RESTRICTED  
  
G/SCM/M/87  
 
31 January 2014  
(14-0551)  Page: 1/13  
Committee on Subsidies and Countervailing Measures    
 
 MINUTES OF THE REGULAR MEETING HELD  
ON 21 OCTOBER 2013  
CHAIR: MR MARCUS BARTLEY JOHNS (AUSTRALIA) 
1.  The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 21 October 2013, convened in WTO/AIR/4212.  
2.  The Committee adopted the following agenda: 
1   NATIONAL LEGISLATION – REVI EW OF NOTIFICATIONS OF NEW OR 
AMENDED LEGISLATION OR REGULATIONS NOT PREVIOUSLY REVIEWED BY THE COMMITTEE (INCLUDING SUPPLEMENTAL NOTIFICATIONS OF EXISTING PROVISIONS NOT PREVIO USLY REVI EWED) .................................................................... 2
 
1.1   Australia (G/SCM/N/1/AUS/2/Su ppl.9 and G/SCM/N/1/AUS/2/Suppl.10) ............................ 2  
1.2   Cameroon (G /SCM/N/1/CMR/1) ................................................................................... 2  
1.3   Chile (G/SCM/N /1/CHL/2/Su ppl.1) ............................................................................... 2  
1.4   Morocco (G/SCM/N/1/MAR/3) ...................................................................................... 2  
1.5   United States (G/SCM/N/1/USA/1/Suppl.12, G/SCM/N/1/USA/1/Suppl.13, and 
G/SCM/N/1/USA/1/Suppl.14) ............................................................................................. 3  
2   NATIONAL LEGISLATION – CONT INUING REVIEW OF LEGISLATIVE 
NOTIFICATIONS PREVIOUSLY REVIEWED BY THE COMMITTEE ........................................ 3  
2.1   Indonesia (G /SCM/N/1/I DN/3) .................................................................................... 3  
3   SEMI-ANNUAL REPORTS OF COUNTERV AILING DUTY ACTIONS (ART. 25.11) ............. 3  
4   NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY 
ACTIONS (ART . 25.11) ..................................................................................................... 4  
5   CONTINUATION OF DISCUSSIONS ON IMPROVING THE TIMELINESS AND 
COMPLETENESS OF NOTIFICATIONS AND OTHER INFORMATION FLOWS ON 
TRADE MEASURES UNDER THE SCM AGREEMENT ............................................................. 4  
6   NON-NOTIFICATION BY CHINA OF ALLEGED SUBSIDIES CONTAINED IN THE 
REQUEST FROM THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM 
AGREEMENT - ITEM REQUESTED BY THE UNITED STATES ................................................ 8  
7   LOCAL CONTENT REQUIREMENT IN RENEWABLE ENERGY SECTOR SUBSIDY 
SCHEMES IN THE UNITED STATES - ITEM REQUESTED BY INDIA ................................... 11  
8   DATE OF NEXT REGULAR ME ETING ............................................................................ 11  
9   OTHER BU SINESS ...................................................................................................... 12  
9.1   Japanese government support for regional aircraft - item requested by Brazil .................... 12 
9.2   Export competitiveness of Indian text ile and apparel products - item requested by 
the United States ............................................................................................................. 12 
9.3   Documents for meetings  - statement by  the Chair ......................................................... 13 
10   ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7) ............. 13  G/SCM/M/87 
 
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1  NATIONAL LEGISLATION – REVIEW OF NOTIFICATIONS OF NEW OR AMENDED LEGISLATION OR REGULATIONS NOT PREV IOUSLY REVIEWED BY THE COMMITTEE 
(INCLUDING SUPPLEMENTAL NOTIFICATI ONS OF EXISTING PROVISIONS NOT 
PREVIOUSLY REVIEWED) 
3.  The Chair recalled that as had been indicate d in the annotated draft agenda for the meeting, 
the primary review of the new legislative noti fications under this agenda item, which were 
multiple-symbolled, would take place in the Committee on Anti-Dumping Practices, where all 
horizontal issues would be addressed, in addition  to anti-dumping issues. He thus requested that 
Members posing questions limit themselves to issues specifically related to countervailing measures.   
4.  The Chair also noted that the deadline for any follow-up written questions related to the 
legislative notifications reviewed under this agenda item (including written versions of questions posed orally at the meeting) was 11 November 2013, and the deadline for written replies was 
2 December 2013.   
1.1  Australia (G/SCM/N/1/AUS/2/Suppl.9 and G/SCM/N/1/AUS/2/Suppl.10) 5.  Australia informed the Committee that these two notifications reflected reforms to Australia's 
countervailing duty system. Supplement 9 established the new Anti-dumping Commission, as from 
1 July 2013, to administer Australia's anti-dumping and countervailing system. This Commission had been transferred from the Customs and Border  Protection Service to the new Department of 
Industry. This would not have any impact on on-going investigations. Supplement 10 related to 
three reforms, on the lesser duty rule, retr ospective duties and anti-circumvention.  
6.  The Committee took note of the notifications and the statement made.   
1.2  Cameroon (G/SCM/N/1/CMR/1)  
7.  Written questions with respect to this notification can be found in:  
 Questions from the US: G/SCM/Q1/CMR/1 (none pertain specifically to countervailing 
measures) 
 
To date, no written repl ies have been received. 
 8.  The Committee took note of the notification and questions. 
1.3  Chile (G/SCM/N/1/CHL/2/Suppl.1) 
9.  Written questions and replies with respect to this notification can be found in:   
 Questions from the US: G/SCM/Q1/CHL/5 (none pertain specifically to countervailing 
measures) 
 Replies to the US: G/SCM/Q1/CHL/6 
 
10.  The Committee took note of the notification, questions and replies. 
1.4  Morocco (G/SCM/N/1/MAR/3) 
11.  Written questions with respect to this notification were available in the following document:  
 US questions in G/SCM/Q1/MAR/6 (none pertain specifically to countervailing measures) 
 
To date, no written replie s have been received.  
 
