RESTRICTED  
  
G/SCM/M/123  
 
27 June 2023  
(23-4390) Page: 1/44 
Committee on Subsidies and Countervailing Measures   
 
MINUTES OF THE REGULAR  MEETING  
HELD ON 2 MAY 2023  
CHAIR: MS SALLY BARDAYAN (PANAMA)  
1. The Committee on Subsidies and Countervailing Measures ("Committee") held a special 
meeting on 2 May 2023, convened in WTO/AIR/SCM /49 dated 21 April 2023. 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, c urrently contained in 
document  RD/SCM/4/Rev.19.  
3. The Committee adopted the following agenda:  
1  NATIONAL LEGISLATION – NEW NOTIFICATIONS  ................................ ........................  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 reviewed)  ................................ .............................  2 
1.1.1   El Salvador (G/ADP/N/1/SLV/3/S uppl.2 - G/SCM/N/1/SLV/3/S uppl.2 - 
G/SG/N/1/SLV/3/S uppl.2) ................................ ................................ ...........................  3 
1.1.2   Iceland (G/SCM/N/1/ISL/2)  ................................ ................................ ...............  3 
1.1.3   United Kingdom (G/ADP/N/1/GBR/1/S uppl.16 -  
G/SCM/N/1/GBR/1/S uppl.15) ................................ ................................ ......................  3 
1.1.4   United States (G/ADP/N/1/USA/1/S uppl.32 - G/SCM/N/1/USA/1/S uppl.33 - 
G/SG/N/1/USA/1/S uppl.3) ................................ ................................ ...........................  3 
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 FOLLOW -UP QUESTIONS CONCERNING PREVIOUSLY REVIEWED 
LEGISLATIVE NOTIFICATIONS:  ................................ ................................ ........................  4 
2.1  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 
B. OUTSTANDING WRITTEN FOLLOW -UP QUESTIONS CONCERNING PREVIOUSLY 
REVIEWED LEGISLATIVE NOTIFICATIONS POSED UNDER THIS AGENDA ITEM AT 
PREVIOUS COM MITTEE MEETINGS:  ................................ ................................ ..................  5 
2.2  Cameroon ( G/ADP/N/1/CMR/2 - G/SCM/N/1/CMR/2 – G/SG/N/1/CMR/2)  ..........  5 
2.3  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 G/SCM/M/123  
 
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  2.4  Ghana (G/ADP/N/1/GHA/2 - G/SCM/N/1/GHA/2 - G/SG/N/1/GHA/2)  .................  5 
3  SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ARTICLE  25.11) – 
G/SCM/N/386 AND G/SCM/N/386/S uppl.1 ................................ ................................ .... 6 
4  PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: NOTIFICATIONS 
(ARTICLE 25.11)  ................................ ................................ ................................ ............  10 
5  PROCEDURES FOR REVIEW OF 2023 NEW AND FULL NOTIFICATIONS  .......................  10 
6  ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR THE  
ELIMINATION OF EXPORT SUBSIDIES  ................................ ................................ ...........  11 
7  IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS  AND 
OTHER INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT  ...... 11 
8  CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM ANNEX VII(B)  ............  17 
9  PERMANENT GROUP OF EXPE RTS ................................ ................................ ...............  18 
10  DISCRIM INATORY SUBSIDIES POLICIES AND MEASURES OF THE  
UNITED STATES – ITEM REQUESTED BY CHINA ................................ ..............................  18 
11  SUBSIDIES AND OVERCAPACITY – ITEM REQUESTED BY AUSTRALIA, CANADA,  
THE EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND THE U NITED STATES  ....... 23 
12  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  ................................ ................................ ..............................  28 
13  PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF NEW AND FULL  
SUBSIDY NOTIFICATIONS – ITEM REQUESTED BY AUSTRALIA, CANADA,  
THE EUROPEAN UNION, JAPAN, NEW ZEALAN D, CHINESE TAIPEI, THE 
UNITED  KINGDOM, AND THE UNITED STATES  ................................ ................................  31 
14  REPORTING BY THE CHAIRPERSON TO THE COMMITTEE ON THE REPORTS 
SUBMITTED TO THE COUNCIL FOR TRADE IN GOODS ("CTG") ON THE  
FUNCTIONING OF THE COMMITTEE AND THE RESPONSE TO THE PANDEMIC  
(DOCUMENTS G/L/1449 - G/SCM/162 & G/L/1450 - G/SCM/163) AND THE 
CONSULTATIONS HELD BY THE CHAIR OF THE CTG IN THIS REGARD  ............................  33 
15  REPORTING BY THE CHAIRPERSON TO THE COMMITTEE ON THE  
TRANSPARENCY SESSION HELD ON 12 APRIL 2023 REGARDING JOINT WORK  
ON SUBSIDIES BY FOUR INTERNATIONAL ORGANIZATIONS AND RELATED  
CREATION OF A SUBSIDY DATABASE BY THE SECRETARIAT  ................................ ..........  35 
16  OTHER BUSINESS  ................................ ................................ ................................ ..... 42 
16.1  European Union – proposal on WTO deliberations and State intervention in  
support of industrial sectors (WT/GC/W/864)  ................................ .............................  42 
16.2  Republic of Korea - European Union's Foreign Subsidies Regulations  ...................  43 
17  DATE OF NEXT REGULAR MEETING  ................................ ................................ ...........  44 
18  ELECTION OF OFFICERS  ................................ ................................ ...........................  44 
 
1  NATIONAL LEGISLATION  – NEW NOTIFICATIONS  
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. The Chair indicated that items 1.1.1  through 1.1.4  of the agenda concern the review of new 
legislative notifications not previously reviewed by the Committee . She stated that  the reviews would 
 
1 Relevant deadlines for written questions and written answers regarding the notifications of legislation 
reviewed in the May 2023 meeting can be found in section 1 of document G/ADP/W/5 11 - G/SCM/W/58 8 - 
G/SG/W/25 7. G/SCM/M/123  
 
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  be conducted in accordance with the rele vant procedures adopted by the Committee and described 
in document G/SCM/W/2 93/Rev.1 . In addition, and pursuant to paragraph 8  of the same 
procedures, item 1.2 pertained to the legislative notification of Saint Kitts and Nevis with 
outstanding written ques tions.  
2. The Chair referred to the past and future deadlines concerning the review of the new legislative 
notifications as follows: any written questions were to be submitted to the Member concerned, and 
to the Secretariat by 11 April 2023. Oral questions mi ght have been asked at this meeting, and any 
Member wishing to receive a written answer would submit the questions asked orally also in writing, 
not later than 25  May 2023. Written answers to all written questions should be submitted to the 
Member posing t he questions and to the Secretariat by 15  June 2023.  
3. The Chair also recalled that the primary review of those legislative notifications would be held 
in the Committee on Anti -Dumping Practices requesting delegations to limit their questions to issues 
which  were specifically related to countervailing measures.  
 
1.1.1   El Salvador (G/ADP/N/1/SLV/3/S uppl.2 - G/SCM/N/1/SLV/3/S uppl.2 - 
G/SG/N/1/SLV/3/S uppl.2)  
4. Written questions had been posed regarding this notification and could be found in document:  
• G/ADP/Q1/SLV/14 - G/SCM/Q1/SLV/14 - G/SG/Q1/SLV/13 – Questions from the United States  
5. El Salvador  indicated that the questions had been conveyed to Capital and that it hoped to 
provide responses as soon as possible.  
6. The United States  indicated that it loo ked forward to receiving the written answers.  
7. Written answers were subsequently received,  prior to the deadline, and could be found in 
document:  
• G/ADP/Q1/SLV/15 - G/SCM/Q1/SLV/15 - G/SG/Q1/SLV/14 – Replies to the United States   
1.1.2   Iceland (G/SCM/N /1/ISL/2)  
8. No written or oral questions were posed with respect to th is notification.  
9. Iceland  stated that the Icelandic Customs Law had been revised some years earlier which did 
not contain substantial changes to the previously notified legislation. Since the revised  law had a 
new reference number it had been submitted for transparency purposes.  
1.1.3   United Kingdom (G/ADP/N/1/GBR/1/S uppl.16 - G/SCM/N/1/GBR/1/S uppl.15) 
10. No written or oral questions were posed with respect to this notification.  
11. No statements were made by any Member.  
1.1.4   United States (G/ADP/N/1/USA/1/S uppl.32 - G/SCM/N/1/USA/1/S uppl.33 - 
G/SG/N/1/USA/1/S uppl.3) 
12. No written or oral questions were posed with respect to this notification.  
13. No statements were made by any Member.  
14. The Committee took note  of the notifications, questions, and statements.  G/SCM/M/123  
 
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  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)  
15. 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  
16. 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.  
17. The Committee took note  of the notifications, questions, answers and the statements made.  
2  NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE2 
18. The Chair first recalled the relevant procedures contained in document G/SCM/W/293/Rev.1 
and the deadlines. Members wishing to ask questions about notifications of legislation or regulations 
previously reviewed by the Committee were to have submitted those question s in writing to the 
notifying Member and to the Secretariat no later than 20  March  2023. Members receiving such 
questions were to submit their written responses by close of business on 17  April 2023. In this 
connection, questions were posed to the previous ly reviewed legislative notification of the 
United  Kingdom under agenda item 2.1 and answers have been received.  
19. The Chair indicated that following that, the Committee would turn to the written questions 
posed under this agenda item at previous Committee m eetings, which remained unanswered to 
date. These would be discussed under agenda items 2.2, 2.3, and 2.4 pertaining to the previously 
reviewed legislative notifications of Cameroon, European Union, and Ghana, respectively  
A. WRITTEN FOLLOW -UP QUESTIONS CO NCERNING PREVIOUSLY REVIEWED 
LEGISLATIVE NOTIFICATIONS:  
2.1  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)  
20. The written follow -up questions had been posed regarding this notification and could be found 
in document:  
• G/ADP/Q1/GBR/9 - G/SCM/Q1/GBR/9 - G/SG/Q1/GBR/11 – Follow -up questions from 
Canada  
21. The written replies were submitted and could be found in document:  
• G/ADP/Q1/GBR/10 - G/SCM/Q1/GBR/10 - G/SG/Q1/GBR/12 – Replies from the 
United  Kingdom  
 
2 Relevant deadlines for written follow -up questions and written answers regarding the notifications of 
legislation reviewed in the May 2023 meeting can be found in section 1 of document G/ADP/W/510 - 
G/SCM/W/587 - G/SG/W/256 . G/SCM/M/123  
 
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  B. OUTSTANDING WRITTEN FOLLOW -UP QUESTIONS CONCERNING PREVIOUSLY 
REVIEWED LEGISLATIVE NOTIFICATIO NS POSED UNDER THIS AGENDA ITEM AT 
PREVIOUS COMMITTEE MEETINGS:  
2.2  Cameroon ( G/ADP/N/1/CMR/2 - G/SCM/N/1/CMR/2 – G/SG/N/1/CMR/2)  
22. Written follow -up questions had been posed regarding this notification and could be found in 
document:  
• G/ADP/Q1/CMR/5 - G/SCM/Q1/ CMR/5 - G/SG/Q1/CMR/5 – Questions by the United States  
23.  The Chair noted that these questions had been pending since the Committee meeting of 
October 2022.  
24. Cameroon was not present at the time. Oral answers had not been provided at the meeting, 
nor had written answers been received to date.  
25. No statements were made by any Member.  
2.3  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)  
26. The written follow -up questions posed by the Russian Federati on can be found in document:  
• G/ADP/Q1/EU/15 - G/SCM/Q1/EU/15 – follow -up questions from the Russian Federation  
27. The European Union  did not take the floor on this agenda item.  
2.4  Ghana  (G/ADP/N/1/GHA/2 - G/SCM/N/1/GHA/2 - G/SG/N/1/GHA/2)  
28. 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  
29. Ghana was not present at the time. Oral answers were not provided at the meeting, nor had 
written answers been received to date.  
30. The Chair, recalling the Committee's agreed procedures, informed Members that for new 
legislative notifications to be placed on the agenda of  the fall 202 3 meeting, they should be circulated 
in all three languages by 1 1 September 202 3. Shortly after that date, the Secretariat would circulate 
a document informing Members of all legislative notifications to be reviewed at the next meeting. 
Pursua nt to paragraph 8 of document G/SCM/W/293/Rev.1, all unanswered written questions 
pertaining to new legislative notifications reviewed 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.  
31. The Chair also recalled that two new legislative notifications from the Kingdom  of 
Saudi  Arabia  would be considered under the first agenda item of the next me eting of the 
Committee. Written questions concerning that notification as well as any other new legislative 
notifications for the fall 202 3 meeting of the Committee should be submitted to the Member 
concerned and to the Secretariat by 2 October  2023. 
32. In order to place previously -reviewed legislation on the agenda of the autumn meeting for 
further review, written questions must be submitted to the Member concerned and the Secretariat, 
not later than 1 1 September 202 3; and written answers to such questions mu st be submitted to the 
Member concerned and the Secretariat, not later than 9 October 202 3. The Secretariat would G/SCM/M/123  
 
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  circulate the usual triple -symbolled document containing all the relevant deadlines shortly after the 
meeting.3 
33. 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 and 
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 M embers that had not yet made a legislative 
notification to do so as promptly as possible.  
34. The Chair referred to the document G/SCM/N/18/Add.5 8 which contained the latest revision 
of the list of authorities competent to initiate and conduct investigations w ithin the meaning of 
Article  25.12 of the SCM Agreement and invited all Members with such an authority to submit the 
required notification pursuant to Article 25.12 of the SCM Agreement, or to review and update as 
necessary their previously -submitted notif ications.  
35. The Committee took note  of the notifications, questions, and statements.  
3  SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ARTICLE  25.11) – 
G/SCM/N/386 AND G/SCM/N/386/S uppl.1 
36. The Chair recalled that document G/SCM/N/3 99 and G/SCM/N/3 99/Suppl.1  had invited all 
Members to submit their semi -annual reports under Article 25.11 of the SCM  Agreement of 
CVD actions taken during the period 1 July through 31 December  2022. 
Document  G/SCM/N/3 99/Add.1 /Rev.1  provided the current status of Members' reporting  for that 
period. Paragraph 1 of the document listed those Members reporting 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 4 7 Members that had submitted a one -time notification that 
they had no investigating authority, had taken no countervailing actions to date, and did not 
anticipate taking any such actions in the foreseeable future.  
37. One-time notifications served a useful transparency function, as they assisted non -active 
Members to meet their notification requirements 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.  
38. 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.  
39. No comments or questions were raised c oncerning the semi -annual reports of Australia, Brazil, 
Canada, China, Colombia, the European Union, India, the United Kingdom, and Viet Nam.  
40. On the semi -annual report of the  United States , Morocco  expressed its concerns regarding 
the countervailing duties  applied on the imports of phosphate fertilizers from Morocco. The 
United  States had been proceeding with an administrative review where it would recalculate the 
initial measure. Both the Kingdom of Morocco and the Moroccan exporters had fully cooperated w ith 
the investigating authority and responded a series of questions leading to a large amount of work. 
The Moroccan Government would continue to cooperate hoping that the administrative review would 
result in a fair duty compatible with the WTO rules.  
41. China  expressed three concerns regarding the United States' practice in CVD investigations. 
Firstly, China objected to the application of adverse facts available (AFA) practice in determining the 
existence of a public body. China had consistently voiced it s objection to the determination of the 
alleged provision of imports for less than adequate remuneration ("LTAR") program, both during the 
CVD investigations and in previous regular meetings of the Committee. China reiterated that there 
was no such program  in China. It was widely recognized that in order to establish the existence of 
 
3 Relevant deadlines can be found in Section 1 of document G/ADP/W/51 1 - G/SCM/W/588 - 
G/SG/W/257 . G/SCM/M/123  
 
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  an unwritten subsidy program, evidence of a systematic series of actions was particularly relevant. 
In other words, an investigating authority had to demonstrate a systematic s eries of actions, provide 
evidence of the existence of a plan or scheme, and identify the beneficiaries of the subsidy. The 
United States Department of Commerce  ("DOC")  incorrectly applied AFA in its findings on the public 
body and the so -called LTAR progr am. 
42. In previous cases, both the Government of China ("GOC") and Chinese respondent companies 
had made reasonable efforts to provide the necessary information regarding their commercial 
nature. The commercial information of the input suppliers could be found in the Enterprise Credit 
Information Publicity System ("ECIPS"). The GOC had provided registration documents as well as 
ownership structure documentation for all of the input suppliers in that system to prove their 
commercial nature. The DOC chose to  ignore the information provided and found out the materials 
that the GOC and the respondent companies would not be able to provide. The DOC applied AFA to 
make the public body determination without any further analysis of the documents it had received.  
43. In the ninth administrative review relating to multi -layered wood flooring from China, the DOC 
once again chose to ignore what the GOC had provided . In that case, the GOC had tried its best to 
obtain from a number of suppliers, their business license s, artic les of association, capital verification 
report s and management appointment documents. The GOC submitted over 1 ,000 pages of 
documents from 18 independent suppliers. However, the DOC applied AFA on the ground that the 
record was still missing critical info rmation regarding whether the owners, the members of the board 
of directors or the managers of the input suppliers were members of the CCP. In response to  the 
DOC's supplemental questionnaire, the  GOC further provided the business information of another 
two input suppliers but the  DOC had ignored those documents and applied  AFA.  
44. China recalled that according to Article 12.7 of the SCM Agreement, determinations might be 
made on the basis of the facts available, only if necessary information was not provided  within a 
reasonable period or the investigation was impeded. It hoped the  United States could change its 
practice of abusing  AFA and take serious consideration of the documents provided by  the GOC and 
the Chinese respondents.  
45. China also expressed its conc erns regarding the Export Buyer 's Credits Program ("EBCP"). 
Although t he Chinese companies had provided detailed information to prove the non -use of the EBCP  
and ha d made their utmost efforts in the whole process  the DOC had applied AFA. The efforts by the 
GOC and Chinese respondent companies were recognized by the United States' Court of International 
Trade ("CIT"). The CIT required the DOC to correct its wrong opinion and redetermine the issue 
showing a consistent view on this point in m any cases. Despite this fact, the DOC kept its AFA 
practice in the export buyer's credits program determination. The CIT indicated that it was familiar 
with other actions concerning that program, including the various explanations the DOC had provided 
in its remand redeterminations. However, the DOC has failed to provide a reasonable explanation 
for its refusal to rely on the customer certifications of non -use. With the persistent wrong practice, 
the ensuing result was that Chinese companies had to sue the DOC at the CIT in order to change its 
determination on export buyer's program and to reduce the 10.54% CVD rate. China expected the 
United States to make its practice in compliance with the SCM Agreement respecting the rulings of 
the CIT.  
46. China also raised  its concern regarding using external benchmark to calculate the amount of 
subsidy expressing its firm opposition on introducing external benchmark in  CVD investigations 
without reviewing and analysing China's prevailing market situation for the goods or s ervices in 
question.  
47. In many of the  CVD investigations, the  GOC had provided its response based on available 
industry information. The  DOC had chosen to ignore China's position and responses and determined 
that the input market within China was distorted b ased on adverse facts available. In many of its 
determination issued, the  DOC simply said that the  GOC had failed to provide all answers to the 
questions in questionnaire such as the total number of producers, the total volume and value of 
Chinese domestic  consumption of the input and the total volume and value of Chinese domestic 
production of the input, the percentage of domestic consumption by domestic production, the total 
volume and value of imports of the input, the percentage of total volume and supplementary  value 
of domestic production, that was, accounted for by companies in which the government maintained 
a major ownership or controlling managing interest, either directly or through other government G/SCM/M/123  
 
