WORLD TRADE  
ORGANIZATION  RESTRICTED 
G/SCM/M/83 
10 January 2013 
 (13-0107) 
Committee on Subsidies 
and Countervailing Measures  
 
 
 
MINUTES OF THE REGULAR MEETING  
HELD ON 23 OCTOBER 2012 
 
Chair:  Mr Sam C.S. Hui (Hong Kong, China) 
  
1. The Committee on Subsidies and Countervailin g Measures ("Committee") held a regular 
meeting on 23 October 2012, convened in WTO/ AIR/4022.  The Committee adopted the following 
agenda: 
A. 
NATIONAL LEGISLATION – REVIEW OF NOTIFICATIO NS OF NEW OR AMENDED 
LEGISLATION OR REGULATIONS NOT PREVIOUSLY REVIEWED BY THE COMMITTEE  ................... 2  
1.  Australia (G/SCM/N/1/AUS/2/Suppl.2, Suppl.3 and Suppl.4) .............................................. 2  
2.  Brazil (G/SCM/N/1/BRA/2/Suppl.7) ....................................................................................... 2  
3.  Indonesia (G/SCM/N/1/IDN/3) ................................................................................................ 2  
4.  Nepal (G/SCM/N/1/NPL/1) ...................................................................................................... 2 
5.  Pakistan (G/SCM/N/1/PAK/2/Suppl.3) ................................................................................... 2  
6.  United States (G/SCM/N/1/USA/1/Suppl.10 and Suppl.11) .................................................. 2  
B.  SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS  ................................................... 2  
C.  NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS  ....................... 3  
D.  PERMANENT GROUP OF EXPERTS  ................................................................................................. 3  
E.  EXTENSION OF THE TRANSITION PERIOD UNDER ARTICLE 27.4  OF THE SCM 
AGREEMENT  .............................................................................................................................. .. 4 
F.  CONTINUATION OF DISCUSSIONS "ON WAYS TO IMPROVE THE TIMELINESS AND 
COMPLETENESS OF NOTIFICATIONS AND OTHER INFORMATION FLOWS ON TRADE 
MEASURES " UNDER THE SCM AGREEMENT  .................................................................................. 6  
G.  ELIMINATION OF EXPORT SUBSIDIES FOR TEX TILES AND APPAREL BY INDIA PURSUANT 
TO ARTICLE 27.5  OF THE SCM AGREEMENT - REQUEST FROM THE UNITED STATES AND 
TURKEY  .............................................................................................................................. ......... 8 
H.  NON-NOTIFICATION BY CHINA OF ALLEGED SU BSIDIES CONTAINED IN THE REQUEST 
BY THE UNITED STATES UNDER ARTICLE 25.10  OF THE SCM AGREEMENT - REQUEST 
FROM THE UNITED  STATES  - G/SCM/Q2/CHN/42 .......................................................................... 9  
I.  NON-NOTIFICATION BY INDIA OF ALLEGED SUBS IDIES CONTAINED IN THE REQUEST BY 
THE UNITED STATES UNDER ARTICLE 25.10  OF THE SCM AGREEMENT - REQUEST FROM 
THE UNITED  STATES - G/SCM/Q2/IND/20 ..................................................................................... 9  
J.  DATE OF NEXT REGULAR MEETING ............................................................................................ 10  
K.  OTHER BUSINESS  ....................................................................................................................... 10  
1.  Process for the Modification of Certai n Parts of the Secretariat Background 
Note Circulated in Document G/SCM/W/546/Rev.3 ........................................................... 10  G/SCM/M/83 
Page 2  
 
  2.  Certain Possible Government Assistance Provided to a Pulp and Paper Mill in 
Nova Scotia, Canada ........................................................................................................... .... 11 
L. 
ANNUAL REPORT  ....................................................................................................................... 11  
 
 A. 
NATIONAL LEGISLATION – REVIEW OF NOTIFICATIONS OF NEW OR AMENDED LEGISLATION OR 
REGULATIONS NOT PREVIOUSLY REVIEWED BY THE COMMITTEE  
1. Australia (G/SCM/N/1/AUS/2/Suppl.2, Suppl.3 and Suppl.4) 
2. Written questions and replies with respect to these notifications were available in the 
following documents:  
- Turkey's questions in G/SCM/Q1/AUS/9  and Corr.1 - Australia's replies in 
G/SCM/Q1/AUS/12; 
 - EU questions in G/SCM/Q1/AUS/10 - Australia's replies in G/SCM/Q1/AUS/13; 
 
- US questions in G/SCM/Q1/AUS/11 - Australia's replies in G/SCM/Q1/AUS/14. 
 
