was the highest source of greenhouse gas emis sions in 
the United States, and it would not be able to meet its Paris commitments and other climate goals 
without bold action to promote major new investments in clean energy technology, especially 
incentives for electric vehicle production and their adop tion. The Act would provide electric vehicle 
tax incentives to encourage a rapid transition to clean, electric transport. It would ensure creation 
of more diverse and robust supply chains and promotion of the domestic adoption of EVs. In addition 
to the Cl ean Vehicle Tax Credit for new EVs purchased, the IRA would also provide for a Commercial 
Clean Vehicle Credit and a Previously -Owned Clean Vehicle Credit. These provisions would create 
tax credits for certain eligible light, medium and heavy duty EVs purc hased by businesses, and, for 
used EVs. Final assembly, battery and critical mineral requirements would not apply to these credits. 
The United States expected that those vehicles would account for a significant share of the total 
EV purchases in the future  and the Congressional Budget Office estimated that those vehicles would 
receive roughly 40  %of the overall EV tax credit funding. The United States was in the early stages 
of developing the regulations for that program. It would welcome input from all sta keholders as the 
Department of Treasury would move forward with its public process in implementing this tax credit 
as required by the legislation.  
137.  The United States also noted that many of its trading partners, including China, had prioritized 
investment i n EV technologies, and taken a range of domestic measures to support zero emission 
vehicles. In discussions regarding electric vehicle measures, the starting point should be the 
importance of working to achieve overall climate, supply chain, and related go als in parallel – and 
to do so in a way that Members could maintain support from their stakeholders. This would include 
Members' shared goal in ensuring they achieved the Paris commitments.  G/SCM/M/121  
 
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  138.  With respect to the semi -conductors and CHIPS Act, the United States noted that China also 
had a semiconductor program. In fact, it had numerous programs at the central and sub -central 
levels of government in the form of government guidance funds, none of which had been notified. 
The biggest of those funds was  the National IC Fund, phase I and II. The total amount of investment 
from those funds was approximately  USD 50 billion. That fund had started in 2014 but had never 
been notified. China had argued that the Fund was a private equity fund and therefore, did not need 
to be notified. This was despite the fact that the Fund was a corporate entity that was 99  %owned 
by government ministries and state -owned enterprises, and also despite the fact that the fund was 
obligated to invest in accordance with government p olicy, just like the state -owned banks.  
139.  Noting that the CHIPS Act had been published and was publicly available, the United States 
reiterated that the publication and public availability of its legal measures establishing and 
implementing the support progr ams stood in stark contrast to support programs in China. There 
were legal measures related to China 's semiconductor program that had not been published, and 
were not public, and that China refused to provide pursuant to a legitimate inquiry point request.  
140.  The publicly available and published CHIPS Act explained in detail which entities and projects 
would be eligible to receive support, and the types of support that they would be eligible to receive. 
It had a website dedicated to publicly sharing informatio n at www.chips.gov  where the USDOC had 
published its initial implementation strategy. In addition, the USDOC had issued multiple requests 
for information on the semiconductor industry and on implementation of the CHIPS Act, which had 
provided an opportunity for interested parties to submit information. The requests, and the 
comments received in response to it, were available at www.regulations.gov . The United States 
expected tha t there would be more opportunities for public comment.  
141.  The CHIPS Act consisted of three distinct initiatives: (1) large -scale investments in leading -
edge logic and memory manufacturing clusters; (2) expansion of manufacturing capacity for mature 
and curre nt-generation chips, as well as new and specialty technologies; and (3) initiatives to 
strengthen and advance the United States' leadership in research and development. A successful 
CHIPS program would respond to market signals, fill market gaps, and inves t along with significant 
private capital. The United States indicated that it was clear from the text of the law that the 
contemplated support would be consistent with the WTO agreements, including the SCM Agreement.  
142.  The United States also noted that the S CM Agreement did not have obligations with regard to 
restrictions on eligibilities of entities receiving government support. The USDOC would implement 
certain restrictions to ensure those who would receive chips funds could not compromise national 
security . Those national security restrictions were described in more detail in the Act. Imposing 
limitations reflecting national security concerns on which entities could receive government support 
was not discriminatory. The national treatment obligation under G ATT Article III did not prevent the 
payment of subsidies exclusively to domestic producers, which, in any event, the Act would not do. 
The United States also noted that the Act would neither tax or regulate domestic products differently 
than other products  nor violate the MFN obligation. It encouraged Members to review the program 
details set forth under the Act, which would not provide for different treatment of products among 
Members.  
143.  China  thanked the United States for its responses. China also recalled the United States' 
proposal on the information requests under Articles 25.8 and 25.9 of the SCM Agreement and 
expected the United States to lead by example in responding China's questions as soon as possible.  
144.  The Committee took note  of the statements made.  
9  SUBSIDIES AND OVERCAPACITY – ITEM REQUESTED BY AUSTRALIA, CANADA, 
THE EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  
145.  Canada  reiterated its concerns over the contribution of government interventions, such as the 
provision of subsidies, to the persistent global excess capacity observed in several sectors. 
Recognizing that subsidies could play an important role in serving the pub lic interest and addressing 
market failures in a manner that would not distort global trade, Canada remained concerned with 
the potential distortive impacts of certain subsidies. Market distorting government interventions 
could lead to over investment in p roduction capacity, depressed global prices, distorted international 
competition, and continued reliance on carbon -intensive processes. These impacts had been G/SCM/M/121  
 
