RESTRICTED  
  
G/SCM/M/105  
 
7 August 2018  
(18-5011) Page: 1/22 
Committee on Subsidies and Countervailing Measures    
 
 
MINUTES OF THE REGUL AR MEETING  
HELD ON 24 APRIL 201 8 
CHAIR: MS IEVA BARŠAUSKAITĖ  (LITHUANIA)  
1. The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 24 April 2018, convened in WTO/AIR/SCM/21 and WTO/AIR/SCM/21/Corr.1  dated 
13 April 2018 and 17 April 2018, respectively.  
 
2. Canada  requested to be included as a co -sponsor for the agenda item 10.  
 
3. China  reiterated its concerns noting that overcapacity was not a trade related issue relevant  
to the operation of the Agreement or the furtherance of its objectives as referred in Article 24.1 of 
the Agreement. Therefore, the Committee was not an appropriate forum for the discussion of this 
issue. There were other international fora such as G -20 Global Forum on Steel Access Capacit y to 
discuss overcapacity. In order to facilitate the proceeding of the meeting, China would not oppose 
the adoption of the agenda; however, the inclusion of this item into the agenda should neither 
constitute any precedent nor represent any degree of cons ensus by Members on including similar 
issues into the agenda of future meetings of the Committee or any subsidiary bodies of the  WTO. 
China requested the Committee to take note of its position as stated.  
 
4. The Committee took note  of the statements made and adopted  the following agenda:  
 
1   NATIONAL LEGISLATION ................................ ................................ .............................  2 
1.1   Review of notifications of new or amended legislation or regulations not previously 
reviewed by the Committee (including supplemental notifications of existing provisions 
not previously reviewed)  ................................ ................................ ................................ ...... 2 
1.1.1    Australia (G/SCM/N/1/AUS/2/Suppl.15) ................................ ................................ ....... 2 
1.1.2    Brazil (G/ADP/N/1/BRA/3/Suppl.9 -G/SCM/N/1/BRA/2/Suppl.12 -
G/SG/N/1/BRA/3/Suppl.3)  ................................ ................................ ................................ ... 3 
1.1.3    European Union (G/ADP/N/1/EU/3/Suppl.2 –G/SCM/N/1/EU/2/Suppl.2)  ...........................  3 
1.1.4    Liberia (G/SCM/N/1/LBR/1 and G/SCM/N/1/LBR/1/Corr.1)  ................................ .............  4 
1.2   Review of notifications of new or amended legislation or  regulations with 
outstanding written questions  ................................ ................................ ...............................  4 
1.2.1    Cameroon (G/ADP/N/1/CMR/1/Suppl.1 -G/SCM/N/1/CMR/1/Suppl.1 -
G/SG/N/1/CMR/1/Suppl.1)  ................................ ................................ ................................ ... 4 
1.2.2    El Salvador (G/ADP/N/1/SLV/3/Suppl.1 -G/SCM/N/1/SLV/3/Suppl.1 -
G/SG/N/1/SLV/3/Suppl.1)  ................................ ................................ ................................ .... 4 
1.2.3    India (G/ADP/N/1/IND/2/Suppl.8 –G/SCM/N/1/SCM/2 /Suppl.8)  ................................ ...... 4 
1.2.4    New Zealand (G/ADP/N/1/NZL/2/Suppl.6/Rev.1 -
G/SCM/N/1/NZL/2/Suppl.6/Rev.1)  ................................ ................................ ........................  4 
2   SEMI -ANNUAL REPORTS OF CO UNTERVAILING DUTY AC TIONS (ARTICLE 
25.11) – G/SCM/N/328 AND G/SC M/N/328/SUPPL.1  ................................ .....................  5 G/SCM/M/105  
 
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  3   PRELIMINARY AND FINA L COUNTERVAILING DUT Y ACTIONS: 
NOTIFICATIONS (ARTIC LE 25.11) – G/SCM/N/326, G/SCM/N /327, 
G/SCM/N/329/REV.1, G /SCM/N/330, G/SCM/N/ 331, AND G/SCM/N/332  ....................  6 
4   ARTICLE 27.4 EXTENSI ONS OF THE TRANSITIO N PERIOD FOR THE 
ELIMINATION OF EXPOR T SUBSIDIES - 31 DECEMBER 2015 END OF FINAL 
PHASE -OUT PERIOD AND FINAL  NOTIFICATION DUE 30 JUNE 2016 
(G/SCM/N/299/…)  ................................ ................................ ................................ ..........  7 
5   IMPROVING THE TIMELI NESS AND COMPLETEN ESS OF NOTIFICATIONS  AND 
OTHER INFORMATION FL OWS ON TRADE MEASURE S UNDER THE SCM 
AGREEMENT  ................................ ................................ ................................ .....................  8 
6   CONSTANT DOLLAR METH ODOLOGY FOR GRADUATION FROM ANNE X VII(B)  ...........  11 
7   PERMANENT GROUP OF E XPERTS (PGE)  ................................ ................................ .... 11 
8   QUESTIONS TO CHINA F ROM THE EUROPEAN UNI ON AND THE UNITED 
STATES REGARDING POT ENTIAL STEEL SUBSIDI ES PURSUANT TO ARTIC LE 25.8 
OF THE SCM AGREEMENT  – ITEM REQUESTED BY THE EUR OPEAN UNION AND 
THE UNITED STATES  ................................ ................................ ................................ ...... 14 
9   SUBSIDIES AND OVERCA PACITY – ITEM REQUESTED BY CA NADA, THE 
EUROPEAN  UNION, JAPAN, MEXICO , AND THE UNITED STA TES (G/SCM/W/575)  .........  16 
10   IMPLEMENTATION OF PA RAGRAPH 2 OF THE MIN ISTERIAL DECISION ON  
FISHERIES SUBSIDIES (W T/MIN(17)/64; 13 DEC EMBER 2017) – ITEM 
REQUESTED BY AUSTRAL IA, CANADA, THE EURO PEAN UNION, ICELAND,  NEW 
ZEALAND, NORWAY, AND  THE UNITED  STATES  ................................ ..............................  19 
11   OTHER BUSINESS  ................................ ................................ ................................ .... 22 
12   DATE OF NEXT REGULAR  MEETING  ................................ ................................ ..........  22 
13   ELECTION OF OFFICERS  ................................ ................................ ..........................  22 
 
