RESTRICTED  
  
G/SCM/M/91  
 
4 March 2015  
(15-1242)  Page: 1/23  
Committee on Subsidies and Countervailing Measures    
 
 MINUTES OF THE REGULAR MEETING HELD 
ON 28 OCTOBER 2014 
CHAIR: MR EDUARDO MINORU CHIKUSA (BRAZIL) 
1.  The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 28 October 2014, convened in WTO/AIR/4376 and Corr.1 and 2. 
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   Brazil (G/ADP/N/1/BRA/3/Suppl.1-G/SCM/N/1/BRA/2/Suppl.10)  ...................... 2  
1.2   Cameroon (G/ADP/N/1/CMR/1/Suppl.1-G/SCM/N/1/CMR/1/Suppl.1-
G/SG/N/1/CMR/1/Suppl.1; G/ADP/N/1/CMR/1/Corr.1-
G/SCM/N/1/CMR/1/Corr.1-G/SG/N/1/CMR/1/Corr.1)  ................................................. 3  
1.3   Congo (G/ADP/N/1/COG/1-G/SCM/N/1/COG/1-G/SG/N/1/COG/1)  .................... 3  
1.4   Côte d'Ivoire (G/SCM/N/1/CIV/1)  ........................................................................ 3  
1.5   European Union (G/SCM/N/1/EU/1)(G/ADP/N/1/EU/1/Rev.1/Suppl.3-
G/SCM/N/1/EU/1/Suppl.1-G/SG/N/1/EU/1/Suppl.1)(G/ADP/N/1/EU/1/Rev.1/Suppl.4-G/SCM/N/1/EU/1/Suppl.2-G/SG/N/1/EU/1/Suppl.2)  .................................................. 3
 
1.6   Mexico (G/ADP/N/1/MEX/1/Suppl.5-G/SCM/N/1/MEX/1/Suppl.4-
G/SG/N/1/MEX/1/Suppl.4)  .......................................................................................... 3  
1.7   Montenegro (G/ADP/N/1/MNE/1/Suppl.1-G/SCM/N/1/MNE/1/Suppl.1-
G/SG/N/1/MNE/1/Suppl.1)  .......................................................................................... 3  
1.8   New Zealand (G/ADP/N/1/NZL/2/Suppl.5-G/SCM/N/1/NZL/2/Suppl.5)  .............. 3  
1.9   Qatar (G/ADP/N/1/QAT/2-G/SCM/N/1/QAT/2-G/SG/N/1/QAT/2)  ...................... 4  
1.10   United States (G/ADP/N/1/USA/1/Suppl.16-
G/SCM/N/1/USA/1/Suppl.16) (G/ADP/N/1/USA/1/Suppl.17-G/SCM/N/1/USA/1/Suppl.17)  ...................................................................................... 4
 
2   SEMI-ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS 
(ARTICLE 25.11) .............................................................................................................. 4 
3   PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: 
NOTIFICATIONS (ART ICLE 25.11) ................................................................................... 5  
4   IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS AND 
OTHER INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT .....................................................................................................................  6
 
5   ELIMINATION OF EXPORT SUBSIDIE S FOR TEXTILES AND APPAREL BY INDIA 
PURSUANT TO ARTICLE 27.5 OF THE SCM AGREEMENT – ITEM REQUESTED BY THE UNITED STATES ...................................................................................................... 10
 G/SCM/M/91 
 
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  6   NON-NOTIFICATION BY CHINA OF ALLEGED SUBSIDIES CONTAINED IN THE 
2011 REQUEST BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM AGREEMENT (G/SCM/Q2/CHN/42) – ITEM RE QUESTED BY THE UNITED STATES .......... 10
 
7   NON-NOTIFICATION BY CHINA OF ALLEGED SUBSIDIES CONTAINED IN THE 
2014 REQUEST BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM 
AGREEMENT (G/SCM/Q2/CHN/51) – ITEM RE QUESTED BY THE UNITED STATES .......... 15  
8   NON-NOTIFICATION BY INDIA OF ALLEGED SUBSIDIES CONTAINED IN THE 
REQUEST BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM 
AGREEMENT (G/SCM/Q2/IND/20) – ITEM REQUESTED BY THE UNITED STATES ........... 17  
9   2012 AND 2014 REQUESTS TO CHINA FROM THE UNITED STATES PURSUANT 
TO ARTICLE 25.8 OF THE AGR EEMENT (G/SCM/Q2/CHN/46 AND 
G/SCM/Q2/CHN/50) – ITEM REQUES TED BY THE UNITED STATES ................................ 18  
10   LOCAL CONTENT REQUIREMENT IN RENEWABLE ENERGY SECTOR SUBSIDY 
SCHEMES IN THE UNITED STATES – ITEM REQUESTED BY THE RUSSIAN 
FEDERATION .................................................................................................................. 2 0 
11   JAPANESE GOVERNMENT SUPPORT FOR THE MRJ PROJECT - REQUEST BY 
BRAZIL PURSUANT TO ARTICLE 25.8 OF THE SCM AGREEMENT 
(G/SCM/Q2/JPN/65) – ITEM REQUESTED BY BRAZIL ................................................... 20  
12   OTHER BU SINESS .................................................................................................... 21  
12.1   India sugar subsides – Item raised by Australia ........................................................... 21 
12.2   Support measures for the construction of a new cement facility in Quebec, Canada 
– Item raised by th e United States ..................................................................................... 22 
12.3   PGE nominations – It em raised by the Chair ............................................................... 23 
12.4   Workshop on notification s – Item raised by the Chair ................................................... 23 
13   DATE OF NEXT REGULAR MEETING .......................................................................... 23  
14   ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7) ............. 23  
 
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 noted that in accordance with the Committee's procedures (G/SCM/W/293), the new 
legislative notifications on the agenda were those that had been circulated in all three languages 
not less than six weeks before the meeting. The deadline for written questions on these 
notifications was 6 October 2014.  
4.  Oral questions could be asked at the meeting, and any Member wishing to receive a written 
answer to any such question would have to submit its question in writing to the Member concerned 
and to the Secretariat not later than 17 November 2014. Written answers were due not later than 
8 December 2014.  
5.  The primary review of the notifications would be held in the Committee on Anti-Dumping 
Practices, where all horizontal issues in addition to anti-dumping issues would be addressed. 
Members thus were requested to limit their questions in this Committee to those specifically 
related to countervailing measures. 
1.1  Brazil (G/ADP/N/1/BRA/3/Suppl.1-G/SCM/N/1/BRA/2/Suppl.10) 
6.  Brazil stated that the legislation contained in this notification currently had been withdrawn and 
cancelled. The subsequent legislation containing the revocation had been notified, but not in time 
for review at the meeting.  
7.  The Committee took note of the notification and the statement made. G/SCM/M/91 
 
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  1.2  Cameroon (G/ADP/N/1/CMR/1/Suppl.1-G/SCM/N/1/CMR/1/Suppl.1-
G/SG/N/1/CMR/1/Suppl.1; G/ADP/N/1/CMR/1/Corr.1-G/SCM/N/1/CMR/1/Corr.1-G/SG/N/1/CMR/1/Corr.1)  
8.  Written questions with respect to this notification can be found in: 
 G/ADP/Q1/CMR/3-G/SCM/Q1/CMR/3-G/SG/Q1/CMR/3 - Questions from the United States  
 9.  To date, no written replies have been received. 
1.3  Congo (G/ADP/N/1/COG/1-G/SCM/N/1/COG/1-G/SG/N/1/COG/1) 
10.  No questions were raised in respect of this notification.  11.  The Committee took note of the notification. 
1.4  Côte d'Ivoire (G/SCM/N/1/CIV/1) 
12.  The Committee took note of the notification. 
1.5  European Union (G/SCM/N/1/EU/1) (G/ADP/N/1/EU/1/Rev.1/Suppl.3-
G/SCM/N/1/EU/1/Suppl.1-G/SG/N/1/EU/1/S uppl.1)(G/ADP/N/1/EU/1/Rev.1/Suppl.4-
G/SCM/N/1/EU/1/Suppl.2-G/SG/N/1/EU/1/Suppl.2)  
13.  No questions were raised in respect of this notification. 
14.  The Committee took note of the notification. 
1.6  Mexico (G/ADP/N/1/MEX/1/Suppl.5-G/SCM/N/1/MEX/1/Suppl.4-
G/SG/N/1/MEX/1/Suppl.4) 
15.  Written questions and replies with respect to this notification can be found in: 
 G/ADP/Q1/MEX/22-G/SCM/Q1/MEX/22-G/SG/Q1/MEX/6 – Questions from the 
United States 
  G/ADP/Q1/MEX/23-G/SCM/Q1/MEX/23-G/SG/Q1/MEX/7 – Replies to the United States 
 
16.  The Committee took note of the notification, questions and answers. 
1.7  Montenegro (G/ADP/N/1/MNE/1/Suppl.1-G/SCM/N/1/MNE/1/Suppl.1-
G/SG/N/1/MNE/1/Suppl.1) 
17.  Written questions and replies with respect to this notification can be found: 
 G/ADP/Q1/MNE/3-G/SCM/Q1/MNE/3-G/SG/Q1/MNE/3 - Questions from the 
United States 
 
 G/ADP/Q1/MNE/4-G/SCM/Q1/MNE/4-G/SG/Q1/MNE/4 - Replies to the United States 
 18.  Montenegro stated that a few days earlier it had submitted nil semi-annual reports on 
countervailing duty actions for the years 2013 and 2014.  
19.  The Committee took note of the notifi cation, questions, answers and statement. 
1.8  New Zealand (G/ADP/N/1/NZL/2/Suppl.5-G/SCM/N/1/NZL/2/Suppl.5) 
20.  No questions were raised in respect of this notification. 
21.  The Committee took note of the notification. G/SCM/M/91 
 
