G/SCM/N/275/SLV  
16 July 2014  
(14-4070)  Page: 1/4  
Committee on Subsidies and Countervailing Measures  Original: Spanish  
 
  SUBSIDIES 
CONTINUATION OF EXTENSION UNDER SCM ARTICLE 27.4 OF THE TRANSITION PERIOD FOR 
THE ELIMINATION OF EXPORT SUBSIDIES PU RSUANT TO THE PROCEDURES CONTAINED 
IN THE GENERAL COUNCIL DECI SION IN DOCUMENT WT/L/691 
Updating Notification 
EL SALVADOR  
The following notification, dated 2 July 2014, is being circulated at the request of the delegation 
of El Salvador.  
_______________ 
 
 1   "EXPORT PROCESSING ZONES AND MARKETING ACT, AS AMENDED" (REFERRED TO 
HEREINAFTER AS "FREE ZONE AND INWARD-PROCESSING WAREHOUSE 
PROGRAMME") 
Pursuant to paragraph 10.6 of the Decision on  Implementation-Related Issues and Concerns 
set forth in document WT/MIN(01)/17, the request for an extension of the transition 
period under the procedures laid down in document G/SCM/39 and the WTO General Council Decision in document WT/L/691, and the SCM Committee Decisions contained in documents G/SCM/65, G/SCM/65/Add.1, G/SCM/65/Add.2, G/SCM/65/Add.3, G/SCM/65/Add.4, 
G/SCM/65/Add.5, G/SCM/65/Add.6 G/SCM/65/Add.7, G/SCM/65/Add.8, G/SCM/65/Add.9 
and G/SCM/65/Add.9/Corr.1, and G/SCM/65/Add.10, concerning the Free Zone and Inward-Processing Warehouse Programme, El Salvador is pleased to submit this notification 
relating to the programme, in accordance with paragraph 2(a) of document WT/L/691.
1 
 E l  S a l v a d o r  h e r e b y  w i s h e s  t o  c o n f i r m  t h a t ,  p u r s uant to paragraph 3(a) of document WT/L/691, 
the Free Zone and Inward-Processing Warehouse Programme satisfies the standstill requirements 
established therein.  1. Title of the subsidy programme, if releva nt, or brief description or identification 
of the subsidy 
 Incentives for firms operating in free trade zones or in inward-processing warehouses. 
                                               
1 El Salvador's notifications pursuant to Article 27.4 of the Agreement on Su bsidies and Countervailing 
Measures were circulated as documents G/SCM/N/253/SLV-G/SCM/N/260/SLV; G/SCM/N/38/SLV/Suppl.1-G/SCM/N/ 48/SLV/Suppl.1-G/SCM/N/60/SLV/Su ppl.1-G/SCM/N/71/SLV/Suppl.1; 
G/SCM/N/95/SLV-G/SCM/N/99/SLV; G/SCM/N/114/SLV and G/SCM/N/114/SLV/Corr.1; G/SCM/N/123/SLV-G/SCM/N/128/SLV; G/SCM/N/ 146/SLV; G/SCM/N/155/SLV-G/SCM/N/160/SLV; 
G/SCM/N/177/SLV; G/SCM/N/186/SLV-G/SCM/N/192/SLV;  G/SCM/N/211/SLV and G/SCM/N/211/SLV/Add.1; 
G/SCM/N/220/SLV-G/SCM/N/226/SLV and G/SCM/N/220/SLV/Corr.1-G/SCM/N/226/SLV/Corr.1, and G/SCM/N/243/SLV. G/SCM/N/275/SLV 
- 2 - 
  2. Period covered by the notification 
 2013  
3. Policy objective and/or purpose of the subsidy 
No changes have been made to the programme since the last notification. 
 
4. Background and authority for the subsidy (including identification of the 
legislation under which it is granted) 
A B
ACKGROUND  
For the reasons set out in previous notifications, El Salvador needs to improve the welfare of its 
people. The benefits deriving from the programme, by creating opportunities to maintain and raise 
employment levels and, by extension, to impr ove the welfare of the Salvadoran people, are 
therefore essential for the country's economic and social development. 
In this context, with a view to creating favourable conditions for sustained economic growth, 
El Salvador is developing and implementing mechanisms to stimulate aggregate demand, enhancing its exportable supply and creating a macroeconomic environment conducive 
to the establishment of investment in the country. The programme of incentives to firms operating 
in free zones or inward-processing warehouses is part of a strategy that seeks to create more and better jobs for Salvadorans, while reducing the country's reliance, in terms of its balance of payments, on family remittances from the United States. 
It should be noted that 8% of all companies operating in free-trade zones or inward-processing 
warehouses belong to the apparel manufacturing industry offering "full package" services and to the in-bond assembly ( maquila ) industry, which represents the country's leading export sector, 
bringing in US$1,158.2 million in foreign currency in 2013, i.e. 21.09% of the total value 
of El Salvador's exports to the world. This sect or also accounted for 12.1% of El Salvador's 2013 
Industrial GDP, reflecting its importance in terms of the country's trade balance performance and 
economic activity. 
Companies in the above-mentioned sector which operate under this programme have production 
chains that promote greater value-added produc tion, for instance through the "full package" 
concept, thereby encompassing textile and logisti cs enterprises and small-scale suppliers of inputs. 
It should be emphasized that this industry is considered the most fully integrated in the Central 
American region. Technological progress has also been made in this sector, especially with regard to yarn and fabric production processes. 
 