 
1  NATIONAL LEGISLATION  
1.1  Review of notifications of new or amended legislation or regulations not previously 
reviewed by the C ommittee (including supplemental notifications of existing provisions 
not previously reviewed)  
5. The Chair noted that, in accordance with the Committee's procedures (G/SCM/W/293/Rev.1), 
the new legislative notifications on the agenda were those that had been circulated in all three 
languages not less than six weeks before the meeting. The deadline for written questions on these 
notifications had been 3 April 2018 . In accordance with the review procedures, the legislative 
notifications of Cameroon, El Salvador, India and New Zealand would also be taken up under this 
item due to outstanding written questions abou t them.  
 
6. Oral questions could be asked at the meeting, and any Member wishing to receive a written 
answer to any such question would have to submit its question in writing to the Member concerned 
and to the Secretariat not later than 14 May 2018. Written answers we re due not later than 
4 June 2018.1  
7. The primary review of the notifications would be held in the Committee on Anti -Dumping 
Practices, where all horizontal issues in addition to anti -dumping issues would be addressed. 
Members thus were requested to limit t heir questions in this Committee to those specifically 
related to countervailing measures.  
1.1.1   Australia (G/SCM/N/1/AUS/2/Suppl.15)  
8. Written questions and answers with respect to this notification can be found in:  
                                                
1 Relevant deadlines for written follow -up questions and written answers in May and June 2018, 
respectively, can be found in section 1 of document G/ADP/W/ 501-G/SCM/W/57 6-G/SG/W/24 3. G/SCM/M/105  
 
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 G/ADP/Q1/AUS/21 –G/SCM/Q1/ AUS/21 – questions fr om Mexico  
 G/ADP/Q1/AUS/22 –G/SCM/Q1/ AUS/22 – replies to Mexico  
 
9. The Committee took note  of the notification, questions and answers.  
 
1.1.2    Brazil (G/ADP/N/1/BRA/3/Suppl.9 -G/SCM/N/1/BRA/2/Suppl.12 -
G/SG/N/1/BRA/3/Suppl.3)  
10. Written questions and answers with respec t to this notification can be found in:  
 
 G/ADP/Q1/BRA/35 –G/SCM/Q1/ BRA/35 – G/SG/Q1/ BRA/4 –questions from the United States  
 G/ADP/Q1/BRA/36 –G/SCM/Q1/ BRA/36 – G/SG/Q1/ BRA/5 –questions from Mexico  
 G/ADP/Q1/BRA/37 –G/SCM/Q1/ BRA/37 – G/SG/Q1/ BRA/6 –replies to the United States2 
 G/ADP/Q1/BRA/38 –G/SCM/Q1/ BRA/38 – G/SG/Q1/ BRA/7 –replies to Mexico2 
 
11. The Committee took note  of the notification, questions and answers.  
 
1.1.3   European Union (G/ADP/N/1/EU/3/S uppl.2–G/SCM/N/1/EU/2/ Suppl.2) 
12. Written questions with respect to this notification can be found in:  
 
 G/ADP/Q1/EU/5 –G/SCM/Q1/ EU/5 – questions from Mexico  
 G/ADP/Q1/EU/6 –G/SCM/Q1/ EU/6 – questions from Saudi Arabia, Kingdom of  
 G/ADP/Q1/EU/7 –G/SCM/Q1/ EU/7 – questions from the Russian Federation  
 
13. The Russian Federation , Saudi Arabia, Kingdom of  and Mexico  noted that they were 
expecting to review this notification in the Committee on Anti -Dumping Practices.  
 
14. Argentina  expressed  its concerns regarding the modifications made in the EU's legislation 
which allowed the investigat ion of subsidies that had not been included in the application. 
Argentina was not sure whether that modification was in line with Article 11.2 of the Agreement.  
 
15. The European Union  noted that the questions 12, 17 and 18 from Saudi Arabia, Kingdom of  
were S CM related and therefore it would provide oral replies. With respect to question 12, the EU 
noted that that question was about the relationship between anti -dumping and anti -subsidy 
instruments which were pursuing different objectives. The EU's new anti -dumping rules focused on 
identifying significant distortions due to state interference that affect the formation of domestic 
prices or costs which were relevant in the calculation of normal value and dumping margin. In the 
context of the EU's amended legisla tion, the elements in determining the substantial government 
intervention which had a distorting effect on market were not exhaustive. In any event, Article 
VI:5 of the GATT 1994 ensured that the two instruments were not used to compensate for the 
same situation of dumping or subsidization.  
 