12.  The Committee took note of the notification and questions. G/SCM/M/87 
 
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  1.5  United States (G/SCM/N/1/USA/1/S uppl.12, G/SCM/N/1/USA/1/Suppl.13, and 
G/SCM/N/1/USA/1/Suppl.14) 
13.  There were no comments or questions concerning this notification. 14.  The Committee took note of the notification. 
2  NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE 
2.1  Indonesia (G/SCM/N/1/IDN/3) 
15.  The written questions and replies in respect of this notification can be found in: 
 Questions from Chinese Taipei: G/SCM/Q1/IDN/16 
 Replies to Chinese Taipei: G/SCM/Q1/IDN/171 
 
16.  Chinese Taipei noted, as expressed in its written questions, its systemic concerns over 
Indonesia's lack of a domestic judicial mechanism for trade remedy disputes. According to 
Article 23 of the SCM Agreement, each Member whose national legislation had provisions on 
countervailing measures was obliged to maintain a mechanism to deal with disputes. However, 
Indonesia's new legislation did not authorize any specific domestic court to hear these sorts of disputes. This was a derogation of Indonesia's commitments to the WTO.    
17.  Indonesia indicated that it would provide its written replies in the near future.   
18.  The Committee took note of the notification, questions and statements made. 
19.  The Chair informed the Committee that any Member wishing to place a previously-reviewed 
legislative notification on the agenda of the Co mmittee's April 2014 regular meeting had to submit 
written questions concerning that notification to the Member involved and to the Secretariat not 
later than 17 March 2014. Any Member receiving such questions had to submit its written replies not later than 14 April 2014.  
20.  The new legislative notifications to be placed on the agenda of the Committee's April 2014 
regular meeting would be those that had been circulated in all three working languages by 17 March 2014. Any written questions concerning such notifications should be submitted to the 
Member involved and to the Secretariat by 7 April 2014.   
3  SEMI-ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ART. 25.11) 21.  The Chair stated that reports on countervailing  duty actions taken in the first half of 2013 had 
been received from Australia, Brazil, Canada, China, the EU, Pakistan, Peru, South Africa, and 
the US. Members that had made nil notifications were listed in paragraph 2 of document 
G/SCM/N/259/Add.1. As listed in paragraphs 3 and 4 of that document, a large number of Members had not submitted their reports, and thus had failed to comply with this important 
notification requirement. The 25 Members that had submitted one-time notifications (of no 
investigating authority, no countervailing actions to date, and no expectation thereof for the foreseeable future) were listed in paragraph 5 of the document. Any other Members that qualified 
to make such notifications were urged to do so.   
22.  There were no questions or comments from Members under this agenda item.   23.  The Committee took note of the semi-annual reports and statement made. 
                                               
