RESTRICTED  
  
G/SCM/M/89  
 
17 July 2014  
(14-4148)  Page: 1/19  
Committee on Subsidies and Countervailing Measures   
 
  MINUTES OF THE REGULAR MEETING  
HELD ON 29 APRIL 2014 
CHAIR: MR MARCUS BARTLEY JOHNS (AUSTRALIA) 
1.  The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 29 April 2014, convened in WTO/AIR/4288 dated 17 April 2014.  
2.  The Committee adopted the following agenda: 
1   NATIONAL LEGISLATION – REVI EW OF NOTIFICATIONS OF NEW OR 
AMENDED LEGISLATION OR REGULATIONS NOT PREVIOUSLY REVIEWED BY THE COMMITTEE (INCLUDING SUPPLEMENTAL NOTIFICATIONS OF EXISTING PROVISIONS NOT PREVIO USLY REVI EWED) .................................................................... 2
 
1.1   Australia (G/ADP/N/1/AUS/2/Su ppl.13 - G/SCM/N/1/AU S/2/Suppl.11) .............................. 2  
1.2   Brazil (G/ADP/N/1/BRA/2/Su ppl.9-G/SCM/N/1/BRA/2/Suppl.8 and 
G/ADP/N/1/BRA/2/Suppl.10-G/SC M/N/1/BRA/2/Suppl.9) ....................................................... 2  
1.3   The Gambia (G /SCM/N/1/G MB/1) ................................................................................ 3  
1.4   Montenegro (G/ADP/N/1/MNE/1-G /SCM/N/1/MNE/1-G/S G/N/1/MNE/1) ............................. 3  
1.5   Papua New Guinea  (G/SCM/N/1 /PNG/1) ....................................................................... 3  
1.6   United States (G/ADP/N/1/USA/1/Suppl.15-G/SCM/N/1/USA/1/Suppl.15-
G/SG/N/1/USA/1/ Suppl.15)................................................................................................ 3  
2   NATIONAL LEGISLATION – CONT INUING REVIEW OF LEGISLATIVE 
NOTIFICATIONS PREVIOUSLY REVIEWED BY THE COMMITTEE ........................................ 3  
2.1   Chile (G/ADP/N/1/CHL/2/Suppl.1 - G/SCM/N/1/CHL/2/Suppl.1. -
G/SG/N/1/CHL/2 /Suppl.2) ................................................................................................. 3  
2.2   The Russian Federati on (G/SCM/N/1 /RUS/1) ................................................................. 3  
3   SEMI-ANNUAL REPORTS OF COUNTERV AILING DUTY ACTIONS (ART. 25.11) ............. 4  
4   NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY 
ACTIONS (ART . 25.11) ..................................................................................................... 4  
5   IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS AND 
OTHER INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT .....................................................................................................................  4
 
6   CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM SCM ANNEX 
VII(B) ........................................................................................................................ ...... 8 
7   PERMANENT GROU P OF EXPERTS ................................................................................ 8  
8   ELIMINATION OF EXPORT SUBSIDIE S FOR TEXTILES AND APPAREL BY INDIA 
PURSUANT TO ARTICLE 27.5 OF THE SCM AGREEMENT - REQUEST FROM THE 
UNITED STATES ............................................................................................................... 9  
9   NON-NOTIFICATION BY INDIA OF ALLEGED SUBSIDIES CONTAINED IN THE 
REQUEST BY THE UNITED STATES PURS UANT TO ARTICLE 25.10 OF THE SCM 
AGREEMENT (G/SCM/Q2/IND/20) – REQUEST BY THE UNITED STATES .......................... 9  G/SCM/M/89 
 
- 2 - 
 
  10   NON-NOTIFICATION BY CHINA OF ALLEGED SUBSIDIES CONTAINED IN THE 
REQUEST BY THE UNITED STATES PURS UANT TO ARTICLE 25.10 OF THE SCM 
AGREEMENT (G/SCM/Q2/CHN/42) – REQU EST BY THE UNITED STATES ....................... 11  
11   2012 REQUEST TO CHINA FROM THE UNITED STATES PURSUANT TO 
ARTICLE 25.8 (G/SCM/Q2/CHN/46) .............................................................................. 15  
12   2014 REQUEST TO CHINA FROM THE UNITED STATES PURSUANT TO 
ARTICLE 25.8 (G/SCM/Q2/CHN/50) .............................................................................. 15  
13   LOCAL CONTENT REQUIREMENT IN RENEWABLE ENERGY SECTOR SUBSIDY 
SCHEMES IN THE UNITED STATES - ITEM REQUESTED BY INDIA (G/SCM/Q2/US A/59) .................................................................................................... 16
 
14   OTHER BU SINESS .................................................................................................... 17  
14.1   India Sugar Subsidies – Item requested by Australia .................................................... 17 
14.2   Sub-central subsidy programmes of the United States – Item requested by China ............ 17 
14.3   Certain Possible Provincial Government Assistance to Port Hawkesbury Paper Mill in 
Canada - Item requested by the United  States ..................................................................... 17 
14.4   Japanese government support for development of regional aircraft – Item 
requested by  Brazil .......................................................................................................... 18 
15   DATE OF NEXT REGULAR MEETING .......................................................................... 19  
16   ELECTION OF  OFFICERS .......................................................................................... 19  
 
1  NATIONAL LEGISLATION – REVIEW OF NOTIFICATIONS OF NEW OR AMENDED 
LEGISLATION OR REGULATIONS NOT PREV IOUSLY REVIEWED BY THE COMMITTEE 
(INCLUDING SUPPLEMENTAL NOTIFICATI ONS OF EXISTING PROVISIONS NOT 
PREVIOUSLY REVIEWED) 
3.  The Chair recalled that 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 by 7 April 2014. 
4.  As had been indicated in the annotated draft agenda, the primary review of these notifications 
would take place in the Committee on Anti-Dumping Practices, where all horizontal issues as well 
as anti-dumping issues would be addressed. Members thus were requested to limit their questions in this Committee to issues specific countervailing measures. 
1.1  Australia (G/ADP/N/1/AUS/2/Su ppl.13 - G/SCM/N/1/AUS/2/Suppl.11) 
5.  Australia recalled that as previously foreshadowed, this notification reflected changes 
announced by the Australian government on 18 September 2013, by virtue of which the new Anti-
dumping Commission was established, as from 1 July 2013, to administer Australia's anti-dumping 
and countervailing system. The Commission had been transferred on 27 March 2014 from the 
Customs and Border Protection Service to the new Department of Industry. The transfer would not 
affect any on-going countervailing duty investigations.  
6.  The Committee took note of the notification and statement. 1.2  Brazil (G/ADP/N/1/BRA/2/Suppl.9-G/SCM/N/1/BRA/2/Suppl.8 and 
G/ADP/N/1/BRA/2/Suppl.10-G/SCM/N/1/BRA/2/Suppl.9) 
7.  Written questions with respect to this notification can be found in:  
 Questions from Peru: G/ADP/Q1/BRA/22 - G/SC M/Q1/BRA/22 (none pertain specifically to 
countervailing measures) 
 Questions from the United States: G/ADP/Q1/BRA/20-G/SCM/Q1/BRA/20 and 
G/ADP/Q1/BRA/21-G/SCM/Q1/BRA/21    G/SCM/M/89 
 
- 3 - 
 
  8.  Brazil stated, in respect of one of the questions from the US, that Ordinance No. 2 was relevant 
to countervailing duty proceedings and had just been notified.  
9.  To date, no written replies to the written questions have been received. 10.  The Committee took note of the notification, questions and statement. 
1.3  The Gambia (G/SCM/N/1/GMB/1) 
11.  The Committee took note of the notification. 1.4   Montenegro (G/ADP/N/1/MNE/1-G/SCM/N/1/MNE/1-G/SG/N/1/MNE/1) 
12.  Written questions and answers with respect to this notification can be found in:  
 Questions from the United States: G/ADP/Q1/MNE/1-G/SCM/Q1/MNE/1-G/SG/Q1/MNE/1. 
 Replies to the United States: G/ADP/Q1/MNE/2-G/SCM/Q1/MNE/2-G/SG/Q1/MNE/2. 
 