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  entities. In general , it would not be easy for a ny market economy country or region to answer all 
those questions.  
48. For certain primary or major input material, a central government might provide some 
answers to the questions. However, in most of the cases concerning non -common inputs, it would 
not be e asy. The DOC had applied  AFA on the grounds  that the GOC had not provided answers to 
all of the questions. China could not find any language explaining the DOC's reasoning of how the 
prevailing market situation for input in question had been distorted, and  such distortion had rendered  
it impossible to be the benchmark for the comparison.  
49. In addition, using out -of-country price might lead to a result that was extremely unfair to a 
responding company. In the first  CVD administrative review of aluminium folio , the investigating 
authority had chosen to use the alloy aluminium products price and  HS code sub-heading 7606.12  
as a whole to be the benchmark. However, the Chinese responding company had made it clear that 
it had produced aluminium foil using aluminium  foil stock containing only  one foil and eight foils  of 
alloy which were the  most similar to that containing 1050 alloy. According to the experts from 
China  Nonferrous Metal Industry Association, the Trade Data Monitor ("TDM") data concerning 
HS sub-heading 7606.12  contained all kinds of alloy aluminium, including those used for making 
artificial uncast . The preceding fee for aluminium foil stock was around  USD 380 per ton, while the 
preceding cost for the aluminium sheet used for making aircraft migh t be as high as  USD 7,300 per 
ton. That Chinese company had been subject to  33.36% and  31.41% CVD rates for the  POI of  2017 
or 2018 respectively, for a program of provision of input for less than adequate remuneration .  
50. China noted that the CIT  had issued its judgement on this case. On the issue of benchmark 
calculation for aluminium plate, it had  concluded that the DOC had not explain ed adequately its 
decision to select  TDM data source and to reject the submission of the respon ding company and 
requested th e DOC  to reconsider its consideration. In the fourth  administrative review of the 
CVD order on aluminium foil from China, the respondent company was facing similar concerns. It 
was trying to persuade the investigation authority to narrow  its selection of t he benchmark.  
51. China hoped that  the United  States could comply with its international obligation s and take 
into consideration of the prevailing benchmark condition s of China without prejudice to China's  
position against the resort to external benchmark.  
52. The Russian  Federation  recalled that it had previously raised concerns about certain practices 
of the DOC in its countervailing duty investigations which had become systemic in nature. First, the 
DOC considered the entities selling inputs to the exporting producers as public bodies, explaining 
that the state allegedly had meaningful control over them. This allegation stemmed from the 
Department's examination of the level of shares in the entity owned by t he State, presence of current 
or former state officials in its managing bodies, involvement of the entity in state policies. How ever, 
these factors in themselves did not evidence that the entity possesses, exercises and was vested  
with governmental authori ty, which was vital for its consideration as a public body. Nevertheless, 
based only on that allegation, the Department considered such entities as public bodies establishing 
the existence of subsidies in violation of Article  1 of the  SCM Agreement.  
53. With r espect to the DOC's determination of de facto  specificity, the Russian Federation 
indicated that the DOC typically looked at the number of recipients of the alleged assistance 
comparing it to the entire universe of enterprises in the jurisdiction of the gr anting authority. 
Commercial realities in the economy, as well as the absence of any plan or scheme limiting the 
number of recipients were disregarded. Such methodology would inevitably lead to establishment of 
de facto  specificity. Following the DOC's log ic, a subsidy would be specific in absolutely all cases 
when it was not used by virtually every economic operator. This was a too loose interpretation of 
Article  2 of the  SCM Agreement, which was not intended by its drafters.  
54. Finally, in provisional decisi on within the administrative review of the countervailing measure 
on phosphate fertilizers, the DOC had preliminarily countervailed the provision of mining licenses to 
Russian phosphate fertilizer producers. This raised another concern. The DOC mischaracte rized the 
management system for subsoil resources, including the issuance of licenses for the use of subsoil 
as a countervailable subsidy and a subsidy program. This system was designed for effective 
management of subsoil resources and had nothing to do wi th financial contribution by a government 
conferring a benefit. Furthermore, in its finding regarding the alleged benefit, the DOC had rejected G/SCM/M/123  
 
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  actual auction prices for licenses. The D OC did not make its determination of the adequacy of 
remuneration in re lation to prevailing market conditions in the country of origin of product under 
consideration. For the record of the Committee, the Russian Federation reiterated its concerns and 
urged the United  States to comply with the  WTO rules and to withdraw its cou ntervailing measures.  
55. With respect to Morocco's comments, the United States  appreciated the answers by Morocco 
to the questionnaire. It recognized that answering that questionnaire was a significant undertaking 
which required time and resources. The United States encouraged Morocco to continue to participate 
in the proceedings noting that Morocco's comments provided in t he course of the proceeding would 
be addressed in the final determination  
56. In response to China's comments on public body determination, the United States noted that 
the DOC used AFA only when there was a failure on the part of the respondent companies or the 
governments to fully respond to the questionnaires to the best of their  ability.  Where  the GOC 
reported that certain suppliers of inputs to respondent companies were less than majority -owned by 
the Government, the United States requested additional information to determine whether those 
entities were authorities under the US law. Those questions sought to determine the level of 
involvement in these input suppliers by the Chinese Communist Party ("CCP") including whether any 
owners, members of the board of directors or management officials were  CCP officials. China had 
never re sponded fully to those questions beyond a cursory summary on the role of the  CCP in China, 
despite myriad evidence that  CCP exerted significant control over economic activities in China. Thus, 
this information on the level of  CCP involvement in the managem ent of input suppliers was relevant 
to determine whether these entities that were less than majority -owned by the government could 
be deemed authorities or public bodies for the purposes of determining whether a financial 
contribution had been bestowed. Wi thout such information, the DOC would be unable to complete 
its analysis, and therefore it would be appropriate to rely on the use of facts available to determine 
that these entities were public bodies.  
57. With respect to the EBCP and the use of AFA, the Unit ed States indicated that the DOC used 
AFA, only when it was fully justified, consistent with the US law, and when there was a failure on 
the part of the respondent companies or government to fully respond to the questionnaires to the 
best of their ability.  With respect to the EBCP, the DOC had repeatedly explained in numerous 
countervailing duty cases and decision documents that the GOC had never fully provided all the 
requested information needed to analyse the program. Specifically, the GOC had failed to provide 
all the laws, regulations, and governing documents for the program, as well as a list of third -party 
banks which were necessary to fully understand the nature and operation of the program. The GOC's 
decision to withhold this information continued t o impede and prevent a complete verification of that 
program.  
58. In response to China's comments regarding certain decisions made by the CIT with respect to 
the EBCP , the United States  noted that the decisions of the CIT had been mixed. Nevertheless, the 
DOC developed supplemental questionnaires to request additional financing information from 
Chinese respondent companies where they voluntarily provided certified statements from all of the 
customers in the United States that  they had not use the program. In ce rtain cases, this information 
has been deemed sufficient for the DOC  to find that the program was not used by the company 
respondents. In other cases where company respondents have not provided complete and full 
responses, the DOC has  continued to find thi s program used because these attempts by company 
respondents were insufficient to overcome the myriad gaps that exist ed in the record due to the 
GOC's  refusal to provide requested and necessary information. The DOC has reiterated in recent 
decisions  that the GOC was  a critical party in providing the necessary documentation regarding the 
internal operation of this program, and without such information, the GOC's  non-cooperation 
continue d to significantly impede the DOC's investigation of the program.  
59. With respect to the use of external benchmark the United States noted that many of its 
determinations concerning findings of market distortion and the use of external benchmarks in 
China's  CVD proceedings involve d the app lication of adverse facts available due to the GOC's 
repeated failure to respond fully to the questions to the best of its ability. These questions address ed 
the nature of the domestic market for certain goods or services, the role of the government and 
government -owned enterprises in the relevant markets, and other conditions concerning the 
purchase and sale of goods or services. In most cases, China neither respond ed fully to those 
questions nor provide d the necessary information, for example, regarding t he composition of the 
industry and government ownership of companies in the sector. Without this necessary information, G/SCM/M/123  
 
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  the DOC was  unable to complete its analysis of the relevant market, in particular with respect to the 
role of the government. Therefore,  in those cases, it was appropriate to rely on the use of facts 
available to determine that the domestic markets for these goods were distorted as a result of 
government involvement and that the use of external benchmarks was warranted . 
60. China  reiterated th at the GOC had confirmed in all of the previous investigations that none of 
the respondents had applied for, used, or benefited from the EBCP during the period of investigation. 
Although the Chinese companies had provided affidavits and other detailed info rmation to prove the 
non-use of that program, the DOC, had applied AFA without articulating a reasonable explanation 
on its conclusions. The DOC had concluded that without the information from the GOC regarding the 
third-party banks it could not verify the  claims of non -use without explaining why that information 
was critical. The DOC had determined that it could not rely on information from the respondents and 
their customers to establish non -use, including the self -certifications on the ground that that 
information was not verifiable. China hoped that the United States could change that unfair practice.  
61. In response to the comments by China, the United States  reiterated that the Court decisions 
on this program had been mixed, but it had, in all instances, followed the Court's directions. The 
DOC had accepted information from the relevant companies as to non -use of the program. The 
United States also noted that  those were fact -intensive investigations and encouraged China to fully 
cooperate  
62. 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: NOT IFICATIONS 
(ARTICLE 25.11)  
63. The Chair reported that since the Committee's October 202 2 regular meeting, notifications 
under Article 25.11 of the SCM Agreement with respect to preliminary and final CVD actions 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/3 98; 
G/SCM/N/ 400; G/SCM/N/ 402; G/SCM/N/ 403; G/SCM/N/ 404; and G/SCM/N/ 405.  
64. The Chair drew the attention of Members  to the continued lack of full compliance with this 
important notification requirement. These notifications represent a key element of the required 
transparency concerning Members' countervailing actions, and the Committee could not effectively 
carry out its monitoring and discussion functions if Members did not fulfil their obligations in this 
regard.  
65. The Chair strongly urged all Members taking countervailing  actions to provide these 
notifications of preliminary and final actions, regularly, consisten tly and in a timely fashion. In this 
regard, the Chair noted that the minimum information format for these notifications adopted by the 
Committee in November  2009 (document G/ SCM/3/Rev. 1), contained important guidance as to the 
kinds of actions that should  be notified and the information that should be provided.  
66. The Committee took note  of the notifications and the Chair's statement .  
5  PROCEDURES FOR REVIEW OF 2023 NEW AND FULL NOTIFICATIONS  
67. The Chair recalled that the 2023 new and full notifications were due on 30 June, and thus would 
be subject to review in special meetings beginning with the one in fall 2023. The Committee thus 
needed to decide on procedures for reviewing those notifications. During the last six notification 
cycles, th e new and full notifications had been reviewed on the basis of the procedures set forth in 
G/SCM/117, first adopted in 2005. The Chair proposed that the Committee agree to conduct the 
review of the 2023 new and full notifications on the basis of the same p rocedures.  
68. The Committee so decided . G/SCM/M/123  
 
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  6  ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR THE ELIMINATION OF 
EXPORT SUBSIDIES  
69. 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.  
70. 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.  
71. 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  27.4.4 
72. 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.  
73. New Zealand  reiterated the importance of those notifications which  were an essential element 
of enhancing transparency and ensuring the effective functioning of the WTO. It welcomed the 
notifications made ack nowledging the efforts taken in submitting those. New Zealand requested to 
keep this item on the agenda encouraging those Members to submit their outstanding notifications 
prior to the next meeting of the Committee.  
74. The United States  echoed New Zealand's c omments noting that this was an excellent example 
of how developing and developed Members could act together to address real problems . It also urged 
the remaining four Members to provide their final transparency notifications.  
75. The Chair noted that the Committee would revert to that issue at the next meeting.  
76. The Committee took note  of the statements made.  
7  IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT  
77. The Chair recalled that since the request of the Chairman of the Trade Policy Review Body in 
spring 2009, the Committee had bee n discussing, at formal and informal meetings, "ways to improve 
the timeliness and completeness of notifications and other information flows on trade measures". 
The substance of those discussions was reflected in the minutes of the previous meetings.  
78. The C hair recalled that at Committee's October 202 2 meeting a number of Members had 
indicated their willingness to continue discussions on ways to 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 
 
4 RD/SCM/36/Rev.6.  G/SCM/M/123  
 
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  status of Members' notifications of subsidies and (ii) the US proposal regarding a written process for 
questions and answers under Articles  25.8 and 25.9 of the SCM Agreement.  
79. 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/546/Rev.1 4. The Chair also 
noted that the Secretariat had informed her that it would start updating this document twice a year 
before each regular meeting of the Committee. Accordingly, the next update of that document would 
be made available by the end of September 2023.   
80. The Chair recalled that her predecessor had sent individual reminder letters to the delegations 
of those Members  who had at least one pending new and full subsidy notification. In her letters, the 
previous Chair  had requested those delegations to submit their pending notifications as soon as 
possible encouraging them to seek technical assistance from the Secretariat  if they needed.  
81. 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 th e proper functioning of the Agreement. 
Eighty -eight Members have not yet made their 2021 new and full subsidy notification. Seventy -five 
Members have not made their 2019 new and full subsidy notification, although the deadline was 
almost four years earlier . Further, 64 Members still have not made their 2017 notifications, which 
were due almost six years earlier. Many of those Members either have never notified or have done 
so only in the distant past.  
82. The Chair invited the Members that had not yet submitted their 2021 notifications to provide 
an update to the Committee on their progress in prepari ng those notifications. No such delegation 
took the floor.  
83. 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 
obligati ons. 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.  
84. The Chair also referred to a technical assistance project on subsidy notification s that has been 
developed by the Secretariat. The aim of the project was to bring  together the officials of developing 
and least -developed -country Members who were responsible for subsidy notifications, for a detailed 
discussion of the notification obligat ion and to exchange experiences and ideas, with a view to 
improving understanding of the notification obligation and identifying ways in which Members could 
streamline and facilitate as much as possible their internal processes for preparing notifications.   
85. This project w ould consist of three phases which w ould be carried out over approximately 
12-16 weeks. In the first phase, the Secretariat w ould provide its usual technical assistance 
regarding the basic notification obligations as well as the basic conce pts under the SCM Agreement. 
In the first phase, the Secretariat w ould also invite participants from other Members, either 
developed or developing, as resource persons to share their experiences in dealing with the 
difficulties of preparing subsidy notific ations.  
86. In the second phase of the project, the participants w ould be expected to prepare a draft 
subsidy notification in approximately eight to ten weeks. During this time, the Secretariat staff  would 
continue to provide direct and individual assistance t o the participants through virtual meetings, in 
addition to providing informal feedback on the draft notifications.  
87. In the last and final phase, the participants w ould have the opportunity to present their draft 
notifications to each other and to share the ir experiences.  
88. The Secretariat ha d invited 43 Members to this new technical assistance activity. In particular, 
least-developed members, unless they submitted their 2021 notifications, and other developing 
Members which ha d not provided any notification f or the last five notification cycles, ha d been invited 
to this project. 26 Members ha d accepted the invitation for this technical assistance activity. The 
first phase of the project w ould start with those Members on 7 June 2023. The Chair hoped that that G/SCM/M/123  
 