2. Brazil (G/SCM/N/1/BRA/2/Suppl.7) 
3. Written questions and replies with respect to this  notification were available in the following 
documents:  
- US questions in G/SCM/Q1/BRA/16 - Brazil's replies in G/SCM/Q1/BRA/18. 
 
3. Indonesia (G/SCM/N/1/IDN/3) 
4. Written questions and replies with respect to this  notification were available in the following 
documents:  
- US questions in G/SCM/Q1/IDN/14 and 15 - Indonesia was working on written replies 
and, once completed, would submit them. 
 
4. Nepal (G/SCM/N/1/NPL/1) 
5. There were no comments or questions regarding this notification. 
5. Pakistan (G/SCM/N/1/PAK/2/Suppl.3) 
6. There were no comments or questions regarding this notification. 
6. United States (G/SCM/N/1/USA/1/Suppl.10 and Suppl.11) 
7. There were no comments or questions regarding this notification. 
B. SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS  
8. Reports on countervailing duty actions taken in the first half of 2012 had been received from 
Australia; Brazil; Canada; European Union; Mexico; Pakistan; Peru and United States.  Members that 
had made a nil notification were listed in para graph 2 of document G/SCM/N/242/Add.1.  A large 
number of Members still had not submitted a report a nd thus failed to comply with this important  G/SCM/M/83 
 Page 3 
 
 
  notification requirement. After circulation of doc ument G/SCM/N/242/Add.1, Viet Nam, Venezuela 
and Nicaragua submitted a nil notification which woul d be reflected in the next addendum to this 
document.  The Chair recalled the one-time notif ication format adopted by the Committee in 
October 2009 and urged Members that qua lified to make such a notification.  
9. There were no comments or questions on any of the semi-annual reports in the agenda. 
10. The Chair recalled that in light of difficulties encountered due to late submission of semi-
annual reports and the need for timely informati on, he had initially advan ced the deadline for the 
submission of reports covering the first semester  of 2012 to 31 July from 31 August. Subsequently, 
aware that Members might not have had enough adva nce notice of the change and that some might 
need time to change their practice, he had enc ouraged Members to meet the 31 July deadline but 
requested that those that could not submit their report as soon as possible and in any event not later 
than 31 August.  While some Members had met the 31 July date, he had been approached by other 
Members regarding the challenges that an earlier deadline posed to their efforts to obtain the 
necessary inputs for their reports. In order to acco mmodate those concerns and at the same time 
maintain and build on the improvement achieved, th e future deadline for the submission of reports 
covering the period July–December would be 15 Fe bruary, but Members would be encouraged to 
submit their reports by 31 January if possible. In the case of the reporting period January–June, the 
new deadline would be 15 August, but Members woul d be encouraged to submit their reports by 
31 July if possible. These deadlines should suffice to  prepare the reports, if Members adapted their 
internal systems.  The Chair noted  that his successor might wish to revisit this issue with a possible 
view to further improving the system. 
11. The Committee took note of the semi-annual reports. 
C. NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS  
12. Since the last regular meeting of the Committee in April 2012, notifications under 
Article 25.11 of the SCM Agreement ("ASCM") of preliminary and final countervailing duty actions 
had been received from Australia, Canada, Chin a, the EU, Mexico, Peru and the US. These 
notifications were listed in doc uments G/SCM/N/240-241 and 244-247. 
13. There were no comments or questions with respect to these notifications. 
D. PERMANENT GROUP OF EXPERTS  
14. The Chair recalled that at the Committee's re gular meeting in October 2011 Australia had 
raised concerns regarding the process of electi on of PGE members and had proposed to undertake 
informal consultations to discuss this matter.  Some  other delegations had supported this proposal and 
expressed readiness to engage in such consultations.  The previous Chair had noted that there seemed 
to be a need to discuss certain systemic issues on th is issue and had urged the new Chair to start such 
the proposed consultations after the meeting. 
15. Against this background, the Chair had calle d for open-ended informal consultations to 
discuss the process of election of members to the PGE which had been held on 23 July 2012.  The 
Chair informed Members of the discussions th at had taken place during these consultations. 
16. At the informal consultations, Australia ha d taken the floor first; had pointed to the 
difficulties faced in the past with respect to the election of PGE members and had proposed to make 
modest improvements to the current system.  More specifically, Australia had identified two issues: transparency of the election process and criteria th at had to be followed in identifying the suitable 
candidates.  On transparency, Australia had proposed that more advance notice be given on the G/SCM/M/83 
Page 4  
 
