G/SCM/Q2/EU/31  
 
25 March 2014  
(14-1855)  Page: 1/2  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
REPLIES TO QUESTIONS FROM MEXICO1 REGARDING THE NEW AND FULL 
NOTIFICATION OF THE EUROPEAN UNION2 
The following communication, dated 24 March 2014, is being circulated at the request of the 
delegation of the European Union.  
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 Question 1  
Measures financed through the European  Agricultural Guarantee Fund: Page 8 
of document G/SCM/N/253/EU shows that export  subsidies have declined on the whole, 
except in the case of bovine meat, for which the level rose in 2012 compared with 2010. 
In this regard, the EU is requested to elaborate on the reasons why there is still a 
significant differential between EU  and international trade prices. 
 
It is also noteworthy that the subsidy for "e ggs and poultry" remained relatively stable 
during the period 2010-2012, and that sinc e 2011 it has been the largest, both in 
absolute terms and relative to the subsidie s for other products. In the light of the 
foregoing, would the EU please provide inform ation on the conditions which have caused 
the wide gap between EU and international trade prices to persist. 
 
Export subsidies (EAGF payments) - EUR million 
Products 2010 2011 2012  
Cereals  -0.4 0.1 0.2  
Sugar  9.8 1.5 0.0  
Rice  0.0 0.0 0.0  
Olive oil  0.0 0.0 0.0  
Fruit and vegetables  0.4 0.0 0.1  
Wine  0.7 0.3 0.1  
Dairy products  186.4 5.4 0.2  
Bovine meat  25.3 55.8 37.2  
Pigmeat  18.8 19.1 18.6  
Eggs and poultry  92.6 84.5 81.1  
Refunds on non-Annex I  51.3 12.7 9.1  
Total expenditure  385.1 179.4 146.7  
 
Reply 
 Export refunds applied by the EU in the past were  based on several factors, and could cover, in 
whole or in part, the difference between the worl d market price and EU market prices. Although 
the refund rate per unit has been continually redu ced, the total EU expenditure for export refunds 
depended on the price levels and volume of produc ts exported with refunds. Because of favourable 
                                               
1 G/SCM/Q2/EU/29.  
2 G/SCM/N/253/EU. G/SCM/Q2/EU/31 
 
- 2 - 
 
  market conditions, the EU exported more beef products in 2012 than in 2010 and therefore the 
total expenditure on export refunds was higher in 2012 even though the refund rate per unit was 
lower. Export refund rates across sectors differed depending on market situation and on economics 
of different sectors. The last export refund rate was set at zero in July 2013 and has since 
remained at that level. 
 Question 2 
 
Milk and dairy products:  With regard to the "Aid for skimmed milk and skimmed milk 
powder for use as feeding stuffs", as indi cated on page 17, the EU is requested to 
expand on the methodology and parameters used to establish the likelihood of a surplus 
creating a serious imbalance in the market. Fo r ease of reference, the relevant part of 
the EU notification has been included below:  
"When surpluses of milk products build up or are likely to create a serious 
imbalance in the market …". 
Reply 
 
Council Regulation (EC) No 1234/2007 provided that the Commission could decide to grant aid for skimmed milk and skimmed-milk powder intended fo r use as feeding stuffs in order to reduce the 
level of surpluses or to prevent market imbalance. However, the aid has not been granted in the 
past ten years. Moreover, following the recent reform of the CAP, the measure was abolished from 
1 January 2014.  
 
 
 
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