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  project would  be a breakthrough and that Members who ha d been experiencing capacity constraints 
would find t he project extremely useful. She encourage d all Members who would receive any 
invitation to similar projects to attend these activities .  
89. The United Kingdom  thanked the Secretariat for its continuous efforts in monitoring 
compliance with notification obligations. It believed that transparency was crucial for the effective 
functioning of the SCM Agreement and remained extremely concerned about the low n umber of 
Members who had submitted notifications. The UK reiterated its specific concern regarding the 
completeness of the submitted notifications. It stated that if a Member's notification omitted a 
significant portion of its subsidies, then that Member h ad failed to fulfil its obligations under the 
SCM Agreement.  
90. For instance, research conducted by the OECD had revealed that below -market financing 
provided through state enterprises was a commonly utilized form of government support. The 
United  Kingdom not ed that such support was not being included in Members' notifications, and it 
found it difficult to believe that none of this support qualified as a subsidy that should be notified 
under the SCM Agreement. The United Kingdom acknowledged that completing no tifications was a 
resource -intensive task that required coordination with multiple levels of government. However, it 
emphasized that it was an important shared obligation that ultimately benefited all Members.  
91. The United Kingdom emphasized that timely and complete notifications were the primary 
means of ensuring that all Members could assess the potential trade effects of subsidies and 
effectively utilize the SCM Agreement to address trade concerns. It expressed gratitude towards 
Members who had made effort s to stay up to date with their notification obligations and called upon 
those Members who had yet to submit their notifications to do so promptly. Lastly, the 
United  Kingdom encouraged Members to seek support from the Secretariat as needed.  
92. The European Union  thanked the Secretariat for updating the report on the state of play 
regarding Members' compliance with their notification obligations. However, it observed that the 
report painted a useful yet highly negative picture of the situation. It no ted that nearly two years 
had passed since the 2021 subsidy notification was due, and the 2023 exercise was imminent.  
93. According to the Secretariat's update on notifications, out of the 164 Members, 88 Members 
had not submitted a notification for 2021, whic h accounted for over half of the Membership. The 
European Union highlighted that the lack of transparency was a widely recognized issue concerning 
subsidy practices, and this lack of information posed obstacles to future important work on subsidies. 
The Eu ropean Union stressed that notification was not a voluntary exercise but an obligation under 
the SCM Agreement, to which all Members had committed. It emphasized that notification was a 
crucial aspect of the Committee's work, enabling Members to assess the  type and level of subsidies 
granted by trading partners and their potential impact on international trade.  
94. The European Union expressed a sincere hope that the Members who had not yet submitted 
their notifications would catch up with the overdue notificat ions and also make the necessary efforts 
to prepare and submit the 2023 notifications, which were due in June.  
95. Canada  expressed deep concern regarding the low level of compliance with the notification 
requirements of the SCM Agreement. It noted that not only had the number of countries completing 
subsidy notifications decreased in recent years, but, according to the most  recent status report, over 
50% of Members had not completed a subsidy notification for the 2021 cycle. This was the first time, 
as indicated by the Secretariat's report, that more than half of the WTO Membership had failed to 
fulfil their subsidy notifica tion obligations under the ASCM, which was seen as a worrisome trend.  
96. Canada emphasized that the notification process was a cornerstone of the  SCM Agreement. It 
stressed the importance of reversing this trend to support the effective functioning of the Agr eement 
and the WTO as a whole. Canada acknowledged that compiling notifications could be a demanding 
task, particularly considering the required resources, time, and coordination between multiple levels 
of government.  
97. Canada encouraged Members experiencin g specific or persistent difficulties in preparing 
notifications to engage in open and frank discussions within the Committee so that the Membership 
could collectively work towards improving compliance with the SCM Agreement's obligations.  G/SCM/M/123  
 
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  98. Japan  emphasized  that the submission of a comprehensive and timely notification was an 
agreed -upon obligation for all Members. It underscored the importance of proper and timely 
notifications in accordance with the SCM Agreement. Japan expressed concern that incomplete 
notifications hindered the review of subsidies that should be reported, thereby undermining the 
fundamental obligation to report on all specific subsidies under the Agreement. It highlighted that 
notifying the subsidies that should be reported would enhance transparency and bring benefits to all 
Members.  
99. Japan also noted the existence of handbooks and webpages provided by the Secretariat, which 
offered extensive guidance on notification. It encouraged all Members to consult with the Secretariat 
for assistance  if needed.  
100.  New Zealand  acknowledged the efforts made by Members in submitting notifications and 
extended gratitude to Members for dedicating their time to this task. It emphasized that timely and 
complete notifications played a crucial role in ensuring tr ansparency and effective monitoring within 
the WTO and the global trading system.  
101.  New Zealand highlighted a recent event titled "Who Notices the Notifications," which it 
co-hosted with the United States and Israel. The event underscored the importance of t he WTO's 
monitoring function to the private sector and confirmed that notifications were indeed noticed. A 
summary of this event was submitted in document RD/CTG/18, to the CTG in early April which also 
included a link to the session for those interested i n watching it.  
102.  New Zealand expressed disappointment in witnessing the continuation of the trend of 
noncompliance with notification obligations. It shared the assessment that chronic noncompliance 
represented a significant problem for the proper functioning  of the SCM Agreement. New Zealand 
acknowledged the capacity constraints faced by Members, particularly as a result of COVID -19 and 
other ongoing pressures, which could impact their ability to complete the necessary processes. 
However, it also encouraged M embers experiencing difficulties to reach out so that the Committee 
could consider how Members or the Secretariat could provide assistance.  
103.  Australia  thanked the Secretariat for revising document G/SCM/W/546, highlighting its 
significance as a vital docume nt for Members. Australia also welcomed the advice that the document 
would be updated twice a year and appreciated the Secretariat's work in this regard.  
104.  Australia emphasized the value it placed on the status of subsidy notifications, considering it 
to be a deeply concerning and sobering analysis of Members' compliance with their notification 
obligations. Despite efforts within the Committee, Australia noted a downward trend, with only 40% 
of Members having submitted their 2021 subsidy notifications. The pe rcentage of Members notifying, 
including those notifying nil subsidies, had reached the lowest level since 1995, standing at 46%.  
105.  Australia reiterated its strong emphasis on the transparency of subsidy programs and regarded 
notification of subsidies as a k ey obligation under the SCM Agreement. It acknowledged the genuine 
capacity constraints faced by Members, recognizing that completing a subsidy notification every 
two years was a complex task. However, Australia also highlighted that many Members not notif ying 
might have the capacity to provide subsidies.  
106.  Australia appreciated the Chair's efforts during the session to seek clarification from Members 
who had not yet notified regarding their efforts to comply with this obligation. It considered this step 
important in identifying any capacity constraints and understanding the specific circumstances of 
non-notifying Members. This would enable the Committee to consider how individual Members or 
the Secretariat could provide assistance. Australia emphasized that t he lack of notifications created 
uncertainty for exporters and hindered fair competition in international markets, emphasizing that 
this aspect formed the foundation of the SCM Agreement.  
107.  The United States  thanked the Secretariat for its excellent work in examining the notification 
obligation, aligning itself with the previous interventions made by other Members. It also agreed 
that the document G/SCM/W/546 should be updated twice a year. The U nited States expressed hope 
that countries requiring technical a ssistance would seek help from the Secretariat.  G/SCM/M/123  
 
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  108.  China  reiterated the importance it attached to the obligation of timely notification. It expressed 
concern about the slow rate of notification among certain Members and expressed hope that those 
Members who h ad not yet submitted their notifications would do so promptly.  
109.  As a developing Member, China acknowledged that it faced similar challenges to other 
Members, including limitations on the capacity to coordinate domestic authorities in collecting and 
processi ng information. China also shared concerns about potential challenges or deliberate 
acquisitions that may arise after notification.  
110.  China welcomed the comments made by Canada and New Zealand during the session, 
appreciating their suggestions and willingnes s to offer support and assistance to Members facing 
difficulties within the Committee.  
111.  With respect to the second topic under this agenda item, the Chair recalled that at the 
Committee's October 202 2 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 
answers under Articles 25.8 and 25.9 of the SCM  Agreement.5 
112.  The United States  recalled that it had formally proposed that written responses to initial 
questions under Article 25.8 be provided within a period of 60 days and that follow -up questions be 
answered in writing within 30 days.  
113.  The United States reiterated its belief that mandato ry deadlines were preferable. However, it 
proposed an alternative approach where Members would agree to make their best efforts to submit 
written responses within a period of 60 days, and responses to follow -up questions within 30 days. 
It also acknowledge d that deadlines of 90 and 60 days could also be considered more favourable.  
114.  Taking into account comments received, the United States recognized that additional time 
might be required to consult with sub -central governments. Its recent experience of answer ing the 
Article 25.8 questions in writing from two previous meetings reinforced its belief in the 
appropriateness of the proposed changes. The United States  expressed its willingness to make the 
necessary adjustments.  
115.  The United States emphasized that the proposal was not extraordinary, as it reflected the 
existing accepted practice among Members for providing answers to questions during the regular 
review of subsidy notifications. It highlighted that this practice was followed by most Members when 
respondi ng to Article 25.8 questions.  
116.  Given the increasing recognition of the need for greater transparency, as demonstrated in the 
recent report conducted by the World Bank, IMF, WTO, and OECD, as well as the establishment of 
various subsidy databases, the United  States expressed hope that this relatively simple proposal 
could be advanced without hiding behind legal technicalities.  
117.  The Russian Federation  expressed its continued support for efforts aimed at improving the 
timeliness and completeness of notifications  and other trade -related information under the 
SCM Agreement. However, it reiterated its concerns regarding the proposal outlined in document 
G/SCM/W/557/Rev.4.  
118.  It emphasized that, in its view, the deadlines could not be mandatory due to various factors 
that could affect the ability to meet them, such as the complexity of questions and the involvement 
of multiple authorities. The Russian Federation also expressed the opinion that the proposed periods 
of 60 and 30 days appeared to be too short, even as guide lines.  
119.  As the text of the proposal remained unchanged, the Russian Federation's concerns persisted. 
It believed that the best way to facilitate constructive discussion would be to amend the text, taking 
into account the views expressed by Members.  
120.  Canada  expressed its continued support for the United States' efforts to advance the proposal, 
which, in its view, aimed to enhance the transparency and completeness of notifications. It reiterated 
 
5 G/SCM/W/557/Rev.4.  G/SCM/M/123  
 
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  its previous statements made during Committee meetings, em phasizing the significance of the 
subsidy notification process and the information request process outlined in Articles 25.8 and 25.9  of 
the SCM Agreement in achieving transparency objectives under the Agreement.  
121.  According to Canada, the United States' pro posal offered valuable guidance that would 
contribute to increased predictability and transparency in the question -and-answer process, while 
ensuring that the burden on Members would not be unreasonable. It acknowledged that this item 
had been under discus sion within the Committee for several years and appreciated the United States' 
efforts to address concerns raised by other Members, aiming to make progress with the proposal.  
122.  Furthermore, Canada highlighted the United States' willingness to move forward wi th the 
proposal on a best endeavours basis rather than imposing mandatory requirements. It encouraged 
Members to engage in constructive discussions on this matter with the aim of reaching an agreement 
in the near future.  
123.  Referring to its previous statement s, New Zealand  reiterated its support for the proposal, 
which was highly relevant to the discussions on enhancing transparency and improving the 
timeliness and completeness of notifications. It emphasized the importance of recognizing potential 
capacity co nstraints faced by Members and avoiding the imposition of unreasonable burdens, aspects 
that were acknowledged in the proposal.  
124.  New Zealand found the best efforts framing and the inclusion of language regarding 
consultation with sub -central governments to be helpful in addressing these concerns. Lastly, it 
expressed appreciation for the United States' efforts in responding to the concerns raised by 
Members in the past and encouraged all Members to engage in constructive discussions regarding 
the proposal.  
125.  Australia  reiterated its support for the proposal, noting that it aligned with the existing and 
long-standing practices of the Committee. It emphasized the importance of having written replies to 
ensure clear understanding of the information provided by Members. Ac cording to Australia, this 
proposal would enhance transparency, improve the Committee's procedures, and promote a better 
understanding of Members' subsidy programs.  
126.  Australia appreciated the revisions made to the proposal, which addressed concerns raised by 
some Members. It also acknowledged the recognition of time pressures related to consulting with 
sub-central governments. Australia requested the item to remain on the agenda for further 
discussion, with the hope of reaching a consensus.  
127.  India noted that  the proposal aimed to establish timelines for providing written responses to 
information requests and follow -up questions. It acknowledged that collecting data for notifications 
and responding to questions could be a time -consuming process, particularly f or developing and 
least developed countries. India also expressed concerns about making these timelines binding on 
such countries, as it could impose a heavy burden on them. It highlighted the challenges related to 
variations in the format and language of national notifications, which could lead to difficulties in 
translation, understanding, and interpretation for Members.  
128.  Given these challenges, India believed that imposing binding timelines for responses under 
Article 25.9 would be burdensome for Members,  and it expressed the view that adherence to such 
timelines might be difficult. India reiterated its commitment to engaging constructively in discussions 
on this matter.  
129.  The United Kingdom  expressed its continued support for the proposal put forward by the  
United States. It believed that the proposal achieved a reasonable balance by promoting 
transparency while considering the legitimate limitations on the capacity of certain Members, as 
raised in previous discussions. The United Kingdom appreciated the ong oing efforts made by the 
United States to address the concerns of Members and encouraged other Members to actively 
participate in constructive engagement, aiming to facilitate progress for the proposal.  
130.  The European Union  referred to the previous statement s made in the Committee, expressing 
support for the US proposal aimed at enhancing and strengthening the provisions of Articles 25.8 
and 25.9 of the SCM Agreement. It acknowledged that the proposal presented practical measures G/SCM/M/123  
 
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  to ensure meaningful transpar ency commitments without imposing unreasonable burdens on 
Members.  
131.  While it was noted that the Agreement only required oral responses, the European Union 
believed that transforming those responses into written form would not be a significant step, 
consider ing that written replies must already exist if they were being discussed in the Committee. 
This transition to written replies would greatly contribute to transparency.  The European Union 
reiterated its full support for the proposal and encouraged other Mem bers to endorse it as well, with 
the aim of advancing its progress.  
132.  Japan  expressed its support for the proposal and reiterated the significance of the obligation 
of notification and transparency, emphasizing that these elements were fundamental to the ent ire 
WTO system. Japan highlighted the importance of facilitating the smooth sharing of subsidy 
information in written format, emphasizing that such an approach would be advantageous for all 
Members.  
133.  Chinese Taipei  expressed its continued support for the pr oposal which, in its view, would 
contribute to enhancing transparency. It acknowledged that while Article 25.9 called for Members to 
provide information as promptly and comprehensively as possible, having specific timelines would 
be preferable. Chinese Tai pei considered the suggested timeline of 60 days for providing written 
responses to information requests and 30 days for replying to follow -up questions reasonable and 
attainable. It also emphasized that all information, whether in response to the initial request or 
follow -up questions, should be submitted in written form.  
134.  China  thanked the United States for its willingness to amend the proposal in response to 
Members' concerns. However, as the text remained unchanged, China reiterated its concerns.  
135.  China believed that further tightening the rules would not be practical when existing 
obligations were not being well fulfilled. China pointed out that even the United States, as a 
developed Member, had not strictly adhered to the 60 -day deadline it proposed. It  highlighted an 
example where China submitted written questions to the United States on 20 October 2022 regarding 
the Inflation Reduction Act and the CHIPS Act. However, China received the replies from the 
United  States on 12 January 2023, which exceeded 8 0 days after the United States received the 
requests. China expressed the hope that all Members, including the United States, would consider 
their concerns, and that the United States would lead by example by adhering to the rules it 
proposed. China remain ed open to further discussions on the matter.  
136.  Brazil  reiterated its support for the proposal and thanked the United States for the 
presentation and the efforts to advance the paper. It also urged those who still had concerns to 
participate constructively i n the debates with a view to support the proposal.  
137.  The United States  thanked Members for their comments and emphasized two points: (i) it 
clarified that it was not proposing mandatory deadlines, as the proposal was strictly based on a best -
efforts basis; ( ii) it mentioned that although the formal proposal stated 60 and 30 days, the 
United  States had made it clear, and would reiterate, that they were willing to extend the timeline 
to 90 and 60 days. It expressed hope that this flexibility would help in reach ing a consensus.  
138.  The Chair stated that it appeared that Members wished to continue discussions on those issues 
at the next regular meeting of the Committee.  
139.  The Committee took note  of the statements made.  
8  CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM ANNEX VII(B)  
140.  The Chair recalled that, pursuant to the Doha Ministerial Decision on Implementation -Related 
Issues and Concerns (document WT/MIN (01)/17, paragraph 10.1), Annex VII (b) to the 
SCM Agreement listed Members until their GNP per capita reached US D 1,000 in constant 
1990 dollars for three consecutive years. As of 1 January 2003, the methodology set forth in 
G/SCM/38, Appendix  2 had applied for making those calculations. In accordance with that Decision, 
since then the Secretariat had circulated annual notes in document series G/SCM/110 updating the G/SCM/M/123  
 
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  GNP per  capita figures for the Members listed in Annex VII (b) based on that methodology. The most 
recent version, Addendum 20, was circulated on 27 March 202 3. 
141.  No Member took the floor and the Committee took note  of the Chair 's statement.  
9  PERMANENT GROUP OF EXPERTS  
142.  The Chair recalled that the term of Mr Jaemin Lee had  expired in April 2022  and the term of 
Mr Rabih Nasser was expiring and therefore the Committee should elect two new expert s to replace 
them. She had explained the procedures to be followed in document G/SCM/16 4. In particular, she 
had established a deadline for nominations, which would be strictly enforced, and also stipulated 
that nominations should include a summary CV as well as the full CV of the n ominee. Four 
nominations had been received by the deadline: Mr Lingchen Pu from China; Mr Wolfgang Mueller 
from the European Union; Mr Pei -Kan Yang from Chinese Taipei; and Ms Vandee Suchatkulvit from 
Thailand. The summary CVs of the nominees had been shar ed with Members on 15 February 2023.  
143.  The Chair's consultations initially had been set to take place on 1 -3 March 2023. Yet, at the 
request of some Members who had needed more time to receive final views from their capitals and 
in order to obtain views fro m as many delegations as possible, she had extended the consultation 
period till the end of the day on 10 March 2023. In addition, she had indicated that the views could 
be conveyed via email.  
144.  During her consultations, some Members had indicated that they  would not be able to join a 
consensus on the election of three of the candidates, namely from China, the European Union, and 
Chinese Taipei. Accordingly, the only candidate who had not received any objection, was Ms Vandee 
Suchatkulvit from Thailand. The Chair had informed the four delegations that had nominated 
candidates of that situation. In addition, she had invited all Members to an informal open -ended 
transparency meeting to report back about the situation which was held on 12 April 2023.  
145.  At that tra nsparency meeting, the Chair had explained that the outcome of her consultations 
would not allow her to recommend two names to fill both of the vacancies at once. She had asked 
for the Members ' guidance on the process forward, in particular regarding the p ossibility of 
suggesting the candidate from Thailand, who had received no objection, to fill one of the vacancies. 
In her email dated 12 April 2023, she had invited Members to express their views whether they 
could join a consensus to elect Ms Vandee Sucha tkulvit to fill the vacancy created by the expiry of 
the term of Mr Jaemin Lee. The deadline to express any objection was 19 April 2023.  She had 
informed the Committee on 20 April 2023 that no objection had been raised by the deadline. On 
that basis, the C hair proposed the election of Ms Vandee Suchatkulvit, for the term of office to expire 
in Spring 2027.  
146.  The Committee so decided . 
147.  Thailand  thanked the Chair and Secretariat for their efforts and also Members for electing their 
candidate to the Permanent Gro up of Experts. It also indicated that Ms Vandee Suchatkulvit would 
serve in an impartial and objective manner.  
148.  The Committee took note  of the statements made.  
10  DISCRIMINATORY  SUBSIDIES POLICIES AND MEASURES OF THE UNITED STATES – 
ITEM REQUESTED BY CHINA  
149.  China  thanked the United States for providing replies to its written questions in document 
G/SCM/Q2/USA/88 and G/SCM/Q2/USA/89  seeking clarifications from the United States  on the 
consistency of some provisions of the US  CHIPS Act  ("CHIPS Act")  and the Inf lation Reduction Act  
("IRA") with WTO rules. In its reply, the United States had indicated that  it intend ed to administer 
the Acts in a manner that was consistent with its commitments under the WTO. However,  China 
observed that  the United States was  going farther and farther away from the multilateral rules. It 
was exemplified by the fact that the United States had recently released several proposed rules of 
implementing the IRA and CHIPS Act that m ight violate the WTO rules.  G/SCM/M/123  
 