At year-end 2013 manufacturing increased 2.1% over the 2012 level. Also of note is the fact that 
exports of coffee, one of the most important tr aditional agricultural products, declined 37.7% 
in this same period as a result of coffee leaf rust. El Salvador was one of the countries that 
suffered most from the disease, which affected 74% of its coffee-growing areas and approximately 
20,000 jobs and had a substantial social and economic impact on the country, since this sector provides employment for small-scale farmers and farm workers. 
 
The Salvadoran economy has been contracting sinc e 2012, with GDP growth rates of 1.9% in 2012 
and 1.7% in 2013. According to the Central Rese rve Bank, the country's production industry 
responds to US market stimuli with a delay of three to four quarters, taking into account 
the fact that 45.5% of El Salvador's 2013 exports are destined for the US market and that remittances from the US, which totalled US$3,953 .4 million in December 2013, represent 16.3% 
of Salvadoran GDP. 
 In the context of a slow economic recovery and an uncertain outlook for strategic input markets, 
the programme in question remains a key factor for our country's sustained development in the 
face of the economic challenges faci ng us in the short and medium term. 
 G/SCM/N/275/SLV 
- 3 - 
  B A UTHORITY  
No changes have been made to the programme since the last notification. 
5. Form of the subsidy (i.e. grant, loan, tax concession, etc.) No changes have been made to the programme since the last notification. 
 
6. To whom and how the subsidy is provided (whether to producers, to exporters, 
or others; through what mechanism; wh ether a fixed or fluctuating amount 
per unit; if the latter, how determined) 
No changes have been made to the programme since the last notification. 
 7. Subsidy per unit or, in cases where this is not possible, the total amount or the 
annual amount budgeted for that subsidy (indicating, if possible, the average 
subsidy per unit in the previous year). Where provision of per-unit subsidy information (for the year covered by th e notification, for the previous year, 
or both) is not possible, a full explanation. 
Given the nature and scope of the programme, no statistical data reflecting the amount 
of incentives per unit are available. 
 
8. Duration of the subsidy and/or any other time-limits attached to it, including date 
of inception/commencement 
This will be in line with the international obligations undertaken by El Salvador, in particular under 
the SCM Agreement. 
 9. Statistical data permitting an assessm ent of the trade effects of the subsidy. 
The specific nature and scope of such statistics is left to the judgement 
of the notifying Member. To the extent possible, relevant and/or determinable, 
however, it is desirable that such inform ation include statistics on the production, 
consumption, imports and exports of the subsidized product(s) or sector(s). 
(See Annex 1). 
 10. Information concerning the steps taken pursuant to paragraphs 1(e) and 1(f) 
of the Procedures for Continuation of  Extensions Pursuant to Article 27.4 
of the SCM Agreement of the Transition  Period under Article 27.2(b) of the 
SCM Agreement for Certain Developing Co untry Members contained in the General 
Council Decision in document WT/L/691. 
No changes have been made since the last notification. 
 
The "Free Zone and Inward-Processing Warehouse Programme" will be in force 
until 31 December 2015, in accordance with the 2007 General Council Decision contained in document WT/L/691.  
 
    
  G/SCM/N/275/SLV  
- 4 - ANNEX 1 
COMPARATIVE TABLE 
(US$ million) 
CONCEPT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 
(a) World exports 7,510,600 7,837,800 8,937,700 11,196,100  12,640,600  14,716,900  17,019,465 19,693,890  20,854,876  18,713,353  21,876,684  22,427,572  23,502,426 
(b) Salvadoran exports 2,864.0 2,995.0 3,128.0 3,305.0 3,418.0 3,707.0 3,979.9 4,549.2 3,797.3 4,499.2 5,308.8 5,339.1 5,491.1 
(c) b/a 0.0381% 0.0382% 0.0350% 0.0295%  0.0270% 0.0251% 0.0234% 0.0231% 0. 0240% 0.0240% 0.0242% 0.0238% 0.0233% 
(d) Salvadoran net 
maquila  exports 489.00 474.00 494 465 616 620 564 647 648 666.4 1,201 1,106 1,158.1 
(e) d/a 0.0065% 0.0060% 0.0055% 0.0042%  0.0049% 0.0042% 0.0033% 0.0033% 0. 0041% 0.0035% 0.0054% 0.0049% 0.0049% 
 
 Source: International Monetary Fund, Central Reserve Bank, Ministry of the Economy. 
 
__________