  vacancy situation; that the timeline for nomination a nd informal consultations be set out in advance; 
that CVs of candidates be distributed directly to Me mbers; and that an informal meeting be organized 
before the Chair finalized his/her nomination. Howe ver, Australia had also stated that the Chair 
should maintain his/her discretion and that the process proposed by Australia was not to replace the bilateral consultations that the Chair held with inte rested Members. On criteria, Australia had pointed 
out that Article 24.3 of the SCM Agreement was relatively clear on the re quired qualifications for 
PGE membership and that it provided  a sufficient basis to reach a d ecision on the proposed names for 
a vacant position. 
17. Many Members had supported the transparency aspect of Australia's proposal, while some 
had said that they needed to consult their Capitals .  Many had also shared the point of view that 
Article 24.3 of the SCM Agreement contained th e required qualifications for PGE membership.  
Some Members had expressed the view that in additi on to those qualifications, the composition of the 
PGE also had to represent the whole WTO membersh ip, but there had been no specific suggestions 
raised on how this had to be done. 
18. The Chair had told Members at the end of the c onsultations that many useful suggestions had 
been made.  He had sensed that there was a good am ount of support on the transparency aspects of the 
Australia proposal, therefore he had also indicated that he would like to take into consideration the 
proposed procedural changes for the coming round of  election process, subject to any further views 
that might in future be presented by Members. 
19. Australia expressed appreciation for the informal c onsultations held in July.  Australia's intent 
has always been to clarify the process for election to the PGE.  Australia was encouraged by the 
Chair's indication that he intended to incorporate in the lead up to the next PGE election the 
suggestions made by Australia and other Members.  Australia found this to be a very useful exercise. 
20. Argentina was consulting with its Capital on this issue and offered some comments of a 
general nature on a preliminary basis.  First, the election process had to comply with the prerequisites 
of ASCM Article 24.3.  Thus, PGE members ha d to be independent and possess the required 
knowledge.  Second, the PGE had to represent the WTO membership in a balanced way.  Third, there 
had to be an effective rotation of PGE membersh ip.  Transparency was a central element of the 
election process. 
21. India raised two primary issues: transparency and criteria for election.  On transparency, India 
agreed that there should be more transparency in the process.  On election criteria, ASCM Article 24.3 
stated that the threshold had to be independence and knowledge.  So far there had not been an issue 
about a PGE candidate not having the required qualif ications.  This was an election process, not 
selection, and therefore Members had to refrain fr om being too prescriptive and rigid.  Although it 
was unfortunate that there had many times been va cancies, it was important for the PGE's credibility 
that it reflect the collective will of and be repr esentative of the whole membership, even if this 
sometimes led to delays.   
22. Brazil stated that transparency was an essential element of the election process and that it was 
open to co-operate on this issue. 
E. EXTENSION OF THE TRANSITION PERIOD UNDER ARTICLE 27.4  OF THE SCM AGREEMENT  
23. The Committee had received annual updating notifi cations and requests for the extension of 
the transition period for the elimination of export su bsidies from all of the 19 Members that benefited 
from extensions in accordance with the General C ouncil decision.  The Chair noted a Secretariat 
paper that had been circulated as JOB/SCM/3, date d 16 October 2012, which listed the programmes in 
respect of which the Committee had agreed in 2011 to  continue the extension of the transition period  G/SCM/M/83 
 Page 5 
 