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  150.  China indicated that it had con cerns regarding  the trade -distorting and discriminatory 
subsidies in the IRA and its implementing rules . 
151.  With respect to imposing protectionism in the name of green policy, China recalled that on 
31 March 2023, the United States had published the proposed guidance on the new clean vehicle 
provisions of the Inflation Reduction Act ( "Guidance "), which took effect on 18 April 2023. Among 
the conditions set forth in the Guidance to qualify for electric vehicles (EV) tax credit, the following 
requirements contai ned domestic local content and discriminate d against specific members:  
• an overarching requirement that the final assembly of such new clean vehicle had to occur 
in North America ; 
• with respect to the critical mineral credit, specified percentages of the vehicle battery 's 
critical minerals need ed to be extracted or processed in the United States , or originating 
from a Free Trade Agreement(FTA) partner  of the United States , or being recycled in North 
America ; 
• with respect to the battery component credit, sp ecified percentages of the battery 's 
components need ed to be manufactured or assembled in North America ;  
• beginning in 2024, an eligible clean vehicle m ight not contain any battery components that 
were manufactured  by a foreign entity of concern and beginn ing in 2025 an eligible clean 
vehicle m ight not contain any critical minerals that were extracted, processed, or recycled 
by a foreign entity of concern.  
152.  The press release of the United States Treasury Department indicated that the above rules 
were intend ed to ensure that American workers, companies, and consumers continued to benefit.  
Along with the proposed rules, the United States had also released a list of EV models qualified for 
tax credit on April 18th, on which most of the recipients were United St ates EV brands and some 
European, Japanese and Korean brands were identified as non -eligible models.  
153.  Through a series of subtle policy designs, the United States had put a green veneer on huge 
subsidies, basically locking the beneficiaries in the United S tates brands, which would help the 
domestic enterprises of the United States to gain unfair competitive advantages at the expense of 
other Members and discriminate against foreign competitors. It was evident that the United States 
has been imposing protect ionism in the name of responding to climate change, accelerating green 
transformation and supporting  the resilience of the global industrial chain. This practice was a serious 
violation of the WTO principles of national treatment and most -favoured -nation t reatment, with 
distorting impact to global trade and market.  
154.  China also noted that arbitrary interpretations of FTAs would seriously undermine global 
trading rules. With respect to critical minerals, the Guidance detailed a proposed set of principles for 
identifying the set of countries with which the United States had an FTA in effect. The term of FTA 
could include newly negotiated critical minerals agreements. In addition to those 20 countries having 
FTAs with the United States, Japan was also deemed as a n FTA partner as it had signed Critical 
Minerals Agreement with the United States on 28 March. According to media reports, the 
European  Union was seeking similar critical minerals agreement with the United States to be 
qualified as an FTA partner.  
155.  China in dicated that the interpretation of the term "FTA" by the United States was not 
consistent with the WTO rules. First, in accordance with Article XXIV of GATT 1994, an FTA should 
aim to facilitate trade rather than to increase barriers to trade between other  WTO Members and 
such FTA partners. However, the proposed guidance used FTA provisions to exclude Non -FTA 
countries from the supply chain of the US battery components and critical minerals in a way by 
restricting other than liberalizing trade. In this rega rd, China requested the United States to explain 
how the United States - Japan Critical Minerals Agreement with a limited product coverage could 
substantially cover all the trade between Japan and the United States as required by Article XXIV of 
GATT 1994.  According to China, this narrowly focused agreement could not meet requirements of 
establishing an FTA and therefore would violate the MFN principle of the WTO.  G/SCM/M/123  
 
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  156.  China also highlighted that the new definition of FTA was accused of its unconstitutionality b y 
some experts in the United States as the United States -Japan Critical Minerals Agreement had not 
been authorized by the Congress.  In this respect, it was beyond China's understanding how the 
United States accused the Appellate Body of arbitrary interpret ations of WTO rules in the rulings, 
while blatantly challenging the authority of the WTO rules through its domestic legislation. China 
was of the view that, as a very dangerous precedent, the United States - Japan Critical Minerals 
Agreement would undermin e the long -standing basic consensus on global trade rules. It would give 
rise to a "broken window theory" caus ing irreversible systemic damage to the authority of WTO  rules.  
157.  China also noted that building an entrenched camp would disrupt the global supply chain of 
critical minerals. The United States had side -lined the vast majority of WTO members from the 
critical minerals supply chain through arbitrary interpretations of the term of FTA while actively 
creating a buyers club for materials with its allies. Such practices, which intended to disrupt the 
industry chain of critical minerals from both the supply and demand sides, would result in 
concentration of industry rather than enhancing the resilience of the industrial chain set as one of 
the policy objecti ves described in the IRA.  
158.  China stated that the relevant measures would slow the pace of green transition of developing 
Members and would catalyse fragmentation of global green economic governance by enticing green 
subsidy race to the bottom. The accelerat ed investment in North America by global EV manufacturers 
in pursuit of subsidies, had triggered industrial shift and technology outflow from some other 
Members. To mitigate the negative spill over effect, the E uropean Union had  proposed the Net -Zero 
Industry Act and Critical Raw Materials Act to scale up manufacturing of clean technologies in the 
European Union. 
159.  According to China, the "siphoning effect" of the subsidy race would lead to distortion of the 
global market and misal location of production resources. The high level of concentration of clean 
energy supply chains in the markets of developed Members would have obvious negative spillover 
effects, reinforce market fragmentation, and would not be helpful for strengthening th e resilience of 
global industrial chains. In particular, this would significantly weaken developing Members' ability 
and access to clean energy products, technologies and investments limiting their space for industrial 
restructuring and technological trans formation, which would run counter to the targets of global 
emission reduction and further widen the gap of global wealth.  
160.  China noted that the United States was of the view that the IRA was an important instrument 
to address climate change and that the co vered subsidies could be justified under this purpose. 
While welcoming the United States' measures to increase public investment and promote green 
transformation, China noted that the means of implementation should not defeat the purpose. Green 
subsidies s hould be implemented in a manner consistent with the WTO rules and should not trigger 
subsidy races among Members, exacerbat ing the rule deficit and development deficit, and disrupt ing 
the global supply chain and industry chain. In this respect, China call ed on the United States to 
eliminate discriminatory and distorting subsidies that were not in line with the WTO rules. According 
to China, the WTO should play a more active role in effectively monitoring such subsidies.  
161.  China also had some concerns regardi ng the trade -distorting and discriminatory subsidies set 
out in the CHIPS Act and its implementing rules. It recalled that the United States ha d been 
advocating free trade and investment  seeking to strengthen existing WTO rules on industrial 
subsidies to d iscipline China and other Members by releasing multiple joint statements on Trilateral 
Meeting of the Trade Ministers of the United States, Japan, and the European Union ( "Trilateral 
Statements "). On the other hand, in the area of semiconductor, the United  States has  grant ed 
massive subsidies to revitalize domestic manufacturing , which, according to China, was a practice 
of double standard by the United States on industrial subsidies. China noticed the following 
inconsistencies between the Trilateral Statem ents and the United States' practices:  
• with respect the excessively large subsidies, China referred to the Notice of Funding 
Opportunity CHIPS Incentive Program - Commercial Fabrication Facilities" ( "Notice ") by the 
United States Department of Commerce dat ed 28 February 2023. China noted that direct 
funding for CHIPs would amount up to USD  38.22 billion, and up to USD  75 billion in direct 
loan or guaranteed principal would be granted. Under the Commercial Fabrication Facilities 
alone, up to 35% of the proje ct's capital expenditure would be funded by the CHIPS Incentive 
Program. In addition, a federal income tax credit which would be equal to 25% of a qualified 
investment could also be applied ; G/SCM/M/123  
 
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  • China recalled, however, that the United States had made clear it s position on the market -
distorting effects of excessively large subsidies. In the Trilateral Statement issued in 
January  2020, it was proposed that for the excessively large subsidies, which were listed as 
one of the particularly harmful types of subsidie s, the  burden of proof should be reversed. 
Specifically, the subsidizing Member must demonstrate that there would be no serious 
negative trade or capacity effects. If such subsidy was found to exist and the absence of 
serious negative effect c ould not  be demonstrated, the subsidizing Member must withdraw 
the subsidy in question immediately ; 
• with respect to non -market -oriented policies and practices, China highlighted that the Notice 
indicated that an applicant must demonstrate how the CHIPS Incentives would incentivize 
the applicant to make investments in the United States which would not occur in the absence 
of those incentives. In that case, the applicant 's investment decisions might not be based 
on commercial interests and logic under mark et conditions because those investments would 
not occur without the CHIPS Incentives. According to China, this was a typical 
non-market -oriented practice ; 
• another example was the so -called "guardrails " provisions. The CHIPS Act restricted 
recipients of the  funds from constructing new or expanding existing leading -edge and 
advanced technology facilities in foreign countries of concern for 10 years. The proposed 
thresholds for that restriction were USD  100,000 or 5% increase in a facility's production 
capacity. The investment restriction had been set as a precondition for receiving subsidies ;  
• the Trilateral Statement issued in May 2018, however, indicated that under market -oriented 
conditions, decisions of enterpris es on investments shall be freely determined and made in 
response to market signals. In addition, the Trilateral statement issued in May 2019, had 
emphasized that non -market -oriented policies and practices would lead to severe 
overcapacity, create unfair c ompetitive conditions for workers and businesses, hinder the 
development and use of innovative technologies, and undermine the proper functioning of 
international trade.   
162.  China also expressed its concerns regarding the local content requirements prescribed  in the 
Notice which has set the prioritization and selection factors for selecting applications for funding. 
One of those factors was to strengthen the use of domestically produced iron, steel, and construction 
materials which might result in local conten t subsidies that were not consistent with the 
SCM Agreement.  
163.  China stated that the chips subsidies and export control measures had wreaked havoc on the 
global semiconductor supply chain . The proposed rule on the guardrail provisions released on 
21 March 20 23 essentially tightened the United States' and its allies' export controls on chips, and 
limited the access of foreign countries of concerned to relevant technologies, aiming to exclude some 
Members, including China, from the global supply chain of semico nductors.  
164.  China also highlighted that chips subsidies might harm the interest of the United States' allies. 
It was reported that some leading chip companies of the United States' allies had expressed their 
concerns on the proposed rules, including insuffic ient subsidies to offset their rising cost of relocating 
the chips plant to the United States; high inflation in the United States diluting the actual benefits 
provided by chip subsidies; and being compelled to share excess profit with the United States 
Government and disclose confidential information of the companies. The United States' allies worried 
that they might lose core competitiveness when the industry chain of chips was forced to shift to the 
United States. In this respect, the chips subsidies mig ht be harmful to the interest of other Members, 
including the United States' allies.  
165.  According to China, these practices and measures by the United States represented a typical 
double standard, cold war mentality, zero -sum game and trade bullying. Such me asures, deviating 
from the market principles, ha d disturbed the normal order of international trade and investment, 
and represented an affront to the rule -based multilateral trading system. They not only br oke the 
existing layout of the global semiconducto r industry chain based on the advantage of resource 
endowment, but also impede d technological progress and post -pandemic global economic recovery. 
This w ould be detrimental to China's interests as well as the key interests of the United States  and 
other Members including allies  of the United States . China call ed on the WTO to strengthen the G/SCM/M/123  
 
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  monitoring on the relevant measures that m ight violate the WTO rules and would like to join hands 
with other WTO members to safeguard the stability and resilience of the  global semiconductor supply 
chain and value chain.  
166.  The Russian Federation  reiterated its concerns over the WTO inconsistency of the IRA noting 
that the Act provided for higher tax credits for a taxpayer  who placed in service a new vehicle 
meeting certain local content requirements. In addition, the Act envisaged 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 produced in the Un ited States. The 
Russian Federation reiterated that such measures would violate Article 3 of the SCM Agreement and 
urged the United States to withdraw them and obey the WTO rules.  
167.  With respect to the CHIPS Act, the United States  indicated that the publicly  available, 
published Act explained in  detail the initiative, including the types of projects eligible to receive 
support, as well as the types of support available.  The CHIPS program also had a website dedicated 
to publicly sharing information at www.chips.gov  where the United States Department of Commerce 
had published its initial implementation strategy and the first notice of funding opportunity.  
168.  The CHIPS Act consisted of three distinct initiatives: (i) large -scale investments in 
leading -edge logic and memory manufacturing clusters; (ii) expansion of manufacturing capacity for 
mature and current -generation chips and (iii) initiatives to strengthen and advance R&D efforts in 
the United States.  
169.  The United States reiterated that the contemplated support was consistent with the US law 
and the WTO commitments of the United States.  As also detailed in the CHIPS Act and implementing 
regulations, a successful CHIPS program would respond to market signals, fill market ga ps, and seek 
to attract significant private capital. To that end, the publicly available CHIPS Act and notice of 
funding opportunity set forth in detail the eligibility criteria, which included the need for long -term 
commercial viability, along with the ec onomic and national security objectives that the Department 
of Commerce would use to evaluate applications.  
170.  In addition, the Department of Commerce would implement certain restrictions to ensure  that 
those who would receive CHIPS funds could not compromise  national security.  Those national 
security -based restrictions were described in more detail in the Act and in a notice of proposed 
rulemaking published in volume 88 of the Federal Register on page 17439 on 23 March which had 
also solicited comments on the  proposed rule.  
171.  The United States recalled its previous statements indicating that China also had a very robust 
semiconductor program.  In fact, it had numerous programs at both the central and sub -central levels 
of government in the form of government guid ance funds, none of which had been notified. The 
biggest of those funds was the National IC Fund and the total amount of investment from those 
funds was approximately USD  50 billion.  Although it had started in 2014, the National IC Fund had 
never been noti fied. 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 despite t he fact that it was 
obligated to invest in accordance with government policy, just like the state -owned banks.  
172.  With respect to the IRA, the United States stated that all Members shared an urgent need to 
increase investments in clean energy technologies to seriously combat the climate crisis, as well as 
to address supply chain issues. The IRA, which was signed by President Biden, would be a key tool 
for the United States to meet those critical objectives.  
173.  The transportation sector was the greatest source of greenhouse gas emissions in the 
United  States which 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 producti on and their adoption.  The Act would provide clean vehicle tax incentives to 
encourage a rapid transition to clean transport.  It would ensure  the creation of  more diverse and 
robust supply chains and promot ion of the domestic adoption of clean vehicles.  
174.  In addition to the Clean Vehicle Tax Credit for new clean vehicles purchased, the IRA would  
also provide for a Commercial Clean Vehicle Credit and a Previously -Owned Clean Vehicle Credit  G/SCM/M/123  
 
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  which would create tax credits for certain eligible light, medium and heavy -duty clean vehicles 
purchased by businesses, and, for used clean vehicles.  Final assembly, battery and critical mineral 
requirements would  not apply to th ose credits.  According to the United States, those vehicles would  
account for a significant shar e of the total clean vehicle purchases in the future . The United States  
Congressional Budget Office estimate d that th ose vehicles w ould receive roughly 40% of the overall 
clean vehicle tax credit funding.  
175.  The United States also mentioned that it was still developing the regulations for th at program  
and was considering input from all stakeholders as the Department of Treasury has move d forward 
with its public process in implementing th ose credits as required  by the legislation.  Several of the 
United States'  trading partners already ha d taken advantage of the opportunity to participate in that 
transparent process, and there w ould be future opportunities to engage in th at process.  
176.  The United States noted that many of its trading partners, including China, ha d also prioritized 
investment in 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 th e 
importance of working to achieve overall climate, supply chain, and related goals in parallel – and 
to do so in a way that Members could  maintain support from their stakeholders.  This would include  
the shared goal in ensuring the achievement of  the Paris  commitments.  
177.  China  thanked the United States for its explanations indicating that the purpose of the subsidy 
would not be enough to justify a good subsidy. It was more important how the subsidy was designed 
and implemented. Acknowledging the policy object ive of the IRA – combatting the climate crisis - 
China had expressed its concerns on the concrete measures adopted by the United States. A subsidy 
should be implemented in a manner that was consistent with the WTO rules refraining from causing 
any disruptio n on the global supply chain.  
178.  With respect to the China Integrated Circuit Industry Investment Fund, China noted that it 
was a government guided investment fund which was not a subsidy as defined by the 
SCM Agreement. The operating mechanism of that fund was to guide the social capital into the field 
of central capital and the fund operated on a market -oriented basis rather than providing grants and 
subsidized loans. China also indicated that since it shared benefits and risks with other investors 
from the  private sector , a government guided investment fund would not constitute a subsidy under 
the SCM Agreement and therefore  would be out  of the scope of a notification .  
179.  The Committee took note  of the statements made.  
11  SUBSIDIES AND OVERCAPACITY – ITEM REQUESTED BY AUSTRALIA, CANADA, THE 
EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  
180.  The United States  took the floor to discuss two reports from the OECD: (i) a synthesis report 
on subsidies drawing from previous OECD level playing field r eports and (ii) the report on  
state-owned enterprise and subsidies.  
181.  With respect to government equity investments, the first report note d that below -market 
equity returns occurred  mainly in high -tech sectors, such as semiconductors, and aerospace and 
defence. Importantly, the presence of below -market equity returns had been  found for almost all 
government -invested firms in semiconductors, as well as for many companies in the aerospace and 
defence  industry. The report found that industrial firms from China receive d disproportionately more 
support overall than firms based in other jurisdictions. The finding that firms based in China had 
obtained relatively more government support overall relate d in part to the predominance of state 
enterprises and government investments more generally, in the Chinese economy.  
182.  The United States highlighted that data from the OECD indicate d that firms in which 
governments hold more than 25 % of the shares tended to  receive relatively more support in the 
form of grants and below -market borrowings. As to the link between subsidies and overcapacity, 
there was evidence to support the proposition that certain types of industrial subsidies ha d 
encouraged additional investment in production capacity, which subsequently ha d exerted downw ard 
pressure on prices.  G/SCM/M/123  
 