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  highlighted in a series of reports by the OECD, as well as in a recent report by the WTO, IMF, OC ED 
and the World Bank on Subsidies, Trade, and International Cooperation. The report highlighted not 
only how the frequency and complexity of distortive subsidies was increasing, but also how greater 
global attention and cooperation was warranted in light of key global economic challenges such as 
climate change, the resiliency of supply chains, the COVID -19 pandemic and other emergencies. The 
report further underscored that there were important information gaps in subsidy practices. To this 
end, the report made clear the need for better information on subsidies, regular -dialogue and 
increased analysis, in order to better understand the trade impacts of subsidy programs. In Canada 's 
view, this reaffirmed the importance of the work of the WTO and the SCM Commi ttee, in particular, 
to support increased transparency and robust discussions on the role subsidies played in contributing 
to global overcapacity, as well as how to address them. Canada urged Members to fully respect their 
transparency obligations, to enga ge constructively in those discussions and to make full use of the 
WTO forum to address the trade distortive impacts subsidies could have.  
146.  The United Kingdom  welcomed continued discussion on overcapacity and echoed Canada's 
statement. It also welcomed the discussion on the report by the OECD, World Bank, IMF and WTO. 
The United Kingdom was supportive of the effort by those institutions to highlight the market 
distorting impact of certain subsidies and the need for effective multilateral rules to counter tho se 
impacts. A key finding  of the report was on the need for greater transparency particularly. In 
particular, the report highlighted the lack of transparency on subsidies provided through state -owned 
enterprises and the forms of subsidies such as below -market financing. This was especially relevant 
to the discussion on overcapacity, given the OECD research had noted the effects of below -market 
financing in sectors where overcapacity was an issue. These types of subsidies were not being 
notified under the SC M Agreement and, instead, the data at hand came from extensive research by 
academics and international organizations. While the United Kingdom welcomed that work, the 
system was not supposed to work like that. When Members failed to provide complete notifi cations 
or adequate responses to questions, they would undermine the effectiveness of the SCM Agreement 
creating an unbalanced system in which only the Members with the greatest resources could monitor 
the subsidies and make use of the rules to protect the ir businesses. The United Kingdom would 
therefore welcome discussions with Members on practical steps that the Committee could take to 
improve transparency on subsidy practices that caused overcapacity and other harmful trade effects.  
147.  The United States  appreciated the attention that the WTO, IMF, OECD, and World Bank had 
brought to the problem of trade distortions being caused by industrial subsidization, that among 
other harms, could lead to overcapacity in subsidized sectors. One of the critical themes in  the series 
of reports from the OECD was that subsidies could occur throughout the value chain, upstream and 
downstream from a product, causing distortion upon distortion.  
148.  As it was seen in China, upstream subsidies from energy, land, and other inputs, sub sidized 
industries like steel and aluminium. These mid -stream industries, in turn, received subsidies largely 
in the form of below -market finance and equity. Ultimately, further downstream industries such as 
rail cars, shipbuilding, and aluminium extrusion s got the benefit of subsidized raw materials and 
other inputs.  All of these benefits would accrue down the production chain and allow Chinese 
industry to compete unfairly both within China and overseas. The report noted this phenomenon 
stating that "glob al supply chains are also changing the impact of subsidies. Subsidies can 
accumulate along supply chains, where support for upstream inputs or processes can lower input 
costs for downstream producers. Equally, support in upstream industries, such as to bui ld 
manufacturing capacity, can increase demand for manufacturing equipment. This not only 
complicates the attribution of benefit to a firm or sector, but it also underscores that subsidies matter 
not just for a particular sector but for the global trading system."  
149.  According to the United States, the report also made clear that information on subsidies overall 
remained weak. The WTO subsidy notification system was weak as it almost exclusively relied on 
Members to notify all of their programs, including tho se subsidies provided by state -owned 
enterprises or public bodies. This was a problem most predominantly in China, but also, more 
generally, as nearly 60  %of WTO members had failed to do their most recent subsidy notification. 
Contrary to recent academic w ork that focused on the number of subsidy programs, the report also 
made clear that listing of subsidy programs based on counts would not capture the magnitude or 
economic importance of the subsidy programs, and a higher count did not necessarily imply rel atively 
more distortive policies or higher levels of subsidies. The report also noted that simple counts might 
also be affected by the form of subsidy and that certain forms of subsidization were more distortive 
and less transparent than others.  G/SCM/M/121  
 