1 Indonesia submitted its written replies after the meeting.   G/SCM/M/87 
 
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  4  NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS 
(ART. 25.11) 
24.  The Chair noted that since the Committee's April 2013 regular meeting, notifications under 
Article 25.11 of preliminary and final countervailing duty actions had been received from Australia, 
Brazil, Canada, the EU, Mexico, and the US. Th ese notifications were listed in documents 
G/SCM/N/257-258 and 261-264.  
25.  No delegation raised comments or questions with respect to these notifications.  
26.  The Committee took note of the notifications. 
5  CONTINUATION OF DISCUSSIONS ON IMPROVING THE TIMELINESS AND 
COMPLETENESS OF NOTIFICATIONS AND OTHER INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT 
27.  The Chair recalled that, since the spring 2009 request from the Chair of the TPRB, the 
Committee had discussed "ways to improve the timeliness and completeness of notifications and 
other information flows" under the  SCM Agreement at formal and informal meetings, as reflected 
in the meeting minutes. Among the steps taken, the Secretariat had prepared, at the request of 
Members, a background note (G/SCM/W/546 dated 28 April 2009), providing a snapshot of compliance with various notification obligations under the Agreement since 1995. This 
compendium had been updated for every spring meeting since then, with the most recent version 
in G/SCM/W/546/Rev.4. On the basis of comments from Members, the Secretariat subsequently had circulated corrected versions of some of the annexes, in G/SCM/W/546/Rev.4/Corr.1. 
28.  In an effort to bring to the attention of th e concerned Members in a direct way the problem of 
non-submission of subsidies notifications, on 13 September 2013 the Chair had sent a letter to 
each Member that had not, as of that date, submitted a 2011 new and full notification. None of those delegations had submitted a 2013 notification either. In the letters, the Chair pointed to the 
missing notifications, and noted resources that dele gations could draw on in working to rectify the 
situation, including the Secretariat Handbook on Notification Requirements for the SCM Agreement; consultations with the staff of  the Rules Division; and the two Geneva-based 
internship programmes coordinated by the Secretariat.   
29.  The letters had generated a certain positive response, as around a dozen delegations had 
consulted with the Secretariat concerning the nature of the notification obligations, the formats to be used, and the Notification Handbook, which the Secretariat had updated before the letters were 
sent. Several delegations had submitted their 2011 and 2013 notifications, some with explicit 
reference to the Chair's letter. These Members in cluded some particularly small delegations and 
others facing challenging circumstances. The efforts of those delegations to complete their 
notifications demonstrated that it was possible for all Members to comply with their obligations. It 
also demonstrated the valuable role played by the Secretariat in providing advice to Members.  
30.  As of the present meeting, 62 Members (co unting the EU as one Member) had submitted their 
2011 new and full notifications, and 47 Memb ers had submitted their 2013 notifications. 
Unfortunately, this meant that four months after the deadline for 2013 new and full notifications, 
58 Members had not yet made their new and full notifications that were due on 30 June 2011. In 
addition, 84 Members had not yet made their 2013 new and full notifications. Compliance in 
previous notification cycles had been similarly poor. The chronic low level of compliance with this 
fundamental notification obligation continued to be an important problem before the Committee.   
31.  As of the present meeting, the following Members had not made a 2011 notification: Angola; 
Bangladesh; Benin; Bolivia; Botswana; Brunei Darussalam; Burundi; Cambodia; Cape Verde; 
Central African Republic; Chad; China; Congo; Côte d'Ivoire; Democratic Republic of Congo; Djibouti; Egypt; Fiji; the Gambia; Ghana; Guinea; Guinea-Bissau; Guyana; Iceland; Indonesia; 
Kenya; Kyrgyz Republic; Lesotho; Malawi; Maldives; Mauritania; Mongolia; Morocco; Mozambique; 
Myanmar; Namibia; Nepal; Niger; Nigeria; Om an; Pakistan; Paraguay; Philippines; Rwanda; 
Senegal; Sierra Leone; Solomon Islands; So uth Africa; Sri Lanka; Suriname; Tanzania; 
Trinidad and Tobago; Tunisia; Uganda; United Arab Emirates; Venezuela; Viet Nam; and 
Zimbabwe. G/SCM/M/87 
 
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  32.  Morocco noted that notifying subsidies involved many departments. The Ministry of Foreign 
Trade, which was in charge of coordinating and submitting these notifications, had met with the 
involved Ministries to impress upon them the importance of fulfilling this notification requirement. Morocco would submit its notification as soon as possible.   
33.  The Chair urged Members that had not yet made their notifications to contact the Secretariat 
with any questions, and to notify their subsidies as soon as possible.   
34.  The US recalled that it previously had submitted a proposal to address the problem of 
Members not responding in a timely and co mplete manner to questions submitted under 
Article 25.8 of the Agreement, despite the clear language of Article 25.9. The US proposed a process for provision of written answers to Articl e 25.8 questions according to a schedule, similarly 
to the procedures in G/SCM/117 for answers to questions on Members’ subsidies notifications. 
That document was an example of the Comm ittee agreeing to workable, common-sense 
procedures to facilitate the Agreement’s notification provisions. Something similar could and should be agreed with respect to the provisions of Articles 25.8 and 25.9. At previous meetings, 
certain Members had questioned whether written answers could be required under Committee 
procedures. The US noted that written answers, within a specified time-period, already were required for routine questions on Members' subsidy notifications.  Questions submitted pursuant to 
a specific provision - Article 25.8 - deserved at least equal treatment.  
35.  The US also proposed that unanswered Article 25.8 questions should remain on the 
Committee's agenda until they were answered, as was done for unanswered questions concerning Members' subsidies notifications. This would encourage Members to adhere to their obligations 
under Article 25.9.  
36.  The US disagreed with the previously-exp ressed view of some Members that the written 
question-and-answer procedures in G/SCM/117 pertained exclusively to Article 26 (surveillance) 
and were not relevant to Articles 25.8 and 25.9. The procedures contained only a single reference 
to Article 25, and none to Article 26, thus provid ing no grounds for the view that the procedures 
were developed solely pursuant to Article 26.   
37.  Regardless of legal arguments, paragraph 4 of G/SCM/117, which set out the reasons for a 
written question-and-answer procedure, was instructive. It stated that: "the written procedure is intended to avoid the repetition of lengthy ques tions and answers in the meeting and to allow the 
Committee to: (a) follow-up in areas where the answers were unclear, and (b) discuss issues 
identified as a result of the written procedure.  The result should be shorter and more focused 
meetings where meaningful discussion could occur". The same rationale supported the proposed written question-and-answer procedure for Articles 25.8 and 25.9. In past meetings, the 
Committee had been unable to engage in discussion s following long, complicated answers provided 
orally under Article 25.9.  
38.  The US was continuing to consider proposing a 60-day deadline for answering Article 25.8 
questions, and any follow-up questions. This was consistent with the Article 25.9 requirement to 
respond to Article 25.8 "as quickly as possible". The US expected to present a revised proposal before the Committee's next meeting.   
39.  China stated that it respected the transparency requirements of the Agreement, and 
understood the concerns expressed at Committee meetings by various Members, but that the 
complexity of the legal matters regarding subsidies under the Agreement, the variety and size of the Chinese economy, and the human resource constr aints in the legal field at the central and sub-
central levels of the Chinese Government, made it very difficult to accomplish the huge work load 
in a timely manner or at all. The "over-reporting" issue raised by the US at the Committee's special meeting earlier that day demonstrated the complexity of the legal matters related to 
notification of subsidies to the Committee.   
40.  As China had demonstrated at the Committee's previous meeting, China had notified a large 
quantity of subsidies at the central and sub-central levels; thus it was not true that China had G/SCM/M/87 
 