 
  until 31 December 2012 and the updating notifications relating to those programmes that had been 
submitted by the Members in question as of 16 October.   The Secretariat paper also contained a model 
text for the decisions to be taken by the Committee regarding the extension of the transition period for 
calendar year 2013. 
1. Review of compliance with transparency and standstill obligations  
24. The notifications received had been circulated in the G/SCM/N/243/xx document series.  The 
notifications and questions and answers re viewed by the Committee were as follows: Antigua and 
Barbuda  (G/SCM/N/243/ATG); Barbados (G/SCM/N/243/BRB); Belize (G/SCM/N/243/BLZ); 
Costa Rica (G/SCM/N/243/CRI; questions from Colombia in G/SCM/Q3/CRI/10; replies from 
Costa Rica in G/SCM/Q3/CRI/11); Dominica (G/SCM/N/243/DMA); Dominican Republic 
(G/SCM/N/243/DOM; Colombia's questions in G/ SCM/Q3/DOM/17; Dominican Republic's replies 
in G/SCM/Q3/DOM/18); El Salvador (G/SCM/N/243/SLV;  Colombia's questions in 
G/SCM/Q3/SLV/13; El Salvador's replies in G/SCM/Q3/SLV/14); Fiji (G/SCM/N/243/FJI); 
Grenada (G/SCM/N/243/GRD); Guatemala (G/SCM/N/243/GTM; Colombia's questions in 
G/SCM/Q3/GTM/15; Guatemala's replies in G/SCM/Q3/GTM/16); Jamaica (G/SCM/N/243/JAM); 
Jordan (G/SCM/N/243/JOR); Mauritius (G/SCM/N/243/MUS); Panama (G/SCM/N/243/PAN; 
Colombia's questions in G/SCM/Q3/PAN/18;  Panama's replies in G/SCM/Q3/PAN/19); Papua New 
Guinea (G/SCM/N/243/PNG); Saint Kitts and Nevis (G/SCM/N/243/KNA); Saint Lucia 
(G/SCM/N/243/LCA); Saint Vincent and the Grenadines (G/SCM/N/243/VCT); and Uruguay 
(G/SCM/N/243/URY; Colombia's questions in G/SCM/Q3/URY/14; Uruguay's replies in G/SCM/Q3/URY/15). 
25. With respect to the tax exemption progra mme maintained by the Dominican Republic, 
Colombia referred to the Dominican Republic's repl ies to Colombia's ques tions and asked why the 
Dominican Republic considered that certain exemption programmes did not constitute export 
subsidies.  The Dominican Republic stated that th e question had been sent to Capital and as soon as it 
was received the reply would be sent to the Secret ariat.  With respect to Uruguay's notification, 
Colombia stated that it looked forward to the inform ation to be provided by Uruguay with respect to 
the dismantling of the programme.  There were no qu estions or comments with respect to the other 
notifications. 
26. Colombia expressed concern that some bene ficiary Members had submitted incomplete 
information in their annual updating notifications on transparency and standstill, and that some 
beneficiaries had not begun the process of eliminating export subsidies under ASCM Article 27.4.  
Colombia raised four specific concerns.  First, so me countries had not yet notified the beneficiaries.  
Second, some countries had not yet submitted a specifi c action plan that would lead to the dismantling 
of these programmes.  Third, some countries had not  yet adopted the necessary legal instruments for 
the elimination of the relevant export subsidy progr ammes.  This was worriso me given that in some 
cases a legislative amendment would be required.  Fourth, there were countries whose notifications 
had not provided statistical information regardi ng the subsidies, their amounts and the beneficiary 
companies.  In the absence of such information, it was difficult to assess the impact of the relevant 
subsidies.  Colombia stated that countries that f ace difficulty in gatheri ng the necessary statistical 
information had to check alternative sources of information.  Failure to do this would create 
discrimination against countries at similar levels of development and which had to dismantle similar 
types of incentives because this would affect their level of competitiveness.  The products that 
benefitted from subsidy programmes that were subj ect to an extension were competing in the 
international markets under conditio ns that were more favourable than those that applied to 
Colombia's products.  Thus, it was important to subm it timely and complete notifications explaining 
the scope, coverage and intensity of  the benefits provided under the relevant programmes.  Colombia 
urged beneficiary Members to strengthen their acti on plans and to implement them in such a manner 
that would allow them to eliminate the programmes by the end of 2015. G/SCM/M/83 
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  27. Guatemala stated that it had a different interp retation of the General Council decision and this 
had been indicated in Guatemala's replies to Colombia's questions. 
28. The Committee completed its review and agreed to continue to extend the transition period 
for calendar year 2013 in respect of the programmes th at benefited from such an extension.  It also 
agreed that based on the text of the model decisi on in the job document the Secretariat would prepare 
and circulate individual decisions pertaining to each  of the programmes for which extension requests 
had been approved by the Committee.  
F. CONTINUATION OF DISCUSSIONS "ON WAYS TO IMPROVE THE TIMELINESS AND 
COMPLETENESS OF NOTIFICATIONS AND OTHE R INFORMATION FLOWS ON TRADE MEASURES " 
UNDER THE SCM AGREEMENT  
29. The Chair noted that at the last regular m eeting of the Committee, several Members had 
indicated their willingness to continue discussions on ways to improve timeliness and completeness of 
notification obligations under the ASCM.  The notifi cation of subsidies was by far the most important 
notification obligation found in the ASCM and th e Committee's discussions had naturally focussed on 
this obligation.  The low level of compliance with this important notificati on obligation continued to 
undermine the transparency function of this Committ ee.  As of the date of the meeting, 73 Members 
had not yet made their 2011 new and full subsidy notification.  Further, a good share of these Members had not observed their previous subsidy not ification obligations either.  The 2011 new and 
full notifications were due on 30  June 2011, yet the Committee had received a 2011 notification only 
from 53 Members.  This constituted an important problem that this Committee should look into. 
30. The Chair read out the list of 73 Members that had not yet made their 2011 notification and 
invited them to explain for their failure to notify their subsidies: Angola; Bangladesh; Benin; Bolivia; 
Botswana; Brunei Darussalam; Burundi; Cambodia;  Cameroon; Cape Verde; Central African 
Republic; Chad; China; Congo; Côte d'Ivoire; De mocratic Republic of Congo; Djibouti; Dominica; 
Egypt; Fiji; Gabon; the Gambia; Ghana; Guinea-Bis sau; Republic of Guinea; Guyana; Haiti; Iceland; 
Indonesia; Kenya; Kuwait; Kyrgyz Republic; L esotho, Madagascar; Malawi; Maldives; Mali; 
Mauritania; Moldova; Mongolia; Morocco; Mozambique ; Myanmar; Namibia; Nepal; Niger; Nigeria; 
Oman; Pakistan; Panama; Papua New Guinea; Paragua y; Peru; Philippines; Rwanda; Saint Kitts and 
Nevis; Saint Vincent and the Grenadines; Senegal; Sierra Leone; Solomon Is lands; South Africa; Sri 
Lanka; Suriname; Tanzania; Thailand; Togo; Trinid ad and Tobago; Tunisia; Uganda; United Arab 
Emirates; Venezuela; Viet Nam; and Zimbabwe. 
31. South Africa stated that it would convey this to Capital. 
32. The Committee turned to the proposal by the United States regarding the treatment of 
questions and answers under Articles 25.8 and 25.9 of the SCM Agreement, circulated in document 
G/SCM/W/557 dated 25 April 2012. 
33. China stated that transparency was an important  element of the ASCM and that therefore it 
understood the rationale behind the US proposal.  Ch ina provided clarifications with respect to 
questions it had received under Article 25.8, circul ated in documents G/SCM/Q2/CHN/4 and 9.  
When these questions had been received, China w as in the process of collecting information for 
preparation for its new and full subsidy notification.  China put efforts into the preparation of its first 
new and subsidy notification.  Because of the h eavy workload involved at the time, China did not 
divert its efforts for its first subs idy notification.  That notificati on reflected China's views about the 
questions circulated in the two mentioned doc uments. Further, questions circulated in 
G/SCM/Q2/CHN/4 had also been discussed in the context of China's transitional reviews by the 
Committee in 2002 and 2003 and China had replied to  these questions in this context.  There was 
duplication of work in a Member's preparation for it s subsidy notification and for replies to questions  G/SCM/M/83 
 Page 7 
 