16. With respect to question 17, Article 10.7 of the EU's basic anti -subsidy regulation set out a 
procedure to be followed when new subsidies were discovered during the course of an anti -subsidy 
investigation. There was no time -frame set out as regards to when  those additional subsidies 
might be identified and it would vary subject to the particular circumstances of each individual 
case. This would need to be sufficiently early in an investigation to ensure that the due process 
could be respected including hold ing consultations with the Member in question. The legislative 
deadlines foreseen for the completion of the anti -subsidy investigations would continue to be 
respected in all cases.  
 
17. With respect to question 18, depending on the nature of any additional su bsidy schemes 
found in the course of an investigation , the European Commission intended to issue an 
amendment to the notice of initiation and would seek further consultations with the government of 
the exporting country. In full respect of the procedural r ights of parties , ample time would be 
granted to provide any additional or supplementary information. This would be determined taking 
into account the specificities and circumstances of each case.  
 
                                                
2 Circulated on 26 April 2018.  G/SCM/M/105  
 
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  18. Saudi Arabia, Kingdom of  indicated that it was expecting written repl ies from the 
European  Union.  
  
19. The Committee took note  of the notification, questions and statements made.  
 
1.1.4   Liberia (G/SCM/N/1/LBR/1 and  G/SCM/N/1/LBR/1/Corr.1)  
20. Written questions with respect to this notification can be found in:  
 
 G/SCM/Q1/LB R/1 - questions from the United States  
 
21. The Committee took note  of the notification and questions.  
 
1.2  Review of notifications of new or amended legislation or regulations with 
outstanding written questions  
1.2.1   Cameroon (G/ADP/N/1/CMR/1/Suppl.1 -G/SCM/N/1/CMR/1/S uppl.1 -
G/SG/N/1/CMR/1/Suppl.1)  
22. Written questions with respect to this notification can be found in:  
 G/ADP/Q1/CMR/3 -G/SCM/Q1/CMR/3 -G/SG/Q1/CMR/3 – questions from the United States  
23. The Committee took note  of the notification and questions.  
 
1.2.2   El Salvador (G/ADP/N/1/SLV/3/Suppl.1 -G/SCM/N/1/SLV/3/Suppl.1 -
G/SG/N/1/SLV/3/Suppl.1)  
24. Written questions with respect to this notification can be found in:  
 
 G/ADP/Q1/SLV/8 -G/SCM/Q1/SLV/8 -G/SG/Q1/SLV/7 - questions from the United States  
 G/ADP/Q1/SLV/9 -G/SCM/Q1/SLV/9 -G/SG /Q1/SLV/8 - questions from Mexico  
 
25. The Committee took note  of the notification and questions.  
 
1.2.3   India (G/ADP/N/1/IND/2/Suppl.8 –G/SCM/N/1/SCM/2/Suppl.8)  
26. Written questions and answers with respect to this notification can be found in:  
 
 G/ADP/Q1/IND/26 –G/SCM/Q1/IND/26 – questions from Ukraine  
 G/ADP/Q1/IND/27 -G/SCM/Q1/IND/27 – questions from Mexico  
 G/ADP/Q1/IND/28 –G/SCM/Q1/IND/28 – replies to Ukraine  
 G/ADP/Q1/IND/29 –G/SCM/Q1/IND/29 – replies to Mexico  
 
27. The Committee took note  of the notifi cation, questions, and answers.  
 
1.2.4    New Zealand (G/ADP/N/1/NZL/2/Suppl.6/Rev.1 -
G/SCM/N/1/NZL/2/Suppl.6/Rev.1)  
28. Written questions with respect to this notification can be found in:  
 
 G/ADP/Q1/NZL/3 -G/SCM/Q1/NZL/3 - questions from the United States  
 G/ADP/Q1/NZL /4-G/SCM/Q1/NZL/4 - questions from Australia  
 G/ADP/Q1/NZL/5 -G/SCM/Q1/NZL/5 -  replies to the United States  
 G/ADP/Q1/NZL/6 -G/SCM/Q1/NZL/6 – replies to Australia  
 
29. The Committee took note  of the notification, questions and answers.  
 
30. The Chair, recalling the Committee's agreed procedures, informed Members that for new 
legislative notifications to be placed on the agenda of the fall 2018 meeting, they would have to be 
circulated in all three languages by 10 September 2018. Shortly after that dat e, the Secretariat G/SCM/M/105  
 
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  would circulate a document informing Members of all legislative notifications to be reviewed at the 
fall meeting. Pursuant to paragraph 8 of document G/SCM/W/293/Rev.1, any legislative 
notification in respect of which written answers to written questions had not been provided would 
be placed on the agenda of the Committee's subsequent regular meeting. Written questions 
concerning new legislative notifications to be reviewed should be submitted to the notifying 
Member and to the Secretaria t by 1 October 2018.  
 
31. To place a previously -reviewed legislative notification on the agenda of the Committee's fall 
2018 regular meeting, written questions had to be submitted to the Member concerned and to the 
Secretariat not later than 10 September 2018.  The Member receiving such questions should 
submit its written answers not later than 8 October 2018. The Secretariat would circulate the usual 
triple-symbolled document containing these and the other deadlines shortly after the meeting.3  
 
32. Some Members ha d yet to submit any notification concerning legislations. The Chair 
underlined the importance of these notifications in terms of transparency, and recalled that for 
many Members all that would be required was a single nil notification. For any Members that  
conducted countervailing duty investigations but had not yet notified their legislation, it was all the 
more important for the Committee to have the opportunity to review and ask questions about that 
legislation. Therefore, the Chair urged all Members tha t had not yet made a legislative notification 
to do so as promptly as possible.   
 