13.  The Chair noted that as per the request of  the United States, these questions would be 
discussed at the Anti-dumping Committee meeting the following day. 
14.  The Committee took note of the notification, questions and answers.  
1.5  Papua New Guinea (G/SCM/N/1/PNG/1) 
15.  The Committee took note of the notification. 1.6  United States (G/ADP/N/1/USA /1/Suppl.15-G/SCM/N/1/USA/1/Suppl.15-
G/SG/N/1/USA/1/Suppl.15) 
16.  The Committee took note of the notification. 2  NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE 
2.1  Chile (G/ADP/N/1/CHL/2/Suppl.1 - G/SCM/N/1/CHL/2/Suppl.1. -
G/SG/N/1/CHL/2/Suppl.2) 
17.  Written questions and replies in respect of this notification can be found in: 
 Questions from the United States: G/ADP/Q1/CHL/7-G/SCM/Q1/CHL/7-G/SG/Q1/CHL/5 
 Replies to the United States: G/ADP/Q1/CHL/8-G/SCM/Q1/CHL/8-G/SG/Q1/CHL/6.  
 
18.  The Chair noted that as the US questions pertained exclusively to safeguards they would be 
discussed in the Committee on Safeguards.  
19.  The Committee took note of the notification, questions and answers.  2.2  The Russian Federation (G/SCM/N/1/RUS/1) 
20.  Written questions and replies in respect of this notification can be found in: 
 Questions from the United States: G/ADP/Q1/RUS/5-G/SCM/Q1/RUS/5-G/SG/Q1/RUS/5 
 Replies to the United States: G/ADP/Q1/RUS/6-G/SCM/Q1/RUS/6-G/SG/Q1/RUS/6 
 
21.  The Committee took note of the notification, questions and answers.  
22.  The Chair stated that any Member wishing to pose written follow-up questions regarding 
legislative notifications reviewed under agenda item  1 should submit the questions in writing to the 
Member concerned and to the Secretariat, by 19 May 2014. The written replies to all written G/SCM/M/89 
 
- 4 - 
 
  questions posed in conjunction with this meeting should be submitted to the Member posing the 
question and to the Secretariat by 10 June 2 014. Any Member wishing to place a previously-
reviewed legislative notification on the agenda  of the Committee's October 2014 regular meeting 
should submit written questions concerning that notification, to the Member concerned and to the 
Secretariat, not later than 15 September 2014. Members receiving such questions were to submit 
their written answers not later than 13 October 2014. Finally, the new legislative notifications that would appear on the agenda of the October 2014 meeting would be those circulated in all three 
languages by 15 September 2014. Such notifications had been received to date from Brazil, the 
European Union, Montenegro and Qatar. Written questions concerning these and any other new legislative notifications to be reviewed should be submitted to the notifying Member and to the 
Secretariat by 6 October 2014. The Secretariat would circulate the usual triple-symbolled 
document containing these and all of the other deadlines shortly after the end of the April 2014 
meeting.  
23.  The Committee took note of the Chair's statement.  
3  SEMI-ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ART. 25.11) 
24.  The Chair noted that Australia, Brazil, Canada, China, the EU, Mexico, Pakistan, Peru, South 
Africa and the other Members of SACU -- that is, Botswana, Lesotho, Namibia, and Swaziland -- 
and the US, had submitted reports on countervailing duty actions taken in the second half of 2013, 
pursuant to the Secretariat's invitation in G/SCM/N/267, as indicated in paragraph 1 of document G/SCM/N/267/Add.1. As per paragraph 2 of that document, 31 Members had informed the Committee that they had not taken countervailing duty actions during the second half of 2013. 
Following circulation of the document, Indonesia had submitted a nil notification. In addition, as 
per paragraph 5 of the document, 28 Members had submitted a one-time notification that they had no investigating authority, had never taken any countervailing actions, and did not anticipate 
taking any such actions for the foreseeable future. Any other Members that qualified to make such 
notifications were urged to do so. Unfortunately, a large number of Members listed in paragraphs 3 
and 4 of the document had not submitted a se mi-annual report for July-December 2013. They 
were urged to submit their reports as soon as possible.  
25.  The Committee took note of the semi-annual reports and the Chair's statement. 4  NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS 
(ART. 25.11) 
26.  The Chair reported that since the Committee's October 2013 regular meeting, Australia, 
Brazil, Canada, China, the EU, Mexico, Peru and the US had submitted notifications under Article 25.11 of preliminary and final countervailing du ty actions. These notifications were listed in 
documents G/SCM/N/265, 266, 268, 269, 270 and 271.  
27.  The Committee took note of the notifications. 5  IMPROVING THE TIMELINESS AND COMP LETENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT 
28.  The Chair recalled that, since the request of the Chairman of the Trade Policy Review Body in 
spring 2009, the Committee had discussed this matter at formal and informal meetings, as reflected in the meeting minutes. At the reques t of Members, the Secretariat had prepared a 
background note (G/SCM/W/546 dated 28 April 2009), providing a snapshot of compliance with 
various notification obligations under the Agreement since 1995. This compendium had been updated for every spring meeting since then, with the most recent version in G/SCM/W/546/Rev.5 
and Corrigendum 1.  
29.  The Chair noted that after the document was circulated, Brazil, India, Senegal and the 
United States had submitted 2013 new and full notifications.  
30.  The Chair recalled that, in an effort to bring to the attention of the concerned Members in a 
direct way the problem of non-submission of subsidies notifications, he had sent a letter, on 13 September 2013, to each Member that had not, as of that date, submitted a 2011 new and full G/SCM/M/89 
 
- 5 - 
 
  notification. None of those delegations at that ti me had submitted a 2013 notification either. In the 
letters, the Chair had pointed to the missing notifications, and noted resources that delegations could draw on in working to rectify the situation, including the Secretariat Handbook on Notification Requirements for the SCM Agreemen t; consultations with the staff of the Rules 
Division; and the two Geneva-based internship programmes coordinated by the Secretariat. The 
letters had generated a certain positive response, as around a dozen delegations had consulted with the Secretariat concerning the nature of the notification obligations, the formats to be used, 
and the Notification Handbook, which the Secretariat had updated before the letters were sent. 
Several delegations had submitted their 2011 and 2013 notifications, some with explicit reference to the Chair's letter. These Members included some particularly small delegations and others facing challenging circumstances. The efforts of those delegations to complete their notifications 
demonstrated that it was possible for all Members to comply with their obligations. It also 
demonstrated the valuable role played by the Secretariat in providing advice to Members. 
31.  The Chair recalled that at the Committee's October 2013 regular meeting, a number of 
Members had indicated their willingness to continue discussing ways to improve timeliness and 
completeness of notifications and other informatio n 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. Seve nty-four Members still had not 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, close to 
one year earlier. Moreover, 61 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. 
32.  The 74 Members that had not yet made their 2013 notifications were: Albania; Angola; 
Argentina; Bangladesh; Belize; Benin; Bolivia; Br unei Darussalam; Cambodia ; Cape Verde; Central 
African Republic; Chad; China; Colombia; Congo; Côte d'Ivoire; Croatia; Democratic Republic of 
Congo; Djibouti; Egypt; Fiji; the Gambia; Ghana; Guinea; Guinea-Bissau; Guyana; Iceland; 
Indonesia; Israel; Kenya; Kyrgyz Republic; Lesotho; Malawi; Malaysia; Maldives; Mauritania; Mauritius; Mongolia; Montenegro; Morocco; Mozambique; Myanmar; Namibia; Nepal; Nicaragua; Niger; Nigeria; Oman; Pakistan; Paraguay; Philippines; Qatar; Rwanda; Samoa; Saudi Arabia; 
Sierra Leone; Solomon Islands; South Africa; Sri Lanka; Suriname; Swaziland; Tajikistan; 
Tanzania; The Former Yugoslav Republic of Mace donia; Tonga; Trinidad and Tobago; Tunisia; 
Uganda; United Arab Emirates; Venezuela; Viet Nam; and Zimbabwe. The Chair asked these 
Members to explain why they had not yet notified and indicate when they might do so.  
33.  The Chair urged those Members that had not yet submitted their 2013 notifications to do so 
as soon as possible, and recalled that the Secretar iat continued to be available for enquiries about 
compliance with notification obligations.  
34.  The Chair then recalled that at previous meetings, the Committee had discussed a proposal 
from the United States regarding the treatment of questions and answers under Articles 25.8 and 
25.9 of the SCM Agreement, contained in document G/SCM/W/557. A number of Members had 
expressed interest in continuing the discussion and this item was on the meeting's agenda. The US 
that day had provided a room document containing a revision to its proposal.  
35.  The US indicated that it was revisiting it s proposal to address the on-going problem of 
Members not responding in a timely and co mplete manner to questions submitted under 
Article 25.8 of the Agreement despite the very clear language in Article 25.9. At previous meetings, the US had discussed at some length the purpose of its proposal, namely to reach 
consensus on procedures for Members' responses to Article 25.8 questions. As previously noted, 
such a process already existed for responding to questions on Members' subsidy notifications, as reflected in the Committee's agreed procedures in document G/SCM/117.  
36.  Creating 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 the TPRB. The ration ale for having procedures for written answers to 
questions on subsidy notifications was equally applicable to questions submitted under 
Article 25.8.  G/SCM/M/89 
 