 
  put under Article 25.8.  In view of the constraint s that Members had in terms of their transparency 
obligations under the ASCM, this had to be taken fully into accoun t in the Committee's discussions on 
this issue.  With regard to the US proposal, Ch ina stated that there was no obligation in ASCM 
Article 25.9 to provide written replies to questions  presented under Article 25.8.  China was studying 
the specific elements of the US proposal. 
34. India agreed that transparency was an impor tant component of the SCM Agreement and was 
vital to the smooth functioning of the multilateral tr ading system.  However, as India had commented 
at the October 2011 meeting in respect of the previous  version of the US paper, transparency imposed 
costs and thus the practicability of imposing enhan ced obligations had to be carefully examined.  
ASCM Articles 25.8 and 25.9 reflected the careful  balance resulting from negotiations.  The US 
proposal disturbed that balance.  India noted the in clusion of the word "written" in Article 25.8 and 
omission of the same in Article 25.9.  For India,  Articles 25.8 and 25.9 were sufficiently clear.  In 
terms of keeping un-answered Ar ticle 25.8 questions on the Committee's agenda, India was not sure 
about the rationale behind the US proposal and did no t support it.  For India, the right place for such 
discussions would be the Negotiating Group on Rules, not the SCM Committee. 
35. South Africa stated that the information prov ided in footnote 2 to the US proposal was 
inaccurate.  South Africa had replied to Me xico's questions circulated in document 
G/SCM/Q2/ZAF/10 dated 30.10.2008.  Such replies had been circulated in document G/SCM/Q2/ZAF/11 dated 20.10.2009.  With respect to the text of the US proposal, the Committee 
should be careful not to change the rules in th e Committee which fall within the domain of the 
Negotiating Group on Rules.  With respect to au tomatically keeping Article 25.8 questions on the 
agenda, South Africa agreed with India.  Furt her, deciding whether the relevant Member had 
appropriately replied to the question could lead to a subjective evaluation.  With regard to practicality 
and pragmatism, South Africa also questioned the need for strict timelines for compliance because doing so would defeat the purpose of obtaining the most comprehensive and detailed information 
possible on programmes that were notifiable. 
36. Turkey in general supported the US proposal.  Th is would be an important step to increase 
transparency.  Despite an explicit requirement to provide replies, many questions under Article 25.8 
remained unanswered or had only been answered ma ny years following the submission of questions.  
So it could be useful to have a scheme requiring the submission of written answers within a certain 
timeline.  Whether the Committee wa s the right place to have these discussions had to be considered.   
37. Australia also generally supported the US pr oposal.  Australia had put questions under 
Article 25.8 but had been waiting to receive a repl y for a long time.  Australia stated that the 
Committee could discuss improvements to procedures on notifications.  Members submitted questions 
under article 25.8 because there was no notification at a ll.  Australia was frustrated that no replies had 
been given to its questions. 
38. Canada, Japan and the EU expressed support for the US proposal. 
39. The US noted that the Committee had already adopted procedures on subsidy notifications 
without there being any specific reference in SCM on  a question and answer mechanism in this regard 
whereas Articles 25.8 and 9 clearly mentioned questions and answers.  Thus, it was reasonable to set out a standard procedure whereby Members would be required to reply in writing and in a particular 
time-frame to questions presented under Article 25.8.  Current Committee practice was that non-
answered questions on subsidy notifications automatica lly remained in the agenda but that was not the 
case with respect to questions under Article 25.8.  Such questions also had to be automatically 
included in the agenda.  With respect to the argumen t on the duplication of efforts, the US and other 
Members did not resort to Article 25.8 until there wa s significant frustration and such resorts were not G/SCM/M/83 
Page 8  
 