33. The Chair referred to the document G/SCM/N/18/Add.45 which contained the latest revision 
of the list of authorities competent to initiate and conduct investigations within t he meaning of 
Article 25.12 of the SCM Agreement and invited all Members with such an authority to submit the 
required notification pursuant to Article 25.12 of the SCM Agreement, or to review and update as 
necessary their previously -submitted notification s. 
 
34. The Committee took note  of the Chair's statement.  
 
2  SEMI -ANNUAL REPORTS OF CO UNTERVAILING DUTY AC TIONS (ARTICLE 25.11 ) – 
G/SCM/N/328 AND G/SC M/N/328/SUPPL.1  
35. The Chair recalled that document G/SCM/N/328 and Supplement 1 had invited all Members 
to submit  not later than 15 February 2018, their semi -annual reports under Article 25.11 of the 
SCM Agreement of countervailing duty actions taken during the period 1 July through 
31 December  2017. Document G/SCM/N/328/Add.1 provided the current status of Members' 
reporting for that period. Paragraph 1 of the document listed those Members reporting 
countervailing duty actions during the period. Paragraph 2 listed Members that had notified having 
taken no countervailing duty action during the period. Paragraph 5 of t he document listed the 
39 Members that had submitted a one -time notification that they had no investigating authority, 
had taken no countervailing actions to date, and did not anticipate taking any such actions in the 
foreseeable future.   
36. One-time notific ations served a useful transparency function, as they assisted non -active 
Members to meet their notification requirements in a streamlined way. Any eligible Member that 
had not already done so thus was urged to submit a one -time notification. The Secretari at was 
ready to assist any Member in this regard.  
 
37. Unfortunately, as listed in paragraphs 3 and 4 of the document, many Members had not 
submitted a semi -annual report for July – December 2017. They were urged to do so as soon as 
possible.  
 
38. No comments or questions were raised concerning the semi -annual reports of Australia, 
Brazil, Canada, China, Egypt, the European Union, India, Mexico, New Zealand, Pakistan, and 
Peru.  
39. With respect to the semi -annual report of the  United States , Turkey  expressed its concern 
over the investigations on iron and steel products originating in Turkey. In the ongoing and 
previous investigations there had been inconsistencies regarding public body, specificity, benefit 
calculation and cross -cumulation decisions. T herefore, Turkey had taken those issues to the WTO 
                                                
3 G/ADP/W/ 501-G/SCM/W/57 6-G/SG/W/24 3, circulated on 27 April 2018.  G/SCM/M/105  
 
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  panel. Turkey invited the US to take into account the Appellate Body and Panel decisions on cross -
cumulation methodology in ongoing investigations and not to cumulate the effects of subsidized 
imports with  the effects of non -subsidized, dumped imports. In  addition, referring to 
Article  27.10(a) of the Agreement, Turkey indicated that as a developing Member, it was expecting 
the US to terminate the investigation s against  Turkey when  the per unit subsidizatio n rate was not 
exceeding the 2% threshold.  
40. Australia  noted that it welcomed the US ITC's determination that there had been no material 
injury in the investigation on silicon metal originating in Australia. It remained concerned with the 
US Department of Co mmerce's (USDOC) findings on countervailability of some of the programmes 
identified during the investigation. Those subsidy findings had been so broad that if they had been 
applied to the US programmes they would have resulted being countervailable. For e xample the 
R&D tax concession in Australia had been deemed to be de facto  specific which was similar to the 
US Research and Experimentation Tax Credit programme. Given the methodology applied by the 
USDOC, that programme would seem to be specific and there fore countervailable.  
41. China  expressed its concerns regarding the US practice of applying adverse facts available in 
countervailing duty investigations against China. In recent cases, USDOC had explained that it had 
been impossible for Chinese companies to  avoid punitive application of adverse facts available 
under the US law even though they had done their utmost to provide responses. Taking Export 
Buyers Credit programme for example, although the Chinese producers, their importers and 
relevant banks had s ubmitted evidence to prove the absence of such subsidies , including the 
sworn certification from their US customers, the USDOC had made final negative determinations 
based on unverified information in certain cases. China urged the US to terminate those 
unreasonable practices and to make its determinations on objective facts.  
42. Indicating that Turkey had raised the same concerns previously in the Committee, the 
United States  referred to its previous statements on those issues. The US decisions and practices 
were fully consistent with its WTO obligations. The US had fully implemented the Appellate Body's 
findings with respect to public body and in a recent compliance panel proceeding, its new 
methodology had been upheld. Regarding Turkey's concern on the negli gibility threshold, the US 
noted that its practice was fully consistent with its WTO obligations.  
43. Regarding the concerns raised by Australia, the US noted that USDOC's findings had been 
based on careful examination of the actual number of recipients of the  subsidy in relation to the 
potential number of eligible users under the programme. This analysis had indica ted that less than 
1% of eligible users had received the subsidy under the programme during the relevant time -
period as a result of which the USDOC had considered the programme as de facto  specific. The US 
was of the view that its findings were fully consistent with its obligations under Article 2 of the 
Agreement.   
44. With respect to China's concerns, the US indicated that its application of facts avai lable was 
fully consistent with its obligations under the Agreement. T he US also noted that there was a  wide 
range of circumstances that led the application of facts available including complete non -
cooperation by respondents or non -provision of specifical ly requested information in the 
questionnaires, and only in those circumstances the rules on facts available were applied.   
45. The Committee took note  of all semi -annual reports submitted, and all statements made.  
 