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  1.9  Qatar (G/ADP/N/1/QAT/2-G/SCM/N/1/QAT/2-G/SG/N/1/QAT/2) 
22.  No questions were raised in respect of this notification. 23.  The Committee took note of the notification. 
1.10  United States (G/ADP/N/1/USA/1 /Suppl.16-G/SCM/N/1/USA/1/Suppl.16) 
(G/ADP/N/1/USA/1/Suppl.17-G/SCM/N/1/USA/1/Suppl.17) 
24.  No questions were raised in respect of this notification. 25.  The Committee took note of the notification. 
26.  The Chair stated that in addition to the previously-indicated deadlines for questions and 
answers regarding the legislative notifications reviewed at the present meeting, any Member 
wishing to place a previously-reviewed legislativ e notification on the agenda of the Committee's 
April 2015 regular meeting had to submit to the Member concerned and to the Secretariat written 
questions concerning that notification not later than 16 March 2015. The Member receiving such 
questions should submit its written answers not later than 13 April 2015.  
27.  For new legislative notifications to be plac ed on the agenda of the April 2015 meeting, they 
would have to be circulated in all three languages by 16 March 2015. Written questions concerning 
such notifications should be submitted to th e notifying Member and to the Secretariat by 
7 April 2015.  
28.  The Secretariat would circulate the usual tr iple-symbolled document containing those and the 
other pertinent deadlines shortly after the meeting.1 
29.  The Committee took note of the Chair's statement.  
2  SEMI-ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ARTICLE 25.11)  
30.  The Chair recalled that document G/SCM/N/274 had invited all Members to submit, not later 
than 15 August 2014, their semi-annual reports under Article 25.11 of the SCM Agreement of 
countervailing duty actions taken in the period 1 January - 30 June 2014. Document 
G/SCM/N/274/Add.1 provided the current status of Members' reporting for that period. 
Paragraph 1 of the document listed those Member s reporting countervailing duty actions during 
the period. Paragraph 2 listed Members that notified having taken no countervailing duty action 
during the period. After the document was circulated, Montenegro and Zimbabwe also had 
submitted such nil notifications. Paragraph 5 of  the document listed the 29 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.  
31.  The Chair recalled that 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.  
32.  Unfortunately, the very large number of Members listed in paragraphs 3 and 4 of the 
document had not submitted a semi-annual report for January - June 2014. They were urged to do 
so as soon as possible.  
33.  There were no comments or questions concerning the semi-annual reports of Australia, 
Brazil, Canada, China, Egypt, EU, Mexico, Pakistan, South Africa , or Turkey . 
34.  With respect to the semi-annual report of India , China expressed concern over the 
countervailing investigation on casting for wind operated electricity generators originating in China. 
                                               
1 G/ADP/W/491-G/SCM/W/563-G/SG/W/232 and G/ADP/W/491/Corr.1-G/SCM/W/563/Corr.1-
G/SG/W/232/Corr.1 G/SCM/M/91 
 
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  For most of the alleged programmes, the complain ant had not provided sufficient evidence on the 
existence, amount and nature of the subsidy, an d it appeared that some alleged subsidies had 
been directly copied from findings in cases of other WTO Members, although the facts in each investigation were different. In China's view, the Indian investigating authority had failed to fulfil 
its obligations under Article 11.3 of the SCM Agre ement to review the accuracy and adequacy of 
evidence provided in the application. China urged India to reconsider the allegations in the application. 
35.  India replied that this case was its first CVD investigation and that its investigating authorities 
were following the provisions of Article 11 of the SCM Agreement. As this was an on-going 
investigation, India was not in a position to make further comments. 
36.  Regarding the semi-annual report of the US, Turkey expressed concern over the increased 
number of US measures against iron and steel products from Turkey. In the previous year, the US 
had initiated four such countervailing investigations, impeding the free flow of trade. In some of those investigations, the US seemed not to have taken into account WTO panel and Appellate Body 
decisions on the appropriate definition of a "public body", and appeared to have calculated 
artificially high subsidy margins for Turkish ex porters. Turkey had repeatedly drawn to these 
inconsistencies to the attention the US authorities.  Turkey asked the US to act consistently with 
WTO rules on CVD proceedings, and reserved its rights under the covered agreements.  
37.  The US stated that it had conducted all proceedings in an open and transparent way in line 
with US law and its international obligations, and had taken into account the views of all interested 
parties. The reasons and rationale underlying each CVD determination were fully explained in the 
final determinations and decision memoranda. Additional information was available on the 
internet. The US considered its decisions on "public body" and its calculations of subsidy rates to be consistent with the SCM Agreement. 
38.  The Committee took note of all semi-annual reports submitted and all statements made.  
3  PRELIMINARY AND FINAL COUNTERVAI LING DUTY ACTIONS: NOTIFICATIONS 
(ARTICLE 25.11)  
39.  The Chair reported that since the Committee's April 2014 regular meeting, Australia, Brazil, 
Canada, China, Egypt, India, Mexico, Pakistan, Peru, South Africa, and the US had submitted 
notifications under Article 25.11 of preliminary and final countervailing duty actions. Those notifications were listed in documents G/SCM/N/272, 273, 276, 277, 277/Corr.1, 278 and 279.  
40.  The Russian Federation expressed concern over a countervailing duty investigation initiated by 
Ukraine on 18 September 2014 on imports of light motor vehicles originating in Russia. Pursuant 
to Article 11.2 of the SCM Agreement, an applic ation should include sufficient evidence of the 
existence of a subsidy, injury and causal link between the subsidized imports and the alleged 
injury. It appeared that the application lacked such necessary evidence and consequently did not meet these requirements. The Ukrainian authorit ies should have rejected the application and 
refrained from initiating the investigation. In Russia's view, the alleged injury might have been 
caused mainly by factors other than the allege dly subsidised imports, such as the overall 
deterioration of the economic climate in Ukraine and the ensuing decline in demand. The application contained no evidence in this regard, however. Nor had Ukraine yet notified this 
countervailing action in accordance with Article 25.11. Russia asked Ukraine to clarify when the 
relevant notification would be submitted.    
41.  Ukraine stated that the application from th e domestic industry provided sufficient evidence 
and covered all required elements. Ukraine would submit the notification shortly, and remained 
open to bilateral consultations with Russia. 
42.  The Committee took note of the notifications and statements made. G/SCM/M/91 
 
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  4  IMPROVING THE TIMELINESS AND COMP LETENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT 
43.  The Chair recalled that, since the request of the Chairman of the Trade Policy Review Body in 
spring 2009, the Committee had been discussing this matter, as reflected in the minutes of 
previous meetings. At the request of Members, the Secretariat since then had prepared and 
updated a background note (G/SCM/W/546 and Revisions), providing a snapshot of compliance with the various notification obligations under the SCM Agreement since 1995. The most recent 
version could be found in G/SCM/W/546/Rev.5 and Corr. 1.  
44.  After this document had been circulated, Brazil; Congo; India; Israel; Oman; Saudi Arabia, 
Kingdom of, Senegal and the US had submitted 2013 new and full notifications. In addition, India 
had submitted, one week before the present meeting, additional notifications pertaining to various 
periods. These would be circulated as soon as possible.  
45.  At the Committee's April 2014 regular meeting, a number of Members had indicated their 
willingness to continue discussing ways to impr ove timeliness and completeness of notifications 
and other information under the Agreement, of which the notification of subsidies was the most 
fundamental. Unfortunately, even with Members' recent submissions, the low level of compliance 
with this important notification obligation continued to undermine the transparency function of this 
Committee. Sixty-nine Members still had not yet made their 2013 new and full subsidy 
notifications. Many of these Members either had never notified or had only done so in the distant past. The 2013 new and full notifications had been due on 30 June 2013, more than one year earlier. Further, 59 Members still had not made their 2011 notifications. The chronic low 
compliance with this fundamental transparency obligation constituted a serious problem in the 
proper functioning of the Agreement. 
46.  The 69 Members that had not yet made their 2013 notifications were: Albania; Angola; 
Argentina; Bangladesh; Belize; Benin; Bolivia; Br unei Darussalam; Cabo Ve rde; Cambodia; Central 
African Republic; Chad; China; Colombia; Côte d'Ivoire; Democratic Republic of Congo; Djibouti; Egypt; Fiji; the Gambia; Ghana; Guinea; Guinea-Bissau; Guyana; Iceland; Indonesia; Kenya; 
Kyrgyz Republic; Lesotho; Malawi; Malaysia; Maldives; Mauritania; Mauritius; Mongolia; 
Montenegro; Morocco; Mozambique; Myanmar; Namibia; Nepal; Nicaragua; Niger; Nigeria; Pakistan; Paraguay; Philippines; Qatar; Rwanda; Samoa; Sierra Leone; Solomon Islands; South Africa; Sri Lanka; Suriname; Swaziland; Tajikist an; Tanzania; The Former Yugoslav Republic of 
Macedonia; Tonga; Trinidad and Tobago; Tunisia; Uganda; United Arab Emirates; Vanuatu; 
Venezuela, Bolivarian Republic of; Viet Nam; Zambia; and Zimbabwe. The Chair asked these Members to explain why they had not yet notified and to indicate when they might do so. No 
delegation made a statement. 
47.  The Chair urged Members that had not yet su bmitted their 2013 notifications to do so, and 
recalled that the Secretariat continued to be available for enquiries about compliance with 
notification obligations. The Secretariat had assisted many Members in the past, and Members 
finding themselves unable to comply with their obligations were encouraged to consult the Secretariat. There was range of resources that delegations 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.  
48.  Australia recalled that at the April 2014 Committee meeting, it had suggested that the 
Secretariat background note be amended to include a new annex listing Article 27.6 requests to 
the Secretariat to calculate export competivene ss. The note referred to Article 27.6 but did not 
contain such an annex, which in Australia's view would be a helpful addition for Members searching 
for information on notifications.  
49.  India stated that it needed to consult internally on this suggestion.  
50.  The US was inclined to favour Australia's suggestion, which it would consider more closely. 
51.  The Chair stated that before the Committee's April meeting he would consult with Members 
concerning Australia's suggestion.  G/SCM/M/91 
 