  frivolous.  The US also pointed to the possibilit y of reinvigorating the Working Group on Subsidy 
Notifications where these issues might be discussed. 
40. The Chair noted the interest in continuing di scussions on the US paper and stated that the 
Committee would continue its discussions at the next meeting.   
41. With respect to further ways to improve the timeliness and completeness of notifications and 
other information flows on trade measures in the context of the SCM Agreement, New Zealand noted 
the Rio+20 Declaration requiring states to notify their fisheries subsidies to the WTO and stated that 
doing so would also improve the monitoring of such measures.  Argentina, Norway, Chile and the US 
supported New Zealand. 
42. China stated that Annex B in document G/SCM/W/546/Rev.3 had to indicate that China's 
2003 subsidy notification had been made; that Annex D should not in clude questions submitted by the 
EU to China through document G/SCM/Q2/CHN/32 sin ce those questions had been submitted in the 
context of the transitional review mechanism under China's Protocol of Accession to the WTO; that 
China had received questions under SCM 25. 8 through document G/SCM/Q2/CHN/4, not 
G/SCM/Q2/CHN/19; and that the latter should therefor e not appear in Annex C of this document.  
China's replies to questions in G/SCM/Q2/C HN/19 had been circulated through document 
G/SCM/Q2/CHN/28.  
43. The Chair stated that at its next regular m eeting the Committee would continue discussions on 
the timeliness and completeness of notifications. 
G. ELIMINATION OF EXPORT SUBSIDIES FOR TEXTI LES AND APPAREL BY INDIA PURSUANT TO 
ARTICLE 27.5  OF THE SCM AGREEMENT - REQUEST FROM THE UNITED STATES AND TURKEY  
44. The US expressed concern that after the computat ions by the Secretariat which showed that 
India had become export competitive in textiles and apparel, India had failed to phase out its export 
subsidies in this particular sector and had al so implemented new export programmes.  The US 
disagreed with India's view that the Committee had to resolve all legal issues before India had to 
phase out its export subsidies.  The US looked forward to meeting bilaterally with India to discuss this 
issue. 
45. Turkey agreed with the US concerns.  For Turk ey, this was more than a systemic issue.  
Turkey's commercial interests were affected by India's subsidy programmes since Turkish textile 
exporters competed with Indians.  Indian textile exports to Turkey had also increased significantly 
since 2007. 
46. India referred to its statements made in previ ous Committee meetings on this issue.  India was 
committed to its treaty obligations, however there wa s need to clarify the definition of "product" and 
when the 8-year phase out period w ould begin.  This was a systemic issue.  ASCM Articles 27.5 and 
27.6 had no provisions on standstill.   Many of the schemes being questioned were in the nature of 
remission or refund of duties on inputs used in e xported goods, and therefore were not export subsidy 
schemes.  India did not raise the issue of interpreta tion of obligations in general.  This was a case 
where admittedly there was a lack of clarity.  India was ready to engage in bilateral talks with the US 
on this matter.  G/SCM/M/83 
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  H. NON-NOTIFICATION BY CHINA OF ALLEGED SUBSID IES CONTAINED IN THE REQUEST BY THE 
UNITED STATES UNDER ARTICLE 25.10  OF THE SCM AGREEMENT - REQUEST FROM THE 
UNITED  STATES  - G/SCM/Q2/CHN/42 
47. The US recalled that it had submitted a requ est under SCM 25.10 listing approximately 200 
subsidy programmes that China had not notified a nd requested that China promptly notify such 
programmes.  Information regarding the subsidies notified by the US was publicly available and had 
been obtained by the US in WTO dispute settlement proceedings; an investigation into China's green 
technology programmes; and several countervailing dut y investigations.  The vast majority of the 
programmes identified in the US request had not app eared in China's subsidy notification made after 
the US request.  A year after the US request, China had yet to take action.  The US made five specific 
observations regarding the subsidy programmes in it s Article 25.10 notification.  First, sub-central 
governments in China played a critical role in the administration of subsidy programmes and therefore 
a notification from China which did not include subs idies administered by sub-central governmental 
authorities could not be seen as a full notification.   Second, the five-year plans played an important role in the administration of subsidy programmes in China.  Third, China kept its subsidy programmes 
in place for short periods and replaced them by new measures.  This showed the importance of 
receiving timely information regarding China's s ubsidy programmes.  Fourth, a number of the 
subsidies included in the US request were prohi bited or actionable subsidies that harmed US 
industries.  Fifth, the fact that the US had been able to collect and analyse all of the information 
included in its Article 25.10 request cast doubts on Ch ina's claim that it lacked  the ability to collect 
and report the same information.  The US also gave  specific examples of China's subsidies and stated 
that they were subsidies that had to be notifie d.  The US urged China to abide fully with its 
notification obligations under the SCM. 
48. The EU, Canada and Japan expressed concern over China's failure to make notifications and 
follow on the Article 25.10 request made by the US .  Turkey expressed the same concerns; noted the 
importance of notifying subsidies provided by su b-central authorities and recalled that ASCM 
Article 25.2 required that any subsid y which is specific be notified. 
49. China referred to its statements made in the pr evious two meetings on this matter.  China was 
in contact with the US on this issue and would keep the Committee inform ed of the progress made. 
I. NON-NOTIFICATION BY INDIA OF ALLEGED SUBSID IES CONTAINED IN THE REQUEST BY THE 
UNITED STATES UNDER ARTICLE 25.10  OF THE SCM AGREEMENT - REQUEST FROM THE 
UNITED  STATES - G/SCM/Q2/IND/20 
50. The US noted that India's most recent subsid y notification covered only three export subsidy 
programmes, all administered by the central government, and did not include any programmes 
administered at sub-central level.  The US Article 25.10 request made in October 2011 listed 
approximately 50 subsidy programmes at both central and sub-central levels in India.  These were 
programmes identified in various countervailing duty investigations conducted by the US and other 
WTO Members.   None of these programmes had been  notified by India despite the requirement under 
Article 25.10 that an unnoticed subsidy progra mme be notified promptly to the Committee. 
51. Canada, Japan, Turkey and the EU urged Indi a to make timely subsidy notifications. 
52. India stated that as previously explained, it had included some programmes identified in the 
US request in its earlier subsidy notifications, th at many of the programmes identified in the US 
request were refunds or exemption schemes that di d not require notification, that schemes such as 
software technology park of India pertained to the services sector and thus also were not subject to 
notification requirements, and that programmes su ch as Industrial Infrastructure Upgrade Scheme, 
Steel Development Fund, Wagon Investment Scheme  and many state programmes were not covered G/SCM/M/83 
Page 10  
 