- 6 - 
 
  37.  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. 
38.  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 be answered within 30 days. 
Although the 30-day deadline was tight, the 20-day rule for replying to questions on Members' subsidy notifications was tighter. Therefore, these time periods were consistent with the 
requirement in Article 25.9 that Members respond to questions "as quickly as possible". The US 
queried how Members that disagreed would interpret the phrase "as quickly as possible". The US acknowledged the concerns raised by some Members that strict timelines for responding to these questions might be burdensome, particularly to lesser developed countries and welcomed further 
discussion of and constructive feedback on its proposal. 
39.  Canada stated that it believed strongly in the transparency and notification obligations under 
the SCM Agreement. Although Canada had not yet reviewed the new proposal from the 
United States, it was open to exploring a mechanism to address Article 25 requests, including the 
possibility of timelines for written replies, give n the importance of Members' obligations with 
regards to transparency. 
40.  The EU took note of the amended timeline su ggested by the US and looked forward to further 
work on this issue. 
41.  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. Australia would seriously consider 
the amended US proposal, and generally supported setting a specific time-frame and remained interested in further discussions on considering such procedures. Concerning the Secretariat's 
document in G/SCM/W/546/Rev.5 and Corrigendum 1, Australia suggested adding another Annex 
containing a table with all requests under Article 27.6 for the Secretariat to calculate export competitiveness.  
42.  Japan stated that notifications were a fundamental obligation for the surveillance scheme 
stipulated in the SCM Agreement, and that all Members benefitted from a transparent multilateral trade system. Japan supported the Secretariat's co ntinuous updating of the background note and 
providing assistance to Members, which it hoped raised Members' awareness of the importance of 
notifications. Japan supported the US initiative which aimed to bring more clarity and predictability 
to the Article 25.8 and 25.9 process. Japan needed  time to review the US amended proposal, and 
wished to further discuss it taking into account comments from Members.  
43.  New Zealand shared the concerns of other Members about the lack of compliance with 
notification obligations, which undermined the Committee's work to improve timeliness and completeness. Transparency was a main principle of the WTO, which timely and complete 
notifications helped to ensure this.  
44.  Chinese Taipei encouraged Members not having notified to do so as soon as possible. Chinese 
Taipei in principle supported the US proposal as it would improve timeliness of notifications. It 
looked forward to further discussions. 
45.  China recalled its statements from previo us Committee meetings regarding Articles 25.8 
and 25.9. In China's view, the procedures proposed by the US would increase obligations and G/SCM/M/89 
 
- 7 - 
 
  burdens on Members. Nevertheless, it was im portant to improve transparency concerning 
notifications under the SCM Agreement at the Committee. China itself had been constantly making great efforts on the 2-year new and full notifi cation and answering questions thereon under 
Articles 25.1 to 25.5 and Article 26. In China's view, the new and full notification and related Q&A 
processes were the primary transparency obligations under the SCM Agreement. As developing 
members faced huge difficulties and challenges in preparing notifications due to capacity constraints, introducing more inflexible and rigi d 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.  
46.  South Africa supported this agenda item, and th e full ventilation of the US proposal, to ensure 
that all Members were comfortable with any new procedures proposed. South Africa noted that the 
revised proposal omitted the erroneous footnote regarding South Africa in the original version of 
the proposal. It remained fully supportive of workable efforts to improve transparency, and needed to review the updated proposal in capital. A quic k review showed that 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. By way of preliminary comments, South Africa recalled its previously stated concerns, in particular, relating to the need for pragmatism in setting strict time frames, in 
view of Members' differing capacity thresholds. Placing additional burdens on Members by having 
mandatory timelines could alter the balance of rights and obligations to the disadvantage of least capacitated Members. South Africa queried whether a strict time frame for replies to Members' requests would achieve the objective sought, name ly a fully comprehensive response. Further, for 
maintaining an item on the agenda pending written replies, contended that it was not clear who 
would determine whether the Member had appropriately responded and what criteria would be used.  
47.  South Africa remained concerned that this proposal could raise systemic problems, 
overloading the agenda as these requests woul d accumulate and would be perpetuated on the 
Committee agenda, rather than encouraging effici ency and streamlining Committee meetings. In 
any event, the rules provided that 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 solution 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 there is no creation of 
additional obligations which fundamentally altered the negotiated balance in the SCM Agreement. South Africa reserved its right to come back with further inputs after capital-based colleagues had 
reviewed the new US paper in detail. 
48.  Russia agreed that transparency was essentia l for the effective functioning of the WTO as a 
whole and the SCM Agreement in particular. Ru ssia noted the concerns expressed about the 
balance of rights and obligations under the SCM Agreement and would carefully examine the US 
proposal.  
49.  Brazil supported transparency, which was a fundamental pillar in the WTO. Brazil queried 
whether the main change in the new document was to set timelines (60 and 30 days) for written 
responses. If so, the US should take into a ccount the views previously presented by Brazil, 
Argentina, China, India and South Africa in previous  occasions with regard to the balance of rights 
and obligations under the Agreement. Careful discussion was needed, taking into account these 
observations. Brazil reserved its right to come back to the proposal in the future. 
50.  India noted that the US proposal had been discussed in the Committee for some time and that 
India had raised concerns during previous meetings. India had hoped that these issues would be 
taken into consideration in the revised proposal. However, the new proposal only included 
timelines to submit written responses, i.e. 60 days, and for written responses to follow-up questions, 30 days. India agreed that transpar ency was an important component of the SCM 
Agreement and was essential for the smooth functioning of the multilateral trading system. 
However, transparency imposed costs and thus pragmatism was needed in imposing such 
enhanced obligations. Developing and LDC members had capacity constraints and challenges to meet enhanced obligations, which in this context ar ose from additional reporting requirements that 
at times might also result in duplication of effort. India had 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. The word "written" was included in Article 25.8 but had been carefully G/SCM/M/89 
 