3  PRELIMINARY AND FINA L COUNTERVAILING DUT Y A CTIONS: NOTIFICATION S 
(ARTICLE 25.11) – G/SCM/N/326, G/SCM/N /327, G/SCM/N/329/RE V.1, 
G/SCM/N/330, G/SCM/N /331, AND G/SCM/N/33 2 
46. The Chair reported that since the Committee's October 2017 regular meeting, notifications 
under Article 25.11 of preliminary and final countervailing duty actions had been received from 
Australia, Brazil, Canada, China, the European Union, Mexico, Pakistan, and the United  States. 
Those notifications were listed in documents G/SCM/N/326, 327, 329 Revision 1, 330, 331, and 
332. 
 
47. No Me mber took the floor regarding those notifications.  
 G/SCM/M/105  
 
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  48. The Committee took note  of the notifications.  
4  ARTICLE 27.4 EXTENSI ONS OF THE TRANSITIO N PERIOD FOR THE ELI MINATION OF 
EXPORT SUBSIDIES - 31 DECEMBER 2015 END  OF FINAL PHASE -OUT PERIOD AND FINAL  
NOTIFICATION DUE 30 JUNE 2016 (G/SCM/N/2 99/…)  
49. The Chair recalled that Members that had been granted extensions under Article 27.4 
pursuant to the procedures in WT/L/691 were required, under paragraph 2(c) of the procedures, to 
submit transparency notifica tions in respect of each year of the final two -year phase -out period, 
i.e. calendar years 2014 and 2015. The deadline for the notification pertaining to 2014 was 
30 June 2015. A reminder to this effect had been circulated in document G/SCM/N/290/INF.  
50. To d ate, Belize, Costa Rica, Dominica, Dominican Republic, El Salvador, Guatemala, 
Jamaica, Jordan, Mauritius, Papua New Guinea, Saint Lucia, and Saint Vincent and the Grenadines 
had submitted these notifications, which had been circulated in the G/SCM/N/290 s eries.  
51. Furthermore, given that 2015 was the final year of the two -year phase -out period pursuant 
to the previously mentioned procedures, the Members with extensions needed to have completed 
the elimination of their export subsidies by 31 December 2015. Th ey also had to provide a final 
transparency notification in respect of calendar year 2015 not later than 30 June 2016. A reminder 
concerning that final round of Article 27.4 –related notifications had been circulated in document 
G/SCM/N/299. For the informa tion of Members, the Chair  had asked Secretariat to prepare a room 
document indicating the current status of notifications and of actions reported by Members with 
extensions under Article  27.4.4 
52. To date, only twelve of the beneficiary Members – Belize, Cos ta Rica, Dominica, Dominican 
Republic, El  Salvador, Grenada, Guatemala, Jamaica, Jordan, Mauritius, Papua New Guinea, and 
Saint Vincent and the  Grenadines  – had submitted those final notifications. The Chair reminded 
other Members with extensions to submit their final transparency notifications as soon as possible. 
The deadline for the elimination of the export subsidies had been more than two years earlier 
while for submitting the final notification  had been nearly two years earlier. She also underlined 
the importance of the compliance of the beneficiary Members with the corresponding substantive 
and transparency obligations.  
 
53. New Zealand  noted that those export subsidies should have been removed by  the end of 
2015. It was difficult to make an assessment in a number of cases as several beneficiary Members 
had not yet confirmed the extent of their reforms. Good progress had been made since the 
October meeting of the Committee yet there were still seve n Members which had not provided 
their final notifications. New Zealand encouraged those Members to address those transparency 
deficiencies by the October 2018 meeting of the Committee. Given that many of those Members 
had indicated time limits and planned  termination of those export subsidies there should be a 
simple administrative matter. New Zealand also requested to keep that item on the agenda for the 
next meeting.  
54. Jordan  indicated that it was developing a new WTO compliant programme which had been 
agreed by the Council of Ministers. It was in a legislative process to incorporate the Income Tax 
Law in line with the timetable for implementing a new programme as contained in Document 
G/C/W/705/Rev.2 submitted to Council for Trade in Goods. The new program me, which did not 
have any linkage to export activity, was in compliance with the Agreement and would be 
implemented as of 1 January 2019. The current programme would be terminated by the end of 
2018 and the Regulation No. 106/2016 stated that income stemm ing from exporting goods of local 
origin totally exempted from income tax only until 31 December 2018. Jordan was also working on 
preparing its final notification regarding its current subsidy programme which would be submitted 
to the Committee.  
55. Uruguay  indicated that it was implementing the necessary measures to eliminate the 
Automotive Industry Programme and would inform the Committee as soon as possible.  
                                                
4 RD/SCM/36/Rev.1.  G/SCM/M/105  
 
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  56. Japan  echoed the concerns raised by New Zealand and noted that the Committee should 
further follow u p those export subsidies from the perspectives of transparency decided by the 
General Council.  
57. The United States  added its voice to those of Japan and New Zealand and urged Members, 
which had not fully phased out their subsidies, to do so without further d elay.  
58. The Chair  noted that the Committee would revert to that issue at the next meeting.  
 