  by the notification obligation.  With respect to  the remaining programmes, the central government 
was in consultation with state governments with a view to gathering the necessary information.  As 
part of that process, India had recently notified its fisheries subsidies which included programmes provided at sub-central level.  India had resource constraints but was committed to meeting its ASCM 
obligations. 
J. 
DATE OF NEXT REGULAR MEETING  
53. The Chair stated that the Committee would hold its next regular meeting in the week of 
22 April 2013.  As from the next Committee meeting, annotated draft agendas would not be sent to 
Members by fax, but Members would be request ed to download them from "Documents for 
Meetings" on the WTO website. An email Contact List for the Rules Committees would be 
maintained and annotated agendas would be sent by email to those delegations that had provided the 
Secretariat with an up-to-date email address. 
K. OTHER BUSINESS  
1. Process for the Modification of Certain Pa rts of the Secretariat Background Note 
Circulated in Document G/SCM/W/546/Rev.3 
54. India raised concern over the process for the modification of certain parts of document 
G/SCM/W/546/Rev.3.  At the Committee's May 2011 meeting, a Member had wanted some changes 
to the previous version of this document whereas ot her Members stated that the then current version 
of the document was alright.  Some Members stated  that they would discuss this matter with their 
Capitals.  No decision had been made at that mee ting.  However, some of the requested changes had 
been made in Rev.3.  India was concerned that at the Committee's April 2012 meeting the previous 
Chair had not informed the Committee that certain ch anges had been made.  In India's view there was 
no basis for these changes.  India ask ed that these concerns be taken in to consideration in the future 
revisions of this document. 
55. China agreed with India's concerns.  China's concern was with the way in which changes had 
been made to this document, not the changes them selves.  China first raised a due process concern 
over the fact that changes had been made to this  document without consensus in the Committee.  
Second, China referred to lack of transparency  because Members had not been informed of the 
changes made. 
56. South Africa supported India's and China's statements.  It stated that the way this document 
had been modified had undermined the principles of  transparency and inclusiveness.  Further changes 
had to be made after discussions by Members. 
57. Brazil expressed a systemic concern over the cha nges made to certain parts of the document.  
Transparency and consensus-b ased decision-making were essentia l to the Committee's work.  
58. The US noted that this was a background note prepared by the Secretariat under its own 
responsibility and that it was very useful.  If everythi ng in this document was subject to consensus it 
would not be possible to produce such documents.  The US was not satisfied with the changes made 
to Annex C to this document and was not  sure why these changes had been made. 
59. Japan noted that the change made in Rev.3 was different from the change requested by a 
Member, and consequently, it was different from the change about which some Members raised 
concerns.  G/SCM/M/83 
 Page 11 
 