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  150.  As the OECD report on below -market finance noted, China was the largest provider of below -
market finance and below -market equity. These types of subsidies were inherently less transparent 
than grants and tax incentives, which often could be tied to government bud gets or company 
financial statements. The OECD report also noted the impact of government intervention in the 
market and the disproportionate benefit provided to enterprises with State ownership. As the report 
made clear "[w]hile many SOEs operate commerci ally without public support, industrial firms in 
which governments are large equity investors benefit relatively more from all kinds of support" 
compared to industrial firms without government investment. In addition to state -owned or 
controlled companies being an important recipient of subsidies that would increase overcapacity, the 
report stated that "SOEs can also be providers of support, as where state banks provide 
below -market lending or state utilities provide below -cost gas and electricity".  
151.  The Un ited States noted that the provision of support by SOEs had been chronically unreported 
by WTO members which underscored that all available estimates would significantly underestimate 
the actual level of subsidization being provided in a state -led economy such as China 's. The United 
States agreed with the four international organizations that improving transparency was a 
fundamental first step in addressing subsidies. The United States recalled that it had made numerous 
proposals to enhance transparency in the Committee which had not been adopted primarily due to 
the opposition of a single Member. If Members could not agree to basic acts of Membership, such as 
publishing trade -related legal measures and providing answers in writing within a certain timeframe , 
there would be little or no hope for more ambitious and meaningful transparency proposals.  
152.  Australia  stated that its interest in co-sponsorship of that item stemmed from its concerns 
about the linkage between subsidies and overcapacity, the identificatio n of the characteristics of 
subsidies that were causing the overcapacity and where improved  subsidy rules might be required. 
Australia was concerned that structural excess capacity remained a feature in several key industry 
sectors. Australia highlighted t he huge and systemic subsidisation and structural dependence of 
industry sectors on such subsidisation which had an impact on production chains. There was a need 
to identify how government support had been provided as well as the most egregious forms of 
subsidies that had the most distortive impact on trade. As the recent IMF, OECD, World Bank, WTO 
report summarised, subsidies were common in all sectors, used by countries at all stages of 
development, took many forms and were affecting all countries. The re port also noted that extensive 
subsidies would influence production and trade. It highlighted that information on subsidies 
remained overall weak, which was also evident in the OECD's continuing analysis of government 
support in industrial sectors. Austral ia agreed with the analysis that Members needed to understand 
the extent and nature of subsidisation globally which continued to be extremely difficult given the 
lack of transparency and notifications. The lack of comprehensive data on government support i n 
industrial sectors would impede efforts to discipline subsidies and counter their distortions on 
international markets. The other common theme in the analysis related to the form of the subsidy, 
with some forms of subsidies being more opaque than others and some forms of subsidies resulting 
in greater market distortions internationally.  
153.  Australia encouraged and supported ongoing analysis noting that sharing that analysis was 
valuable for the Committee. Members needed a clear understanding of the extent o f support and 
better data to fully understand the effects of subsidies and the effects of specific forms of subsidies, 
and this in turn would inform them where reforms of subsidy rules would be most needed.  
154.  Japan  echoed the statements made by the previous speakers noting that subsidies have been 
used in all sectors and by Members at all levels of development. While they were an important tool 
to achieve public objectives, without proper design and an appropriate implementation, harmful 
subsidies might disto rt the competitive environment requiring a global attention and cooperation, as 
noted by the report by the IMF, OECD, World Bank and WTO. The report referred to the need for 
intra-governmental cooperation to discourage subsidies that have been significantl y distorting trade 
or investment. An important example of such poorly designed subsidies would be subsidies causing 
overcapacity. Subsidies to firms that were not following market principles could distort the market 
by causing excess capacity relative to d emand. In sectors such as steel and shipbuilding, large -scale 
government support measures by certain Members had caused overcapacity issues. Such 
government support had caused over -production of the items being subsidized, leading to a price 
collapse of su ch products, severely limiting the room for companies from market -oriented Members 
to compete. In order to address such problems, it was important for the Committee to continue 
discussing subsidies that could lead to overcapacity, including how Members cou ld improve the 
transparency regarding such subsidies. Ensuring a level playing field was becoming even more G/SCM/M/121  
 