- 8 - 
 
  omitted by the negotiators from Article 25.9. Including it in the proposal disturbed the negotiated 
balance. Proposed time limits for replies to questions received under Article 25.8 needed to be examined from the point of view of practica lity and pragmatism. Most developing and LDC 
members had capacity constraints in compiling information from different agencies. An extension 
of this was the proposal for time limits for submitting written replies to follow-up questions. 
Severely constrained Members would find it difficult to meet such obligations, such that strict time frames might not yield effective results. Also, the proposal stated that all pending questions would 
automatically remain on the agenda of the Committee until a reply was provided. India questioned 
the rationale behind this proposal as any Member could request that an item be placed on the agenda of a Committee meeting. The more important issue was who would determine whether a question had been 'appropriately answered'. Indi a reserved the right to make detailed comments 
after review in capital.  
51.  The US stated that the main change in th e amended US proposal was the addition of the 60 
and 30-day deadlines. With respect to the argume nt that setting such deadlines might not be 
useful or could detract from the work on new and full notifications, and the question and answer 
framework agreed by the Committee, the US viewed the obligation under Article 25.8 and/or 25.9 as separate from the one to notify a Member's subsidy programmes on a yearly basis or every 
other year as the Committee had decided. The US did not consider this as an additional reporting 
requirement, but an existing requirement already found in the SCM Agreement. Further, while it 
proposed that written answers be provided, this was no different from the existing obligation to provide written answers to questions on Members su bsidies' notifications. In terms of technical 
assistance, the US acknowledged the Secretariat's work on this issue and stated that this was an 
area that it could explore, and that it would be  willing to provide some technical assistance to 
those in need. The US looked forward to further discussions on this matter. 
52.  The Committee took note of the statements made.  
6  CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM SCM ANNEX VII(B)  53.  The Chair recalled that, pursuant to the Doha Ministerial Decision on Implementation-Related 
Issues and Concerns (document WT/MIN(01)/17, paragraph 10.1), Annex VII(b) to the SCM 
Agreement listed Members until their GNP per capita reached US $1,000 in constant 1990 dollars for three consecutive years. As of 1 January 2003, the methodology set forth in G/SCM/38, Appendix 2 had applied for making these calculations. In accordance with that Decision, since then 
the Secretariat had circulated annual notes in document series G/SCM/110 updating the GNP per 
capita figures for the Members listed in Annex VII(b) based on that methodology. The most recent version, Addendum 10, had been circulated in 2013. The Secretariat would circulate updated 
calculations during the summer, when the necessary World Bank data became available.  
54.  The Committee took note of the Chairman's statement. 7  PERMANENT GROUP OF EXPERTS 
55.  The Chair informed Members that the term of office of Mr Gérard Depayre as a member of the 
Permanent Group of Experts (PGE) was expiring  and that the Committee should elect a new 
member to replace him.  
56.  The Chair recalled that over the past couple of years, the Committee had engaged in 
considerable discussion regarding the procedures for electing new members to the PGE when 
vacancies arose, with a view to ensuring full tran sparency in the process. The Chair's predecessor, 
after extensive consultations with Members, had announced an enhanced set of procedures which 
he had followed one year earlier, when there we re two nominations to the PGE to fill a single 
vacancy.  
57.  In anticipation of the vacancy to be crea ted by the expiry of Mr Depayre's term, and in 
keeping with those procedures, the Chair had called for nominations in a fax dated 
31 January 2014, setting a deadline of 28 February. That deadline had come and gone with no nominations, so on 10 March, he had sent a second fax with a new call for nominations, and a new deadline of 28 March. The second deadline also had come and gone with no nominations received. 
Then on 8 April he had sent a fax to all Members indicating that because no nominations had been G/SCM/M/89 
 
- 9 - 
 
  received by the deadlines established, he would not be in a position to put forward a name for 
election to the PGE. Two days later, on 10 Apri l, the delegation of Malaysia had submitted the 
nomination of Mr Subash Pillai. In keeping with  the agreed procedures, the Chair immediately had 
sent Mr Pillai's CV to all Members, by fax dated 11 April. The Chair had indicated in the cover note 
conveying the CV that because this was the on ly nomination submitted and both previous 
deadlines had passed, it was his intention to propose that the Committee elect Mr Pillai at this regular meeting of the Committee. He also had invited any delegations wishing to discuss this 
proposal with him to contact the Secretariat befo re Wednesday, 17 April. No Member had done so 
by that date.   
58.  The Committee elected Mr Subash Pillai to the Permanent Group of Experts.  8  ELIMINATION OF EXPORT SUBSIDIES FOR TEXTILES AND APPAREL BY INDIA 
PURSUANT TO ARTICLE 27 .5 OF THE SCM AGREEMENT - REQUEST FROM THE 
UNITED STATES 
59.  The US stated that on the basis of 2010 Secretariat calculations on the export 
competitiveness of Indian textile and apparel products, India had reached export competitiveness 
no later than 2007. Therefore, India had an obligation – since at least 2007 – to gradually phase out export subsidies provided to numerous products in this sector. Moreover, this year was the last 
year of the eight-year phase-out period – as of  1 January 2015, all export subsidies to India's 
textile sector should be terminated. Unfortunately, India had taken little or no concrete action toward phasing out its export subsidies, and had made various claims that certain programmes might have been terminated and that perhaps others were not specific subsidies. India also had 
argued that this Committee must 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.  
60.  The US had informed India that it would welcome further dialogue on these issues in the 
context of continued bilateral engagement. Unfortunately, the numerous US requests to meet 
bilaterally to date had yet to result in a substantive discussion. The US hoped to receive clarification and to resolve this issue through dialogue.  
61.  India recalled its previous intervention on this issue and expressed its commitment to meeting 
its obligations under the Agreement and to be constructively engaged in the Committee to develop 
clarity on the obligations in the Articles 27.5 an d 27.6 of the Agreement. This explained India's 
request for clarity and common understanding on the definition of 'product' and when the 8 year 
period of phasing out would begin. India disagreed th at it was raising the issue of interpretation of 
obligations in general, and instead considered it necessary to develop clarity, for implementation, on the definition of product, coverage of tariff lines and where and when export competitiveness 
was reached. As mentioned previously, many of the schemes being questioned were in the nature 
of remission or refund of duties on inputs us ed in exported goods and thus were not export 
subsidy schemes. Some of them also had been discontinued since October 2011. India was willing to engage in further discussions, was surprise d that the US had made numerous requests for 
meetings, and asked the US to keep the Permanen t Mission of India in Geneva aware of such 
requests in the future.  
62.  The Committee took note of the statements made.  
9  NON-NOTIFICATION BY INDIA OF ALLEGE D SUBSIDIES CONTAINED IN THE REQUEST 
BY THE UNITED STATES PURSUANT TO ARTICLE 25.10 OF THE SCM AGREEMENT (G/SCM/Q2/IND/20) – REQUEST BY THE UNITED STATES 
63.  The Chair recalled that the US request to India under Article 25.10, in document 
G/SCM/Q2/IND/20 dated 10 October 2011, had been  discussed in previous meetings of the 
Committee. 
64.  The US recalled that India's last "new and full" subsidy notification had covered only three 
export subsidy programmes – all administered by the central government. At the time India had G/SCM/M/89 
 