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  183.  The United States recalled that t he earlier OECD study of below -market finance  had found, a 
positive and significant correlation between the amount of below -market borrowings that firms 
obtained and their investment in fixed assets  such as production facilities and equipment.  Capacity 
additions in steelmaking, aluminium  smelting, and solar PV module manufacturing appear ed also to 
have corresponded with significant decreases in output prices for these industries. While the analysis  
had only identified a correlation rather than a causal link, its findings were consistent with other 
academic studies.  
184.  The United States also noted that government support tend ed to correlate with lower firm 
productivity, as it would prevent the exit of the least efficient producers, which underscore d the 
trade and competition problems posed by 'zombie companies ' that, owing to subsidies, continue d 
operating despite their weak performance. The report also highlight ed that subsidies d id not only 
harm tradi ng partners, but m ight in certain cases hinder domestic productivity, thereby questioning 
the provision of subsidies even if only as a matter of domestic economic policy. Finally, the report 
noted that transparency of government was critically lacking.  
185.  As providers of support, governments possess ed the primary source information and 
therefore, were indispensable actors for increasing the public availability of information on industrial 
subsidies. The lack of transparency by governments has posed a crucial challenge to the world 
trading system. While strengthening compliance with the S CM Agreement transparency obligation 
was part of the solution, the report recognize d that tougher notification rules should be accompanied 
by technical assistance to help those  WTO Members, notably developing and least -developed 
countries, that m ight lack the capacity to identify and report the variety of national and sub -national 
subsidies they had.  
186.  The United States stressed that the  OECD has done extensive work also on the l ink between 
state-ownership and industrial subsidization  and quoted its statement in the April 2022 meeting: 
"according to one academic today, Chinese state capitalism generates industrial overcapacity in 
targeted sectors; provides SOEs favourable  access t o credit and other advantages; and causes 
numerous other economic distortions around the world. "  
187.  The OECD, in its report released in April 2023  had found that state enterprises in the 
manufacturing sector could not only be large recipients of a wide range of government support but 
also providers of government support, thereby acting as intermediaries between the government 
and industrial recipients. The United States also noted  the report 's reference to the  National IC fund 
of China and how it was state-owned and funded, indicating that "state-related entities provided 
nearly 98% of all of the Fund 's financial resources. " The United States noted that this was contrary 
to numerous claims on the part of China that the fund was purely private commercial entity, including 
in response to questions posed by the United States in th e Committee. The United States underlined 
that no  truly private company, acting  in a purely commercial capacity, would provide below market 
finance as found by the OECD with respect to the IC Fund. In addition , the report also noted that 
the consolidation and merger of state -owned companies was a growing concern that was enabling 
China to even more effectively use its market dominance to crowd out foreign competition and 
capture domestic and international market share.  
188.  The OECD report emphasize d that "there need ed to be a better understanding of the extent 
and forms of direct and ind irect government intervention favouring  such enterprises to the detriment 
of trade and competition. " Transparency of subsidies, including subsidies provided to and through 
state-owned enterprises was critical for Members to be able to defend themselves aga inst trade 
distortions caused by other WTO members. The OECD report conclude d that "the provision of 
government support through state enterprises as intermediaries c ould make it harder for trading 
partners to identify measures or policies of concern, as we ll as creating further ambiguity around 
the nature of government entities and the global scale of industrial subsidies. " 
189.  The United States noted that China ha d consistently refused to provide information on 
subsidies provided to or through its state -owned enterprises in its subsidy notifications to the 
Committee. The United States recalled its  questions about USD 1.8 billion in subsidies that it had  
uncover ed to the Chinese SOEs Sinopec, CNOOC, and PetroChina, three of the top 20 global oil 
companies. China claim ed that these funds were compensation money for the general service 
provided by such enterprises, with the aim to enable SOEs to participate fairly in market competition. 
In addition, the government appropriations, which was the term used by China for grants, indicated 
in financial statements were not necessarily subsidies as defined in the SCM Agreement.  G/SCM/M/123  
 
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  190.  The United States requested an explanation whether those subsidies were needed  to enable 
those SOEs to participate fairly in market  competition  and o n what basis, th ose government grants 
were not financial contributions by a government under the SCM Agreement . According to the 
United  States,  this was only one example of the difficulties it has  faced in the Committee in trying 
to get c omplete and accurate notification of subsidy programs, including subsidies to and 
through  SOEs.  
191.  As the OECD note d in its conclusion to the report, "WTO Members ' lack of transparency with 
respect to their subsidies m ight contribute to hindering efforts to identify such support. " According 
to the United States,  that was the reality Members has faced in the Committee and it was up to 
Members, to seek more substantial information from Members who have engage d in opaque and 
distortive practices that undermine d the confidence of Members'  citizenry that the playing field was 
level and that trade was really free and fair.  
192.  Canada  echoed some of the concerns raised by the United States and reiterated that the link 
between government interventions in the form of trade distortive subsidies, in particular, and the 
persistent global access capacity observed in several sectors remained a crucial issue for Members 
to examine. Acknowledging various public policy reasons for providing subsidies, it recalled that 
Canada a nd some other Members previously highlighted that certain forms of government 
intervention could have distortive effects. Various reports undertaken by the  OECD had considered 
the impacts of market distorting government interventions  and reports by other o rganizations, such 
as the report by the four international organizations that was discussed at the October  2022 meeting 
of the Committee , had also considered the complexities in assessing the scope and scale of such 
interventions.  
193.  The recent  OECD synthesis  report on government support in industrial sectors, for example, 
highlight ed those issues with respect to certain industrial sectors. Based on an assessment of 
firm-level data, th e OECD report consider ed how the role of state -owned enterprises, which c ould 
serve as both recipients as well as providers of subsidies themselves, and the complexities of global 
supply chains, c ould make it difficult to assess the ultimate impacts of government support in 
manufacturing. According to Canada , the report echoe d the discussions held at the  Committee in 
October  2022, indicating the  persistent lack of reliable and comparable data, which has create d 
important gaps in knowledge of subsidy practices. This underline d the fact that increased 
transparency was not only valuab le for better understanding subsidy programs, but it was also 
fundamental to inform ongoing policy discussions on subsidies and global trade. The report identifie d 
strengthening compliance with the  SCM transparency obligations as one of the components of t he 
solution. In Canada's view, this reaffirm ed the importance of the work that the  WTO and 
the Committee have been  doing to support increased transparency and discussions on the role 
subsidies  could  play in contributing to global overcapacity, as well as h ow to address them. Canada  
urged  Members to fully respect their transparency obligations, to engage constructively in their 
discussions and to make full use of the  WTO forum and the technical assistance offered by the 
Secretariat in the efforts to address the ongoing transparency concerns and the overall trade 
distortive impacts that subsidies c ould have. 
194.  The United Kingdom  recalled its previous statements on this agenda item noting that subsidies 
had become more complex and less transparent over time, and that those evolving forms of subsidy 
have been driving trade distorting effects such as overcapacity which was reinforced by the 
two OECD reports. For example, the synthesis report on government support  in industrial sectors 
showed the effects of below -market financing and below -market energy inputs in sectors in 
overcapacity. Those findings raised two  key points. Firstly, the  OECD reports highlighted the need 
to improve transparency around those more co mplex forms of subsidy. Even though  OECD research 
showed that those types of subsid ies were clearly having significant impacts on trade, they were not 
being notified under the  SCM Agreement. Given the scale and impact of these subsidies, Members' 
failure t o notify them would severely undermine the functioning of the  SCM Agreement. Secondly, 
the OECD reports noted that due to the increasing complexity of government support , there was a 
need to clarify what would constitute a subsidy under the  SCM Agreement. In this respect, the 
United  Kingdom  welcome d recent General Council papers from Members which call ed for discussions 
on the relationship between WTO  rules and the evolving nature and impacts of government support. 
The United Kingdom  encourage d Members to e ngage constructively on both of these points  indicating 
that if Members  failed to address th ose challenges, there would be  a risk that trust in the  WTO could  
be further eroded and escalati on of  subsidy races which would  not be in the interest of most G/SCM/M/123  
 
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  Membe rs. The United Kingdom expected that  the recent General Council papers w ould spur 
productive discussions on th ose issues . 
195.  The European Union  recalled that this agenda item arose 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 which Members had to examine in depth. 
The European Union noted that the recent OECD reports provided valuable information on the state's 
interventions in the economy in support of industrial sectors, which was one of the main issues 
affecting global trading system.  
196.  The European Union fully concurred with the detailed analysis and interventions made by the 
previous speakers. The OECD reports highlighted the importance of state support in causing 
overcapacities identifying several types of government support, including direct subsidies, tax 
incentives and preferential loans, which could distort competition and contribute to excess capacity 
in certain sectors.  
197.  The OECD reports back ed up the conceptual knowledge with factual and numerical evidence. 
Firstly, o vercapacity c ould be the result of government policy whereby support measures ha d the 
effect of incentivizing overinvestment. State support c ould directly cause overcapacity, because 
support would make it possible for the recipient firm to invest in new capacity at a level that would 
exceed what would be justified by market conditions.  Secondly, support measures c ould artificially 
maintain unprofitable activities  which would prevent excess capacity from adjusting downwards. 
Overcapacity c ould lead to distortions among competing producers  as healthy competitors would 
suffer because of th e overcapacity of others. They m ight end up reducing their capacity while 
competitors gain the markets because they would receive more support and not because they were 
more efficient. For potential new entrants, overcapacity of existing producers was a hurdle that 
would prevent new competitors from entering the markets.  
198.  The report also indicated that lack of transparency was a widespread problem. State resources 
often transit ed through financial intermediaries , such as state -owned banks or state -led equit y funds  
which would  make  them harder to track. Measures were not always being properly notified or 
acknowledged as constituting  subsidies. As a result, overcapacity resulting from below -market 
financing was more challenging  to quantify. Therefore, the Euro pean Union  called for all Members 
to improve notifications, in particular when the state measures concern ed sectors suffering  from 
overcapacity.  
199.  According to the European Union, t he current  WTO rules d id not sufficiently take into account 
distortive impac ts of overcapacity highlighting the need to address th ose concerns at the  WTO, 
including through deliberations  which could then be followed by rulemaking in due course. 
WTO Members should deliberate on how overcapacity concerns could be better addressed as part of 
the wider reflection of state interventions in support of industrial sectors . 
200.  Australia  echoed the views expressed by the previous speakers and welcomed the ongoing 
discussion on the role subsidies play in distorting global trade and international markets and their 
potential to contribute to overcapacity. It also welcomed the ongoing collaborative work between 
the four  international organisations, the IMF, the  OECD, World Bank and the  WTO. The synthesis 
report on government support  in industrial sectors by the  OECD provided an excellent analysis of 
the key issues underpinning both the increasing use of industrial subsidies and the growing 
significance of industrial subsidies in trade discussions and for future potential rulemaking. It usefully 
pulled together the threads of analytical work on subsidies. It identified the ongoing lack of 
comprehensive data on government support in industrial sectors, that government disclosure of 
subsidies might often be partial and outlays of subsidi es announced might differ from the subsidies 
actually received by firms. A further complication might be the lag between a government 
announcement of a subsidy package and implementation and delivery of the subsidies to recipients.  
201.   Given the ongoing probl ems of lack of comprehensive data on government support, the  OECD 
had turned to analysing firm level data without which any efforts to improve subsidy rules would be 
"at risk of missing their target". The report usefully identified the complexities that ar ose in selecting 
market benchmarks for subsidies provided as tax concessions, below -market borrowings and 
below -market equity. But regardless, market -based benchmarks were essential in being able to 
measure government support, and Members would need to be able to measure that government G/SCM/M/123  
 
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  support, both for transparency reasons as well as being able to assess the scale of industrial 
subsidies.  
202.  The report also identified the trade effects of industrial subsidies on the supply chain, 
indicating that the impact of subsidies would go beyond the targeted sector with multiple 
beneficiaries, including in other markets and jurisdictions. The report noted that that transparency 
on government support was crucially lacking underscoring the seriousness of the ever -worseni ng 
lack of compliance with subsidy notifications. The lack of comprehensive data on government support 
in industrial sectors would impede efforts to discipline subsidies and counter their distortions on 
international markets. Noting that t he report undersc ored the need for greater understanding and 
transparency around the full impact of industrial subsidies, Australia expressed its support to 
the European Union's  proposal to establish a dedicated discussion on subsidies and other forms of 
state intervention  in support of industrial sectors.  
203.  Finally, Australia  encourage d and support ed ongoing analysis in th e Committee. Sharing that 
analysis was valuable for th e Committee, and Members would  need a clear understanding of the 
extent of support and better data t o fully understand the effects of subsidies and the effects of 
specific forms of subsidies  which in turn w ould show where reforms of subsidy rules were most 
needed . 
204.  Japan  stated that subsidies have been used by Members at all levels of development, in all 
industrial sectors. Those subsidies needed to be properly utilized to achieve public objectives. As 
noted by the OECD report, although many of the subsidies have been utilized properly with the 
intention to correct market failures, they would not achieve t he intended purpose and could distort 
the competitive environment if they were not properly designed. An example of such poorly designed 
subsidies was subsidies causing overcapacity issues.  
205.  Subsidies that have not followed market principles could distort the market by causing excess 
capacity relative to demand. In fact, in sectors such as steel and shipbuilding, large -scale 
government support measures by certain Members have caused overcapacity issues. Furthermore, 
China has been providing support on an ex tremely large scale including through Government 
Guidance Funds and state -owned financial institutions, to the advanced industries included in "Made 
in China 2025" and other programs. As noted in the OECD report, the actual expenditure of specific 
subsidie s based on "Made in China 2025" remained unclear. In addition, the complex ownership 
structure of Government Guidance Fund might invite suspicion that it has been camouflaging its 
nature as a public body. Such support in advanced sectors that was not based  on market principles  
might cause excess production capacity in the future . According to Japan, in order to address those 
problems, it was important that the Committee continue to discuss subsidies that could lead to 
overcapacity as well as improving the transparency regarding such subsidies. Japan reiterated that 
it would like to continue to discuss in the Committee how to tackle and prevent such subsidies that 
could lead to overcapacity.  
206.  China  reiterated that the issue of overcapacity was n ot in the terms of reference of the 
Committee and the Committee was not an appropriate forum for that discussion. It also noted that 
the causes of overcapacity were complex, and it was untenable to simply attribute overcapacity to 
China's industrial polici es. China had made effective efforts to cut production capacity in recent years 
therefore accusing China of distorting the market does not square with facts. China also recalled 
that it made clarification on the IC Fund under the previous agenda item.  
207.  With respect the OECD report, China stated that the data accuracy remained a serious concern 
to many Members, including China. The OECD  reports used firm -level data from the recipient's 
perspective and that methodology could cause multiple issues, such as repe ated calculation and 
inappropriate sampling. China was also concerned with the use of the term of state enterprises. 
Setting aside the data accuracy, the report seemed to indicate that if a state enterprise outperformed 
private companies, that must be beca use they g ot extra support from the government. If they  have 
receive d loans, that must be because they were backed by government guarantees , which was  not 
the fact.  
208.  China also stress ed that besides the general, cyclical and structural effects in the econo mic 
development, the impact of trade protectionism was one of the causes of overcapacity that should 
not be ignored. Those two  OECD reports seem ed be biased with prejudged conclusion with G/SCM/M/123  
 
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  inaccurate information. The policies of certain Members to provide h uge subsid ies to its domestic 
industries intentionally have cut off the already formed global industrial and supply chains, forc ing 
companies and other Members to make decisions against market rules and their wills. Such 
discriminatory and distortive measu res as well as  the practice of double standards would ultimately 
lead to unnecessary capacity expansion s. China recalled that it  had elaborated on th at point under 
the previous agenda item and expected that Members and the Committee w ould take note of th at. 
209.  The Russian Federation  reiterated that the discussions under this agenda item continued to 
be one -sided noting that certain measures which effectively have supported national industries in 
the sectors affected by overcapacity escaped from the attention  of the Committee. One of t he most 
obvious factors causing overcapacity was trade protectionism. A long -lasting trade remedy measure 
would cause tangible support to an industry operating in a sector where overcapacity existed, 
keeping foreign competitors away. Other trade barriers w hich the Russian Federation had faced 
lately, such as prohibitive import duties, import bans and other similar actions would contribute to 
support to national industries of certain Members. The Russian Federation indicated that one -sided 
approaches would n ot be helpful to address overcapacity and urge Members to withdraw 
protectionist measures.  
210.  According to Brazil , overcapacity continued to be one of the main challenges Members have 
been facing in global trade, particularly in sectors such as steel. It welc omed multilateral cooperation 
to overcome issues related to overcapacity  including the work carried out by the Global Forum on 
Steel Excess Capacity. Harmful and distorting subsidies were not only contributing to overcapacity 
in industry and agriculture bu t were also counterproductive in the efforts for sustainability in th ose 
sectors . Brazil also noted that the Committee should not overlook the risk of overcapacity that might 
be caused by the current wave of green subsidies granted by various governments.  
211.  The Committee took note  of the statements.  
12  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 S TATES  
212.  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 Chi na had 
designated as the MOFCOM Gazette. However, China has rarely been publishing its subsidy measures 
in the MOFCOM Gazette, especially the ones it called "normative documents" and measures from 
sub-central governments. In addition, sometimes those measu res were not made public at all.  
213.  In its Protocol of Accession, 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".  
214.  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 ind ustry. Since it could not find those measures in the MOFCOM 
Gazette, or anywhere else, the United States had submitted a request to China's WTO inquiry point 
in April 2020.  
215.  Under its Protocol of Accession, China had agreed that "replies to requests for in formation 
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 inte rested party." After three years from the initial 
request, no written response had been provided.  
216.  In September of 2020, a Ministry of Commerce representative contacted the United States 
Embassy in Beijing and stated that China would not be providing copie s 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 
measures. According to the United States, if Ch ina was of the view that it did not need to provide a G/SCM/M/123  
 