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  failed to notify sub-central subsidies.2 China would continue to take concrete steps to improve its 
notifications and responses to questions to achieve the objective of transparency under Article 25.  
41.  With respect to the format for responses to questions raised under Article 25.8 notifications, 
the Agreement struck a delicate balance. It contained no requirement for written responses to 
such questions, as Article 26 did not contain prov isions leading to the development of procedures 
for Articles 25.8 and 25.9, as it did for Article 25.1. The Committee had a well-established practice for how to conduct these activities. China wished that Members would raise these matters within 
the boundaries of the Agreement.   
42.  Brazil understood the need to improve notification procedures and other information flows on 
trade measures under the SCM Agreement. Transparen cy constituted one of the main principles in 
the WTO, in which this Committee played a key role. Brazil welcomed the US initiative, while 
noting the importance of guaranteeing the balanc e of rights and obligations among Members. The 
notification procedures under Articles 25.8 and 25 .9, if subject to strict time frames, might be 
onerous for LDCs and developing Members. Brazil  questioned the definition of "appropriately 
answered" in the US proposal, and whether this would be determined by the respondent or the 
proponent. Finally, the possible duplication of no tification requirements, taking into account the 
new and full notifications, could be burdensome for some Members.  
43.  Canada agreed that notification of subs idies was a fundamentally important transparency 
exercise and expected Members to notify in a ti mely and complete manner. Canada supported the 
US interventions on notifications and transparency, and believed strongly in the obligations of the Agreement. Canada was open to exploring a mechanism to address Article 25.8 requests, including 
possible mandatory time-frames to provide written replies, given the importance of the 
transparency obligations. 
44.  Australia remained interested in and supportive of the US proposal, which was directly 
pertinent to the TPRB Chair’s request to discuss ways to improve the timeliness and completeness 
of notifications. Australia previously had provided detailed comments on the proposal, as well as a preliminary reaction to the US suggestion of a mandatory 60-day time-frame for the provision of 
written replies to questions posed under Article 25.8, and looked forward to discussing the 
expected revision to the proposal at the Committee's next meeting.  
45.  Determining procedures for review of noti fications was within the scope of the Committee’s 
work.  Regarding the previously-expressed view that the US proposal would be more appropriately 
addressed under the mandate of the Negotiating Group on Rules, Australia considered that the US 
was not seeking to amend the Agreement, but instead was proposing that Members agree in the Committee on procedures to implement existing noti fication and review provisions, in which, in 
Australia's view, the US usefully had identified a gap.   
46.  As an example, Australia in the past had received a request under Article 25.8, to which it had 
responded within 14 days. Australia also had made a request under Article 25.8, which remained 
unanswered some 10 years later. For the sake of equity, all Members that received such requests 
should respond, in writing. Greater procedural clarity would encourage compliance with notification obligations, and improve completeness and timeliness of notifications. 
47.  Japan attached great importance to the notification and surveillance schemes in Part VII of 
the Agreement. The rules-based multilateral tr ading system was supported by each Member 
fulfilling its obligations, and notification was a f undamental obligation for the successful functioning 
of the surveillance scheme. All Members were bene fitting from the rules-based multilateral trading 
system, and to continue to do so, all must meet their obligations. On the US proposal, Japan 
supported increasing the clarity and predictability of the Article 25.8 and 25.9 processes. Japan would remain constructively engaged in further dialogue on these matters.   
                                               
2 Subsequent to the meeting, China clarified, due to a difference in understanding, that by "subsidies at 
the sub-central levels" in this paragraph, China means certain of the programmes listed in the US counter-
notification under sub-central subsidies that are in  fact central government programmes but that are 
implemented at the sub-central level.   G/SCM/M/87 
 