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  52.  The Chair recalled that at previous meetings, the Committee had discussed a proposal from 
the US (in document G/SCM/W/557) regarding the treatment of questions and answers under Articles 25.8 and 25.9 of the SCM Agreement. In  September, the US had formally submitted a 
revision (G/SCM/W/557/Rev.1) which had been discussed as a room document at the April 2014 
regular meeting. A number of Members had expressed an interest in continuing to discuss the 
proposal, and the former Chair had indicated that th is item would be on the agenda of the present 
meeting. 
53.  The US recalled that at the April meeting it had revisited its proposal for addressing the on-
going problem of Members not responding in a timely and complete manner to questions 
submitted under Article 25.8 of the Agreement, desp ite the very clear language in Article 25.9. The 
US previously had discussed at some length th e purpose of its proposal, namely to reach 
consensus on procedures for Members' responses to Article 25.8 questions. Such a process already 
existed for responding to questions on Members' subsidies notifications, as reflected in the Committee's agreed procedures in document G/SCM/117. 
54.   Establishing a similar, common sense and practical approach for responding to questions 
under Article 25.8 would help facilitate and enhance the notification provisions of the SCM Agreement, as requested by the Chairman of th e TPRB. The basic rationale for procedures for 
written answers to questions on subsidy notifications was equally applicable to questions 
submitted under Article 25.8.  
55.  A number of Members had previously expressed concern that the US proposal might upset the 
balance of rights and obligations under the SCM Agreement because there was no legal basis for 
requiring written responses to Article 25.8 qu estions. Those same Members, however, had 
universally noted the importance of the transparen cy obligations enshrined in the Agreement, and 
had stated that overseeing those obligations constituted a key function of the Committee's work. 
The US fully supported the latter point and believed that adoption of its proposal was not only fully 
consistent with the balance of rights and obligat ions, but advanced that balance by promoting the 
information exchange called for in the relevant provisions of the Agreement. The balance of rights 
and obligations was diminished, and the transp arency provisions were undermined, when 
Members' Article 25.8 questions went unanswered or  were only answered after lengthy delays. If 
Members were truly committed to the principle of transparency they should support advancing that principle through the exchange of information as  called for under Articles 25.8 and 25.9 of the 
Agreement. 
56.  As for the proposal, the amendment was that written answers to initial questions under 
Article 25.8 be provided within 60 days and that follow-up questions are answered within 30 days. 
Those periods were consistent with the requirement in Article 25.9 that Members respond to 
questions "as quickly as possible". The US ackn owledged the concerns raised by some Members 
that strict timelines for responding to these questions might be burdensome, particularly to lesser 
developed countries. It welcomed ideas by any Member – particularly lesser developed countries – 
on ways to address those concerns, and remained flexible in finding a pragmatic solution that satisfied its underlying objective of enhancing the information exchange.  
57.  Some Members also had expressed the concern that maintaining pending questions on the 
Committee agenda could reduce the efficiency of Committee proceedings. This practice, however, 
would not differ from the current procedures under which questions regarding a Member's Article 25 subsidy notification remained on th e agenda until answered, as at the Committee's 
special meeting earlier that day. Questions submitted under Article 25.8 reflected specific concerns 
by Members regarding certain subsidy practices, an d were no less significant than other questions 
submitted. They thus deserved at least equal consideration by the Committee. The US welcomed 
further discussion on the issue, and looked forwar d to constructive feedback regarding all aspects 
of its proposal. 
58.  South Africa recalled its preliminary comments at the April meeting regarding the revised US 
proposal, in which the only changes were to insert specific time frames, 60 days for written 
responses to Article 25.8 queries, and 30 days for replies to follow-up queries. South Africa 
queried whether a strict time frame for replies to Members' requests would achieve the objective sought, namely a fully comprehensive response. South Africa recalled its previously stated 
concerns, in particular, relating to the need for prag matism in setting strict time frames, in view of 
Members' differing capacity thresholds. Placing additional burdens on Members by having G/SCM/M/91 
 
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  mandatory timelines could alter the balance of rights and obligations to the disadvantage of least 
capacitated Members. Further, it was not clear who would determine whether a Member had appropriately responded and what criteria would be used in deciding to maintain an item on the 
agenda pending written replies.  
59.  South Africa remained concerned that, rather than encouraging efficiency, this proposal could 
overload the Committee's agenda, as these requests would accumulate and be perpetuated. In any event, any Member could request that an item be placed on the agenda of a Committee 
meeting at any time. South Africa supported appropriate timely responses, and discussions by 
Members of how this could be encouraged. The so lution lay in exploring possible modalities for 
technical assistance for those Members requiring it, as was being provided by the Secretariat with regard to notifications. This would ensure that no additional obligations fundamentally altering the 
negotiated balance in the SCM Agreement were created.  
60.  China recalled its statements from previo us Committee meetings regarding Articles 25.8 
and 25.9. In China's view, there was no legal basis for procedures for written answers to 
Article 25.8 questions. Article 26, entitled "Surveil lance", only provided for the examination by the 
Committee of new and full notifications submitted under Article 25.1, without mentioning Articles 25.8 or 25.9. The new and full notification and related Q&A process were the primary 
transparency obligations under the SCM Agreemen t and the only such obligations subject to 
written form under the Agreement. The US proposal would increase obligations imposed on Members.  
61.  Requiring written answers to Article 25.8 questions, and imposing strict timeframes, probably 
would not "improve the timeliness and completeness of notifications" as had been intended by the 
proponent, but rather result in even further dela ys of notifications. As developing members faced 
huge difficulties and challenges in preparing notifications due to capacity constraints, introducing 
more inflexible and rigid requirements under Articles 25.8 and 25.9 would ultimately lead to a 
situation that would not be helpful and conducive for Members to best use their resources to work on the 2-year new and full notifications and related Q&A process. Nevertheless, it was important to 
improve transparency concerning notifications under the SCM Agreement, and Members had the 
right to request information under Article 25.8. These Article 25.8 questions could be considered and properly addressed by recipient Members in form ulating their full and new notifications, and in 
answering questions thereof under Articles 25.1 to 25.5 and Article 26.  
62.  Canada stated that subsidy notification, and the Q&A process under Articles 25.8 and 25.9, 
were fundamentally important transparency exerci ses. Canada expected Members to make every 
effort to provide their subsidy notifications and to reply to questions in a timely and complete 
manner. Given the importance of Members' transp arency obligations, Canada remained open to 
exploring a mechanism to address Article 25.8 requests, including possible timelines for written replies and an agreed practice to maintain questions on the Committee's agenda. 
63.  India supported the statements of South Africa  and China. At the previous meeting, India had 
noted that the revised US proposal contained no changes other than the inclusion of timeframes. 
Many of the views expressed in the Committee in th e past had not been taken into account in the 
revised proposal. India had presented its concerns in respect of all four areas where the US 
proposal went beyond the finely crafted balance resulting from negotiations on Article 25.8 and 
25.9, and asked that those statements be take n into account. Transparency was an important 
component of the SCM Agreement and was essentia l for the smooth functioning of the multilateral 
trading system. Transparency imposed costs, ho wever, and pragmatism thus was needed in 
imposing enhanced obligations. Developing and LDC Members had capacity constraints and challenges to meet enhanced obligations, in this context additional reporting requirements, which 
also might result in duplication of effort. 
64.  The Russian Federation agreed that compliance with transparency obligations was crucial for 
the effective functioning of the WTO as a whole and of the Committee in particular. The Russian 
Federation had 85 subordinate entities, each having the right to grant subsidies. As a recently 
acceded Member, the lack of human resources at the regional level would impede comprehensive 
answers, if pre-determined strict time-limits were in place. The current language of the SCM Agreement allowed authorities to prepare comprehensive replies, the core issue in the 
transparency exercise. The proposed time-limits for Articles 25.8 and 25.9 were too strict and 
would impose a heavy burden on Members with a complex state organization. Russia asked the US G/SCM/M/91 
 
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  to review its proposal to take into account complex state structure and limited national 
competence in WTO-related matters. 
65.  Brazil supported the statements made by  South Africa, India, China, and Russia, and 
remained concerned over the substantive elements of the proposal.  
66.  Australia stated that it was the continuing non-notification of subsidies that upset the balance 
of obligations under the Agreement. This made it difficult to explain domestically why Australia had 
to update its notifications. Australia also had a very complex system with national and sub-national 
governments, which it needed to consult in preparing its notifications.  
67.  Australia agreed with the US proposal, which completed the full range of transparency 
provisions in Article 25 of the Agreement and was directly pertinent to the request of the TPRB 
Chair to improve timeliness and completeness of notifications. Members had developed procedures 
under Article 25 to review notifications, involving a process of written Q&A with set deadlines, and 
a written procedure and the specific timeline pr o p o s e d  b y  t h e  U S  w e r e  c o n s i s t e n t  w i t h  t h o s e  
existing procedures and practices. Australia supported efforts to clarify the procedures for 
reviewing notifications and considered that the US  proposal, made in that context, had usefully 
identified a gap in those procedures. Greater clarity would encourage compliance with the notification obligations and would improve the completeness and timeliness of notifications. 
Australia remained willing to continue discussing the proposal.   
68.  The EU was concerned about the lack of  compliance by many WT O Members with their 
obligation to notify subsidies in due time. The EU noted the deadlines suggested in the revised US 
proposal, and looked forward to working further with Members on this issue. 
69.  Korea, Republic of shared the view that missing notifications and insufficient reporting 
undermined the transparency function of the Committee. Strict application of timelines for written 
responses could be burdensome to developing  countries, however. Korea would welcome a 
pragmatic approach and a discussion on the types of flexibility that could be considered, and 
looked forward to further work on the issue. 
70.  Japan stated that the transparency mechanism and notifications were quite important. It also 
thanked the US for its proposal, and welcomed the US’ flexible approach. Japan remained 
committed to constructive engagement in further discussions. 
71.  New Zealand welcomed any contribution that could help to improve Members' compliance with 
the existing obligations on transparency and noti fication, and considered the revised US a useful 
basis for continuing discussions. Some Member s were concerned about upsetting the carefully 
crafted balance of existing agreements. A Committee decision on how to implement an obligation – which was not uncommon in the WTO – did not change that obligation. That could only be done by 
amending the Agreement.  
72.  The US, in response to South Africa's concern about how to objectively determine whether 
questions had been answered or not, noted that Members already were dealing with these issues, 
as at the Committee's special meeting earlier that day. The Secretariat was well-qualified to make 
those judgements, it was expected that Members would implement the proposal in good faith.  
73.  Regarding China's opinion that there was no obligation for written answers under the 
Article 25.8 and 25.9 mechanism, the US noted that there also was no requirement for written 
answers to written questions asked about Members' subsidy notifications. Written questions and 
answers were a pragmatic way of exchanging information and furthering transparency. As New Zealand had stated, the Committee could not change Members' legal obligations. Only a 
change to the Agreement could do so.  
74.  On China's statement that written questions under Article 25.8 could divert resources away 
from the preparation of subsidy notifications, the US noted that while it was probably the largest 
user of the Article 25.8 process, it had used it sparingly, only when no notification had been 
provided for years, as was the case of China. The US submitted Article 25.8 questions to China only due to lack of subsidy notifications. If a Member provided a subsidy notification, it was 
unlikely that it would receive Article 25.8 questions. G/SCM/M/91 
 