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  requested measure if that measure might be replaced at some point far off into the future, the 
inquiry point obligation would be entirely meaningless.  
217.  The United States indicated that China had changed  its position with respect to other measures 
noting that it was not arguing that its legal measures on semiconductors, for example, were not 
covered by its WTO commitments but rather arguing that the requested measures were not laws, 
regulations or other m easures.  
218.  The United States noted that the Protocol of Accession inquiry point commitment was written 
very broadly by referring to "laws, regulations and other measures" and it was difficult to imagine a 
more inclusive language. The United States also stres sed that in the dispute settlement context, 
"any act or omission attributable to a WTO Member could be a measure of that Member". The 
requested measures, one of which was from China's State Council, the highest executive office in 
the Chinese Government, w ould be easily included under such a broad definition.  
219.  According to the Report of the Working Party on the Accession of China, the creation of the 
inquiry point was meant to address the concerns of WTO Members at the time of China 's accession 
with regard t o "the difficulty in finding and obtaining copies of regulations and other measures 
undertaken by various ministries as well as those taken by provincial and other local authorities. " 
After 22 years, and after China had agreed to establish an inquiry point , those very same concerns 
remained.  
220.  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.   
221.  The European Union  expressed its support to the points raised  by the United States  and 
recalled that China's obligation on transparency did not  only stem from Article 25.8 of the 
SCM Agreement, but also from its Protocol of Accession to the WTO. In this context, China had 
agreed to the creation of an inquiry point mechanism which had been done by establishing the 
Bureau of WTO Notification and Inquiry. China had also agreed to publish its trade -related measures 
in the MOFCOM Gazette. China indicated repeatedly that it h as published many issues of 
China  Foreign Trade and Economic Cooperation Gazette annually. However, if the information was 
not complete  or China did not provide answers to the requests for information, these obligations 
would not be met. The European Union urged China to back its commitment to transparency by 
dealing with all the requests to the inquiry point and publishing all trade -related measures in the 
Gazette . 
222.  Japan  noted that the notification obligation and transparency were among the most essential 
foundations of the WTO system and complying with them would benefit all Members. Japan was 
concerned that the lack of transparency in t he expenditure of specific subsidies might encourage 
distortive subsidies and cause global challenges, including overcapacity.  Japan requested China  to 
fulfil its obligations agreed upon in its Protocol of Accession regarding transparency, to keep effectiv e 
the mechanisms that would contribute to enhanced transparency.  
223.  Australia  joined the previous speakers noting that it attached considerable importance to the 
WTO notification and transparency obligations which stemmed 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 international markets. It was for  the subsidising M ember to promptly and 
comprehensively notify its measures and not place a burden of discovery on other  WTO Members. 
Australia urged China to fulfil the transparency commitments made as part of its Protocol of 
Accession.  
224.  The United Kingdom  echoed the concer ns raised by the previous speakers and recalled that it 
had previously emphasised the importance of Members' transparency obligations which included 
specific commitments made by Members. Acknowledging that China had taken some action with 
respect to those obligations it urged China to take further steps towards compliance. The 
United  Kingdom particularly highlighted the need to publish all relevant measures and encouraged 
China to engage constructively with the concerned Members to clarify which information  China G/SCM/M/123  
 
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  considered to be within the scope of its inquiry point obligations and how Members should engage 
with the inquiry point to get that information.  
225.  Canada  echoed the concerns of other Members regarding China's compliance 
with WTO transparency obligations. It reiterated that the notification process was an integral aspect 
of not only the  SCM Agreement, but also of the multilateral trading system. According to Canada, it 
was important that all Members provided notifications in accord ance with the relevant 
WTO requirements. It encouraged China to fully comply with its transparency obligations in 
accordance with  WTO rules and its Protocol of Accession.  
226.  China  reiterated that it had faithfully fulfilled its transparency obligation in the  WTO. The 
commitment to set up an inquiry point showed that China valued transparency. China acceded to 
the WTO 21  years ago when access to information was relatively limited. It was against this 
background that China had made a commitment to set up an inqu iry point, which was a stricter 
commitment stricter and showing China's willingness to provide relevant information with the utmost 
sincerity and to the greatest extent possible.  
227.  Second ly, China also noted that the transparency provisions of its Accession Protocol d id not 
require China to answer the inquiries in writing. The  COVID -19 pandemic in  2020 ha d brought great 
difficulties to the internal work of governments of all Members, including China. In spite of th is 
situation, the inquiry point has worked hard to overcome the impact of the pandemic and responded 
to the  United States  as soon as possible following  the completion of internal procedures.  
228.  Thirdly, the Chinese Government has been promoting information d isclosure and policy 
transparency over the years. For example, the regulations of the People's  Republic  of China on 
government information disclosure  enacted in  2007 and revised in  2019, stipulate d the subject and 
scope of information disclosure, including  trade policies. In recent years, the rapid development of 
a network communication technology also ma de the access to information much more convenient.  
229.  Finally , as for the policy document requested by the United  States, the policy regarding fishery 
develo pment ha s been published on the official website. The rest of the policies were neither  subject 
to "laws, regulations or other measures affecting trade" nor they f ell under the scope of information 
disclosure. The China's  inquiry point has explained this t o the United  States and clarified it on the 
regular meeting, as well as the  CTG meeting, for several times. China expected  that its accession 
commitments aimed at enhancing transparency and demonstrating sincerity w ould not become a 
means of repeated peste ring and be taken advantage of by some Members . 
230.  The United States  reiterated that it had demonstrated over many years that China did not 
follow its publication obligation to publish all laws, regulations and other measures in the  MOFCOM  
Gazette. In its questions with respect to China's subsidy notifications, the United State had 
repeatedly asked multiple questions whether those measures had been published in the MOFCOM 
Gazette but China had never answered affirmatively. The United States  requested China to 
demonstrate where the relevant measures in the MOFCOM Gazette. With respect to the inquiry point, 
the United States stressed that a relatively simple measure such as a fuel subsidy for fishermen was 
neither in a public document not publ ished in the MOFCOM Gazette. This was also the case regarding 
semiconductors. Although China has been reiterating that transparency was a key value the facts 
demonstrated otherwise.  
231.  China  repeated that it attached great importance to transparency. Not only  China but also 
many other Members have been working hard to enhance their capability to fulfil the transparency 
obligation and improve the notification continuously. Even for the United  States, there were cases 
where policies were not notified. According to China, it would be more practical to focus on the 
present and future, rather than on repeated entanglements at  the Committee.  
232.  The United States  reiterated that currently China has not been  publish ing all of its measures 
in the  MOFCOM Gazette  despite it was obligated to do  so.  
233.  The Committee took note  of the statements made.  G/SCM/M/123  
 
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  13  PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF NEW AND FULL SUBSIDY 
NOTIFICATIONS – ITEM REQUESTED BY AUSTRALIA, CANADA, THE EUROPEAN UNION, 
JAPAN, NEW ZEALAND, CHINESE TAIPEI, THE UN ITED KINGDOM, AND THE 
UNITED  STATES  
234.  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 su bsidy notifications. This was a straight -forward Committee document 
that established a written question and written answer process to occur within a specific time -frame.  
235.  For many years, in the normal course of the Committee's review of notifications, Membe rs 
had asked about programs not included in the notification being reviewed. The United States and 
some other Members had received these questions and had answered them.  Responding to such 
questions had become part of the routine question and answer proces s for subsidy notifications and 
had aided in the overall transparency of Members ' subsidy regimes.  
236.  The United States noted that to clarify the Committee's procedures, the co -sponsors proposed 
an amendment that would require all Members to provide written a nswers 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.  
237.  According to the United States, it was a simple amendment that nearly all Members have been 
following since the very beginning. Its adoption wou ld encourage a degree of transparency that the 
drafters of the Agreement had assumed would exist in the normal course of the Committee's review, 
even in the absence of a written obligation.  
238.  The European Union  recalled that it had expressed concerns at previous meetings about the 
approach by some Members to the review process of subsidy notifications and particularly with 
regards to the questions posed on non -notified subsidies. Some Members had indicated that 
questions under the review procedure should be limited only to schemes included in the notification. 
However, this approach would seriously undermine the effectiveness of the review process and 
hinder Members from achieving fully understanding of all subsi dies. The process of posing questions 
in writing was not to highlight shortcomings of Members in subsidy notifications but rather to 
complete the picture where information appeared to be lacking.  Over the years, the European  Union 
had made a number of supp lementary notifications in response to questions from other Members 
regarding subsidy programmes that were overlooked in the notification process. This had helped the 
European Union to contribute to greater and improved transparency under the  SCM Agreement . Like 
the one discussed under agenda item 7, that was an important proposal which would enhance the 
transparency of subsidy notifications. The European Union encouraged Members to support the 
proposal.  
239.  Canada  welcomed continued discussion of the  proposal  noting that it was a simple amendment 
that would support increased transparency by requiring that written answers w ould be provided to 
all written questions posed, including those subsidies not included in a Member's notification. The 
written question and answer process has been  a fundamental part of the subsidy notification process. 
By improving this process, Members could improve transparency as a whole and fill some of the 
important information gaps that ha d been referenced during the meeting . According to Canada , the 
proposal would achieve this by formalizing a longstanding practice that many Members have already 
respect ed. 
240.  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 notifications as the deadline was 
approaching. 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 quest ions. 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 included in a Member's notification.  According to Australia, the proposal G/SCM/M/123  
 
- 32 - 
 
  reflected the longstanding practice of the Committee enabling that any Member at any time might 
seek information on any subsidy granted or  maintained by another Member or for an explanation of 
the reasons why a specific measure had not been considered subject to the notification requirement . 
Australia encouraged Members to support the proposal.  
241.  Japan  stated that t he SCM Agreement allowed Mem bers to request explanations of the 
reasons for which a support measure had been considered as not being subject to the notification 
requirement. If such explanations and relevant information on specific subsidies were shared more 
smoothly in writing, it w ould serve to enhance transparency. Japan look ed forward to the support of 
Members for this proposal . 
242.  The United Kingdom  noted that the proposal aimed to help improve transparency by simply 
formalizing what it considered to be the standard practice by Memb ers. Therefore, it would not create 
new or unreasonable burdens on Members. Recalling the approaching deadline for the  2023 new 
and full subsidy notifications, the United Kingdom hoped that Members could support the proposal 
to ensure a smooth and producti ve review of those notifications.  
243.  India stated that the document G/SCM/W/583 required two conditions to be fulfilled in order 
for it to become effective. Firstly, timely provision of questions and answers was necessary. 
Secondly, responsible officials were  required to be present for all the replies in case Members failed 
to provide written responses before the deadline. India noted that the proposal put forward in the 
said document was akin to the proposal discussed under agenda item 7 which was prescribing  
timelines for action under Article 25.9 of the SCM Agreement. Therefore, regarding the establishment 
of timelines for providing written responses, India reiterated the concerns raised under Agenda 
item 7, highlighting how such a proposal would be burdenso me for Members. Furthermore, as the 
information on industrial subsidies was sought and compiled from different stakeholders, the second 
condition of making the officials concerned available during the meeting for oral replies would not 
have been feasible f or the least -developed Members, especially where there was a federal structure 
of government. Therefore, Members would have found it challenging to follow the conditions and 
timelines proposed in the document for the review of the new and full notification s of Members from 
2023. India emphasized that this needed further deliberation and expressed its willingness to engage 
constructively in these discussions.  
244.  New Zealand  welcomed the proposal and referred to its previous statements on the matter. 
New Zealand viewed the proposed amendment as consistent with the spirit and the intent of existing 
transparency obligations and as an important way to support transparency and th e effective 
monitoring function of the Committee. It remained supportive of the proposal and encouraged other 
Members to do likewise.  
245.  The Russian Federation  reiterated its concerns that had been expressed during the previous 
Committee meeting regarding the  proposal. It recalled that the amendment had envisaged Members 
providing written answers to all written questions posed in actions "regarding specific subsidies not 
included in the notification". The language of the proposal had appeared to be at odds wit h 
Article  25.2 of the SCM Agreement, which had not enabled specific subsidies to be un -notified. 
Additionally, it had provided room for considering a measure as a specific subsidy without offering 
any substantial evidence to prove its specificity. Finally,  such wording could have implied an 
additional burden on the notifying Member to prove that the un -notified measure was not a specific 
subsidy. During the previous discussion, the Russian Federation had suggested replacing the phrase 
"specific subsidy" wit h the term "alleged subsidy". The Russian Federation expressed its readiness 
for further discussion of this proposal.  
246.  The United States  clarified that the proposal was about amending the review procedures by 
adding one sentence. Accordingly, if a written q uestion was given to a Member about a program that 
had not been notified, a written answer had to be provided. The proposal did not include any 
provisions regarding timelines or other related matters.  
247.  The Chair noted that there was a considerable divergenc e 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 they so 
wish. G/SCM/M/123  
 
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  248.  The Committee took no te of the statements made.  
14  REPORTING BY THE CHAIRPERSON TO THE COMMITTEE ON THE REPORTS SUBMITTED 
TO THE COUNCIL FOR TRADE IN GOODS ("CTG") ON THE FUNCTIONING OF THE 
COMMITTEE AND THE RESPONSE TO THE PANDEMIC (DOCUMENTS G/L/1449 - 
G/SCM/162 & G/L/1450 - G/SCM/163) AND THE CONSULTATIONS HELD BY THE CHAIR 
OF THE CTG IN THIS REGARD  
249.  The Chair indicated that this item was placed on the agenda of the meeting to report back to 
the Committee on the issue of the ongoing consultations at the level of the CTG regarding the 
WTO reform and the two reports the Chair had submitted under h er own responsib ility to the Chair 
of the CTG – upon his request – on the functioning of the Committee and on the response to the 
pandemic ( documents G/L/1449 also circulated as G/SCM/162 and G/L/1450 also circulated as 
G/SCM/163 ). 
250.  The first report concerned the current f unctioning of the Committee, i.e., the concrete actions 
that the Committee had adopted over the past years to improve its work. The Chair's report was an 
overview of the reforms that had already been introduced and where the Committee currently stood. 
This exercise only focused 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, the Chair 
had refrained from including recommendations or an assessment of what needed to be improved as 
this would be for Members to take up, should they so choose.  
251.  The second report pertained to the WTO response to the Pandemic and described the activities 
that the Committee had undertaken in the context of the pandemic over  the past two years.  
252.  The Chair recalled that on 21 November 2022, she had sent both factual reports to the 
Membership in a draft form, to provide Members with the opportunity to make comments. On 
28 November 2022, she had submitted both documents to the CT G. 
253.  Based on what was contained in those reports and in all other subsidiary bodies' Chairs 
reports, the CTG Secretariat circulated on 11 January 2023 a "Comparison Matrix" contained in 
document G/C/W/824 providing a general overview of the main elements th at seemed to be 
comparable across the reports. The Chair noted that as explained in the introductory part of that 
Matrix, this Matrix would not replace the reports submitted by the Chairs and did not reflect all the 
information contained in those reports.  
254.  On 31 January 2023, the CTG held an informal meeting to which all 14 Chairs, including the 
Chair of the Committee, were invited along with all CTG Members. At that meeting, the Chair of the 
Committee had provided a brief overview of both reports and listen ed to Members' comments. On 
the functioning of the Committees, although there were no specific comments directed to the 
SCM Committee's report per se, Members had made suggestions based on their reading of the 
different reports and of the Matrix. Their views reflected their own vision as to how to replicate what 
they considered to be good practices, while preserving the individ uality of each Committee as clearly 
there could not be a one -size-fits-all solution. The CTG Chair had noted that it was clear to him that 
it would be up to the Members of each Committee to discuss and decide whether any procedures, 
practices, or means of conducting business needed an improvement or change. The CTG Chair 
recommended and encouraged discussion of those issues at the level of the Committees.  
255.  On the response to the pandemic, no specific questions or comments had been made on the 
SCM Committee's  report. The main message was that all subsidiary bodies should be applying 
lessons learnt from the pandemic in line with their own mandates. The CTG Chair indicated that this 
was a steppingstone along the way and that discussions on the issue would contin ue. 
256.  On 9 March 2023, the Chair of the CTG had sent to the Chairs of the 14 subsidiary bodies a 
communication requesting them to start discussions in their respective bodies, in the context of 
formal or informal meetings, concerning the functioning of those  Committees. This would then allow 
Members to identify possible areas for improvement in that particular body taking into account the 
Comparative Matrix that was prepared by the Secretariat, a revised version of which was circulated 
in mid-February  in docu ment G/C/W/824/Rev.1. The Chair of the CTG had also emphasized that at 
a later stage, all subsidiary bodies would be requested to submit a written report to the CTG G/SCM/M/123  
 