59. The Committee took note  of the statements made.  
 
5  IMPROVING THE TIMELI NESS AND COMPLETENES S OF NOTIFICATIONS A ND OTHER 
INFORMATION FLOWS ON  TRADE MEASURES UNDER  THE S CM AGREEMENT  
60. The Chair recalled that since the request of the Chairman of the Trade Policy Review Body in 
spring 2009, the Committee had been discussing, at formal and informal meetings, "ways to 
improve the timeliness and completeness of notifications an d other information flows on trade 
measures". The substance of those discussions was reflected in the minutes of the previous 
meetings.  
61. The Chair recalled that at Committee's October 2017 meeting a number of Members had 
indicated their willingness to conti nue discussions on ways to improve timeliness and completeness 
of notification obligations under the SCM Agreement, with the notification of subsidies being the 
most fundamental. In this regard, there were three topics to cover under this agenda item, the 
status of Members' notifications of subsidies; the Australian suggestions regarding the Secretariat 
document on the status of Member's notifications; and the US proposal regarding a written process 
for questions and answers under Articles 25.8 and 25.9 of the SCM Agreement.  
62. Regarding the status of subsidy notifications, the Chair noted that the Secretariat had 
prepared and updated a background note (G/SCM/W/546/Rev.9) at the request of Members 
since 2009, providing a snapshot of the level of compliance wit h the various notification obligations 
under the SCM Agreement since 1995.  
63. Unfortunately, compliance with the obligation to notify subsidies remained low. 85  Members 
had not made their 2017 new and full subsidy notification for  which the deadline had been 
30 June 2017. Sixty -six Members still had not made their 2015 new and full subsidy notification, 
although the deadline had been nearly three years earlier. Further, fifty -six Members still had not 
made their 2013 notifications,  which had been due almost five years earlier. Many of these 
Members either had never notified or had done so only in the distant past. The chronic low 
compliance with this fundamental transparency obligation constituted a serious problem in the 
proper fun ctioning of the Agreement.  
64. The Members that had not yet made their 2017 notifications were: Afghanistan5; Albania; 
Angola; Antigua and Barbuda5; Armenia; Bangladesh; Barbados; Benin; Bolivia, Plurinational State 
of; Brunei Darussalam; Burkina Faso; Cabo Ve rde; Cambodia; Cameroon; Central African 
Republic; Chad; China5; Colombia; Congo; Côte d'Ivoire; Democratic Republic of Congo; Djibouti; 
Egypt; Eswatini; Fiji; the Gambia; Georgia; Ghana; Guinea; Guinea -Bissau; Guyana; Haiti; India; 
Indonesia; Israel; Jama ica; Kenya; Kuwait, the State of; Kyrgyz Republic; Lao People's Democratic 
Republic; Lesotho; Liberia; Maldives; Mauritania; Mauritius; Mexico; Mongolia; Montenegro; 
Morocco; Mozambique; Myanmar; Namibia; Nepal; Nicaragua; Niger; Nigeria; Pakistan; Panama;  
Qatar; Russian Federation; Rwanda; Saint Kitts and Nevis5; Saint Lucia; Saint Vincent and the 
Grenadines; Samoa; Senegal; Seychelles; Sierra Leone; Solomon Islands; South Africa; Sri Lanka; 
Suriname; Tajikistan; Tanzania; Tonga; Trinidad and Tobago; Tunis ia; Uganda; United Arab 
Emirates; Uruguay; Vanuatu; Venezuela, Bolivarian  Republic of; Viet  Nam; Yemen; and 
Zimbabwe.  
 
65. The Chair invited the Members that had not yet submitted their 2017 notifications to provide 
an update to the Committee on their progress  in preparing those notifications.  
 
                                                
5 Submitted its new and full notificatio n after the meeting of the Committee.  G/SCM/M/105  
 
- 9 - 
 
  66. New Zealand  expressed its concerns regarding the low level of compliance with the 
notification obligations. Without notifications it would be difficult to assess what trade distorting 
subsidies were in force which might affect the trade interests of other Members. Many Members 
had not yet submitted a "nil" notification although they did not have any subsidy programmes in 
place, which was contributing to the level of uncertainty. New Zealand encouraged those Members , 
who h ad not submitted their notifications particularly for 2015 and prior periods , to do so as soon 
as possible.  
 
67. The Russian Federation  indicated that it was finalizing its new and full notification and would 
submit it shortly.  
 
68. The European Union  reiterated i ts concerns with regard to the poor state of compliance of 
Members with the notification obligations. It invited  Members to make the effort to meet their 
notification obligations as quickly as possible. Having no information regarding the subsidy 
schemes u ndermined the work of the Committee. Members needed to see that information to 
understand how subsidies had impact on international trade .  
 
69. Japan  echoed the comments made by New Zealand and the EU and noted that it was 
surprised to see that 85 Members had  not notified yet. Members should think about improv ing the 
situation seriously.  
 
70. Moldova, Republic of  reiterated the importance of the implementation of Paragraph 31 of the 
Nairobi Ministerial Declaration. Noting that it had excluded all types of subsidi es in agriculture 
sector, Moldova reiterated the importance of provision of  all types of notifications by Members . 
 
71. The United States  strongly agreed with the views expressed by New Zealand, the EU and 
Japan. The low level of compliance with notification o bligations was troubling and the trend was 
not showing any improvement. The US recognized the difficulties for developing countries, in 
particular with multiple levels of government, however, the transparency obligation was a core 
principle of the Agreemen t and all Members should work hard to fulfil that basic obligation in a 
timely manner.  
 