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  75.  Concerning the difficulty of collecting information at the sub-central level, alluded to by 
Russia, the US was familiar with that process. Under the US Constitution, states could not be 
obliged to respond, and therefore creating a mechanism to gather state-level information had taken time.  
76.  The US remained flexible to adjust its proposal, including the possibility of longer deadlines for 
lesser developed countries, and other flexibilities. The objective was to enhance transparency and to ensure close adherence to the Agreement's requirements.  
77.  The Chair noted that this agenda item ga ve Members the opportunity to discuss ways to 
improve timeless and completeness of notifications, which remained one of the main jobs of the 
Committee. It was his sense that Members would like to continue their discussion of these issues, including the proposals of the US and Australia, at the Committee's next regular meeting.  
78.  The Committee took note of the statements made. 
5  ELIMINATION OF EXPORT SUBSIDIES FOR TEXTILES AND APPAREL BY INDIA 
PURSUANT TO ARTICLE 27.5 OF THE SCM AGREEMENT – ITEM REQUESTED BY THE 
UNITED STATES 
79.  The US recalled, as it had at previous meetings, that in March 2010 the Secretariat had 
released its calculations on export competitiveness of Indian textile and apparel products and 
shortly thereafter, a revision. According to the calculations, India had reached export 
competitiveness no later than 2007. Therefore, India had an obligation – at least since 2007 – to gradually phase out export subsidies provided to numerous products in the textile and apparel sector. The eight year phase-out period should have  been completed by the end of 2014, such that 
as of 1 January 2015 – less than three months away - all export subsidies to India's textile sector 
should have been terminated. India had taken little or no concrete action toward phasing out export subsidies to its textile sector, however. India had claimed repeatedly that certain 
programmes might have been terminated and that others were not specific subsidies. India also 
had argued that the Committee needed to consider and resolve all legal questions before India began any action to meet its obligations. The US questioned whether this was the proper role of 
the Committee and feared the systemic implications if all Members were to take a similar position 
with respect to any of their WTO obligations that might conceivably be subject to more than one legal interpretation. The US welcomed further dialogue with India on these issues in the context of their continued bilateral engagement. Unfortunate ly, numerous US requests to set up a video 
conference had yet to result in a substantive discussion.  
80.  India recalled its previous statements , and expressed its commitment to meeting its 
obligations under the Agreement, and to be constructively engaged to develop clarity on the 
obligations under Articles 27.5 and 27.6, in particul ar the definition of 'product' and when the eight 
year phase-out period would begin. India was not raising the issue of interpretation of obligations in general. Instead, it was essential for implementation to clarify the definition of 'product', the 
coverage of tariff lines, and where and when export competitiveness was reached. Most of the 
schemes questioned were in the nature of remission or refund of duties on inputs used in exported 
goods. They were not export subsidy schemes and some of them had been discontinued since 
2011. India remained available to engage in further discussions on this matter both at the 
multilateral and bilateral level. It had offered a date for a video conference, but had not heard 
from the US. 
81.  The Committee took note of the statements made. 
6  NON-NOTIFICATION BY CHINA OF ALLE GED SUBSIDIES CONTAINED IN THE 2011 
REQUEST BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM AGREEMENT (G/SCM/Q2/CHN/42) – ITEM REQUESTED BY THE UNITED STATES  
82.  The Chair noted that this US request under Article 25.10, dated 11 October 2011, had been 
discussed at previous meetings of the Committee.  
83.  The US recalled that China had submitted only two subsidy notifications in its 13 years of WTO 
Membership: in 2006, covering 2001-2004; and in 2011, covering 2005-2008. Both had been G/SCM/M/91 
 
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  submitted well beyond the deadline for the periods covered, and China had yet to notify a single 
programme under the current 12th five-year plan, which was coming to a close. In terms of completeness, China had notified any subsidy administered by a local or provincial government. The two subsidy notifications suffered not only from significant under-reporting, but also from 
substantial over-reporting of programmes that could hardly be considered "subsidies" under the 
SCM Agreement, such as social-welfare programm es designed to alleviate poverty and promote 
employment. The inclusion of such programmes inflated artificially the number of programmes 
reported. Following years of frustration and af ter fair warning, in October 2011 the US had 
pursued the "counter-notification" procedure of Article 25.10, listing approximately 200 central and sub-central government subsidy measures and requesting China promptly to notify these programmes or to explain why they should not be notified. For transparency purposes, the US had 
included translated copies of every underlying legal measure.  
84.  Concerning the counter-notification, the US noted first that over half of the programmes 
mentioned therein were at sub-central level, supporting the long-standing US position in the 
Committee that sub-central programmes were critically important in China, as actual 
implementation of central government industrial subsidy policies was often, if not normally, the responsibility of the sub-central governments. It  also appeared that sub-central governments had 
a degree of freedom to implement some programmes according to local conditions. This could 
complicate the nature of any central government "programme", as sub-central governments might 
provide slightly different subsidies while implementing the central government "programme". The ongoing research by and actions of the US – including the most recently filed counter-notification – 
continued to demonstrate unequivocally the critical role played by sub-central governments in the 
implementation of subsidy policies in China. A subsidy notification from China that did not include sub-central programmes was simply not a full notification. 
85.  Second, the Committee previously had discusse d the importance of China's five-year plans. 
China had responded that five-year plans and other industry plans did not establish subsidy programmes. Whether or not this was true in a narrow, technical sense, it was nevertheless clear 
that China's industrial plans established industrial support policies under which actual subsidy 
programmes were implemented. This process had un folded with respect to the 12th five-year plan. 
For example, following the central government's issuance of the 12th five-year plan for strategic and emerging industries, sub-central governments were implementing it by developing subsidy 
programmes. 
86.  Third, certain Chinese subsidy programmes were in place for a short period, such as two 
years, and then were replaced by other measures. This underscored the importance of China 
notifying its subsidy programmes on a regular and timely basis. If this did not occur, many 
programmes would have come and gone without any notification while the programmes were actually in effect. The result was little, if any, me aningful transparency, contrary to the intention of 
Article 25. China was coming up on its 13th five-year plan, but had yet to notify a single 
programme under the 12th five-year plan.  
87.  Fourth, insisting on a complete and timely notification of China's specific subsidy programmes 
had meaningful implications beyond the necessary transparency obligations, notably upsetting the 
balance of Members' rights and obligations und er the SCM Agreement. Some of the 200 subsidy 
measures identified in the submission appeared to be prohibited export and import-substitution subsidies, as well as actionable subsidies that had been found to be a direct and significant cause 
of harm to US industries. . 
88.  Fifth, the fact that the US compiled and analysed all of the information included in its 2011 
Article 25.10 submission – much if not all from publicly available Chinese government sources – 
cast doubts on China's repeated claims that it lacked the ability to collect and report the same 
information, especially after more than 13 years of WTO Membership. China had become the world's largest exporter and was verging on becoming the world's largest economy. Claims of capacity constraints – which China had made most recently in its trade policy review - were 
difficult to take seriously. 
89.  In previous meetings, China had provided some information orally and had stated that some 
programmes already had been notified in some way. Although the information China provided was 
a helpful, initial response to the US counter-notification, it fell far short of what was required. 
China had addressed approximately 40 measures out of the 200 contained in the US submission. G/SCM/M/91 
 