- 34 - 
 
  describing the discussions held and improvements introduced. To the extent possible, such w ritten 
reports should be submitted to the CTG for consideration at the last formal meeting of the CTG, 
which was tentatively scheduled to take place on 30 November 2023. In other words, such reports 
should be submitted to the CTG by mid -November at the lat est. 
257.  On 22 March 2023, the Chair of the CTG had invited the Chairs of the subsidiary bodies to an 
informal brief meeting to exchange views and provide updates on where things stood. In case of this 
Committee, the Chair had made it clear that this would be placed on the agenda of this meeting at 
which she would be reporting on the reports she had submitted to the CTG and open the floor for 
discussion and views.  
258.  Last, but not least, the Chair noted that at its formal meeting of 3 -4 April 2023, the CTG Chair 
had provided a status report on his consultations under the agenda item "MC12 Implementation 
Matters: Functioning of the CTG and its Subsidiary Bodies and WTO Response to the Pandemic". 
Members had requested the CTG Chair to share with the 14 Chairs of the subsidiary bodies the 
current status of work at the CTG, as reflected in document JOB/CTG/28.  
259.  In a communication sent to all 14 Chairs, the CTG Chair had particularly highlighted that the 
Council had thus far been able to reach formal agreement on the foll owing four issues, namely: 
adopting the use of the E -Agenda in the work of the CTG on a trial basis; extending the deadline for 
the inclusion of agenda items to 15 calendar days before the formal meeting to allow Members to 
better prepare for the high numb er of trade concerns raised at the CTG; instructing the Secretariat 
to separate newly raised trade concerns and place them in the agenda before previously raised 
concerns; and instructing the Secretariat to integrate the CTG data concerning trade concerns into 
the Trade Concerns Database, subject to budgetary constraints.  
260.  In addition, there were approximately 11 other issues that the Council would not discuss 
again, at least for the moment, because the Council had instructed either the CTG Chair or the 
CTG Secretariat to take some action towards addressing the issues, or because they were cross 
cutting issues that may need to be addressed at a horizontal level or had budgetary implications.  
261.  At the same CTG meeting, some Members had underlined that there was broad convergence 
on a number of issues that had been discussed at the CTG which should also be taken up for 
discussion under the subsidiary bodies, and in particular those related to assistance to capital based 
and Geneva based delegates, planning and org anization of meetings, and working procedures.  
262.  While the Chair of the CTG had indicated in his communication that the subsidiary bodies 
might find inspiration in some of the actions that had been taken by the Council, he emphasized that 
it went without say ing that it would be up to each subsidiary body to decide which issue to discuss 
and what kind of action to take to improve its functioning. He reminded the Chairs of the subsidiary 
bodies once more that they should submit their written reports to the CTG describing the discussions 
held and improvements introduced and that, to the extent possible, such written reports should be 
submitted for consideration at the last formal meeting of the CTG, which was scheduled to take place 
on 30 November 2023. In this r egard, and to ensure a smooth transition, he requested all outgoing 
Chairs to brief the new Chairpersons with respect to this area of work as soon as they were 
appointed.  
263.  The Chair apologized for h er lengthy statement but wished to be as thorough as possib le when 
she drew Members' attention to those issues. She invited Members to provide any suggestions they 
might have based on h er reports to the CTG, on her reporting at the meeting and on how Members 
wished to take up this issue in future Committee meeting s. 
264.  Before opening the floor for comments and suggestions, the Chair requested Members – while 
making such comments – to also focus on the future path of this discussion.  
265.  First, with respect to the mode of the discussion, formal vs. informal . The Chair ind icated 
that in her view and in order to ensure a free exchange of views, she could foresee – if Members 
agreed – that the discussions at this meeting as well as all future discussions on this matter could 
take place in an informal mode. That would allow fo r a frank and open discussion among Members. 
If consensus would be reached on any improvements to be introduced to the functioning of the G/SCM/M/123  
 
- 35 - 
 
  Committee, a decision could be taken on that basis at the October meeting or in a special meeting, 
or via a written pr ocess. The Chair noted that she would appreciate Members' input in this respect.  
266.  Second , while there would be an obvious focus on the issue of the functioning of the 
Committee,  she also remin ded Members of the issue of the response to the pandemic  and 
whether Members wished to pursue any further substantive discussions in this respect. She recalled 
that some Members had submitted legislative notifications illustrating the procedural adaptations 
they undertook in their trade remedy investigations as a result  of COVID -19. The Chair queried 
whether there was any further discussion Members wished to pursue on the matter.  
267.  It was decided  that the Committee would conduct its discussion in an informal mode.  
268.  After reverting to the formal mode, the Chair indicated that following the meeting, the 
Secretariat would circulate a room document6 containing the list of items and suggestions for future 
discussions/exploration/consideration. She added that she would be circulating – along with the 
two outgoing Chairs of the Committees on Safeguards and Subsidies and Countervailing Measures 
– a joint  communication7 on the way forward to follow up on these issues. The room document 
reflecting the list of issues would be attached to that communication. The rest of the process would 
be taken up by the new Chairs upon their election. She also added that Members could, if they so 
wished, place any additional suggestions on the table for discussion.     
269.  The Committee took note  of the statements made in the formal mode.  
15  REPORTING BY THE CHAIRPERSON TO THE COMMITTEE ON THE TRANSPARENCY 
SESSION HELD ON 12 APRIL  2023 REGARDING JOINT WORK ON SUBSIDIES BY 
FOUR  INTERNATIONAL ORGANIZATIONS AND RELATED CREATION OF A SUBSIDY 
DATABASE BY THE SECRETARIAT  
270.  The Chair indicated that this item was placed on the agenda of the meeting to report back to 
the Committee about the discussions at the informal transparency session held on 12 April 2023.  
271.  In her email dated 7 April 2023, the Chair had explained that she had been informed by the 
Secretariat about the launch of a joint subsidy information platform which would provide acce ss to 
various subsidy -related databases and information sources of four international organizations, 
namely, the IMF, World Bank, OECD and the WTO, as part of the follow -up to their joint study on 
subsidies that was published in April 2022. She had also be en informed that as part of this joint 
project, the Secretariat had been working to create  a dataset of the subsidies notified by Members 
in the 2021 notification cycle.  
272.  The Chair had taken the opportunity of the 12 April 2023 informal transparency session  on 
PGE elections to request the Secretariat to provide a presentation regarding the ongoing joint work 
with the other international organizations , and the Secretariat's efforts to create a subsidy database.  
273.  During the presentation, the Secretariat had exp lained the joint initiative of the 
four organizations on making subsidy -related information more accessible through a joint web -based 
subsidy platform. As part of this joint initiative, the Secretariat had been working on the creation of 
a new database tha t would convert the contents of the 2021 new and full subsidy notifications into 
a database format.  
274.  There had been a lengthy discussion during the transparency session, with numerous Members 
taking the floor. While emphasizing the significance of transpar ency, many Members who took the 
floor had expressed their concern that they had not been consulted by the Secretariat before the 
launch of the database project, in which their subsidy notifications would be converted into 
spreadsheet format. Some had also objected  that the process had not been Member -driven.  
275.  Almost all delegations that took the floor had expressed concern regarding the end -April 
deadline for launching the joint subsidy portal and the WTO subsidy database. Those Members had 
indicated, among other things, that they would need sufficient time to review their information as 
 
6 RD/SCM/62.  
7 Circulated on 10 May 2023.  G/SCM/M/123  
 
- 36 - 
 
  presented in the database format to ensure its accuracy, considering the extensive amount of data 
to be verified. They had emphasized the sensitive nature of subsidy informat ion, noting that any 
change in the presentation format would require careful examination in their capitals. Additionally, 
some Members had mentioned that since the informal transparency session was the first opportunity 
for Members to comment on the projec t, they would need more time to reflect on and discuss the 
matter from a systemic perspective. Consequently, several delegations had requested formal 
discussions to be held in the Committee.  
276.  Finally, at that informal meeting, some Members had questioned th e value -added of the new 
database, stating that the notifications were already publicly available, and the main issue concerned 
measures that had not been notified by Members. Additionally, one Member had expressed concerns 
about the potential inclusion of  links to databases other than those maintained by the four 
international organizations.  
277.  As per the request made by Members at the informal meeting, the Secretariat had shared the 
presentations delivered during the meeting, along with the methodological pa per providing technical 
explanations regarding the conversion of notifications into the database format. Furthermore, the 
Secretariat had sent to each Member that had notified information in the 2021 notification cycle the 
portions of the database pertaining to its notified information, for the purpose of checking and 
verification. The Secretariat had requested the concerned delegations to submit any comments and 
correc tions on those files by 12 May 2023.  
278.  Additionally, on 28 April 2023, the Director -General had sent an explanatory note to all 
delegations, providing them with additional information regarding the ongoing joint efforts with other 
international organizations  in relation to subsidies, as well as about the work done by the Secretariat 
for the creation of the subsidy database.  
279.  After this report, t he Chair then offered the floor to Deputy Director -General ( "DDG") 
Anabel  Gonzalez, who was leading the Secretariat's  work on subsidies with the other international 
organizations, to provide information on the joint initiative of the four international organizations 
and on the Secretariat's efforts to create the subsidy database.  
280.  The DDG stated that she was pleased to pr ovide the Committee with an update on the joint 
initiative of the four institutions (the WTO, the World Bank, the IMF, and OECD) on making 
subsidy -related information more accessible. She recalled the information note that had been sent 
to all Members by t he Director General on 28 April 2023. In her note, the Director General had 
explained the origins of the Secretariat's work on subsidies and level playing field issues. The DDG 
recall ed that this work had been initially announced in a communication sent by  the Director -General 
to delegations on 30 June 2021, indicating the division of responsibilities among  the 
Deput y Director s-General.  
281.  The DDG recalled that the first phase of the Secretariat's work on subsidies had been 
completed. The outcome of this work was a report entitled "Subsidies, Trade, and International 
Cooperation" produced jointly by the WTO, the IMF, OECD, and World Bank, with the purpose of 
identifying knowledge gaps and steps to enhance transparency and fill some of those gaps. The joint 
report, which was also available on the WTO website, had been launched on 22 April 2022 by the 
executive heads of the four authoring institutions. She added that a public event had been held in 
Geneva on 5 May 2022, where staff from the four authoring institut ions had presented the report's 
main findings.  
282.  On 25 October 2022, the WTO staff had presented the report's findings to delegations. The 
presentation had been followed by an open discussion, with the participation of capital -based officials 
of Members. She  further mentioned that since the launch of the report, the WTO Secretariat had 
also met with any requested delegation to answer questions on the report.  
283.  The joint report had examined different aspects of the landscape on subsidies, and one key 
set of find ings had focused on transparency. The DDG  acknowledged that the Committee was well 
aware that there were many gaps in WTO subsidies notifications, which had been a subject of 
continuous discussion over the years. The findings in the joint report were consi stent with this, 
showing a lack of consistent and deep information on subsidies across all sectors and types of 
activity.  G/SCM/M/123  
 
- 37 - 
 
  284.  The DDG highlighted that one key conclusion in the joint report was that, since the 
four institutions all invested in collecting infor mation on subsidies, it would make sense for them to 
work jointly to better share existing information, identify gaps, and fill those gaps, for the sake of 
efficiency and coherence.  
285.  The priority for joint follow -up action identified by the executive heads of the four institutions 
was to create a common subsidies platform in the form of a web page. The purpose was to make 
publicly available information from all participating institutions accessible in a clear, coherent, and 
user-friendly format. The DDG expl ained that this meant placing the links to several existing sets of 
publicly available information on subsidies held by the four international organizations onto a single 
web page. Users visiting the website would find a single access point with links to t he information 
held by each institution.  
286.  The DDG stated that one element of the website would be the contents of the subsidies 
notification documents that had been submitted for the 2021 new and full notification cycle in 
database format. She pointed out t hat while the other institutions had existing databases containing 
subsidy -related information and the WTO had almost 30 years' worth of subsidy notification 
documents, the WTO did not currently have this information in a database format. She emphasized 
that this severely limited the extent to which the information could be searched and used. Therefore, 
the goal of that part of the project had been to simply convert the information in the subsidy 
notification documents, which had been available to everyone within and outside the WTO, into a 
database form. The conversion would allow the textual information in the notifications to be more 
easily searched and accessed for the benefit of everybody. She believed that Member governments 
would benefit from this, as  it would enable them to easily search through notifications for specific 
types of information.  
287.  The DDG underscored that all the information involved was already publicly available, and 
there would be no new data added or subtracted in respect of the noti fied information from Members. 
She clarified that the information included in the database was from the most recently completed 
notification cycle, which was the 2021 notification cycle (the documents in the G/SCM/N/372/ 
series), so historical data beyond that would not be found in this database. She commented that 
although this initiative was not formally part of the Open Trade Data Initiative, which had been 
ongoing for several years, it was very much in the same spirit.  
288.  Regarding the process, she recalle d that after the transparency session on 12 April, the 
Secretariat had sent the verified portions of the database reflecting the notified information from the 
2021 notification cycle to each Member that had submitted information for checking and verificati on. 
The Secretariat had requested the relevant delegations to submit any comments and corrections on 
these files by 12 May 2023.  
289.  She echoed the Director -General's call to Members to work closely with the Secretariat to 
check the information for the 2021 new and full notification cycles sent to them in database format. 
She highlighted that collaboration between Members and the Secretariat would prevent a situation 
where other international organizations or outside entities extracted and manipulated th e data 
contained in Members' publicly available subsidies notifications without any opportunity for 
delegations or capital -based officials to verify the relevant information.  
290.  The DDG further informed that the schedule of the project was not entirely in the  
WTO Secretariat's hands, as the Subsidies Portal was a joint initiative of the four organizations. She 
mentioned that following the meeting, they would meet with their counterparts in the IMF, OECD, 
and World Bank to set a date for the launch of the websi te. She expressed confidence that the 
establishment of the Joint Subsidy Data Platform would make an important contribution to greater 
trade policy transparency and enhance the collective understanding of this critically important issue.  
291.  China  stated that  it supported information sharing and the improvement of transparency 
among Members in principle. It thanked the Secretariat for the work it had done in this regard, 
including the organization of an informal transparency session on 12 April 2023 to provide  
information and address Members' concerns.  
292.  With respect to the database, China expressed several concerns. First, China emphasized the 
importance of transparency in the procedure and the participation of Members. Noting that the WTO G/SCM/M/123  
 
- 38 - 
 
  was a Member -driven o rganization, China indicated that the Members had not been informed by the 
Secretariat on the work being carried out until very recently and had no idea of how the database 
would be presented finally. Second, China raised concerns about the utilization and  interpretation of 
the data. The point s of view from one  organization would be published on a joint website which likely 
would be biased , and misunderstood as commonly recognized or agreed views from those 
four organizations, since they would be presented on a single platform.  China was concerned about 
how the  WTO could avoid endorsing the data and views of the other three  institutions. The third 
concern raised by China pertained to the working schedule. China highlighted that the Secretariat 
had requested Members to check and review the ir notified information  within a specified time -frame 
which has created a significant workload. China further noted that the timeframe had not been 
discussed or consulted with Members in advance.  
293.  Based on the aforem entioned concerns, China made the following requests:  
(i) only information submitted by notifying Members under Article 25.2 of the SCM Agreement 
should be included in the database. Neither information submitted by other Members under 
Article 25.10 or oth er sources not recognized by the notifying Member should be included, nor 
should the Secretariat act on its own initiative in any circumstances to search or accept any 
other information ; 
(ii) the sources of relevant information in the database must be clea rly stated and 
distinguished. The information must not be expressed or implied in any way to be reliable or 
based on or approved by relevant Members ; 
(iii) any information in the database, including information provided by other institutions, 
should under no circumstances be used as the basis for trade remedy investigations or any 
litigation or arbitration, or as the basis for judging its legal nature ; 
(iv) any work of the Secretariat on the database, including the personnel, budget, etc., should 
be transpa rent and any further work on the database should be notified to the Members in 
advance to seek guidance from them.  
294.  Australia  thanked the DDG for her presentation on the subsidies portal and stated that it 
considered the growing use of subsidies to be the g reatest challenge confronting the global trading 
regime. It highlighted that the previous year's joint report had emphasized the urgent need for 
improved transparency and analysis to fully understand the extent of the subsidization problem.  
295.  Australia view ed the establishment of the portal as a significant step forward in addressing 
this matter, which would enhance the collective understanding of Members regarding this critical 
issue. Australia consider ed that the WTO Secretariat had the flexibility to unde rtake research and 
analytical work on major trade challenges, and the portal fell within the Secretariat's remit. Australia 
encouraged the Secretariat to maintain ongoing engagement with Members as the project 
progressed.  
296.  Australia thanked  the DDG for con firming that the contribution of subsidies notifications to the 
portal by the WTO involved transforming publicly available data into a more searchable format. It 
acknowledged that Members had the opportunity to continuously identify and address any errors.  
Australia also appreciated the Secretariat's comprehensive explanation of its methodology for this 
work and recognized its efforts in managing risks.  
297.  Australia reaffirmed its commitment to transparency , expressing the hope that this significant 
contribution to transparency efforts would continue to progress smoothly. Australia reiterated its 
previous concern that if the issue of subsidies was not urgently addressed, there was a risk of a 
greater subsidies war in the coming decade.  
298.  Canada thanked the DDG for providing an update on the process and the work undertaken to 
date. It also appreciated the Secretariat's efforts in developing a database on subsidy notifications 
and its work on the subsidy portal that would facilitate access to i nformation from the OECD, WTO, 
World Bank, and IMF. Canada recognized the importance of transparency in the subsidies domain 
and agreed on the necessity of a comprehensive, independent, and open resource that would enable 
monitoring and fair comparison of practices across countries over time.  While considering this G/SCM/M/123  
 