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  48.  South Africa supported continuing to discuss of this agenda item, and stated that any future 
changes to documentation first should be discussed in the Committee to ensure transparency and 
inclusiveness.  
49.  Concerning the US proposal, South Africa had made comprehensive comments in previous 
meetings, and looked forward to the expected revision of the proposal, including correction of 
footnote 2 to indicate that South Africa had provided replies. While fully supporting efforts in the Committee to improve transparency, South Africa's concerns over the proposal remained. 
Pragmatism was needed in seeking strict time-fra mes, in view of Members’ different capacity 
thresholds. These questions were mainly posed to lesser-resourced, developing and LDC Members, and it was the more-resourced developed Members that typically had the capacity to pose such questions. The additional burden on Members of mandatory time-lines could alter the balance of 
rights and obligations, to the detriment of lesser-capacity Members. South Africa was not 
convinced that a strict time-frame would yield an effective result. Priority should not be given to a rapid, ineffective response over a comprehensive one. Regarding maintaining a request on the 
agenda of Committee meetings pending written replies, it was not clear who would determine 
whether the Member had "appropriately responded", and what criteria would be used. This proposal could raise systemic problems resulting in an even more overloaded agenda as these 
requests accumulated, rather than yielding simpler and shorter meetings. In any event, any 
Member could request at any time that an item be placed on the agenda of a Committee meeting.   
50.  South Africa considered that timely written responses were crucial. There were other ways to 
ensure such proper and timely responses, including through technical assistance and capacity 
building, such as was being provided by the Secretariat in respect of notifications. This was where 
the solution lay.   
51.  The EU appreciated the Secretariat's work on this topic, the Chair's update on the state of 
play of Member's notifications, and the practi cal support being given to Members, which was 
yielding some results. The EU attached great importance to the notification obligations, which were an essential element to ensure transparency und er the SCM Agreement and a very important basis 
for the Committee's work. The EU supported the US initiative and looked forward to receiving the 
revised US proposal before the Committee's next meeting. 
52.  New Zealand shared the concerns of other Members over the lack of compliance with the 
notification obligation, which undermined the work of the Committee. Transparency was a core 
principle of the WTO system, and timely and complete notifications were an important means of 
ensuring this. The Chair and the Secretariat should continue their work in this area. There was a range of reasons for late and incomplete notifications. The Committee had heard earlier in the 
meeting an encouraging example from Morocco abou t the tangible steps it was taking to improve 
its internal coordination, and its notification processes. New Zealand encouraged the US to 
continue its work, and looked forward to reviewin g the revised proposal. The need for pragmatism 
should be borne in mind on all sides of the discussion as the work went forward.   
53.  Argentina fully supported all initiatives to improve transparency in the WTO, especially in the 
SCM Committee, and looked forward to discussing the revised US proposal. Argentina shared the 
concern expressed by South Africa and Brazil over changing the balance of rights and obligations 
in the WTO Agreements.   
54.  India looked forward to the revision of the US proposal and requested the US in preparing it, 
and the Committee in its further work on this issue, to take into account certain concerns, many of 
which had been identified by other speakers, including China, Brazil, South Africa and Argentina. 
These included reservations about tilting the finely crafted balance in Article 25.8; creating onerous burdens on Members, especially LDCs and developing Members; and possible duplication 
of information in notifications and in what was being sought under Articles 25.8 and 25.9. In 
addition, deadlines might prove counter-productive,  as they could force delegations to provide 
incomplete information, and thus lose the value-added transparency that was being sought. Clearly defining "appropriately answered" also would be important.   
55.  The Chair indicated that this agenda item would be included in the agenda of the Committee's 
next regular meeting, given Members' apparent interest in continuing these discussions.   G/SCM/M/87 
 
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  56.  The Committee took note of the statements made.  
6  NON-NOTIFICATION BY CHINA OF ALLEGE D SUBSIDIES CONTAINED IN THE REQUEST 
FROM THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM AGREEMENT - ITEM REQUESTED BY THE UNITED STATES 
57.  The US recalled that until the fall of 2011, China had submitted only a single subsidies 
notification in its ten years of WTO membership. That notification, submitted in 2006, covered the 
period 2001-2004. At the time of China's submission, the US and several other Members had 
expressed serious concerns about the incompletene ss of the notification. Thereafter, the US and 
several other Members repeatedly had requested that China submit its subsidy notifications for the periods subsequent to 2004.  
58.  In the spring of 2011, the US made clear before the Committee that if China did not submit a 
new notification, the US would have to consider other alternatives under the SCM Agreement, such 
as the mechanism under Article 25.10. Given the continued absence of a subsidies notification from China – in spite of US urging over many years, in the Committee and bilaterally– as well as 
the prevalent use of subsidies in China, and China’s increasingly important role in the world 
economy, the US had had no choice but to pursue the Article 25.10 procedure. 
59.  In October 2011, the US submitted an Article 25.10 request to China which listed 
approximately 200 central and sub-central subsidy programmes that China had not notified, and 
requested China promptly to notify these programmes. As part of its submission, although not so required under Article 25.10, the US had included translated copies of every underlying legal measure establishing each of the 200 programmes. The programmes listed in the request largely 
covered the period 2004-2011. In the view of th e US, the 200 programmes constituted not even a 
small fraction of the full range of subsidies in China provided at the sub-central and central government levels.   
60.  The US noted, first, the prevalence of sub-central programmes in China. Such programmes 
made up over half of the programmes in the US request, supporting the US point made in the Committee over many years that such programmes were critically important in China, as the 
implementation of central government industrial subsidy policies were often, if not normally, the 
responsibility of the sub-central governments. A subsidy notification from China that did not include sub-central programmes was not a full notification. 
61.  Second, in the past, the Committee had discussed the importance of five-year plans in China. 
China had responded that five-year plans and other industry plans did not establish subsidy 
programmes in China. Whether or not this was true in a narrow, technical sense, China’s industrial plans nevertheless established industrial support policies under which actual subsidy programmes 
were implemented. This process was unfolding with respect to the latest planning cycle. Following 
the issuance by the central government of the tw elfth five-year plan for strategic and emerging 
industries, for example, sub-central governments were developing subsidy programmes that 
implemented the policies of the central government. 
62.  Third, certain subsidy programmes in China were  only in effect for short periods, such as two 
years, and then replaced by other measures. China was at least four years behind in providing its 
subsidy notifications. If subsidy programmes were in effect for two years and subsidy notifications 
were provided every four years, many prog rammes would have come and gone without any 
notification while those programmes were in effect. The result was little, if any, meaningful transparency, contrary to the intention of the notification obligation under Article 25.  
63.  Fourth, insisting on a complete and timely notification of China’s specific subsidy programmes 
was not simply an academic exercise. Certain subsidies identified in the US counter-notification appeared to be prohibited export and import-substit ution subsidies, as well as actionable subsidies 
that had been found to be a direct and significant cause of harm to US industries. Failing to 
provide a complete and timely notification of th ese subsidies fundamentally upset the balance of 
Members' rights and obligations under the Subsidies Agreement. 
64.  Fifth, the fact that the US had been able to  compile and analyze all of the information included 
in the 2011 submission – much, if not all from publicly available Chinese government sources – G/SCM/M/87 
 