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  The programmes that China had identified as having been notified were often in China's second 
subsidy notification, which had been submitted afte r the US 2011 counter-notification. Even if the 
US accepted all of China's arguments, which it did not, there remained approximately 160 
uncontested measures that China had failed to address in any manner. Although such technical 
issues were better solved bilaterally, China had refused to have a substantive discussion. While the 
US appreciated the difficulty of the task that Ch ina, or any Member, faced when compiling subsidy 
information that could not be an excuse for not submitting timely and complete notifications. 
90.  The US remained willing to meet bilaterally to discuss specifics of the measures in its 2011 
Article 25.10 submission. It urged China to comply with its subsidy notification obligations and to take concrete steps to move rapidly toward a subsidy notification that would present the full picture of its subsidy regime in a clear and transparent manner. 
91.  The EU stated that it remained concerned over China's record to date in notifying its subsidies 
under the SCM Agreement. The US activation in October 2011 of the provisions of Article 25.10 of 
the SCM Agreement to date had not resulted in an y satisfactory outcome. Therefore, the EU urged 
China to devote the necessary resources to prepar e without delay a full and complete notification 
of its subsidies at both the central and sub-central level, covering all outstanding reporting periods up to 2013 as required by the latest exercise . The EU hoped that the 2014 request by the US 
would be instrumental in achieving that objective. 
92.  Australia acknowledged the difficulties in preparing a comprehensive notification, and in 
determining whether a programme was a notifiable subsidy. Australia, like the US and the EU, was 
concerned over the significant delays in the receip t of new and full notifications by China and what 
this meant to Members seeking to understand the potential impact Chinese programmes might 
have on Members' interests, which was the purpose of the notification process. Prolonged delays in 
submitting notifications exacerbated the difficulti es arising from incomplete notifications, and 
significantly reduced Members' ability to adequately review and understand the interrelationships 
of subsidy programmes. The purpose of notificati ons was not to make any judgement on Members' 
industrial policy or programmes; rather it was a transparency exercise. Australia urged China to 
comply with its subsidy notification obligations as soon as possible. 
93.  Japan shared the previous speakers' concerns, and regretted that since acceding to the WTO 
China had submitted only two notifications. The la st Chinese notification covered the time period 
up to 2008. More than six years and a half had passed since then. Japan was concerned that China 
never had notified recent subsidies. China had become the second largest economy and the largest 
exporter in the world. Japan expected China to fulfil its fundamental WTO transparency obligation. 
Recalling China's statement from the October 2013 meeting that it was preparing its 2011 and 
2013 notification, Japan asked when China would submit its next notification. 
94.  Canada recalled its previous interventions on this item and shared the concerns raised by 
previous speakers. The subsidy notification process was fundamentally important to achieving the 
transparency objectives underpinning the SCM Agr eement. Although recognizing the difficulties 
that Members might have in providing subsidy notifications and responding to questions, Canada remained concerned with how China approached its transparency obligations. When these obligations were not fulfilled, the rights of other Members were impeded. Canada appreciated 
China's detailed oral responses provided in prev ious meetings to the US Article 25.10 submission. 
These responses were not, however, adequate or desirable substitutes to a full subsidy notification, which Canada looked forward to receiving from China.  
95.  China stated that the limited number of staff of the relevant Division was working 
simultaneously on two fronts: preparing China's third notification, which was technically 
demanding and required time and energy; and ve rifying hundreds of alleged programmes raised 
by other Members, sometimes unfounded, lacking official sources, already eliminated, already 
notified, or not subject to the SCM notification obligation at all. The latter task demanded even 
more time and energy than the first because every alleged item needed to be carefully analysed before being passed on to the relevant government agencies, central or sub-central. This 
attention-distracting exercise had prolonged the al ready difficult notification preparation process. 
China attached great importance to honouring its WTO obligations and had spared no efforts in preparing its notification subsequent to 2008.  G/SCM/M/91 
 
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  96.  Despite these challenges, China had brought to the Committee, since the 2013 spring 
meeting, three batches of clarifications, and would submit at the current meeting further 
clarifications based on feedback or verifications offered by the relevant central and local authorities since the previous meetings. China would use 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 
notification (G/SCM/N/155/CHN-G/SCM/N/186/CHN):  
 Item No. 3 in the "Prohibited Subsidies" Section, in the first part of the US submission 
concerning the green technology subsidies, i. e. Notice of Guidance for Accelerating the 
Localization of Wind Power Equipment issued by Economic and Trade Commission, had been terminated by the National Development and Reform Commission Decree No. 18 in 2012.  
 
 Item No. 3 under the category "Central Government Measures" in the "Actionable Subsidies" 
Section, in the fourth part of the US submission concerning other subsidies, was about Fixed Assets Investment Orientation Regulatory Tax (FAIORT). FAIORT had been introduced in 
1991 and had been suspended since 1999. In 2012, the legal basis of FAIORT, namely the 
Rules for the Implementation of the Provisiona l Regulations on the Fixed Asset Investment 
Orientation Regulatory Tax of the People's Republic of China, had been terminated.  
 
 Item No. 24 under the same category concerned Income Tax Exemption for Foreign-
invested Enterprises ("FIEs") located in Jiangsu Province. Preferential tax treatment for FIEs had been notified by China to the WTO (programmes No. 1, 2, 4, 5, 6, 8, 12, 38, 40, 41, 43, 
81, 82 and 85 in G/SCM/N/186/CHN).  
  Also in the fourth part, Item 10 under "Sub-Central Government Measures" in the 
"Prohibited Subsidy" section concerned Income Tax Programmes in the Linsang Processing 
Industrial Zone in Qingdao. Preferential treatment regarding FIEs had been included in programmes No.1, 2, 4, 5, 6, 12 and 83 of China's notification (G/SCM/N/186/CHN).  
 
 Item 13 under "Central Government Measures" in the "Actionable Subsidies" Section, in the 
first part of the US submission concerning the green technology subsidies, i.e. Land Administration Law of the People's Republic of China, adopted by the National People's 
Congress on 25 June 1986, amended by the National People's Congress on 
29 December 1988, 29 August 1998 and 28 August 2004, was a law containing no concrete subsidy measures or programmes.  
 
97.  Regarding China's 12th five-year plan, China recalled that the US requests under Articles 25.10 and 25.8 listed dozens of China's fi ve-year plans and industrial policies, and tended 
to regard any industry listed in those plans as being subsidized, based only on such wording as 
"encouraging" or "prioritizing". As China had reiterated at the present meeting, and as His Excellency Mr Wang Shoo Wen, Assistant Commerc e Minister of China and the Head of China's 
Delegation had stated in its 5th Trade Policy Review, held on 1 and 3 July 2014, development 
plans and policies only represented the blueprin ts for China's economic, social and industrial 
development, offering opinions of a guiding nature only, and treating all market players in an open and fair manner in their implementation. These pl ans and policies provided no support or specific 
subsidy, nor did they create concrete obligations for central or sub-central governments to 
implement. Therefore, they should not be regarded as subsidy programmes under the SCM 
Agreement, and as such the SCM Committee did not constitute a proper forum for discussing 
them.  
98.  Regarding the statement that because the US had been able to collect and analyse 
information on all of the programmes, China's arguments that it faced difficulties to do so were weakened, China noted that the US was expe rienced in rule-making and implementation. 
Subsidies in particular, given their high technicality, demanded years-long experience and 
expertise. Unlike USTR, which had departments composed of many lawyers and experienced practitioners, China, despite being a WTO Member for more than a decade, still faced a unique 
problem unlike other developed nations - the language problem.  
99.  China's Ministry of Commerce worked together with other central government agencies in 
compiling all information related to the subsidy notification. Across all Chinese governmental 
departments, China was lacking legal expertise. Considering the agenda of the present meeting, 
for example, it was always developed nations, such as the US, EU, Australia, New Zealand and G/SCM/M/91 
 
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  Canada that were able to pose written questions on each notification submitted by other Members. 
China, among other developing countries, did not have the capacity to look in great detail at and pose questions on what was reported in each notification. Its energy and staffing were limited and focused on the preparation of the third notificati on. There had to be a distinction between China, 
as a developing country, although big in size or in trade or economy level, and developed WTO 
Members, which had been around for decades.  
100.  China stated that it had provided clarifications on roughly clarified 62 alleged subsidies, 
about 40% of all items mentioned in the US Article 25.10 submission, not 42 programmes as 
referred to by the US. Although it faced capacity constraints, China was determined to dedicate all efforts to fulfilling its WTO notification obligations, including for subsidies. China thus disagreed with the EU that no satisfactory outcome had been delivered in response to the US submission. 
101.  Recalling Australia's statement that the purpos e of notification was not to judge the nature of 
any practice, but to ensure transparency, China noted that only specific subsidies, within the meaning of Articles 1 and 2 of the SCM Agreemen t, had to be notified. The 12th five-year plan, 
among other industrial policies, should not be included in the discussion. 
102.  As for Japan's query on the schedule for preparing the 2011 and 2013 notifications, the pace 
of the work had increased. While it could not offer a specific time-frame, China was focusing 
energy on compiling the notification as soon as  possible, and was exploring ways to incorporate 
local elements into the notification.  
103.  The US recalled with respect to China's position that there were so many US Article 25.8 
questions that China was unable to put together its normal subsidy notification, that China had 
joined the WTO in December 2001 and had received the first US Article 25.8 questions only in 
October 2004. China had been unable to submit any subsidy notification during the two-and-a-half years where no US questions had been asked. The same had happened during the period 2007–
2011: although there were no outstanding US Article 25.8 questions, no subsidy notifications had 
been forthcoming from China. Therefore, even in periods when there had been no Article 25.8 
questions to be answered by China, subsidy notifications still had not been forthcoming. As for lack 
of official sources, the US had undertaken great efforts to identify all of the legal measures for all 
of the programmes in both counter-notifications, and to translate and make them accessible to all WTO Members. If there were specific issues with specific measures, the US was willing to discuss 
them bilaterally.  
104.  The US was willing to further examine programmes that China stated already might have 
been notified or terminated. The US was ready to discuss bilaterally and to examine individually every measure, but China had not agreed to such  a meeting. Regarding China's argument that a 
measure might have been terminated in 2012, the US counter-notification had been submitted in 
2011, so that measure still had been a valid subsidy programme to raise.  
105.  The US agreed that the five-year plan was only a blueprint. However, provincial and city 
measures that did provide specific subsidies were ci ted in that blueprint. Therefore, those five-year 
plans and general industrial plans promulgated at the central government level were part of the general subsidy policy under which specific subsidy programmes were provided.  
106.  Regarding China's point that its staffing was limited and lacked the legal expertise of the US 
staff, the US noted that its 2014 counter-notification – the subject of the next agenda item - had 
been largely put together by two researchers wi th no subsidies experience. If China devoted 
sufficient resources, it rather easily could submit complete and timely notifications.  
107.  China recalled that initially China was a so-called Recently Acceded Member. Apart from the 
technical requirements for compiling a subsidy notification, the officials of the Ministry of 
Commerce, the pioneering and most open-oriented, single contact in China, had to go through a 
painful adaptation and learning process after China's integration into the multilateral trading 
system, to get used to the new rules environment. Following the initial stage, the WTO had had a unique process for China, the so-called "transit ional trade policy review", which had been 
concluded just a few years earlier, right after the submission of the first US counter-notification. 
During that process the Division of Notification and Trade Policy Review had conducted both of 
these functions, such that China needed to shif t between the transitional review on an annual G/SCM/M/91 
 