- 39 - 
 
  initiative a positive step, Canada understood that most of the information available on the platform 
would rely on data self -reported by governments. Therefore, Canada hoped that the new database  
and portal would encourage more WTO Members to fulfil their subsidy notification obligations.  
299.  In terms of the process, Canada supported the previous comments made, including those 
from the April session, stressing the importance of allowing sufficient ti me for the review of data 
prepared by the Secretariat. Canada took note that the Secretariat had circulated the data for 
Members' review and expressed its expectation to complete the data review within the proposed 
deadline. Canada strongly encouraged othe r Members to do the same.  
300.  India expressed serious concerns on what, why and how the whole exercise had been 
conducted by the Secretariat on this matter. It stated that this exercise had not been mandated by 
Members. Members were not aware as to what ha d been done until very recently. They had received 
a few communications from the Secretariat recently and certain details had been made known in the 
informal meeting on 12 April 2023 upon the insistence of Members. India expressed that there was 
still a lack o f clarity regarding the actions being taken, and the recent frequent communications from 
the Secretariat were only contributing to the existing confusion.  
301.  It was unfortunate that the Secretariat engaged with the Membership only to inform about 
what it had been doing after months of discreetly carrying out such a sensitive exercise. The purpose 
behind the exercise and the reasons for its hurried nature were still unclear to India. India highlighted 
that there had been no request or proposal from any Member t o undertake such an exercise, and 
there had been no discussion in a formal meeting prior to its initiation which was contrary to the 
fundamental nature of the WTO as a Member -driven organization.  
302.  Additionally, India had concerns regarding how the whole ex ercise has been carried out. India 
emphasized that transposition, being a serious task, required detailed discussions within the 
Committee. As previously informed in the informal meeting, transposition involved merging or 
splitting information from various  parts of the notifications provided by Members. As the DDG had 
indicated, there were data gaps and inconsistencies which, according to India, required further 
discussions. India stressed that this was a complex undertaking which could lead to errors if it  was 
rushed. India believed that only Members were in a position to effectively carry out such work. As it 
also had pointed out during the informal meeting, at the first instance, India had found glaring 
infirmities in its excel sheet.   
303.  India further empha sized that the publication of reports by external stakeholders could not 
serve as a binding reason for undertaking such an exercise without the approval of Members. Instead 
of doing a post-mortem of such exercise or treating it as fait accompli , merely due  to the work of 
certain authors,  India preferred prior information and discussions among Members, followed by 
further work with their consent. India recognized that the resources of the Secretariat were limited, 
and therefore, it should be up to the Member s to decide the best use of these limited resources. 
Moreover, any external engagement should be mandated by Members themselves.  
304.  India recalled that during the informal meeting on 12 April, certain issues and concerns had 
been raised by many participating Members. However, these comments and concerns had not been 
adequately addressed in the Secretariat's communication dated 28 April 2023, which reported on 
the exercise and included a brief summary of the informal session. The communication failed to 
articul ate these concerns and, furthermore, contained an incorrect reflection of the discussion. 
Omission and incorrect reflection of the discussions in the informal session was a matter of serious 
concern. In this regard, India had certain suggestions:  
• first, In dia requested the Chair to issue a report on the informal session at her own 
responsibility. India acknowledged that this ha d been done during the meeting and thanked 
the Chair for that ; 
• second, the Chair should report on any informal consultations that sh e might have had or was 
likely to have with Members, bilaterally or in a group ; 
• third, India suggested that the Chair hold structured consultations with Members on this 
matter. Thereafter, this issue might be brought up in the formal meeting for Members ' 
consideration and decision.  G/SCM/M/123  
 
- 40 - 
 
  305.  India noted that it had been in communication with its capital and would send a formal 
response to the communications received from the Secretariat as soon as they were ready. It also 
stated that, considering the sensit ivities, this matter should not be hurried, and no data should be 
released in the proposed excel format without the consent of Members.  
306.  India recalled that one argument in the information note circulated by the Secretariat was the 
possible manipulation of the information by other international organizations if it was not presented 
in the proposed format. India highlighted that Members provide notifications in an approved format. 
It further expressed that if any institution or scholar were to manipulate Memb ers' data, they would 
be doing so at their own peril and responsibility by risking their own credibility. If Members were to 
respond to such potential manipulation by external stakeholders, they would be left with no time 
and resources for other substantiv e work. However, India urged caution to ensure that facts were 
not manipulated within the WTO. It also emphasized that only the Members themselves were capable 
of interpreting their own notifications.  
307.  India indicated that if any Member considered it necess ary that the format of the transparency 
notification required a change or if the information would be more useful if furnished in excel format, 
such a proposal might be brought in the Committee by that Member. The Secretariat should not be 
leading any such  exercise unless mandated by Members.  
308.  The United Kingdom  supported the statements made by Australia and Canada. It recognized 
that the usefulness of a database would depend on the quality of data provided by Members through 
their notifications and saw sign ificant potential value in making subsidy data more user -friendly. The 
United Kingdom encouraged Members to engage constructively with the Secretariat on this matter.  
309.  South Africa  thanked the DDG for providing information on the database It also thanked th e 
Chair for organizing the informal session on 12 April. South Africa recalled that Nigeria had spoken 
on behalf of the African Group at the informal meeting and had expressed concerns about the process 
followed in respect of the proposed database. South Africa and many other Members had echoed 
those concerns. South Africa reiterated the concerns raised and called upon the Secretariat to allow 
Members adequate time and scope to ass ess the implications of the proposed database.  
310.  The Russian F ederation  thanked the Secretariat for the update on the subsidy database and 
echoed the concerns raised by China and India. It looked forward to having further clarifications and 
reserved its rights to make further comments.  
311.  The European Union  thanked the Chair for putting this item on the agenda as well as for 
organizing the transparency session in April. It also thanked the DDG for providing a very useful 
overview of the whole process, including its genesis. The European Union emphasized the value of 
transparency, in particular with respect to subsidies. In this regard, it fully supported any efforts for 
enhanced transparency of subsidies including the subsidies webpage being developed by the  WTO 
and the other three  international organizations. While it su pported the project and encouraged 
Members to engage constructively on it, it also had some concerns which had been  communicated 
at the transparency session on 12 April.  
312.  The European Union regret ted that the Secretariat had not engaged in prior consultati on with 
Members regarding the development of the webpage. Additionally, it acknowledged the extension of 
the deadline for Members to review the Excel sheet created by the software but highlighted that the 
large volume of information might still pose a chal lenge for some Members. The European Union 
hoped that the Secretariat would explore ways to facilitate the review process for those Members. 
It appreciated the hard work of the Secretariat and other international organizations in developing 
the subsidies w ebpage, emphasizing the importance of promoting transparency in the subsidies 
area, which was discussed during the meeting.  
313.  Pakistan  recalled that at the informal session in April 2023, several Members had expressed 
concerns on the subsidy database , noting  that it had not been mandated by Members and that the 
Secretariat had not shared enough information about it. Pakistan requested that this activity should 
not be haste ned, and that further details should be made available for all Members. The process 
should be made formally Member -driven and ample time should be afforded for the data to be 
overseen by the capitals before its release in the database.  G/SCM/M/123  
 
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  314.  The United States  thanked the DDG for the additional information provided. Like other 
Members, the United S tates had serious concerns about the Secretariat engaging in this work without 
prior consultation with Members. This was an important topic which could be sensitive as well. 
Although the verification of the Excel spreadsheets would take some time, the Unit ed States would 
try to meet the deadline.  
315.  Sri Lanka  thanked the Chair for her report on the transparency session held on 12 April. It 
also thanked the DDG for her update on the ongoing work. As many other delegations indicated, 
subsidies were highly sensit ive for all Members. Many delegations, including Sri Lanka, had not been 
aware of the work to incorporate Members' notifications into a joint portal to be launched. Sri Lanka 
expected to get more information on the entire exercise.  
316.  Brazil  thanked the DDG f or her report to the Committee and reiterated its total support to 
efforts to guarantee further transparency of subsidies. However, Brazil also indicated that the time 
provided by the Secretariat to Members for comments was insufficient for a thorough anal ysis noting 
that the deadline had not been discussed with Members. Brazil stated that the joint portal should 
not be launched before Members' review in order to avoid inconsistencies or absence of information. 
It also emphasized that Members would profit i f they could have detailed information on the format 
and content of the online portal. Brazil also expressed its concern that differences in the definition 
and scope of the term "subsidy" used by different organizations involved in this process might be a 
source of confusion and misunderstandings for the general public, if not correctly addressed.  
317.  The DDG thanked all delegations for their comments and suggestions noting that many 
important points ha d been made. The DDG said that she heard loud and clear tha t Members assigned 
importance to information sharing and improved transparency. This was in line with one of the very 
important objectives at the WTO which was to promote a dialogue in the Organization that was 
based on information.  
318.  The DDG also noted the  concerns raised regarding information -sharing by the Secretariat and 
the origins of the project. She clarified that the project's origins could be traced back to 2021, 
specifically referring to the joint report launched in April of the previous year. The report had 
emphasized the significance of enhancing data collection and dissemination.  
319.  The DDG also acknowledged the concerns raised, particularly regarding the clarity of the 
sources of relevant information. She emphasized that the project aimed to consol idate existing public 
information from the four organizations. She reiterated that this joint portal would bring together 
the information from these organizations into a single website, clearly indicating which information 
corresponded to which organizatio n. Furthermore, she highlighted that each organization would 
make reference to the appropriate definitions used in its own work, ensuring that there was no risk 
of confusion regarding the organization responsible for the presented work.  
320.  She recognized the importance of the Secretariat engaging with Members and allowing them 
to thoroughly verify their respective files. She emphasized that the Secretariat had been and would 
continue to be available to closely collaborate with Members, addressing any inquiries  they m ight 
have. She assured Members that any errors or mistakes in the files would be corrected. She 
emphasized the objective of having fully accurate information expres sing the Secretariat's 
commitment to closely collaborate with Members in order to ach ieve this goal.  
321.  The DDG also acknowledged the concerns raised with respect to the timeline indicating the 
Secretariat's readiness to redouble its efforts to closely work with Members to ensure compliance 
within the given deadline.  
322.  With respect to the comm ents on whether the Secretariat could conduct such an exercise, she 
recalled the "coherence mandate" in the WTO Agreements emphasizing the importance of working 
with other international organizations to make sure that the resources of each organization hav e 
been leveraged in the best way possible to serve Members.  
323.  The DDG  reiterated that those were her initial reactions to the comments raised by Members. 
The Secretariat would work closely with Members to make sure that the WTO had a database that 
would reflect the fully accurate information and that it could be added to th e joint portal. She also 
took note of suggestions that it should not be launched before Members reviewed their files.  G/SCM/M/123  
 
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  324.  Referring to the DDG's statement that she had heard loud and clear Members' comments on 
information sharing and transparency, India clarified that, in light of the presentations made in the 
informal meeting on 12 April 2023, the issue was not transparency but accessibility of information 
and facilitation and convenience of getting that information. The transparency obligation was very 
well c overed by the notification of Members, but the issue was not just transparency in that particular 
case. India also recalled that it had raised other concerns noting that it had not heard how those 
concerns would be taken into account, such as the Member -driven mandates of the Secretariat to 
work further on this issue. India requested some clarity and assurance on that matter.  
325.  The DDG indicated that she took note  of India's comment regarding the issue not being about 
information sharing or transparency but r ather accessibility of information and facilitating access to 
information. With respect to the issue of mandate, she reiterated that the mandate stemmed from 
the joint report that had been presented the previous year where it was clearly indicated that the  
organizations would undertake joint work in this area. This was one of the results of that joint 
collaboration which also stemmed from the coherence mandate regarding  WTO's relations with those 
organizations.  
326.  India reiterated that, in light of the present ations made by the Secretariat, the issue was 
about the facilitation or accessibility but not transparency which was taken care of through Members' 
notification obligations. The issue was about the correct transposition of these notifications which 
were pr ovided to the WTO in the designated format. This transposition had to be with the consent 
of Members. India also recalled its other concerns including the fact that this issue had never been 
discussed in a formal Committee meeting. There might be a report,  but this had never been 
discussed in the formal meeting of the Committee. In this regard, India would like to see a proposal 
by Members requesting such a transposition exercise or Members' ideas on better accessibility of 
the notification information that  Members so provided.   
327.  The Chair encouraged Members to contact the Secretariat if they needed further clarifications 
or have any specific questions on this database project.  
328.  The Committee took note  of the statements made.  
16  OTHER BUSINESS  
16.1  European Union – proposal on WTO deliberations and State intervention in support 
of industrial sectors (WT/GC/W/864)  
329.  The European Union  introduced its proposal (WT/GC/W/864) submitted in the context of the 
General Council regarding WTO deliberations and State intervention. The European Union explained 
that in its submission of 20 February 2023, entitled  "Reinforcing the Deliberative Function of the  WTO 
to Respond to Global Trade Policy Challenges, it  had proposed to enhance deliberations among WTO 
Members on several key issues affecting global trade. One of  the identified topics was State 
intervention in support of industrial sectors. According to the European Union, this topic included 
subsidies as one of the key types of measures that should be part of the deliberations by the 
Membership. At the same time,  the intended scope of the deliberations would go beyond subsidies. 
Other types of state intervention should also be part of the deliberations, for example, the role of 
state-owned enterprises.  
330.  The European Union noted that the Membership should aim for s ubstantive policy 
deliberations, not legal debates on whether a particular measure fell under the definition of subsidy 
under the SCM Agreement or not. Rather, the deliberations should focus on how to improve 
transparency and how to design state interventi ons in a way that maximized the positive impacts 
while minimizing the negative spill overs on other WTO Members. The deliberations should also 
consider the role of support to industrial sectors in promoting development, notably the positive and 
negative sp ill overs on developing countries.  
331.  For these reasons, the European Union suggested that MC13 should set up a Member -driven 
dedicated space to conduct these discussions. As the scope of the deliberations extended beyond 
subsidies and beyond the current par ameters of the SCM Agreement, it would be useful to conduct 
them in a separate dedicated space, even though the continued work of the SCM Committee 
remained a key component, notably as regards to transparency and notifications. Lastly, the G/SCM/M/123  
 
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  European Union e ncouraged all Members to provide full and complete transparency on subsidies to 
have the best possible factual basis for the deliberations on state intervention in support of industrial 
sectors.  
332.  In reaction, India recalled that there were three items in the European Union's submission on 
reinforcing of deliberative function, including trade policy and state intervention. This proposal would 
be discussed again in the forthcoming General Council's meeting and India w ould engage 
constructively in the SCM Committee once the European Union introduced this issue in the formal 
agenda.  
16.2  Republic of Korea - European Union's Foreign Subsidies Regulations  
333.  The Republic of Korea  raised concerns about the European Union's Foreign  Subsidies 
Regulations, which entered into force in January 2023. Korea had  submitted its comments during 
the European Union's legislative procedure and through bilateral meetings but ha d not received a 
response yet. As the date of full applicability was r apidly approaching, meaning that  the ex officio  
investigation under regulation would enter into force in July 2023 and the pre notification obligation 
would take effect in October, it would like to convey its concerns once again. Korea expressed that 
it recognized the aim of the European Union's Foreign Subsidies Regulation to address distortions of 
the European Union internal market arising from foreign subsidies. However, it noted that the current 
broad definition of foreign financial contributions and no tification obligation posed a tremendous 
administrative burden on its businesses.  
334.  Therefore, Korea requested the European Union to consider the following: first, the regulation 
appeared to impose a higher administrative burden on companies receiving forei gn financial 
contributions compared to recipients of European Union's state aid, thereby discriminating de facto  
against foreign suppliers and imposing excessive burden on their free economic activities. The 
companies that were subject to European Union's state aid regulation would benefit from the 
shortened process under the Green Deal Industrial Plan and recent reforms to the state aid regime, 
and intentions to re -elect this regime further. However, the business subject to the Foreign Subsidies 
Regulation s, most of which non -European Union businesses, were likely to have discriminatory 
burden of having to submit all the documents related to direct and indirect financial contributions by 
the non -European Union government.  
335.  Second, Korea requested the Europe an Union to ease the administrative burden of individual 
business by clarifying the scope of applicability. Under the regulation, the scope of financial 
contributions that were subject to the submission requirement was not clear. Korea would like the 
Europ ean Union to ensure that the unreasonable administrative burden, that is, the submission of 
documents of the subsidiary companies, should be eliminated . In addition, the exemption or waiver 
system should be provided for the confidential business informatio n so that the regulation should 
not impose an unreasonable and actually impracticable administrative burden for the businesses.  
336.  Lastly, Korea requested the European Union to resolve business managing uncertainty by 
promptly providing guidelines and furthe r clarification. The current regulations were not clear on the 
important elements such as the criteria for financial contributions and market distortive effects. 
Therefore, the guidelines that included such clarifications were urgently needed. In addition,  further 
guidelines should be provided: first, for the scope of a notification update obligation under the 
Articles 6 and 7 of the Implementing Regulation; second, for the pre notification waiver requests 
under Section E of the Concentration Annex and Sect ion F of the Procurement Annex; and three, for 
the minimum period for document submission of Article 18. Korea thanked the European Union for 
considering its concerns in advance and remained steady to engage in order to make the 
implementation of the Forei gn Subsidies Regulation smooth.  
337.  In reaction, the European Union  expressed it was not sure that these remarks and the scope 
of the Foreign Subsidies Regulations fell in the remit of the SCM Committee. The European Union 
made a reference to the Article 44.9  of the Foreign Subsidies Regulation that regulated the 
relationship with other instruments, explaining that whenever a situation fell in the scope of the 
SCM Agreement, it did not fall in the scope of the Foreign Subsidies Regulation. Therefore, the 
Europ ean Union had doubts that this Committee was competent to address these points. Secondly, 
the European Union mentioned that it took good notes of the points that Korea, which would be 
relayed to Brussels.  G/SCM/M/123  
 
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  338.  Lastly, the European Union reassured Korea that th e process was still ongoing, namely with 
regard to the Implementing Regulation of the Foreign Subsidies Regulation and that all the 
comments that Korea and the other parties made would be taken into account duly. The 
European  Union explained it launched a public consultation on implementations and that it would 
come up with an implementing regulation before the entry into force of the obligations of the main 
instrument of the Foreign Subsidies Regulation.  
339.  Regarding the Europea n Union's doubt whether the SCM Committee was applicable for the 
comments regarding the scope and applicability of the Foreign Subsidies Regulations , the Republic 
of Korea  stated that the regulation was not limited to competition and public procurement. In  fact, 
if analysed, the ex officio  investigation under this regulation was applicable to "all other working 
situations". And particularly given that, as said in its statement, the date of full applicability was 
approaching and the next regular meeting of t he SCM Committee was only happening in late 
October, Korea was compelled to bring this matter in this current meeting. Korea then thanked the 
European Union for its understanding and for its comments about the still ongoing process.  
340.  The Committee took note  of the statements made.  
17  DATE OF NEXT REGULAR MEETING  
341.  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. The next regular meeting of the Committee would be held in the week 
of 23 October  2023 . 
342.  It was so decided .  
18  ELECTION OF OFFICERS  
343.  The Chair recalled Rule 12 of the Committee's Rules of Procedure which provides that the 
election of the new Chair shall take place at the first regular meeting of the year and that the election 
shall take effect at the end of that meeting.  
344.  As the consultations at  the CTG level regarding the selection of the new Chair of this 
Committee as well as of other Committees under the CTG were still under way, a new Chair could 
not be elected at the end of the meeting.  In these circumstances, the Chair suggested that the 
Secretariat send a communication once the CTG has completed its work, indicating the proposed 
Committee Chair identified by the CTG.  The new Chair would be deemed to be elected by the 
Committee absent any objection.  This approach, which has been taken in pre vious years, would 
obviate the need for an additional meeting of the Committee.  
345.  It was so decided . 
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