- 24 - 
 
  necessary and important when various government support measures were taken by Members to 
support the recovery of the economy from the COVID or faci ng the global challenge to decarbonize, 
among others. Japan would like to continue to discuss the issue in the Committee to tackle and 
prevent subsidies that could lead to overcapacity.  
155.  The European Union  echoed the previous statements and recalled that th is agenda item had 
arisen following the G20 Summit in Hangzhou in September 2016 where the leaders had highlighted 
the role of subsidies and other types of government support in creating excess capacity. This was a 
crucial issue which Members had to contin ue to examine in -depth. The European Union noted that 
the joint report by four international organizations endorsed that the relationship between subsidy 
and overcapacity was a key element. The report highlighted the importance of support in the form 
of be low-market financing, in contributing to overcapacities. This type of support was especially 
prevalent in capital incentive industries where it would lower the funding costs of the beneficiaries. 
Below -market financing would make it possible for the recipi ents to invest in capacity exceeding the 
level that would be justified by market conditions. In addition to such overinvestments, overcapacity 
would be caused also when support measures artificially maintained unprofitable enterprises in 
operation. This wo uld prevent excess capacity from adjusting to demand. In an overcapacity 
situation, this might cause some otherwise healthy competitors to reduce their capacity instead. The 
report showed large variations between sectors with regard to below -market financi ng. Heavy 
industries received most below -market financing. The report mentioned aluminium, cement, glass, 
ceramics and semi -conductors some of which had been previously highlighted under this agenda 
point as examples of sectors suffering from overcapacity.  The report correctly put the focus on the 
need for rule -making to address overcapacity concerns.  
156.  According to the European Union, the current WTO rules did not sufficiently take into account 
the distortive impact of overcapacity. With the support of the report, WTO Members should discuss 
how overcapacity concerns could be better addressed in WTO rules  in the future. Members needed 
to compare concepts and distil common principles paving  the way for rule -making in the future. As 
the report stated, lack of transparency was a widespread problem and below -market financing 
represented additional transparency  challenges. State resources often transited through financial 
intermediaries, such as state-owned banks  or state-lead equity funds which would make this type 
of support harder to track, leading to measures not being properly notified or being admitted to 
constitute subsidies. As a result, the volume of overcapacity resulting from below -market financing 
was harder to quantify.  
157.  The European Union called for all Members to improve the notifications of all types of support, 
in particular when the state measur es concerned sectors that would suffer from overcapacity. The 
European Union hoped to continue discussions on this issue as well as on other findings of the Joint 
Subsidies Report of the four international organizations in the SCM Committee.  
158.  China  reiterat ed that overcapacity was a universal, cyclical, and structural problem in 
economic development. The current overcapacity in steel industry was caused by the global 
economic recession resulting from the 2008 international financial crisis and the consequent  
decrease in demand for steel.  A few Members had attempted to attribute the current overcapacity 
to China's industrial subsidies and support measures, claiming that China had distorted the market. 
These claims were inconsistent with the facts. Since 2016, China had been carrying out a structural 
reform, producing remarkable progress in over -capacity reduction. China 's steel production had been 
reduced remarkably  and the export took only minimum proportions in China's total production. For 
example, between 2 018 and 2020, China had reduced over 150 million tons of crude steel production 
capacity. Last year, the net export of China 's crude steel amounted for only 1.6% of China 's total 
crude steel output, while its net steel export took up only 4.2% of the globa l export. For the 
aluminium industry China's export volume had decreased by 10% accounting for only 8% of China 's 
aluminium total output. China recalled that a certain Member had introduced a new legislation which 
would provide huge amount of investment an d production subsidies for a specific industry. China 
would not repeat its concerns raised previously over the potential impact of those measures, in 
particular their distorting effects on the international market as well as possible overcapacity in that 
sector. However, it asked Members to take note of those points.  
159.  The Russian Federation  stated that although it had previously urged to have a broader 
perspective on the root causes of the impacts of overcapacity in steel and other sectors, the 
discussion co ntinued to be one -sided. It noted the previously raised concerns about subsidisation 
and other actions, such as making privileges to state -owned enterprises, using them to pursue G/SCM/M/121  
 
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  government objectives or to deliver the subsidies to the recipients. Accordin g to the 
Russian  Federation, however, other types of government actions and their contribution to 
overcapacity continued to escape from the attention of the Committee. One of the most obvious 
actions in question  was trade protection. For instance, a relief  caused by a trade remedy measure, 
which lasted for more than two decades, would provide a tangible support for an industry, keeping 
foreign competitors away. A number of such long lasting trade remedy measures have been 
favouring producers in steel sector , which was heavily affected by overcapacity. Another example 
that the Russian Federation had faced were politically motivated trade barriers, prohibitive import 
duties and import bans. Other similar trade restricting actions also provided advantages to na tional 
industries which did not seem to worry Members who blamed  state support for overcapacity. Such 
a double standard seemed odd to the Russian Federation. It had nothing to do with the genuine  
collective effort to overcome the global challenge of overcapacity, which was highly required. The 
Russian Federation urged the sponsors of that agenda item to adopt a constructive and 
comprehensive approach to tackle overcapacity and to withdraw their protectionist measures.  
160.  The Committee took note  of the statements made.  
10  SUBSIDY TRANSPARENCY AND CHINA'S PUBLICATION AND INQUIR Y POINT 
OBLIGATIONS UNDER CHINA'S PROTOCOL OF ACCESSION – ITEM REQUESTED BY 
AUSTRALIA, CANADA, THE EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND  
THE UNITED STATES  
161.  The United States  reiterated that together with other Members, it had numerous concerns 
with respect to the transparency of China's industrial subsidy regime. In its Protocol of Accession, 
China had agreed to publish all trade -related measures in a single journal, which China had 
designated as the MOFCOM Gazette. However, China has rarely been pu blishing its subsidy measures 
in the MOFCOM Gazette and sometimes those measures were not made public at all. China had also 
agreed to establish or designate an "enquiry point where, upon request of any individual, enterprise, 
or WTO Member all information  relating to the measures required to be published may be obtained".  
162.  The United States had come across references to five legal measures, two relating to fuel 
subsidies for fishermen, one relating to the development of China's distant water fishing fleet, and 
two relating to the semiconductor industry. Since it could not find these measures in the MOFCOM 
Gazette, or anywhere else, the United States had submitted a request to China's WTO inquiry point 
in April 2020.  
163.  Under its Protocol of Accession, China ha d agreed that "replies to requests for information 
shall generally be provided within 30 days after receipt of a request. In exceptional cases, replies 
may be provided within 45 days after receipt of a request. Notice of the delay and the reasons 
therefore  shall be provided in writing to the interested party." Although the United States had 
submitted its initial request in April 2020, no written response had been provided.  
164.  In September of 2020, a Ministry of Commerce representative contacted the United Sta tes 
Embassy in Beijing and stated that China would not be providing copies of any of the requested 
measures because they were either soon to be replaced by new measures or not relevant to China's 
WTO commitments. MOFCOM had not provided any information on timing of the replacement of 
measures. According to the United States, China's handling of its request was inadequate and 
contrary to China's WTO commitments.  
165.  According to the United States, the transparency obligations of China 's Protocol of Accession 
were there because Members had been concerned with the lack of transparency of China 's industrial 
subsidy regime. Those concerns remained after 21  years. It was difficult to understand why China 
was refusing to make public a legal measure on its fuel subsidy  programme for fishers.  
166.  The United States recalled that it had found two of the requested measures relating to China's 
fuel subsidy programs for its domestic and distant water fishers which had been published on 
unofficial Chinese news sites rather than in  the MOFCOM Gazette or on other official government 
websites. With those measures, which covered China's fuel subsidy programmes from 2015 to 2020, 
China had reduced subsidies for its fishers in its own waters, while increasing the level of subsidies 
for its distant water fleet keeping the overall level of support for its fishing industry the same. Those 
measures also provided striking new details about China's support for domestic fishers. For example, G/SCM/M/121  
 