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  cast doubt on China’s repeated claims that it lacked the ability to collect and report the same 
information, especially after more than elev en years of WTO Membership. Indeed, China had 
become the world’s largest exporter and second largest economy – claims of capacity constraints were difficult to accept. 
65.  At the previous meeting, China had argued that approximately thirty programmes in the US 
Article 25.10 submission overlapped with programmes in one of China’s notifications. The US remained available for detailed bilateral discussions to take up every issue raised by China. Even if 
the US accepted all of China’s arguments from the previous meeting, however, nearly 
170 programmes in the counter-notification from two years earlier would remain completely unaddressed.  
66.  Critically, China had not notified any programmes following the US counter-notification, 
despite the requirement of Article 25.10 that any specific subsidy programme not notified should 
be notified “promptly” to the Committee. 
67.  The US urged China to abide fully by its subsidy notification obligations under the Agreement. 
The US was ready to work with China to take concrete steps to move rapidly toward a subsidy 
notification to clearly and transparently present the full picture of China's subsidy regime. 
68.  Canada recalled its previous interventions on  this issue. Questions and answers on Members' 
new and full notifications were critical to achi eving the aims of transparency required by the 
Agreement. Canada was concerned with how China appeared to be approaching its transparency obligations. Subsidy notification was a critically important transparency exercise, and Canada was interested in a comprehensive response  from China to the US request.   
69.  Japan was disappointed that there had been little progress on this issue. Japan urged China to 
fully respond to the questions posed by the US on the counter-notified programmes. Japan asked 
China to clearly explain its non-notification of subsidies. 
70.  The EU remained concerned over China's continuing lack of subsidy notification, and recalled 
its previous comments on this issue. The lack of notification undermined other Members' rights 
and also ignored China's own obligations under the Agreement. The EU urged China to avoid 
further delays, and to comply with its obligations by filing a complete, up-to-date notification as 
soon as possible.   
71.  Australia thanked China for the details it had provided at the Committee's previous meeting 
on subsidy programmes identified in the US Article 25.10 request. Australia nevertheless shared 
the concerns expressed by the US and the other speakers over certain matters arising from that 
request. While there might be difficulties in preparing notifications, including ensuring their comprehensiveness and determining whether programmes were notifiable subsidies, Australia was 
concerned over the significant delays in receipt of  new and full notifications, and the implications 
thereof for understanding the potential impacts of programmes on Members' interests, which was the purpose of the notification process. Prolonge d delays in submitting notifications exacerbated 
the difficulties arising from incomplete notifications, significantly reducing Members' ability to 
adequately review and understand the profiles and interrelationships of subsidies. The notification provided a historical snapshot of selective subsidy programmes that might have been in place some four years prior to the submission of the notification, but which might no longer exist and 
might have been replaced by other programmes. China's replies at the previous meeting had 
highlighted the difficulties of tracking such relationships where programmes were terminated or amended. Australia asked China when it expected to submit its 2011 and 2013 notifications, which 
Australia looked forward to receiving. These would help to understand and assess the trade 
impacts of current programmes, consistent with the Agreement's intent.  
72.  China stated that the US Article 25.10 submission (G/SCM/Q2/CHN/42) reflected to a 
considerable extent an incorrect understanding of policies and measures of China. China had not 
been able to provide more details because the US document was the result of almost a decade of information-gathering by the US. Analyzing and verifying that information could not be done 
quickly.   G/SCM/M/87 
 