- 10 - 
 
  submitted that notification, the US and severa l other Members had expressed serious concerns 
about its timeliness and completeness. A subsidies notification that only included a small fraction of the universe of the programmes that should be notified pursuant to Article 25 should not be considered a full notification. Such an approach undermined the notification obligation under the 
SCM Agreement and raised serious systemic issues. In spring 2011, the US had made it clear to 
the Committee that if Members did not honour their subsidy notification obligation, it would have to consider other alternatives under the Agreement, such as the mechanism under Article 25.10. 
On 6 October 2011, the US had submitted a request to India under Article 25.10 which listed 
approximately 50 subsidy programmes at both the central and sub-central levels in India that had not been notified, and requested India to notify them promptly. Although not required under Article 25.10, as part of its submission the US had included copies of the underlying legal 
measures that established all 50 programmes. 
65.  The United States considered the subsidy programmes in its submission to be subject to 
notification because they appeared to provide specific subsidies within the meaning of the 
Agreement. Moreover, India had not notified any programmes pursuant to the US 2011 request, 
despite the requirement of Article 25.10 that any un-notified specific subsidy programme should 
be notified "promptly" to the Committee, although it appreciated that India subsequently had 
submitted a notification covering numerous fishery subsidy programmes. At previous meetings 
India had stated that it was consulting with state governments with a view to gathering the necessary information to notify certain programmes. The US requested a progress update on that process, and urged India to continue its effort s toward providing a subsidy notification that 
presented the full picture of its subsidy regime. 
66.  Canada recalled its previous interventions und er this item, expressed its concerns with the 
way India approached its transparency obligations,  and looked forward to India's responses to the 
written questions from the US. 
67.  The EU recalled its previous statements on  this item and urged India to comply with its 
obligations without delay, by filing complete notifi cations and replying to the questions of the US.  
68.  Australia recalled the importance of transp arency and acknowledged that India had provided a 
partial notification about sub-central fisheries su bsidies programmes. It would be of great benefit 
to all Members, however, if Australia could re view other Members' programmes in the same way 
that other Members could review Australia's programmes based on its notifications. Australia also 
noted that it was very difficult to explain to its industries this balance of rights and obligations 
when other Members consistently did not submit their subsidy notifications.  Australia urged India to provide complete and timely notifications and replies to the US requests for information. 
69.  India recalled for the record its previous inte rventions on the issue, where it had explained in 
detail how some of the programmes listed in the US request were already included in India's 
previous subsidy notifications. Further, many of th e schemes that were 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 sp ecific because they were general infrastructure, 
or they pertained to the service sector. With respect to the remaining programmes the Central Government was consulting with the state governments with a view to gathering the necessary 
information. As part of this process India had recently submitted to the WTO a new notification on 
fisheries subsidies for the period 2010-11 and 2011-12. With this new notification India had completed its fisheries notifications up to the period 2011-12. This was an indication of India's 
commitment and serious efforts towards meeting its obligations under the Agreement. Despite 
several constraints in compiling information at the state level India confirmed its commitment to update its notifications and to meet its obligations under the SCM Agreement. 
70.  The Committee took note of the statements made.  G/SCM/M/89 
 
- 11 - 
 
  10   NON-NOTIFICATION BY CHINA OF ALLEGED SUBSIDIES CONTAINED IN THE 
REQUEST BY THE UNITED STATES PURSUANT TO ARTICLE 25.10 OF THE SCM AGREEMENT (G/SCM/Q2/CHN/42) – REQUEST BY THE UNITED STATES 
71.  The Chair recalled that the US request to China under Article 25.10, in document 
G/SCM/Q2/CHN/42 dated 11 October 2011, had b een discussed at previous meetings of the 
Committee. 
72.  The US recalled that since becoming a WTO Member in 2001, China had submitted a mere 
two subsidy notifications, the first in 2006, covering the period 2001 to 2004, and the second in 
2011 covering the period 2005 to 2008. Those subsidy notifications did not include any subsidies administered by local or provincial governments in China, and also excluded many of the subsidies identified by the US and other WTO Members in various countervailing duty investigations. 
Further, those notifications not only suffered from significant under-reporting, but also from 
substantial over-reporting of programmes, such as  social-welfare schemes designed to alleviate 
poverty or promote employment, which artificially inflated the number of reported programmes. 
The US and other Members had repeatedly - in writing and in multiple Committee meetings - 
raised their serious concerns with respect to China's poor record of subsidy notification, by highlighting the previous points and other obvious gaps in China's reporting on its subsidies. It was 
in light of this background that on 6 October 2011 the US had pursued the procedure set out 
under Article 25.10. The resulting submission listed approximately 200 central and sub-central legal measures that China had not notified and requested that China promptly notify all specific subsidy programmes. For transparency, the US had included translated copies of the underlying 
legal measures that established each of the 200 measures, which largely covered the time period 
2004 to 2011.  
73.  Concerning its Article 25.10 request, a first key observation was the prevalence of sub-central 
programmes in China. Over half of the measures in the US submission were sub-central, 
supporting the repeated US point that sub-central programmes were critically important in China, as actual implementation of central government industrial subsidy policies were often, if not 
normally, the responsibility of the sub-central go vernments. The US on-going research and actions 
continued unequivocally to demonstrate the critical role played by sub-central governments in the implementation of subsidy policies in China. A subsidy notification from China that excluded sub-central programmes would not be a full notification. 
74.  Second, in the past the Committee had discussed the importance of five-year plans in China. 
China had argued that five-year plans and othe r industrial plans did not establish subsidy 
programmes in China. Whether or not this was true  in a narrow, technical sense, it nevertheless 
was clear that China's industrial plans established industrial support policies under which actual 
subsidy programmes were implemented. This process had unfolded with respect to the latest planning cycle. Following the issuance by the cent ral government of the twelfth five-year plan for 
strategic and emerging industries, for example, sub-central governments developed subsidy 
programmes implementing the policies of the central government.    
75.  Third, certain subsidy programmes in China were  only in effect for a short period, such as two 
years, and then replaced by other measures. The use of temporary measures underscored the 
importance of China notifying its subsidy programmes on a regular and timely basis, as if not, 
many programmes would have come and gone without being notified while in effect, resulting in little, if any, meaningful transparency, contrary to the intention of Article 25. 
76.  Fourth, the US insisted on a complete and timely notification of China's specific subsidy 
programmes. The 200 subsidies identified in the US submission included some that 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. Not providing a complete and 
timely notification of these subsidies fundamentally would upset the balance of rights and obligations of Members under the Subsidies Agreement. 
77.  Fifth, the fact that the US had been able to  compile and analyze the information included in its 
2011 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 twelve years of WTO Membership. China was now the G/SCM/M/89 
 
- 12 - 
 
  world's largest exporter and the world's second largest economy – claims of capacity constraints 
were difficult to accept.  
78.  The 200 subsidy measures in the 2011 submission  represented just a small fraction of the full 
range of subsidies in China provided at the sub-central and central government levels. It was 
almost two and a half years since the US counter-notification and China had yet to provide any 
written responses addressing the measures identified. Instead, China had argued in the Committee that the US had misunderstood its subsidy programmes by failing to understand the 
interrelationship between its notified progra mmes and those contained in the US counter-
notification. At the October 2013 meeting, China had provided some information in its oral response to the US intervention, identifying a handful of measures from the US counter-notification which China claimed already had been notified, or were outside the scope of its most 
recent notification. Although the US considered the information to be a helpful, initial response to 
the US counter-notification, it fell far short of what was required, as China had addressed fewer than 30 measures out of the 200 contained in the US submission. Notably, the measures China 
identified as having been notified were in China's second subsidy notification, which was submitted 
after the US counter-notification; China's responses failed to address the vast majority of the measures that the US had identified. 
79.  For these reasons, the US rejected China's claim that it had made an "irresponsible 
accusation" by failing to study the Chinese notifica tion seriously. Indeed, the provision by the US 
of translations of these measures demonstrated th e seriousness the US afforded to this exercise. 
China also had stated at the previous meeting that it might provide additional information 
following further verification and analysis. To date, China had provided no such information in 
writing and the US urged China to do so in due course.  
80.  The US acknowledged the difficulty of the ta sk that China, or any Member, might face when 
compiling subsidy programme information. However, this could not be an excuse for not 
submitting timely and complete notifications.  
81.  The US remained willing to take China up on its offers to meet bilaterally to discuss the 
specifics of the measures in the US counter-notif ication and noted its disappointment that the one 
bilateral discussion that had taken place was not productive. China had been unwilling or unable to provide requested details on the accounting of the alleged overlap, or specifics on the alleged errors or misunderstandings in the US 25.10 submission. When further bilateral meetings had 
been requested by the US, China had not responded positively. 
82.  For over two years China had taken only mi nimal action to address substantively the US 
Article 25.10 submission and it had neither notified the measures at issue nor, except for a few 
examples given in the last couple of Committee meetings, explained why the measures should not 
be notified. There seemed little doubt that the me asures identified in the US counter-notification 
should have been notified. The US urged China to abide by its subsidy notification obligations 
under the Agreement and was ready to work with China to take concrete steps toward a subsidy 
notification that presented the full picture of its subsidy regime in a clear and transparent manner. 
83.  Canada recalled its previous interventions on this item and expressed concern about how 
China approached its transparency obligations. Cana da emphasised the importance of notification 
for transparency, and urged all Members to make every effort to provide their subsidy notifications 
in a timely and complete manner. 
84.  Japan noted that all Members, including China,  benefited from a transparent multilateral trade 
system, which was undermined by the lack of notifications. Japan urged China to take further 
steps to promptly respond to the questions posed by the US. Regarding the Chinese notification, in the last special meeting of the Committee, China had mentioned that it was in the process of 
preparing the 2011 and 2013 new and full notifications, and was studying the possibility to include 
local programmes. Japan requested China to provide information on the current situation of its new notification.  
85.  The EU expressed concern over the continued lack of notification by China. While China had 
provided some clarifications in previous meetings, these clarifications were not a substitute for a 
complete and comprehensive notification. The EU recalled its previous interventions on this issue G/SCM/M/89 
 