72. Australia  indicated that the transparency obligation was a core principle, not a second -tier 
obligation under the Agreement. It urged all Members to make their supreme efforts to provide 
notifications and to seek technical assistance from the Secretariat. Submitting a notification was a 
very difficult but a necessary process whic h could help exporters to understand what programmes 
were being provided by other governments.  
 
73. The Chair urged Members that had not yet submitted their notifications to do so, and 
recalled that the Secretariat continued to be available for enquiries abou t compliance with 
notification obligations. The Secretariat had assisted many Members in the past and Members 
finding themselves unable to comply with their obligations were encouraged to consult the 
Secretariat. There was a range of resources that delegat ions could draw upon in working to rectify 
the situation, including the Secretariat Handbook on Notification Requirements for the 
SCM Agreement and the two Geneva -based Internship Programmes coordinated by the 
Secretariat.  
 
74. With respect to the second topic under this agenda item, the Chair recalled that at previous 
meetings, the Committee had discussed two suggestions by Australia to add a new annex to the 
compendium document which would list all Secretariat calculations of e xport competitiveness 
pursuant to Article 27.6; and another suggestion in relation to the requests for information under 
Article 25.8 and the Annex C of the document.  
75. Australia  noted that it had two proposals which were aimed at providing completeness of the 
compendium document. In the first proposal, Australia was suggesting to add a separate annex 
regarding the Secretariat's calculations under Article 27.6. The second proposal was in relation to 
the request for information under Article 25.8 and the Anne x C of the document, so that Members 
could understand whether there had been replies to requests made under Article 25.8. That was a 
matter of transparency for assisting Members to find core information quickly.   
76. Canada , the United States , New Zealand , and the European Union  reiterated their support 
for Australian proposals.  G/SCM/M/105  
 
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  77. China  noted that since the SCM Agreement did not provide for the submission of written 
replies by Members to the Article 25.8 questions, the title of Annex C to the Secretariat's 
backg round note, "request for information under Article 25.8 of the SCM Agreement", was quite 
clear. In the third column of the annex, the document numbers of those requests were shown for 
information which reflected the heading i.e., the notification provided as well as the relevant rules 
of the Agreement. Therefore to change that heading into replies by the Members receiving request 
for information was neither legally grounded nor reasonable.  
78. In response to China's comments Australia  noted that the issue was about transparency and 
being able to locate Members' replies. Therefore it asked China whether it would be acceptable to 
refer to the minutes of the meeting during  which the relevant Member had provided oral replies to 
the Article 25.8 questions.  
79. China  noted that it would come back to Australia's suggestion in the next meeting . 
80. The Chair  suggested reverting to that issue at the next meeting of the Committee.  
81. The Chair recalled that at the Committee's October 2017 regular meeting, a number of 
Members had ind icated their willingness to continue discussions on the proposal from the US 
regarding procedures for questions and answers under Articles 25.8 and 25.9 of the 
SCM Agreement. The most recent version of the proposal was contained in document 
G/SCM/W/557/Rev .2. 
 
82. The United States  recalled the previous discussions in the Committee and noted that the 
introduction of the proposal contained sufficient details. The Committee should reach consensus on 
those common sense procedures to respond questions submitted und er Article 25.8 of the 
Agreement. It would continue to consult with Members with a view to addressing the concerns 
raised previously.  
83. Japan  reiterated its support for the US proposal. Referring to the concerns raised by China 
regarding provision of writte n answers to questions submitted under Article 25.8, Japan indicated 
that one possible option could be a non -mandatory guideline as a sample of good practice.  
84. New Zealand  supported the US proposal indicating that it would allow a better 
understanding of M embers' programmes. The proposal was practical and not overly burdensome.  
85. The European Union  expressed its support for the US proposal and noted that the questions 
submitted under Article 25.8 allowed filling the blanks regarding the subsidies that were n ot 
notified by Members. The EU expected to reach a consensus on the proposal.  
86. Australia  reiterated its support for the US proposal indicating that it was within the 
competencies of the Committee to agree on procedures or guidelines regarding Articles 25.8 and 
25.9.    
87. Canada  supported the US proposal noting that the mechanisms under Articles 25.8 and 25.9 
were important pillars for transparency.  It was open to explore  a mechanism to address 
Article  25.8 requests and could be flexible on the best approach. It also encouraged constructive 
discussions between Members in particular from those Members who had expressed concerns.  
88. China  indicated that the requirements for making such written answers or setting 
compulsory deadlines would impose newly added substant ive obligations on Members for which 
there was no legal basis. In some circumstances if Members intend to provide detailed answers to 
the questions, they might face with time and human resources constraints. Those Members might 
have to spend their limited time and resources trying to negotiate the possible extension of the 
deadlines for submitting those answers. It would probably distract their focus on preparing the 
answers and their notifications which might cause further delay in submission of the notifi cations 
contrary to the original intention. In addition, it was not clear as to who could judge the 
appropriateness of the Member's answers to Article 25.8 questions. All those issues were needed 
to be further discussed.  G/SCM/M/105  
 
- 11 - 
 
  89. The Russian Federation  welcomed  the US proposal noting that timely responsiveness would 
benefit all Members. In general, Russia did not oppose the US proposal; however, Members should 
take into account of the difficulties faced by Members with large economies and complex state 
structures. The opportunity to agree on other deadlines made the proposal more doable; however 
there was still much to be thought over how to put that in practice. The Russian Federation 
remained ready for further discussions.  
90. The United States  indicated that it would  continue to work on the proposal with Members 
and remained flexible.  
91. The Chair  stated that it appeared that Members wished to continue discussions on those 
issues at the next regular meeting of the Committee.  
 