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  73.  That said, at the Committee's previous meeting, following a preliminary but detailed reading 
of the paper that the US had provided to suppo rt its submission, compared to China's subsidy 
notification, China finally had been able to provide a first batch of detailed clarifications. While still awaiting more feedback from various related authorities concerning specifics and details of the 
policies and measures raised by the US and their relationship with the notification obligation under 
the SCM Agreement, at the present meeting Ch ina would provide additional clarifications 
confirmed since the previous meeting. China would us e the word “item” to refer to the policies and 
measures identified in the US submission, and the word “programme” to refer to those in China’s 
notifications (G/SCM/N/155/CHN and G/SCM/N/186/CHN).  
74.  Items No. 15, 26 and 27 under “Central Government Measures”, in the first part of the US 
submission concerning green technology subsid i e s ,  w e r e  e x a m p l e s  o f  p r o g r a m m e s  o n  w h i c h  
Members might have different understandings as to their nature under the SCM Agreement. China 
had been doubtful as to whether these kinds of programmes were subject to the notification obligation under the SCM Agreement, because subsidies provided under such programmes were 
consumption subsidies benefiting end-users for their purchase of related products, they were 
based on objective criteria, and they were availabl e for all related products meeting those criteria. 
It was due to this doubt that item No. 27 did not appear in China’s notification. Items No. 15 
and 26 were the same kind of programme as item No. 27 but had been launched in 2009 and thus 
were not within the timespan of China’s latest notification. China in fact had been transparent on these three programmes, because despite its doubts under the SCM Agreement, all three programmes had been mentioned in the Gove rnment Reports of China prepared for Trade 
Policy Reviews. Specifically, items No. 15 and 26 could be found in para. 21 and para. 17 
respectively in the Government Report of China for the TPR in 2012, and item No. 27 could be found in para. 39 in the Government Report of China for the TPR in 2010. Without prejudice to 
China’s position on the nature of these programmes, China might include programmes of this kind 
in its subsidy notification for transparency purposes, if Members all would do the same. 
75.  Regarding items No. 2 and No. 9 in the last section of the first part of the US submission 
concerning the green technology subsidies, specifically the Directory Catalogue on Readjustment of 
Industrial Structure , and the Catalogue of Priority Industries for Foreign Investment in Central and 
Western Regions , such catalogues themselves by no means constituted subsidy programmes as 
defined in the SCM Agreement, and therefore they  should not be treated or listed as specific 
subsidy programmes. The bulletins or announcements promulgating these catalogues contained no 
wording relating to financial contribution or other subsidy elements. That said, the catalogues might be referred to in other administrative measur es that stipulated specific subsidy programmes. 
To the extent that they were related to or refe rred to such specific subsidy programmes, which 
certainly would be notified by China, they could ea sily be identified. For the two catalogues in the 
US submission, item No. 2 could be found in programme No. 83 in China’s notification, and item 
No. 9 could be found in programme No. 15 in China’ s notification. China noted, however, that the 
English translations of these catalogues in the US submission and in China’s notification were different.   
76.  Item No. 11 in "Sub-Central Government Subsidy Programmes" of the section of actionable 
subsidies in the last part of the US submission,  specifically, Exemption from City Construction Tax 
and Education Tax for FIEs in Guangdong Province , was an example illustrating that the US 
misunderstood what it called local subsidy programmes in China.  
77.  First, Exemption from City Construction Tax and Education Tax (Education Surcharge) for FIEs  
previously had been a policy implemented nation-w ide as part of the general different tax regimes 
for domestic and foreign-invested enterprises in China, which had been known to Members for a 
long time. Contrary to the US submission, this exemption for FIEs never had been implemented 
specifically only in Guangdong Province.  
78.  Second, China had been pushing ahead its reform of the taxation system, and over the 
previous decade one major move had been the unification of the different tax regimes for domestic 
and foreign-invested enterprises. The enterpri se income tax regimes had been unified on 
1 January 2008, as reflected in China's latest subsidy notification, and on 1 December 2010 this urban construction and maintenance tax and the education surcharge also had begun to be applied 
equally for both Chinese and foreign-invested ente rprises and individuals. With this step, the tax 
regimes for Chinese and foreign-invested enterprises and individuals in China finally had been completely unified. China also had been transparent about this development concerning the urban G/SCM/M/87 
 
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  construction and maintenance tax and the education surcharge, as it could be found in para. 50 in 
the Government Report of China prepared for the TPR in 2012. 
79.  The US submission was the result of almost a decade of information gathering, for which the 
US had all the resources and capabilities. For China to illustrate to the Committee its view that 
such a submission intentionally or unintentionally contained much misunderstanding, China had 
had no choice but to divert much of its resources and efforts to the thousands of pages that the US had submitted electronically, to identify the relevant authorities and to verify details and specifics, 
and to analyse and come to positions on whether the items listed in the US submission were 
indeed subsidy programmes subject to notification under the SCM Agreement, and how many in fact already had been notified. For all this work, China also had to shift between languages. The work was still ongoing, and had a serious impa ct on other Committee-related work that China 
considered to be more important.  
80.  After the meeting, China would make its statement available to all Members, through the 
Secretariat, for Members' better understanding of all of the technical details. 
81.  The US was grateful for China's efforts to address US questions and comments; for some time 
it had been seeking these types of clarifications from China. The US looked forward to receiving 
the written version of China's statement, and to engaging further with China in the Committee and 
bilaterally. 
82.  The Committee took note of the statements made. 
7  LOCAL CONTENT REQUIREMENT IN RENEWABLE ENERGY SECTOR SUBSIDY SCHEMES 
IN THE UNITED STATES - ITEM REQUESTED BY INDIA 
83.  The Chair recalled that India's request, in document G/SCM/Q2/USA/59, had first been 
discussed at the April 2013 meeting.  
84.  India stated that G/SCM/Q2/USA/59 highlighted certain programmes in US states that India 
considered might be non-compliant with both th e SCM and the TRIMS Agreements. These included 
Delaware's Solar Renewable Energy Credit programme, Minnesota's Xcel Energy-Solar Rewards programme, Massachusetts' Commonwealth Solar II Photovoltaic Rebate programme, and 
Connecticut's Residential Solar Investment programme. India also had pointed to certain energy 
programmes of California, Michigan and Texas, and believed that other states also had such local content requirements. India was grateful for the pa rtial responses provided by the US, especially 
with reference to certain measures in Austin, Texas, and the fact that the US claimed that the 
incentive in Michigan was very small. India wanted  to follow up on its other questions concerning 
programmes in the other states. India was not looking at the specific amount of the subsidies, as referred to by the US in respect of the incentive in Michigan, but instead was concerned over the 
violation of the principles underlying the SCM Agreement. 
85.  The US indicated that India's questions raised important issues, and that extensive 
consultations had been conducted with the relevant authorities. Because of the partial shutdown of 
the US government, the US had not been able to finalize its replies to the questions in time for the 
present meeting. It expected to submit the replies well before the Committee's next meeting. 
86.  The Committee took note of the statements made. 
8  DATE OF NEXT REGULAR MEETING 
87.  The Committee decided to hold its next regular meeting during the week of 28 April 2014, 
with the exact date to be confirmed in due cour se. This meeting would be immediately preceded 
by a special meeting for review of subsidy notifications. G/SCM/M/87 
 