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  basis for several years, and the biannual trade policy review. China also was actively in the review 
of other Members policies, including the upcoming trade policy review of the US. The same Division also was responsible for all WTO notifications, one of the most difficult being subsidy notifications. Lack of people was not a pretext but a reality, and China was committed to progress 
on the notification process even if it could not provide a specific time-frame for submitting the 
notification.  
108.  The Committee took note of the statements made. 
7  NON-NOTIFICATION BY CHINA OF ALLE GED SUBSIDIES CONTAINED IN THE 2014 
REQUEST BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM AGREEMENT (G/SCM/Q2/CHN/51) – ITEM REQUESTED BY THE UNITED STATES  
109.  The Chair noted that this US request under Article 25.10 had been circulated in document 
G/SCM/Q2/CHN/51, dated 21 October 2014. 110.  The US recalled that on 15 October it had filed its second Article 25.10 submission "counter-
notifying" 110 subsidy measures that China had not previously notified, which supported many 
products including steel, semiconductors, textiles, and fish, and provided stimulus to a wide range 
of industries of strategic importance to China. 
111.  The 2014 Article 25.10 submission was based entirely on programmes identified in the 2012 
Article 25.8 information request to China which had been submitted two years ago. Under 
Article 25.9, a Member had to respond "as quickly as possible and in a comprehensive manner" to such requests. The US had resorted to the Article 25.10 counter-notification mechanism only after two years had passed without any meaningful response from China, or any timeframe as to when 
a response might be forthcoming. This submission included a list of 110 subsidy measures and, 
although not required to do so under the Agreement, the US had arranged for electronic access through the WTO website to translated copies of  each measure. There were over 800 pages of 
translated subsidy measures that China was obligated to notify and, pursuant to its protocol of 
accession commitments, to publish in a single journal, and to make translations available to WTO Members.  
112.  The counter-notification included 13 steel subsidy measures, three at the central government 
level and the remainder at sub-central levels. Most related to the central government's "adjustment and revitalization" policy, which was further applied through the provinces and then the cities. The specific subsidy programmes were provided at sub-central levels and included 
special funds for capital investment; loans for supporting the technical reconstruction of steel 
enterprises; financial incentives for power-saving technology; and incentives for the elimination of backward productive capacity. The growth of China's steel industry, a sector China considered to 
be of strategic importance, had been phenomenal over the past three decades. China represented 
51% of global steel production. China's capacity alone exceeded the combined steelmaking capacity of the European Union, Japan, the US  and Russia. China's excess steelmaking capacity 
was currently estimated by the OECD Secretariat to exceed 200 million metric tons -- by 
comparison, the total steelmaking capacity of Japan was 131 million metric tons. In addition, China continued to be the largest steel exporter in the world. China's steel exports had hit record levels in 2014, increasing 36% by volume in the first eight months of 2014 compared to the same 
period in 2013, despite sluggish growth in global steel demand. Yet China had not notified a single 
steel subsidy measure. While the US was not implying that the growth of China's steel industry could be solely attributed to government subsidies, or that it was necessarily linked to government 
subsidies, the lack of transparency allowed for, and indeed encouraged, that line of analysis. If 
China were to notify its programmes, this perhaps would lead to a more robust, objective analysis of the situation. The absence of  transparency promulgated suspicion and further trade frictions. 
113.  The counter-notification also included 13 wild capture fish programmes at the central and 
sub-central levels of government, including under the 11th and 12th five-year plans, as well as measures relating to fuel subsidies, a relative ly common subsidy given to fishermen around the 
world, but which China had not yet notified. China continued to be the world's largest producer of 
fish, nearly three times as large as the world's next largest producer. The state of the world's 
fisheries remained alarming: 85% of fish stocks we re considered by the FAO to be fully exploited, 
overexploited, depleted, or in recovery. There had be en an effort to discipline fisheries subsidies at G/SCM/M/91 
 
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  the WTO and in numerous other fora. Most recently, at an APEC Ocean Ministerial in summer 2014 
hosted by China, the Xiamen Declaration had b een agreed upon. Paragraph 21 of the Declaration 
stated: "In light of the Rio+20 outcome document, particularly paragraph 173, we encourage APEC members to further improve the transparency and reporting of existing fisheries subsidies 
programmes through the WTO, and to eliminate subsidies that contribute to overcapacity and 
over-fishing, and to refrain from introducing new such subsidies or from extending or enhancing existing such subsidies, without prejudice to the WTO Doha negotiations." Despite this, China had 
never notified a single wild capture fishery programme. While agreement on disciplining fisheries 
subsidies had been difficult, most concerned Members agreed – as evidenced by the Xiamen Declaration - that transparency was a critical first step. The US questioned when China would join the other concerned fishing nations and take that first step towards a sustainable oceans fishery 
regime. In addition, the Secretariat report in China's most recent Trade Policy Review had listed 
over 30 support programmes for fishermen in China. The US urged China to examine whether these programmes should be notified, and to include in its next notification, which the US hoped to 
see before the spring meeting, those meeting the criteria as specific subsidies. 
114.  Twenty-six of the subsidy measures in th e counter-notification appeared to be stimulus 
plans. These covered, among other things, textiles, shipbuilding, non-ferrous metals, and light 
industry. The subsidies in those measures appeared to include: increased credit support; special 
funds to support research and development, and technology transformation; financial rewards for 
the transformation of energy-saving technology; the state purchase and storage of products; and 
the suspension of social insurance payments.  
115.  It appeared that all of those measures ha d been implemented during the financial crisis, 
when China's economy and the world economy as a whole had been on the verge of collapse. Under such conditions, all governments were expected to intervene to avert disaster. The US 
government had intervened, as had almost every other government in the world with the financial 
resources to do so. But the US had also notified its subsidies, as had many other WTO Members. Indeed, at the time of the financial crisis, the WTO had taken aggressive affirmative action to 
promote even greater transparency of Members' tr ade policies, which along with other monitoring, 
might very well have helped to avert a severe contraction of trade and a possible trade war. Yet, despite the seriousness of the situation and the obligations of all WTO Members, China had not notified a single stimulus measure, and in fact had not notified a single subsidy programme since 
2008. China, as the world's largest exporter and as a leader in this institution, had a responsibility 
to abide by its obligations, especially during times of crisis. 
116.  The US recognized that it was every WTO Member's right to decide the degree of 
government intervention in its economy. Every Member also had agreed that its subsidies were 
subject to WTO rules and to the transparency obligations that were central to the proper 
functioning of the SCM Agreement. It had been only in response to China's complete inaction that 
the US had the actions that it had pursuant to Article 25.  
117.  The US was ready to discuss these issues at any time and to work toward a solution. It could 
not and would not, however, stand idly by when there appeared to be lack of any movement toward providing the transparency required und er the SCM Agreement and China's protocol of 
accession. 
118.  Canada noted that this new counter-notification was an understandable reaction to the 
continued lack of timely and complete subsidy notifications from China. Canada, as other 
Members, had a strong interest in reviewing up-to-date notifications of China's and other 
Members' subsidy's programmes. The onus was on individual Members to notify their subsidies, and submissions from other Members were not an adequate or desirable substitute for fulfilling 
those responsibilities. Canada remained concerned over how China appeared to be approaching its 
subsidy notification obligations, and looked forward to receiving a full subsidy notification from China.  
119.  China stated that it had been working hard to submit its next notification and was 
determined to accelerate that process. Regarding this agenda item, China was still studying the 
details of the US request and had no further comments.  
120.  The Committee took note of the statements made. G/SCM/M/91 
 
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  8  NON-NOTIFICATION BY INDIA OF ALLEGE D SUBSIDIES CONTAINED IN THE REQUEST 
BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM AGREEMENT (G/SCM/Q2/IND/20) – ITEM REQUESTED BY THE UNITED STATES  
121.  The Chair noted that the US request under Article 25.10, circulated in G/SCM/Q2/IND/20 
and dated 10 October 2011, had been discussed at previous meetings of the Committee.  
122.  The US expressed concerns regarding the timeliness and completeness of India's most 
recent "new and full" subsidy notification, which covered only three export subsidy programmes – 
all administered by the central government. As India had stated earlier that day, subsequent 
notifications were coming. The US looked forwar d to those and appreciated their submission. The 
subsidies notified to date by India, however, had included only a small fraction of the universe of the programmes that should be notified under Article 25 and should not be considered a full 
notification.  
123.  In light of this situation, in October 2011, the US had submitted, under Article 25.10, a list of 
approximately 50 subsidy programmes at both the central and sub-central levels, including all of 
the underlying legal measures, which should have b een notified because they appeared to provide 
specific subsidies within the meaning of the SCM Agreement. Some examples were: (1) the Export Oriented Units programme which provided various incentives based on export performance; (2) 
the Focus Product Scheme, which provided exporters with import duty benefits based on the value 
of exports; and (3) the Market Development Assi stance Scheme, which gave grants to exporters 
for market development.  
124.  The US requested a progress update on India's previous statements that it had been 
consulting with state governments to gather the necessary information. The US urged India to 
continue its efforts toward providing a subsidy no tification that presented the full picture of its 
subsidy regime. 
125.  The US also understood that India would soon be releasing its 2014-2019 Foreign Trade 
Policy which, as in years past, presumably would detail the various subsidy programmes administered by the government. The US looked forward to reviewing the new trade policy and 
again encouraged India to provide a timely and complete subsidy notification.  
126.  Canada recalled its previous interventions on this item. Subsidy notification continued to be 
a fundamentally important transparency exercise and Canada remained concerned with how India 
appeared to be approaching its transparency obligat ion. Canada looked forward to receiving a full 
subsidy notification from India. 
127.  India recalled that in previous intervention s, it had explained how some of the programmes 
listed in the US request had already been included in India's previous subsidy notifications, such as 
the example given by the US of the EOU scheme re lated to income taxes. Further, many of the 
schemes listed in the US request did not need to be  notified because either they were refunds or 
exemptions of duties on inputs of products that were exported, or they were not specific because 
they were general infrastructure, or they pertai ned to the service sector. With respect to the 
remaining programmes, the Central government was consulting with state governments to gather the necessary information. India was at an advanced level in that process, and hoped to complete it shortly. India recalled that as part of that process it had recently submitted to the WTO, a new 
notification on fisheries subsidies for the period 2010-2011 and 2011-2012, and also had 
submitted a new notification that covered th e period 2012-2013 to 2013-2014. With that last 
notification, India had fully updated its notification up to 2014. Efforts at the federal and sub-
federal level had gone into preparing this notifi cation. India also had submitted a new and full 
subsidy notification in continuation of its earlier notification G/SCM/N/155/IND dated 29 October 2010 (which had covered the period 2004-2005 to 2008-2009), covering the period 
2009-2010 to 2011-2012 in respect of the preferential tax programmes of the central government. 
This was an indication of India's commitment and serious efforts toward meeting its obligations under the Agreement. Despite several constraints in compiling information, India had generally made an attempt to update its notifications in the area of both fisheries and general subsidies. 
128.   The Committee took note of the statements made. G/SCM/M/91 
 