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  the measure covering fishers in China's domestic water s cited the objective of renovating 
14,000  fishing vessels and scrapping or converting to other uses, 20,000 fishing vessels.  
167.  The United States reiterated its request to China to clarify its reasons for not publishing those 
measures as required by its Protocol of Accession and refusing to provide the measures pursuant to 
a legitimate request of another Member or not providing a written explanation as required under its 
Protocol of Accession.  
168.  The United States also requested China to clarify the content of other measures that China 
had refused to provide information or make public. One of the remaining measures was China's plan 
to develop its distant water fishery and the other two measures related to China's semiconductor 
policies. The United States aske d China to explain what it was about those measures that China did 
not want other Members to see.  
169.  The United States noted that although China's initial response to such transparency issues 
was that it took its transparency obligations very seriously, the United States' experience with 
China's inquiry point demonstrated otherwise. The United States wanted to know what else China 
was not showing despite its transparency obligations.  
170.  Canada  echoed the United States' concerns and recalled that i t was important that all Members 
provided notifications in accordance with the relevant WTO requirements. Although it welcomed the 
additional information China had provided in previous meetings, with respect to the publication of 
measures in the MOFCOM Gaz ette and the inquiry point process, transparency would not be achieved 
unless all relevant measures were published, and all inquiries were responded to. Canada 
encouraged China to fully comply with its transparency obligations in accordance with WTO rules 
and its Protocol of Accession to the WTO noting that it would be critical to the successful functioning 
of the rules -based international trading system.  
171.  Australia  attached considerable importance to the WTO notification and transparency 
obligations which s temmed from both the Agreements and Members' Protocols of Accession. 
Transparency remained critical to the proper functioning of the WTO and underpinned the 
SCM Agreement, as it created certainty for all exporters in being able to compete fairly in 
interna tional markets. Australia urged China to fulfil the transparency commitments made as part 
of its Protocol of Accession and to clarify for Members the procedures China had established for 
WTO Members to avail themselves of this inquiry point.  
172.  The European U nion expressed its support to the points raised by previous speakers. Subsidies 
transparency was critical to understand their impact on trade. The European Union recalled China's 
previous statements where it had paid a high attention to abiding by WTO rule s and fulfilling its 
obligations. It also reiterated that China's obligation on transparency would not only stem from 
Article 25 of the SCM Agreement, but also from its Protocol of Accession to the WTO. In this context, 
China had created an inquiry point m echanism by establishing the Bureau of WTO Notification and 
Inquiry. It had also agreed to publish its trade -related measures in the MOFCOM Gazette. However, 
in case the information was not complete or the request to the inquiry point was not answered thes e 
obligations would not be met. The European Union urged China to back its commitment to 
transparency by dealing with the requests made to the inquiry point and publishing all trade -related 
measures in the MOFCOM Gazette as it had agreed to do.  
173.  The United Kingdom  recalled that this issue had been raised numerous times both at the 
SCM Committee and the Council for Trade in Goods, without any resolution. It reiterated that 
transparency was fundamental to the proper functioning of the SCM Agreement which also included 
specific commitments that Members had made. It was essential that all Members had access to the 
information needed to assess trade effects of subsidies. Therefore, it would be essential to have 
clarity on how to get the information that China had committed to provide. The United Kingdom 
called on China to comply with its transparency commitments under its Accession Protocol, and to 
engage constructively on the concerns raised by Members. It also requested China to clarify how 
Members could seek inf ormation through its inquiry point.  
174.  Japan  reiterated that the notification obligation and transparency were one of the most 
important foundations of the WTO system and complying with them would benefit all Members. It 
was concerned that the lack of transpa rency in the expenditure of specific subsidies might encourage G/SCM/M/121  
 