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  9  OTHER BUSINESS 
9.1  Japanese government support for regional aircraft - item requested by Brazil 88.  Brazil said that it had previously raised the issue of Japanese government support to the 
Mitsubishi Regional Jet Project (MRJ Project) in various bilateral and multilateral fora. Japan's 
responses had lacked essential information, and thus had not allowed Brazil to understand fully the 
role of the Japanese government in this projec t. The MRJ was under development by Mitsubishi 
Aircraft Corporation, a subsidiary of Mitsubishi Heavy Industries. The development and launch of 
this new aircraft was supported by subsidies inconsistent with the SCM Agreement, with significant 
adverse effects on the interests of Brazil and othe r Members. Brazil sought confirmation that the 
Japanese government support to the MRJ Project complied with the SCM Agreement and other international Agreements, and requested information on the nature, source and terms of the 
official support provided in connection with the project.   
89.  Brazil first asked whether the Eco-friendly, High-performance Regional Jet programme was 
part of the Subsidy of Expense to Investigate the Development of Next Generation Airplanes that 
Japan previously had notified under Article 25, or an independent programme. If the latter, Brazil 
requested information on the annual amounts of government expenditure under the programme, the main recipients, and the conditions to benefit from the subsidy.   
90.  Second, a document provided by METI for 2010 and 2011 concerning subsidies showed that 
METI had provided to Mitsubishi Aircraft Company approximately 6.6 billion yen under the Industrial Technology Research and Development programme. Brazil sought confirmation of this information and requested information on the conditions to benefit from grants under the 
programme. Brazil asked whether Mitsubishi Aircraft Company had used all of the funds that it had 
received under this programme for the MRJ Project. If not, Brazil sought details on the destination 
of the amounts received by Mitsubishi Aircraft Company.  
91.  Third, Brazil asked which companies had rece ived funds under the R&D for Advanced Flight 
Control Systems programme, and requested information on annual expenditures under the programme since 2008, and information on the programme's main recipients and on the 
conditions to benefit from the programme.   
92.  Fourth, regarding the Future Aircraft Testing programme, and the R&D for Highly Efficient 
Technology for Domestic Passenger Airplanes programme, both implemented by JAXA, Brazil asked Japan to explain the role played by private companies in those projects, and specifically in 
appropriating the technology developed, since one of JAXA's five objectives as stated on its 
website was to revive aircraft manufacturing as a key industry in Japan. Brazil asked whether there was any transfer of technology from JAXA to Japanese companies, and if so, on what terms.   
93.  Finally, Brazil requested Japan to provide any studies or data to show that the MRJ Project 
would be commercially feasible without official financial support.   
94.  Japan replied that it would review the questions with its capital officials. 
95.  The Committee took note of the statements made. 
9.2  Export competitiveness of Indian textile  and apparel products - item requested by 
the United States 
96.  The US noted that according to Secretariat calculations of the export competitiveness of 
Indian textile and apparel products, released in March 2010 and revised shortly thereafter, India 
had reached export competitiveness no later than 2007. The fact that the US had not requested an agenda item on this issue was due to extenuating circumstances, and not because it was no longer 
of concern to the US. This continued to be an on going concern, and an important issue for the US, 
which it expected to raise at the Committee's next meeting.   
97.  India understood that the US continued to have an interest in this item. India was completely 
aware of its rights and obligations under the SCM Agreement and was working with its 
stakeholders on this issue. To implement the phase-out obligation, it was necessary to understand G/SCM/M/87 
 
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  its scope and coverage, and there was a lack of clarity in the Agreement. India had sought clarity 
from the Committee on issues such as the defini tion of product and the applicable phase-out 
period. India was willing to engage with in terested delegations on these issues.   
98.  The Committee took note of the statements made. 
9.3  Documents for meetings - statement by the Chair 99.  The Chair recalled that for the past year, in an effort to reduce paper, the Secretariat had 
been implementing on the Members' website an on -line facility to provide documents for meetings 
electronically. To assist Members with the transition, the Secretariat had been sending faxes 
informing Members that certain documents had been  placed on the website and providing the link 
to the site. Also, at the Committee's spring special meeting, the Secretariat had made a presentation on how to use the on-line system. Now that Members had had time to become 
familiar with this system, the Secretariat was discontinuing the faxes informing Members about the 
posting of documents to the "Documents for meetings" site. Members thus were requested regularly to check the "Documents for meetings" website, beginning about six weeks before a 
given meeting, as this was the usual interval when such documents began to be posted, starting 
with annotated draft agendas. As a courtesy, the Secretariat would continue to e-mail the annotated draft agendas and draft annual report s to those Members that had provided their 
contact details. The "Documents for meetings" website was, however, the official channel by which 
the Secretariat transmitted the documents.   
100.  The Committee took note of the statement made. 
10  ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7) 
101.  The Committee adopted its Annual Report (2013) to the Council for Trade in Goods.3 
 
 
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3 G/L/1052 and Corr.1 (English only).