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  9  2012 AND 2014 REQUESTS TO CHINA FROM THE UNITED STATES PURSUANT TO 
ARTICLE 25.8 OF THE AGREEMENT (G/SCM/Q2/CHN/46 AND G/SCM/Q2/CHN/50) – ITEM REQUESTED BY THE UNITED STATES 
129.  The Chair recalled that these requests from the US, dated 29 October 2012 and 
15 April 2014, respectively, had been discussed at previous meetings. 130.  The US stated that the Article 25.8 questions it had submitted in 2012 had formed the basis 
for its most recent Article 25.10 submission. For six programmes from its 2012 Article 25.8 
questions, the US could not find the underlyin g legal measures but had seen evidence that 
government assistance had been provided or had continued to be provided. The US had not included those programmes in its most recent counter-notification, but instead had asked follow-up questions in the form of a supplement to its original Article 25.8 questions from 2012. The US 
hoped that China could provide answers to those supplemental questions. The US also asked for 
the underlying legal measures and if the measures had been published in a single official journal and translated into a WTO language – both of which were requirements under China's protocol of 
accession. Further, China had an obligation to provide information regarding these programmes 
"as quickly as possible and in a comprehensive manner." 
131.  The US recalled that in April 2014, in the face of continued absence of a complete and timely 
subsidy notification, it had submitted another set of Article 25.8 questions to China. 
132.  China was in the fourth year of its 12th five-year planning period, which ran from 2011 to 
2015. China's last subsidy notification covered only up to 2008 and none of the more recent programmes in China's 12th five year plan. This illustrated that many of China's programmes 
would have come and gone without being notified during the time that they were actually in effect. 
The result was little, if any, meaningful transparen cy, contrary to the intention of Article 25 of the 
Agreement. 
133.  The key industrial policy of the current five-year plan was the promotion of strategic 
emerging industries, which included: (1) new energy vehicles; (2) new materials; (3) biotechnology; (4) high-end equipment manufac turing; (5) new energy; (6) next generation 
information technology; and (7) energy conservati on and environmental protection. This policy 
had begun with measures announced by China's State Council in 2010. Subsequently, other central and sub-central authorities had issued industrial policies for the 12th five-year planning period targeting the development of the strategic emerging industries.  
134.  Of particular note was the important role bestowed upon sub-central governments pursuant 
to the 'National Five-Year Plan for the Developm ent of Strategic Emerging Industries': "Local 
governments shall, in light of the priorities in th e efforts to develop strategic emerging industries, 
and according to local actual conditions, focus on developing distinctive emerging industries with 
competitive edges, and avoid random developmen t and redundant development." This statement, 
and the plethora of sub-central measures – including specific funding measures – cited in the US 
Article 25.8 questions, supported the US view that  a subsidy notification from China that did not 
include sub-central programmes was not a full notification. 
135.  Finally, while much of the language in the cited measures was rather broad and general, 
many of the measures mentioned or established special-purpose funds that would be used to 
support the strategic emerging industries. For ex ample, a measure from the National Development 
and Reform Commission (NDRC) explained that the Special Fund for the Development of Strategic Emerging Industries was a "centrally budget ed special fund to support key technology 
breakthroughs, product innovation and development, and major demonstration and regional 
clustering for strategic emerging industries." The same NDRC measure explained that the monies in the Special Fund for the Development of Stra tegic Emerging Industries would "generally be 
appropriated in the form of grants, equity venture capital funds, etc." 
136.  The US urged Members to read through its questions, all of which had solid, document-based 
sources.   
137.  China stated that it was still in the proce ss of checking and verifying the two US submissions 
and the one supplement under Article 25.8, and had several observations. G/SCM/M/91 
 
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  138.  Regarding item 3 in the 2012 Article 25.8 request, G/SCM/Q2/CHN/46, on the need to notify 
the interim provisions promoting industrial structure adjustments (i.e. "Decision 40") and listing the encouraged projects, China explained that "Decision 40" concerned the investment regime 
(mostly foreign-invested projects). Investment in the encouraged projects would be subject to 
more streamlined verification and approval procedures and less red-tape compared to non-
encouraged ones. This should not be treated or listed as a specific subsidy programme under the SCM Agreement. 
139.  Item 15 in the US request concerned refund of customs duties and VAT for advanced textile 
manufacturing. This measure had been included in China's subsidy notification (G/SCM/N/155/CHN-G/SCM/N/186/CHN), as programme No.83. The VAT refund had been terminated in 2008. As China had explained at the previous meeting, VAT for purchasing fixed 
assets had become deductible in 2009, which previo usly had not been the case, and with a view to 
avoiding double tax relief, the refund for import VAT had been terminated. This latest development of programme No. 83 would be updated and reflected in China's third new and full subsidy 
notification currently being prepared.   
140.  Item 21 concerned subsidies to enterprises located in intensive industrial zones in the 
Shunde District and was similar to Item 19 in the US request G/SCM/Q2/CHN/42, under "sub-
central government measures" in the "Actionable Subsidies" Section in the fourth part concerning 
other subsides. There was no preferential treatm ent regarding land development implemented or 
subsidy provided to the newly-established industrial projects located in the zones by the local government. 
141.  Regarding the 2014 Article 25.8 US request (G/SCM/Q2/CHN/50), China was still studying it. 
However, some items in the request al ready had been notified by China:  
 Item 2 in Question 2, regarding fund s for development of the electrical 
information industry already had been notified in China's subsidy notification 
(G/SCM/N/155/CHN-G/SCN/N/186/CHN),  namely, programme No.87.  
 
 Item 5 in the same question, regarding the integrated circuit industry, 
already had been notified (G/SCM/N/155/CHN-G/SCM/N/186/CHN), namely, programme No. 85.  
 
142.  All of the latest developments in China's industrial policies would be reflected in its future 
notification. China would keep the Committee informed of further comments and responses in respect of both US submissions. If China's noti fications had been studied more carefully, the 
energy and endeavour that China had to put into cross-checking and clarifying these items could 
have been saved, to submit the next notification sooner. 
143.  China acknowledged that the issue of transp arency and translation had been a concern for 
some Members and had been raised in the Trade Policy Review of China. The Foreign Economic 
and Trade Gazette was compiled, edited and publis hed by the Ministry of Commerce. It was an 
official journal bearing all of the published or  promulgated regulations and rules, and other 
measures affecting trade in goods, trade in services, and trade-related IPRs or foreign exchange 
control. From its first publication in 2002 until the end of May 2014, 923 issues had been 
published, bearing all together 5266 documents, including 196 drafts to solicit opinions. China had made specific institutional arrangements to step up the translation of laws, regulations and other 
measures. The Legal Affairs Working Committee under the National People's Congress published, 
on a regular basis, a notice of English version of laws of China. The Legislative Affairs Office of the State Council also published, on a regular basis, Chinese and English versions of regulations 
related to foreign economics and trade in China.  On 24 February 2003 the General Office of the 
State Council of China had issued No. 10 document 2003, a notice on good practices for the translation and review of the official English version of departmental rules. According to the notice, all localities in China and departments should follow it. At the moment, the Ministry of Commerce 
together with the Legislative Affairs Office of th e State Counsel were trying to improve the general 
implementation of this work as well as to improve that notice, which had been published more than 10 years before.  G/SCM/M/91 
 