- 13 - 
 
  and again urged China to commit the necessar y resources to prepare full and complete 
notifications of the subsidies administered at central and sub-central level for all of the outstanding reporting periods up to 2012 as required by the last exercise. 
86.  New Zealand echoed comments of other Members and recalled its own previous statements 
about the importance of subsidy notifications for transparency purposes. New Zealand also called 
on China, and in relation to the previous agenda item, India, to provide full and up-to-date notifications, which would include subsidies at the sub-central level. New Zealand appreciated the 
complexity of the exercise; however, it was an obligation with which all Members needed to 
comply.  
87.  Australia shared the concerns of previous sp eakers.  While acknowledging the difficulties and 
complexities that may arise in preparing subsidy notifications, Australia reiterated its concerns 
about the significant delays in the receipt of new and full notifications and what this meant to 
other Members seeking to understand the potential impact that programmes might have on their interests, which was the purpose of the notification process. Prolonged delays in submitting 
notifications exacerbated the difficulties arising from incomplete notifications. The longer a Member 
delayed a subsidy notification the more complex the exercise became, as Australia had experienced with changes in its automotive sector programmes. Australia urged China to provide a 
full and complete notification. 
88.  China stated that its capital-based colleagues were still working with relevant authorities, 
especially those in local governments on details of the policies and measures mentioned in the US Article 25.10 submission (G/SCM/Q2/CHN/42) and their relationship with the notification 
obligations under the SCM Agreement. For the present meeting, China could report certain 
clarifications regarding certain sub-central programmes, for which feedback or verifications had been furnished by some local governments. 
89.  Item 33 under "Sub-Central Government Measures" in the first part of the US submission 
concerning the green technology subsidies, was Plans for a New Round Technological Renovation of Ningxia Industry (2008-2012), which was issued on 23 December 2008. Regarding this item, 
information from relevant local authorities indicated that the provisions in this Plan were very 
general, and that no specific subsidy programme was included or specified in the Plan itself. Besides, the Plan was not of compulsory legal force unless the provisions therein were incorporated into specific implementing measures. Therefore this item did not constitute a subsidy 
programme as defined by the SCM Agreement.  
90.  On Item 34 under sub-central government measures in the section of Actionable Subsidy in 
the first part of G/SCM/Q2/CHN/42 concerning Green Technology Subsidy, feedback from local 
authorities indicated that the Shandong Province  Energy Fund was primarily provided to such 
entities as hotels and high schools using solar energy heating collection systems for demonstration purposes. It had been provided in the Interim Measures on Administration of Financial Support 
Fund for Solar Energy Heating Collection System in Shandong Province (LuCaiJian[2007]No.55), 
which was dated 17 October 2007, but was later abolished in 2009. Also, this was a consumption subsidy benefiting end-users for their purchase of solar energy heating collection systems. As China had stated in previous meetings of the Committee, China remained uncertain whether such 
programmes should be notified under the SCM Agreement because Members might have a 
different understanding of the notification obligation regarding a consumption subsidy.  
91.  For Item 6 under "sub-central government measures" in the section of prohibited subsidy in 
the fourth part of G/SCM/Q2/CHN/42 concerning "Other subsidies", this had been notified in 
Program 49 of China's subsidy notification of G/SCM/N/155 and 186/CHN. The SMEs International Market Exploration Fund mentioned in Item 6 was contributed by the Central Government and 
delivered through the Xiamen government, the latter acting as a payment agent. Therefore, it 
should not have been singled out and listed as a separate local subsidy programme.  
92.  Based on China's analysis to date, some programmes in the US submission seemed to lack 
official sources, as some local governments had indicated that the alleged programmes did not 
exist.  G/SCM/M/89 
 
- 14 - 
 
  93.  For example, Item 19 under sub-central government measures in the section of actionable 
subsidy in the fourth part concerning "Other Subsidies" was about exemption from Land Development Fees for Enterprises Located in Industrial Cluster Zones in the Zhongshan, Guangdong Province. However, no preferential po licy regarding land development fees had been 
implemented in the Zhongshan city, and no subs idy had been provided to newly-established 
industrial projects located in the Zhongshan industrial zone by the local government.  
94.  In the same section of the same part, Item 21 related to the Haicheng City VAT and Business 
Tax Incentives. The webpages given in the US submission were not official sources for policy 
information of the city, and the Haicheng City government had not issued such documents as might be relevant to the webpages and none of the enterprises in the Haichen economic development zone had been granted preferenti al treatment regarding VAT and Business Tax. 
95.  For item 26 under sub-central government measures in the section of actionable subsidy in 
the fourth part concerning "Other subsidies" in the US submission, the information provided seemed to be the same as in item 27 of the same section, and both seemed to concern the 
technological innovation fund provided by the Zhejiang province. The local government stated that 
there had been no fund at the local level for the alleged items.  
96.  In the same section of the same part, item 29 was about Tianjin Binhai New Area Science and 
Technology Infrastructure Construction Fund established in 2007. The local government had 
clarified that this fund had not been implemented in reality and there had been no subsequent regulations or rules issued for this fund.  
97.  Item 31 was Provision of Land for Less than Adequate Remuneration in Anhui Province, but 
the information of the item seemed to be identi cal to that listed in item 23 under sub-central 
government measures in the section of actionable subsidy in the fourth part concerning "Other subsidies" in the US submission. As far as verified by local government, there was no preferential 
policy regarding land price in Anhui Province and there was no land provided at a price lower than 
adequate remuneration.  
98.  Item 33 was preferential tax treatment in Jiangsu Yixing Economic Development Zone. The 
local authorities had clarified that the webpage given in the US submission was a testing page 
w h e n  t h e  w e b s i t e  w a s  e s t a b l i s h e d ,  w h i c h  s h o u l d  n o t  b e  r e g a r d e d  a s  a n  o f f i c i a l  s o u r c e  o f  government policy information. No preferential treatment specific to enterprises in Jiangsu Yixing Economic Development Zone had been granted by the local government. 
99.  Apart from these alleged programmes which lacked official sources for information, there also 
were programmes that had been abolished or repealed a long time earlier. For example, item 18 under the sub-central government measures in the section of actionable subsidy in the fourth part 
concerning "Other subsidies" was Implementing Provisions for Encouraging Foreign Investment in 
Guangdong Province. The regulation was issued in 1987 and abolished in 1998, even before China's accession to the WTO.  
100.  It was time-consuming and costly to collect and analyze the hundreds of programmes 
mentioned in the US submission, many of which were not well grounded. However, the work was 
still going on, and China hoped to be able to clarify more of the programmes in the future.  
101.  The US thanked China for the very detaile d intervention and the item-by-item approach 
which might be better discussed on a bilateral ba sis. The US acknowledged China's comment about 
the difficulty of educating local government officials and recalled that the same issue was relevant for the US where among the 50 States there was a need to explain many times what the roles 
were. However, all WTO Members had the same obligations which also applied to sub-central 
governments. China had joined the WTO in 2001 and had yet to provide a full and complete notification. The US urged China to provide the necessary resources to do so.  
102.  The Committee took note of the statements made.  G/SCM/M/89 
 
