G/SCM/N/284/SLV  
G/SCM/N/290/SLV  
14 July 2015  
(15-3614)  Page: 1/4  
Committee on Subsidies and Countervailing Measures  Original: Spanish  
 
  SUBSIDIES 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF THE GATT 1994 AND 
ARTICLE 25 OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES 
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 
EL SALVADOR  
The following communication, dated 30 June 2015, is being circulated at the request of the 
delegation of El Salvador.  
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I. "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 para graph 2(a) of document WT/L/691.
1 
 
El Salvador hereby wishes to confirm that, purs 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 relevant , 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/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 y 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, G/SCM/N/243/SLV, G/SCM/N/253/SLV-G/SCM/N/260/SLV and GNV/SCM/N/275/SLV. G/SCM/N/284/SLV • G/SCM/N/290/SLV 
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  2. Period covered by the notification 
 2014.  
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 su bsidy (including identification of the 
legislation under which it is granted) 
A. B
ACKGROUND  
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 macroecono mic 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 stra tegy 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. 
 In El Salvador, enterprises operating in free zones have maintained 84,667 direct jobs and created another 169,334 jobs indirectly, which in tota l represent around 9.08% of El Salvador's 
labour force. 
 Accordingly, such programmes are vital for promot ing the economic and social development of the 
country, by creating opportunities to maintain and raise employment levels and, by extension, 
to improve the welfare of the Salvadoran people.  
It should be noted that 9% 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$1,024.0 million in 2014, i.e. 19.42% of the total value of El Salvador's exports to 
the world. This sector also accounted for 10.43% of El Salvador's 2014 Industrial GDP, reflecting 
its importance in terms of the country's trad e balance performance and economic activity. 
 
Companies in the above-mentioned sector which operate under this programme have production 
chains that promote greater value-added production, 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, which offsets, to a certain 
extent, the significant decline in exports of coffee, which is one of the main traditional agricultural products. It should be noted that El Salvador is one of the countries that has suffered 
most from coffee leaf rust, which has affected 74% of its coffee-growing areas and 
approximately 20,000 jobs, and has had a substantia l 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.  
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 before us in the short and medium term. 
 G/SCM/N/284/SLV • G/SCM/N/290/SLV 
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  B. AUTHORITY  
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 othe r time-limits attached to it, including date 
of inception/commencement 
 
In accordance with the international obligations undertaken by El Salvador, and any multilateral 
agreements that may be reached in this regard.  
9. Statistical data permitting an assessm ent of the trade effects of the subsidy. 
The specific nature and scope of such stat istics is left to the judgement of the 
notifying Member. To the extent possible, relevant and/or determinable, however, 
it is desirable that such information 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  Country Members contained in the 
General Council Decision in document WT/L/691 
 
No changes have been made since the last notification. 
   
  G/SCM/N/284/SLV • G/SCM/N/290/SLV  
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COMPARATIVE TABLE 
(US$ million) 
CONCEPT 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 
a) World exports 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  24,352,872 
 
b) Salvadoran exports 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 5,272.7 
c) b/a 0.0382% 0.0350% 0.0295% 0.0270%  0.0251% 0.0234% 0.0231% 0.0240% 0. 0240% 0.0242% 0.0238% 0.0233% 0.0216% 
d) Salvadoran net maquila exports  474.00 494 465 616 620 564 647 648 666.4 1,201 1,106 1,158.1 1,024 
e) d/a 0.0060% 0.0055% 0.0042% 0.0049%  0.0042% 0.0033% 0.0033% 0.0041% 0. 0035% 0.0054% 0.0049% 0.0049% 0.0045% 
 Source: International Monetary Fund, Centra l Reserve Bank, Ministry of the Economy. 
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