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  144.  The US expressed interest in the comments about the MOFCOM Gazette, although it 
appeared that many measures, in particular sub- central subsidy measures, never were published. 
The US asked China when it would submit its next subsidy notification.  
145.  China stated that despite its efforts, it could not specify a time for the submission.  
146.  Regarding the Gazette, China took note of the US view, which had been expressed not only 
in the WTO framework, but also bilaterally under the Joint Commission on Commerce and Trade and the Strategic and Economic Dialogue. China remained committed to trying to improve its 
implementation of this policy.  
147.  Regarding regulations published by local gove rnments, the Department of Rules, etc., China 
was still establishing a platform to collect that information. Other developed WTO Members had institutional arrangements enabling them to organize different local bodies and to solicit and 
compile the information required for a notification. After more than 10 years as a WTO Member, 
China had managed to establish a working group for both trade policy reviews and notifications, only at the central government level. For local go vernments it was still work in progress. In 2014, 
China had published the State Council General Office Notice on the better compliance with rules, 
laws and regulations, normative documents and other policy measures relating to or affecting trade in goods, trade in services and trade-related IPRs. It was a learning process but China being 
a vast country with diverse levels of economic development, it was impossible to guarantee that 
compliance with rules would be uniform across levels and venues. China took every possible opportunity to gather information from local authorities more effectively, and was willing to learn from any WTO Member that wanted to share its experience.  
148.  The Committee took note of the statements made. 
10  LOCAL CONTENT REQUIREMENT IN RENEWABLE ENERGY SECTOR SUBSIDY SCHEMES 
IN THE UNITED STATES – ITEM REQUESTED BY THE RUSSIAN FEDERATION  
149.  The Russian Federation recalled that this issu e originally had been raised by India, and that 
there had been an exchange of written questi ons and replies between India and the US. Russia 
had followed that exchange closely and in Russia's view, there were some questions to which the 
US had not replied. Hence, Russia was interested in keeping this agenda item.  
150.  In several cases there was a contingency on using local goods in order to obtain a benefit 
under subsidy programmes. The US response stated: "in addition to the Solar Rebate Programme offered by Xcel Energy, consumers can also qualif y for an additional rebate of $2.75/W with the 
purchase of a PV module manufactured in Minnesota."  
151.  Russia queried how the US incentives in the renewable energy sector with legally binding 
local content requirements complied with US obligations under the WTO. It also requested 
information on the total amount of each programme. Such data remained unclear as the US had 
not provided the relevant notifications. 
152.  India stated that it would prepare follow-up questions to the US responses, as its questions 
had been only partially responded to. India requeste d that this item remain on the agenda for the 
next meeting.  
153.  The US complimented India on its well-researched questions, which clearly had taken a lot of 
time and effort. The US was ready to answer additional questions that India or Russia might have. 
154.  The Committee took note of the statements made. 
11  JAPANESE GOVERNMENT SUPPORT FOR THE MRJ PROJECT - REQUEST BY BRAZIL 
PURSUANT TO ARTICLE 25.8 OF THE SCM AGREEMENT (G/SCM/Q2/JPN/65) – ITEM 
REQUESTED BY BRAZIL  
155.  Brazil recalled that this was the third time  it had brought this issue to the Committee, this 
time under Article 25.8 of the SCM Agreement. Thus far, no reply from the Japanese government 
had been received. In bilateral discussions in September, Japan again had refused to provide G/SCM/M/91 
 
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  details about its subsidy programmes which were directed to assisting the aircraft sector, for 
example, the eco-friendly high performance regional jet or R&D for domestic passenger airplanes. Japan had stated only that these programmes were not specific within the meaning of Article 2 of the SCM Agreement. This line of argument had been presented to the Committee in October 2013 
and April 2014, although Japan had not presented any information about the terms and conditions 
of the programme. Thus, neither Brazil nor any other Member could verify that assertion. Refusing 
to give information to the Committee undermined the principle of transparency. Brazil requested 
that Japan share some information on the MRJ project.  
156.  Japan stated that in the bilateral consultations held on 30 September, Japan had answered 
in good faith each of the five questions posed by Brazil:  
 For question 1, the project in question ai med to support R&D for the promotion of the 
environmental technology as applied across ma ny different industries. Therefore, this 
project did not meet the specificity requirem ent of the SCM Agreement. Furthermore, the 
project already had been terminated. 
 
 For question 2, the project was R&D to develop certain kinds of technology that was applied 
across transport industries, such as railway, cars and vessels. Therefore, the programme did 
not meet the specificity requirement of the SCM Agreement.  
  For question 3, the programme did not meet the subsidy definition of the SCM Agreement 
because the fees paid for the service provid ed under this project were not less than 
adequate remuneration. Furthermore, this project was R&D contributing to the development 
of a steering system applied across various di fferent industries. Therefore, the programme 
did not meet the specificity requirement of the SCM Agreement.  
 
 For question 4, the programme supported R&D for the promotion of cutting edge 
technology. The project did not meet the spec ificity requirement of the SCM Agreement.  
 
 For question 5, to Japan's knowledge, no such subsidies had been provided.  
 157.  Japan was ready to continue bilateral consultations with Brazil. 
158.  The Committee took note of the statements made. 
12  OTHER BUSINESS 
12.1  India sugar subsides – Item raised by Australia 
159.  Australia had raised India's sugar subsidies provided under its Sugar Development Fund at 
the Committee's April 2014 meeting. Australia also had raised this issue in capital, and in the 
Committee on Agriculture, where Australia had submitted written questions and intended to 
submit follow-up questions. Members' obligatio ns under the SCM Agreement and the Agriculture 
Agreement were distinct. Australia remained concerned about the impact of these subsidies on the world sugar market. It had become necessary to raise this matter in the SCM Committee, especially where Members were not providing complete subsidy notifications, including in a timely 
fashion. This made it challenging to understand the operation of subsidy programmes. 
160.  India had been unable to provide a response at the April meeting. Australia thus asked India 
to provide further details on the operation of the sugar programme and on whether payments had 
been made. Australia understood that India had established an Expenditure Management 
Commission to review government expenditure and reduce subsidies, and asked India to explain 
the scope of this Commission and whether the re view would include the sugar subsidies regime. 
161.  India stated that the issue was already under discussion in the Committee on Agriculture, 
and India was not convinced of the need to include the same matter in the discussions of the SCM 
Committee while the discussions in the Committee on Agriculture were underway. 
162.  Australia stated that, in the absence of a subsidy notification, it was very difficult for 
Members to have a complete understanding of how a programme operated. The questions that G/SCM/M/91 
 
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  Australia was asking India in the Committee on Agriculture were quite distinct, as was the 
Agreement on Agriculture. Australia was seekin g clarification and transparency in the SCM 
Committee in the context of subsidy notification and a subsidy programme that India was providing to its producers. 
163.  The Committee took note of the statements made. 
12.2  Support measures for the construction of  a new cement facility in Quebec, Canada 
– Item raised by the United States  
164.  The US expressed concern about support provided by governmental entities for the 
development of a new cement facility in Port-Daniel-Gascons, in Quebec.  
165.  First, the US noted that although a facility at this site had been under consideration since the 
1990s, it apparently never had attracted sufficient commercial investment. Press reports that 
quoted non-governmental participants in the current  project had explained that the official support 
was what made the project possible. 
166.  Second, the magnitude of the support was sign ificant – nearly half a billion dollars, which 
included: (i) a loan of C$250 million from Investment Quebec, a provincial government entity of 
the Government of Quebec ("GOQ"); (ii) an eq uity investment of C$100 million also from 
Investment Quebec, and (iii) an investment of C$100 million from Quebec's pension management 
system. The 250 million dollar loan appeared to have a two-year grace period and was 
subordinated, meaning that in the event of financial difficulty, the GOQ would be repaid only after private sector investors.  
167.  Third, the existing cement producers in Qu ebec had significant unused production capacity, 
which raised questions as to the need for a new plant. 
168.  Finally, the US was concerned that both the government and company officials involved in 
the project had indicated that a significant amount of the plant's production would be exported to 
the US. Both Quebec's former Premier and incoming Economic Minister had stated that the facility 
would not compete with other cement companies in the province and would instead largely export to the US. The CEO of the new company also had pointed to anticipated exports in numerous 
interviews, to counter criticism that the support measures and resulting new capacity would harm 
existing producers and workers in Quebec. 
169.  The creation of a new cement producer with nearly half a billion dollars in government funds 
that was focused on exporting much of its production to the US could have serious and troubling 
consequences for US cement producers. The US as ked that Canada and the GOQ enable interested 
parties to confirm that these support measures, including the loans and equity investments, were on commercial terms and were not contingent upon export performance. Relevant entities should, 
for example, reveal the detailed terms on which th ey were providing support for the new facility 
and the market studies underlying their decisions to provide such support. The US also expected 
that if the assistance met the definition of a specific subsidy, Canada would notify the Committee 
as soon as possible. 
170.  Canada stated that it was a strong supporter of a rules-based trading system, and took its 
international obligations very seriously. As the programme seemed to be under jurisdiction of a 
provincial government, Canada would bring them to the attention of that government and would 
provide a response. It was Canada's view that the measures were consistent with Canada's 
international obligations. Public sources gave no indication that Investment Quebec or Quebec's pension fund had deviated from usual practices seeking commercial return on their investments. 
In the spirit of cooperation, on 15 August 2014 officials from the Embassy of Canada in 
Washington had met with USTR representatives to discuss these concerns. Likewise, on 23 September 2014 Quebec's Minister of the Economy, Innovation and Exports had met with the 
Consul General of the US in Quebec, to provide further information on the financial assistance. 
Canada remained open to discuss this issue further.  
171.  The Committee took note of the statements made. G/SCM/M/91 
 
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  12.3  PGE nominations – Item raised by the Chair  
172.  The Chair noted that at the spring 2015 meeting, Members would need to elect a new 
member to the Permanent Group of Experts, to re place Mr Akio Shimizu, whose term of office 
would be expiring. Members were encouraged to start thinking about potential candidates. The 
Chair would circulate the official request for nominations early in 2015, and if necessary would 
hold informal consultations with Members co ncerning selection of the new PGE member. 
12.4  Workshop on notifications – Item raised by the Chair 
173.  The Chair recalled that the previous day many delegations had attended a workshop on 
safeguard notifications that had been held back-to-back with the Committee on Safeguards. The 
Chair's impression was that the participants had found the workshop useful in clarifying technical aspects of compliance with the notification requirements for safeguard actions. He was aware that 
interest had been expressed in holding a similar workshop on notifications of anti-dumping and 
countervailing actions, and he planned to discuss th is issue with his colleague, the Chair of the 
Anti-Dumping Committee. Such a workshop could be held back-to-back with the April meetings of 
the Committees.  
174.  Colombia supported this initiative, and stated that the information session on safeguard 
notifications had helped Members to clarify vari ous questions requiring clarification. Further 
capacity building would improve the work of the Committee.  
175.  Chile also expressed support and stated th at the workshop on safeguards had been very 
useful, with a practical impact for all Geneva-based delegations.  
176.  The Committee took note of the statements made. 
13  DATE OF NEXT REGULAR MEETING 177.  The Committee decided to hold its next regular meeting during the week of 27 April 2015, 
with the exact date to be confirmed in due cour se. As usual, this meeting would be immediately 
preceded by a special meeting for review of subsidy notifications.  
14  ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7)  178.  The Committee adopted its Annual Report (2014) to the Council for Trade in Goods.
2 
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2 G/L/1077.