- 27 - 
 
  distortive subsidies and encourage global challenges, including overcapacity issues.  Japan requested 
China to ensure transparency and comply with the notification requirements, especially with regard 
to the expenditure of subsidies. Japan also asked China to fulfil its transparency obligations under 
its Protocol of Accession.  
175.  China  recalled that it had provided a written reply to the United States' follow -up questions 
which were discussed at the  special meeting of the Committee earlier. On the issue of the inquiry 
point, China noted that it had contacted the United States Embassy in Beijing and provided responses 
at the previous regular meetings of the Committee. It also reiterated that the infor mation requested 
by the United States was not subject to laws, regulations and other measures pertaining to or 
affecting trade, and was outside of the scope of the information that should be provided by China 's 
inquiry point. In response to the remarks by the United Kingdom regarding how Members could 
obtain information from China, China indicated that it would notify its subsidies notifications to the 
WTO on time and Members could also contact the inquiry point. China would fulfil its transparency 
obligati ons if the requested information was within the scope of China's obligations.  
176.  The Committee took note  of the statements made.  
11  PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF NEW AND FULL SUBSIDY 
NOTIFICATIONS – ITEM REQUESTED BY AUSTRALIA, CANADA, THE EUROPEAN UNION, 
JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  
177.  The United States  recalled that under Article 26 of the SCM Agreement the Committee had 
been given the task to review Members' subsidy notifications and in 2005 the Committee had agreed 
upon a procedure for the review those notifications that continued to be followed for the review of 
Members ' 2021 new and full subsidy notifications. This was a straight -forward Committee document 
that established a written question and written answer process t o occur within a specific time -frame.  
178.  For many years, in the normal course of the Committee's review of notifications, Members 
had asked about programs not included in the notification being reviewed. The United States and 
some other Members had received t hese questions and had answered them. Responding to such 
questions had become part of the routine question and answer process for subsidy notifications and 
had aided in the overall transparency of Members ' subsidy regimes.  
179.  The United States noted that to c larify the Committee's procedures, the co -sponsors proposed 
an amendment that would require all Members to provide written answers to all written questions 
posed, including questions regarding specific subsidies not included in a Member's notification. The  
only substantive change was the one bolded sentence in the third paragraph – all other changes 
would only be to change the dates such that the amended process would begin with the review of 
the 2023 new and full subsidy notifications.  
180.  According to the Uni ted States, it was a simple amendment that nearly all Members have been 
following since the very beginning. Its adoption would encourage a degree of transparency that the 
drafters of the Agreement had assumed would exist in the normal course of the Committ ee's review, 
even in the absence of a written obligation.  
181.  The United Kingdom  welcomed the continued discussion on that proposal and reiterated its 
support. The proposal was not designed to highlight shortcomings of Members notifications but 
aimed to help i mprove transparency by formalising the standard practice. The proposal clarified that 
Members should provide written replies to all questions, including questions regarding specific 
subsidies which had not been included in Members' notifications. Therefore , the United Kingdom was 
of the view that the proposal would not create new or unreasonable burdens on Members. Hoping 
that Members could support the proposal, it encouraged Members to engage constructively by 
highlighting any specific ways in which they t hought the proposal would place an unreasonable 
burden on them.  
182.  The European Union  recalled the report by four international organizations which referred to 
important information gaps on subsidies and how this was hindering the understanding on the impact 
of subsidies on global trade. This was an important proposal as it aimed to further enhance  the 
transparency of subsidy notifications and the work of the Committee. Transparency was not simply 
about notifying subsidies but also about clarifying, explaining , and elaborating when things were not G/SCM/M/121  
 
- 28 - 
 
  clear or not included in the notifications. The European Union was seriously concerned that some 
Members were of the view that questions under the review procedures should be limited only to 
schemes included in the no tifications. According to the European Union, however, such an approach 
would seriously undermine the effectiveness of the review process and hinder Members from 
achieving full understanding of all subsidies granted. It acknowledged that the notification e xercise 
was complicated requiring investment in resources, and information was sometimes inadvertently 
omitted. The review process was there to fill information gaps. Through a serious engagement in 
that process Members could better understand and build th e full picture of subsidies. For that reason, 
the European Union strongly urged Members to support the proposal.  
183.  Australia  was of the view that it was timely and useful to consider the procedures for 
submission and review of the 2023 new and full subsidy n otifications. The first element of the 
proposed text would require written replies to written questions. The written procedure was to 
ensure that the replies were fully understandable to the Member posing questions. In fact, it was 
open to a Member to pose  additional written questions in case the replies were incomplete or unclear. 
Secondly, the proposal would reflect the longstanding practice of the Committee that Members might 
seek to pose written questions on any specific subsidies including those not in cluded in a Member's 
notification, which, according to Australia, was in line with Articles 25.8 and 25.9 as well as the 
longstanding practice of the Committee. Article 25.8 provided that any Member may at any time 
seek information on any subsidy granted o r maintained by another Member or for an explanation of 
the reasons why a specific measure has not been considered subject to the requirement of 
notification. Article 25.9 established that any Member may bring the matter of a measure to the 
attention of th e Committee. The notification process was to enable the other Member to be able to 
assess compliance of the measure with the SCM Agreement. In line with those core obligations, 
since 1995, as part of the review of Members' subsidy notifications, it had bee n the practice of the 
Committee to raise questions on specific subsidy programs that were not included in the subsidizing 
Member's notification. Australia encouraged Members to support the proposal.  
184.  Canada  reiterated that the subsidies notification process  was a fundamental exercise to uphold 
transparency which included the written question and answer process. The proposal would support 
enhanced transparency by proposing a minor amendment that would formalise a long -standing 
practice that many Members have already respected. It would help ensure that Members' 
notifications were sufficiently complete, allowing other Members to assess the possible impact of 
such subsidies on trade and exercise their rights in respect of the implementation and enforcement 
of such measures. This would not only support the effective functioning of the SCM Agreement, but 
also the predictability of the rules -based trading system as a whole.  
185.  Japan  noted that timely submission of complete notifications with all necessary information 
was an agreed -upon obligation of all Members. If specific subsidies were not subject to the review 
by the Committee due to lack of submission of the required notifications, that would seriously 
undermine the fundamental obligations under the SCM Agreement. Japan believed that if the 
information on specific subsidies was shared more smoothly in writing that would enhance 
transparency.  
186.  India noted that the proposal in document G/SCM/W/583 was the same as the proposal with 
respect to Article 25.9 of the SCM Agr eement which was also discussed under agenda item six. India 
reiterated its concerns raised under agenda item six indicating that the information on industrial 
subsidies was sought and compiled from different stakeholders. The conditions and timelines 
proposed in the document for review of Members' 2023 new and full notifications could not be 
committed. India reiterated that the timeline should be based on  best-endeavour  basis with a period 
of 90 days for providing written answers initially and 60 days for follow -up questions.  
187.  The Russian Federation  noted that its concerns remained the same as the proposal had not 
evolved. Those concerns were caused by the proposed wordin g of "including questions regarding 
specific subsidies not included in the notification". This wording appeared to be at odds with 
Article  25.2 of the SCM Agreement which did not enable specific subsidies to be unnotified. In 
addition, it would make it pos sible to label a measure as a specific subsidy without substantiation as 
required by Article 2.4 of the SCM Agreement. Also, it might imply additional burden on the notifying 
Member to prove that the unnotified measure was not a specific subsidy. The Russi an Federation 
also noted that Article 25.8 of the SCM Agreement enabled posing questions on measures which 
were not notified. The Russian Federation was of the view that such questions were useful as they 
let the notifying Member double check whether any s pecific subsidy had been overlooked and G/SCM/M/121  
 