 
  60. The Chair stated that since this item had b een raised under other business, Members might 
wish to take some time to reflect on it in order to engage more fully in discussions.  Document 
G/SCM/W/546 had emerged for the first time in 2009 as a job document prepared at the instruction of the then-Chair.  It had then been updated as a b ackground note prepared under the Secretariat's own 
responsibility, without prejudice to the positions of Members.  The Chair welcomed views from 
members on how the Committee could improve this doc ument both in terms of substance, which was 
a factual issue, and in terms of form, which w as indeed a reader-friend liness issue.  The Chair 
intended to hold informal consulta tions, bilateral and/or in the form of an informal Committee 
meeting, to provide Members with another oppor tunity to exchange views on this issue. 
2. Certain Possible Government Assistan ce Provided to a Pulp and Paper Mill in 
Nova Scotia, Canada 
61. The US raised concern the provincial government  of Nova Scotia in Canada intended to 
provide significant government assistance to Port  Hawkesbury Paper, a manufacturer of super-
calendared paper located in Nova Scotia, because of the commercial impact that such assistance 
would have on the depressed market for printing pape r in North America.  This Mill had been shut 
down by its previous owner and was being rest arted under new ownership with the help of a 
substantial provincial government assistance package.   Many of the measures taken by the provincial 
government might constitute actionable subsidies.  Th e assistance package was particularly disturbing 
because it would keep uneconomic capacity on line .  The US invited Canada to provide details 
regarding each of the elements of the assistance package that had been or would be provided to this 
company. 
62. The EU shared the US concerns. 
63. Canada stated that it was working with the pr ovincial government on replies to the questions 
that the US had sent regarding this issue and exp ected to provide such replies in November 2012.  
Canada was ready to have further dialogue  on this matter with interested Members. 
L. ANNUAL REPORT  
64. The Chair stated that, as had been done for this meeting, henceforth draft annual reports of the 
Committee would be posted on the WTO website pr ior to the meeting at which they would be 
proposed for adoption, and would not be distributed in paper. 
65. The Committee adopted its Annual Report (2012) to the Council for Trade in Goods.1 
66. The Chair stated that following the meeti ng, Ms Clarisse Morgan would replace 
Mr Müslüm Yilmaz as Secretary to the Committee and that therefore Members had to direct any 
correspondence relating to the work of the Commit tee to Ms Morgan.  Mr Martin Goyette would 
continue to serve as Deputy Secretary to the Committee. 
67. The meeting was adjourned. 
__________  
 
                                                      
1 Circulated in document G/L/1005.