- 15 - 
 
  11  2012 REQUEST TO CHINA FROM THE UNITED STATES PURSUANT TO ARTICLE 25.8 
(G/SCM/Q2/CHN/46) 
103.  The Chair recalled that written questions from the US to China pursuant to Article 25.8, in 
document G/SCM/Q2/CHN/46 dated 29 October 2 012, had been discussed in previous meetings. 
104.  The US stated that in the fall of 2012 -- nearly one and half years earlier – it had submitted 
questions to China under Article 25.8 of the SCM Ag reement due to deep concerns with respect to 
the transparency of China's industrial subsidy regime, and the incompleteness of China's subsidy 
notifications. In the fall of 2011, the US had counter-notified nearly 200 Chinese measures and 
provided full, legal documentation for each measure. The vast majority of these measures remained un-notified. 
105.  In the light of China's failure to respond substantively to the US counter-notification, and the 
grossly deficient second subsidy notification submit ted by China, the US had felt compelled to seek 
information under Article 25.8 of the Agreement on additional, newer programmes, based on solid documentary evidence. 
106.  The sectors covered by the US questions included: iron and steel, fisheries, high-tech, 
textiles, non-ferrous metals, light industry, shipbuilding, semiconductors and civil aircraft. The types of support included: grants, loans, interest rebates, tax breaks, preferential land use and 
exemptions from land development fees. 
107.  China had an obligation under Article 25.9 to provide information regarding these 
programmes "as quickly as possible and in a co mprehensive manner." However, almost one and 
half years had passed since China received the US questions under Article 25.8. 
108.  The US reiterated its question to China, in its Article 25.8 submission, whether the legal 
measures at issue had been published in a single official journal and translated into a WTO language – both of which were requiremen ts under China's protocol of accession. 
109.   Finally, the United States respectfully asked China to update the Committee as to its efforts 
to provide answers to the Committee and as to  the date when the Committee could expect 
answers. 
110.  China stated that progress was being made, also for the two new and full notifications of 
2011 and 2013, in terms of information collection, verification and consolidation. China would try 
to accelerate its efforts to provide information to the Committee to improve understanding on this issue and was open to bilateral consultations with Members having a concern on this matter. 
111.  The Committee took note of the questions, answers and statements made. 
12  2014 REQUEST TO CHINA FROM THE UNITED STATES PURSUANT TO ARTICLE 25.8 
(G/SCM/Q2/CHN/50) 
112.  The US stated that in the face of the continued absence of a complete and timely subsidy 
notification, it had submitted on 15 April 2014 another set of Article 25.8 questions to China.  
113.  China was in the fourth year of its 12th fi ve year planning period, which ran from 2011 to 
2015. China's latest subsidy notification covered only up to 2008, and thus covered none of the 
more recent programmes in China's 12th five-year plan, which was now near its end. This fact, illustrated that many of China's programmes would have come and gone without any notification provided during the time they were in effect. The result was lack of meaningful transparency as to 
China's industrial subsidy policies, contrary to the intention of Article 25 of the SCM Agreement. 
114.  One of the key industrial policies of the curre nt five-year plan was the promotion of strategic 
emerging industries, which China's legal measures  had defined to include the following product 
areas: (1) new energy vehicles, (2) new materials, [a category that includes advanced textile 
products] (3) biotechnology, (4) high-end equi pment manufacturing, (5) new energy, (6) next 
generation information technology, and (7) energy  conservation and environmental protection.  G/SCM/M/89 
 
- 16 - 
 
  115.  In the absence of a timely subsidy notificati on covering this centrepi ece of China's 12th five-
year plan, the US had felt compelled to submit an other set of questions under Article 25.8 covering 
China's support regime for its strategic emerging industries. This policy had begun with measures announced in 2010 by China's State Council, the highest executive organ of State power. 
Subsequently, to carry out the decision of China's State Council, China's 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. 
116.  Of particular note was the important role played by sub-central governments in 
implementing China's 12th five-year plan industrial  policies. For example, the National 12th Five-
Year Plan for the Development of Strategic Emerging Industries stated: "Local governments shall, in light of the priorities in the efforts to deve lop strategic emerging industries, and according to 
local actual conditions, focus on developing distinctive emerging industries with competitive edges, 
and avoid random development and redundant deve lopment." This statement and the plethora of 
sub-central measures – including specific funding measures -- cited in the US Article 25.8 
questions, supported the point that a subsidy notification from China that excluded sub-central 
programmes was not a full notification. 
117.  Finally, while much of the language in the planning measures tended to be rather broad and 
general, many of the measures established or mentioned special purpose funds that would be used 
to support the strategic emerging industries. For example, measures from the National Development and Reform and Development Commission (NDRC) – the highest central government agency with broad economic planning powers  – explained that the Special Fund for the 
Development of Strategic Emerging Industries was a "centrally budgeted special fund to support 
key technology breakthroughs, product innovation and development, and major demonstration and regional clustering for strategic emerging in dustries." The same NDRC measure explained that 
the monies in the Special Fund for the Development of Strategic Emerging Industries would 
"generally be appropriated in the form of grants, equity venture capital funds, etc." 
118.  The US queried whether the legal 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, and reiterated that China now had an obligation to provide information regarding these programmes "as quickly as possible and in a comprehensive manner". 
119.  China replied that, in relation to the five-year plan of China, every WTO Member was entitled 
to have its own development plan, which was the blueprint of the direction that the Chinese people 
and the National Congress intended to take. This blueprint did not create concrete and specific obligations to sub-central governments to implement it. Moreover, the SCM Committee was not a 
forum to discuss the five-year plan as such in this manner. China doubted whether any of the 
measures illustrated by the US had the effect of im port substitution or local content, as these were 
prohibited subsidies which China would never implement. It invited the US to inform the legal 
team in Geneva or in the capital of any such prohibited subsidies. Progress for notifying measures 
for 2013 was under way. 
120.  The US stated that although each Member was entitled to have its own development plan, if 
specific subsidy programmes were included in th is plan, they must be notified. The US did not 
allege that there were any new import substitution programmes or any export subsidies. With 
respect to its latest Article 25.8 submission, it appeared that there was a new policy in China and available documentation appeared to demonstrate that there were certain subsidy programmes to 
support strategic emerging industries. The US ur ged China simply to notify those programmes as 
part of its obligations under the SCM Agreement. 
121.  The Committee took note of the Article 25.8 request and the statements. 
13  LOCAL CONTENT REQUIREMENT IN RENEWABLE ENERGY SECTOR SUBSIDY SCHEMES 
IN THE UNITED STATES - ITEM REQUESTED BY INDIA (G/SCM/Q2/USA/59) 
122.  The Chair noted that this item had been plac ed on the agenda at the request of India, which 
had circulated a request to the US pursuant to Article 25.8, contained in document 
G/SCM/Q2/USA/59 dated 15 April 2013. The week before, the US had submitted written replies to 
India's questions, found in document G/SCM/Q2/USA/61.  G/SCM/M/89 
 