- 29 - 
 
  whether it needed to be notified additionally. In addition, it would give an opportunity to provide 
detailed explanations why the measure in question was not subject to notification. The 
Russian  Federation, therefore , believed that the proposed amendment should be reviewed in order 
to eliminate that ambiguity. For instance, the wording "specific subsidy" might be replaced by 
wording "alleged subsidy". According to the Russian Federation, the SCM Agreement and the curr ent 
procedures for review provided Members with sufficient tools for a comprehensive exchange of 
information. If Members deemed it  necessary to amend the procedures with better clarification, the 
Russian Federation would be ready for further discussion.  
188.  China attached great importance to transparency and therefore appreciated the efforts made 
by the proponents of the proposal to enhance transparency. However, China was of the view that 
the proposal would increase Members' written answer obligations under Ar ticles 25.8 and 25.10. 
There were realistic difficulties faced by some Members regarding notification practices in addition 
to capacity constraints or different understanding of subsidies. As the Chair had reported earlier, 
89 Members had not yet submitted  their notifications. In this regard, it would not be a constructive 
manner to impose new obligations on Members without addressing those difficulties first. China 
remained open for further discussion on the proposal.  
189.  New Zealand  expressed its support for the proposal which was consistent with the spirit and 
intent of existing transparency obligations. New Zealand viewed the proposal as an important way 
to support transparency and effective monitoring function of the Committee.  
190.  The Chair noted that there was a considerable divergence of views regarding the proposal. 
She suggested that the co -sponsors continue to discuss the proposal with other Members until the 
next meeting of the Committee and to inscribe this item on the agenda of that meeting if t hey so 
wish. 
191.  The Committee took note  of the statements made.  
12  OTHER BUSINESS  
12.1  India – countervailing duty investigation on the importation of saturated fatty 
alcohols from Indonesia  
192.  Indonesia  noted that in the countervailing duty investigation on saturated fatty alcohols from 
Indonesia, the investigating authority of India ("DGTR") failed to provide meaningful disclosure 
statements containing essential facts which would form the basis to issue  the definitive 
determination. The investigating authority also failed to provide the interested parties with sufficient 
time to respond to the Disclosure Statements, which was a serious violation of Article 12.8 of 
SCM Agreement.  
193.  The Government of Indones ia had received the disclosure statement document on 
22 September 2022. The deadline for comments was on 27 September 2022 which included 
weekend holidays. Thus, on 23 September 2022, the Government of Indonesia had requested the 
DGTR for an extension of t he deadline to submit its response through letter 
No. PP.01/726/DAGLU.6/ND/2022. In response, the DGTR extended the deadline for only one day 
via an e -mail on 26 September 2022. On 27 September 2022, the Government of Indonesia had 
requested another extens ion via another letter No.  PP.01/736/DAGLU.6/ND/9/2022. Unfortunately, 
however, no reply had been provided by the DGTR. Therefore, the Government of Indonesia had 
submitted its response to the Disclosure on 28 September 2022. On 29 September 2022, the DGTR  
had informed the interested parties that an additional extension to submit revised or additional 
comments had been granted until 7 October 2022 which was unfavourable for Indonesia as it had 
been communicated after the original deadline.  
194.  In terms of basi c essential facts, the Government of Indonesia had sent two letters requesting 
meaningful disclosure statements containing essential facts through letter 
No. PP.01/736/DAGLU.6/ND/9/2022 dated on 27 September 2022 and letter 
No. PP.01/763/DAGLU.6/SD/10/2022  dated on 7 October 2022. However, as no response had been 
received from the DGTR, Indonesia requested India to provide clarification on that matter.  G/SCM/M/121  
 
- 30 - 
 
  195.  India indicated that the comments received from Indonesia would be conveyed to the DGTR 
for appropriate a ction.  
12.2  The Chair's statements on the election of the new Vice -Chair and the ongoing 
consultations in the General Council and the Council for Trade in Goods regarding 
WTO  reform and improving the functioning of the WTO Committees  
196.  The Chair indicated that s he had two statements to make. First, the Chair referred to the 
election of the Committee's new Vice -Chair. The Chair recalled that the Committee had decided at 
its meeting in April 2022 that once she had taken office, she would conduct the necessary 
consu ltations with Members with respect to the election of the Committee's Vice -Chair. The Chair 
reported that she had started these informal consultations, but that for the time being she was not 
in a position to propose a name for the election of a new Vice -Chair. 
197.  Second, the Chair referred to the ongoing consultations at the level of the General Council 
(GC) and the Council for Trade in Goods (CTG) regarding WTO reform. The Chair noted that a number 
of delegations at the recent GC meeting had raised the issue  of improving the operation of 
WTO Committees as an area for potential work. The Chair of the GC in his closing remarks also 
emphasized that in parallel with the formal and informal conversations in the GC, each subsidiary 
body should be tasked to see what  has been done and explore ways to improve their daily functioning 
and better deliver on their respective mandates. He also encouraged the subsidiary bodies that had 
already started such discussions to continue to do so.  
198.  In the same vein, the Chair of the CTG had convened an informal session of that Council on 
14 October 2022 to report on his consultations concerning MC12 implementation issues, including 
the issue of improving the functioning of the different Committees under the auspices of the CTG. 
At the  end of that meeting, the Chair of the CTG proposed two concrete and immediate suggestions, 
to which there were no objections, that could be used to prepare for future discussions. The Chair 
quoted them one by one:  
"The first suggestion would be to request  the Chairpersons of the 14 CTG's subsidiary bodies 
to prepare a report, under their own responsibility and with the Secretariat's assistance, 
describing the concrete actions their Committees have adopted over the past years to 
improve their work, as well as the proposals for improvements that have been submitted. 
This will provide an opportunity for each Chair to present an overview of the history of past 
negotiations or attempts to improve the daily work of their Committee. We can then request 
the Secreta riat to compile this information for our consideration, and then have an informal 
meeting where we will also invite those 14 Chairpersons of the subsidiary bodies.  
 
The second suggestion that was proposed by several delegations, and that was also subjacent  
in my report, was to organize an information session, including the use of Interprefy to allow 
for participation from Capitals, to learn more about the electronic tools that are currently 
being used by some Committees (for example, e Agenda, Trade Concern s Database, the 
Notifications Portal, and e -Ping). We will work on the format with the Secretariat. This would 
provide an opportunity to explore whether we can get inspiration to expand the use of these 
tools to other Committees, if there are possible impr ovements that can be introduced to 
them, and also whether there are plans for improvements in the context of the modernization 
of the Secretariat that were launched by the Director General."  
199.  The Chair stated that on 20 October 2022, the Chair of the CTG ha d invited all 14 Chairs of 
the different CTG subsidiary bodies to a meeting at which he reported back on the outcome of the 
meeting held with Members on 14 October 2022 and to exchange views on the issue. At the meeting 
on 20 October 2022 and as confirmed by a communication to all 14 Chairs received from the Chair 
of the CTG, the Chairs of the CTG subsidiary bodies have been requested to prepare two factual 
reports under their own responsibility. The Chair indicated that the upcoming Chair would prepare 
these reports with the help of the Secretariat and under her/his own responsibility as the Chair of 
the Committee.  
200.  The Chair explained that the first report concerned the WTO response to the pandemic and 
should describe the activities that the Committee has u ndertaken in the context of the pandemic G/SCM/M/121  
 
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  over the past two years, if any. If no work had been done in the Committee, then this should be 
stated briefly.  
201.  The second report concerned the current functioning of the Committees, which was one of the 
issues that  Members would like to discuss under the umbrella of the WTO reform. This report should 
describe the concrete actions that the Committee has adopted over the past years to improve its 
work, as well as the proposals for improvements that have been submitted , even if they were not 
successful. This would provide an opportunity for each Chairperson to present an overview of the 
reforms that have already been introduced and where the Committee currently stands. This exercise 
should only focus on past actions and  discussions. Since this was meant to be a stocktaking and 
information gathering exercise to allow for a fact -based discussion among Members, all Chairs were 
requested to refrain at this stage from including recommendations or an assessment of what needed 
to be improved – this would be for Members to take up, should they so choose. The Chair mentioned 
that once that factual report was submitted to the CTG, any Member that may have new ideas about 
the operation of this Committee would be welcome to raise the m for consideration in this forum.9 
202.  The Committee took note  of the statements made.  
13  DATE OF NEXT REGULAR MEETING  
203.  The Chair recalled that by decision of the Committee, its two regular meetings take place in 
the spring and the autumn of each year, in the last week of April and the last week of October, 
respectively. For the next spring meeting, the last week of April 2023 would coincide with Eid El Fitr 
which followed the Holy Muslim month of Ramadan. The United Nations would observe Eid on 
24 April 2023, and the WTO Secretariat would not schedule any official meetings that day. To ensure 
a full five -day work week for the Rules Committees, the next regular meeting of the Committee, 
would thus exceptionally be held in the week of 1 May 2023.  
14  ANNUAL REPORT OF  THE COMMITTEE ON SUBSIDIES AND COUNTERVAILING 
MEASURES TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7)  
204.  The Committee adopted  its 2022 Annual Report to the Council for Trade in Goods .10 
 
__________  
 
9 Those reports were circulated in documents G/L/1449 – G/SCM/162 and G/L/1450 – G/SCM /163.  
10 G/L/1438 – G/SCM/161 .