- 17 - 
 
  123.  India stated that it was analysing the responses and reserved the right to raise follow up 
questions at the next meeting. 
124.  The Committee took note of the ques tions and answers and statements made.  
14  OTHER BUSINESS 
14.1  India Sugar Subsidies – Item requested by Australia 
125.  Australia registered its concerns as a major sugar producer and exporter over India’s new 
sugar subsidies and which had been raised bilaterally in capital.  Australia stated that on 
28 February 2014, the Sugar Development Fund (Amendment) Rules (Sugar Rules) had come into 
force in India. These Rules provided for a direct payment to sugar factories of 3300 rupees per tonne (approximately USD$55 per tonne or 15% of the current world sugar price), contingent on the export of raw or refined sugar. At th e 21 March 2014 meeting of the Committee on 
Agriculture, Australia and a number of other Members had raised questions and concerns 
regarding this subsidy, including with respect to its consistency with the Agreement on Agriculture.  
126.  Australia also was concerned regarding the consistency of this subsidy with India's 
obligations under the SCM Agreement. Clause 20B of the Sugar Rules set out the eligibility 
conditions for the subsidy and sub-paragraph (3) provided that:  
The sugar factories shall also be entitled for such incentive for raw sugar supplies 
against import invalidation of Advance Authorization License under Advance 
Authorization Scheme. Provided that such domestic supplies of raw sugar shall 
be refined and exported  within ninety days of the supply. 
127.  This appeared to make payment of the subsidy in respect of refined sugar conditional on the 
use of locally-sourced raw sugar. Australia sought clarification from India on the operation of 
Clause 20B(3) of the Sugar Rules, and as to whether any payments had been made under this new programme. 
128.  India noted Australia's concerns on this issue, which was already under discussion in the 
Committee on Agriculture. India was not convince d of the need to include discussions on this 
matter in this Committee, in the light of the ongoing discussions of the same matter in the 
Committee on Agriculture.  
129.  The Committee took note of the ques tions and answers and statements made.  
14.2  Sub-central subsidy programmes of the Un ited States – Item requested by China  
130.  China stated that it was concerned about some of the sub-central subsidy programmes of 
the US in the context of its industry promotion policy at the sub-central level. Due to capacity 
restraints, China had not been able to complete its questions concerning those programmes before the airgram convening the meeting had been circul ated. China would submit the questions before 
the next regular meeting and hoped to rece ive detailed written replies from the US. 
131.  The US welcomed any comments or questions from China on US sub-central programmes. 132.  The Committee took note of the statements made.  
14.3  Certain Possible Provincial Government Assistance to Port Hawkesbury Paper Mill 
in Canada - Item requested by the United States 
133.  The US noted its continued concern with respect to a provincial government assistance 
package given to a paper mill in Port Hawkesbury , Nova Scotia, Canada. As previously mentioned, 
this assistance had been provided following a bank ruptcy settlement that had resulted in the sale 
of the mill to a Canadian firm. In the press, the new owner had indicated that absent a certain level of government assistance, the mill was not economically viable and would not be re-opened. 
Negotiations between the Provincial Government an d the new owner resulted in what appeared to 
be a very generous assistance package that had le d to the re-opening of the mill and the start-up G/SCM/M/89 
 
- 18 - 
 
  of new production, sales and exports. Given the relatively small Canadian market for super 
calendered paper, US producers estimated that ov er 90 percent of the Port Hawkesbury production 
of super calendered paper was exported to the US market. The US believed that but for the government assistance package, the plant at Port Hawkesbury would not be in production. 
134.  The US understood that some of the provincial  government assistance appeared to consist of 
loans that might be forgiven if certain criteria were met. The US industry had expressed concern that such loan forgiveness might occur as early as fall 2014. The US therefore continued to urge 
t h e  G o v e r n m e n t  o f  C a n a d a  a n d  t h e  P r o v i n c i a l  G o v e r n m e n t  o f  N o v a  S c o t i a  t o  r e - c o n s i d e r  t h i s  
apparently very generous support package, and pa rticularly any forgiveness of loans extended to 
the mill, and to mitigate the negative consequences this package could have on US producers and others competing in the U.S. market.  
135.  Canada stated that it took very seriously the US concerns.  While the measure mentioned by 
the US was under the purview of the provincial government without any involvement by the federal government, the federal government had examined the programme and was confident that 
it was not inconsistent with Canada's WTO obligations. Canada and the provincial government had 
worked to address the concerns expressed and ha d provided responses to US questions in as 
much detail as possible while respecting the bu siness confidentiality of the information. The 
circumstances of the sale of the Port Hawkesbury Mill and its re-opening were a matter of public 
record in the context of Court-sanctioned creditor protection proceedings in which creditors of the US and other stakeholders figured prominently in the decision-making.  
136.  The Committee took note of the statements made.  
14.4  Japanese government support for de velopment of regional aircraft – Item 
requested by Brazil 
137.  Brazil re-raised the concerns it had raised previously with regard to the official support 
provided by Japan in connection with the Mitsubis hi Regional Jet Project. Before the Committee's 
October meeting, Brazil had presented to Japan a list containing five questions regarding the nature, source and terms of the official support provided by Japan. Brazil hoped that Japan could 
provide some information on the issue.  
138.  Japan stated that its aircraft policies were carried out in accordance with the WTO 
Agreements, including the SCM Agreement. Unde r Article 25.2 of the SCM Agreement, Members 
were obliged to notify any subsidy as defined in Article 1.1, which was specific within the meaning 
of Article 2. Japan had notified to the WTO's SCM Committee relevant subsidy information, 
including on the subsidy provided to the aircraft industry. Regarding Brazil's previous question No. 5, Japan was not aware of such a determination. 
139.  Brazil thanked Japan for the preliminary responses but believed that Japan had not provided 
to the Committee any information on the nature and conditions of the official support provided by Japan to the project. Brazil had tried to obtain re sponses to these questions bilaterally and in this 
Committee, with no success. Brazil requested that the same questions it had presented in the last 
Committee meeting be included in the minutes of the current meeting.
1 Japan had stated that its 
subsidies programmes fully complied with the disciplines of the SCM Agreement. However, without any information on the nature, source and terms of the official support, which Japan had 
repeatedly refused to provide, Brazil stated th at it could not analyze whether the programmes 
were compatible with the disciplines of the SCM Agreement. Brazil was open to exchange views 
with Japan on whether the Japanese subsidies programmes complied with the disciplines of the 
SCM Agreement. Brazil reserved its rights to co me back to this issue after further analyzing 
Japan's statement. All of Brazil's questions would be circulated through the Secretariat following the meeting.
2  
140.  China stated that it shared the concerns ra ised by Brazil and urged Japan to submit written 
responses to the questions of Brazil. 
                                               
1 The questions as posed in the previous meeting ca n be found in G/SCM/M/87,  at paragraphs 88-93. 
2 G/SCM/Q2/JPN/65. G/SCM/M/89 
 
- 19 - 
 
  141.  The Committee took note of the statements made.  
15  DATE OF NEXT REGULAR MEETING 142.  The Chair informed Members that the Committee would hold its next regular meeting during 
the week of 27 October 2014. The exact date woul d be confirmed in due course. That meeting 
would be immediately preceded by a special meeting for review of subsidy notifications.  
143.  The Committee so decided. 16  ELECTION OF OFFICERS 
144.  On the basis of the proposal received from the Chair of the Council for Trade in Goods, the 
Committee elected Mr Eduardo Minoru Chikusa of Brazil as Chair, by acclamation, to take effect at the end of the meeting. 
145.  On the basis of the Committee Chair's consultations, the Committee elected 
Mr Vegard Emaus of Norway as Vice-Chair, by acclamation, to take effect at the end of the 
meeting. 
146.  The Chair appreciated the work of his Vice -Chair, Mr Hamed El Etreby of Egypt, who had 
assisted him in all aspects of his work, and thanked the Secretariat.  
147.  The meeting was closed.  
__________