92. The Committee took note  of the statements ma de. 
 
6  CONSTANT DOLLAR METH ODOLOGY FOR GRADUATI ON FROM ANNEX VII(B)  
93. 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 199 0 
dollars for three consecutive years. As of 1 January 2003, the methodology set forth in G/SCM/38, 
Appendix 2 had applied for making those calculations. In accordance with that Decision, since then 
the Secretariat had circulated annual notes in document s eries 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 15, had been circulated the previous week.  
94. No Member took the floor and the Committee took note  of the Chair's statement.  
7  PERMANENT GROUP OF E XPERTS (PGE)  
95. The Chair recalled that the term of office of Mr Welber Barral had expired in April 2017 and 
the term of Mr Chris Parlin was expiring  and therefore the Committee should elect two new experts 
to replace th em. At the previous meetings of the Committee, some Members had underlined the 
importance of completion of the election of PGE members as soon as possible. With a view to 
ensure that Members had sufficient time for engagement on that matter and that they c ould reach 
consensus on two candidates within a reasonable time -frame the Chair had explained the 
procedures to be followed in document G/SCM/151. In particular, she had established a deadline 
for nominations, which would be strictly enforced, and also sti pulated that nominations should 
include a summary CV as well as the full CV of the nominee. Following the deadline she had 
circulated the summary CVs to all Members and the full CVs of the nominees had been made 
available for interested Members.  
96. The Secre tariat had received five nominati ons to fill the two vacancies: Mr Rabih Nasser 
(Brazil); Ms Lanye Zhu (China); Mr Jaemin Lee (Korea, Republic of); Ms Marina Foltea (Moldova); 
and Mr Ronald K. Lorentzen (United States).  
 
97. The Chair's consultations initially  had been set to take place on 9 and 10 April 2018. Yet, at 
the request of some Members who had needed more time to receive final views from their capitals 
or had scheduling conflicts to meet the Chair, she had extended the consultation period as 
requested  to the end of the day on 12 April 2018. In addition, she had indicated that the views 
could be conveyed via email. The consultations had taken place with all the interested Members on 
9, 10 and 12 April 2018.  
 
98. Some Members had expressed their preferences and views in writing. In case of any 
ambiguity in written expressions of view , the Chair had requested written clarifications. When the 
coordinators of regional groups had expressed views on behalf of the group Members, the Chair 
had requested additional c larification in order to confirm that individual Members of the Group 
were aware of the expression of views conveyed by the group coordinators. These steps, along 
with the presence of the Secretariat at all of the consultation meetings, had been to ensure full 
transparency and clarity throughout the process.  
 G/SCM/M/105  
 
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  99. All Members had been invited to consult and overall a significant number of Members had 
expressed their views. However, some Members had expressed their views with respect to only 
one candidate.  
 
100.  At the end of the consultations Mr. Rabih Nasser of Brazil had received the greatest 
number of expressions of support, by a wide margin. The second candidate by number of 
expressions of support had been Mr. Jaemin Lee, followed by the remaining three candidat es. The 
number of expressions of support for the rest of the candidates had been very close to each other. 
The Chair also underlined that not every Member expressing a preference had indicated whether 
they could join a consensus around the candidates other  than the ones they had preferred.  
 
101.  The Chair had informed the nominating delegations of the situation to confirm whether they 
would join the consensus around the candidates that had received more support. However, during 
that meeting, some of the nominati ng delegations had expressed their concerns about the clarity 
of the process as it had been set out in the beginning of the consultations, such as, for example, 
lack of precise indication whether further consultations would be scheduled and the treatment o f 
preferences in cases where delegations had expressed no clear preference for the second name. In 
addition, one delegation had indicated that the consultations could have benefitted from a more 
extended timeline.  
 
102.  Prior to the Committee, the Chair had inv ited all Members to an informal open -ended 
transparency meeting to report back about the situation. During that meeting one of the 
nominating Members had reiterated its concerns and requested the suspension of the process 
while two of the nominating Member s had opposed that suggestion. The Chair had tried to work 
with those delegations to explore whether it might be possible to reach a positive conclusion 
before the Committee meeting, however, the situation remained the same. For that reason, the 
Chair had no basis to make a recommendation for the election of the nominees and the issue 
would be taken up by the next Chair of the Committee.  
 
103.  Moldova, Republic of  noted that it was time to revitalize the work of the PGE and to try to 
mobilize the experts in the interest of all Members. The WTO was a member -driven organization 
and if something did not work, it is up to Members to offer another strategy.  
 
104.  Moldova had shown flexibility and accepted the postponement of the selection process for 
the PGE and to wait un til that year, when the second vacancy would be open. It had demonstrated 
a constructive position and adjusted its view to the larger WTO Membership position.  
 
105.  That year the process had become more complicated and allowed only four days for 
consulting the capital. Following the notice sent by the Secretariat regarding the launching of the 
selection process, Moldova had contacted the Chair and the Secretariat in order to kindly request a 
postponement of the consultations process, given the fact that less tha n a one -week time -period 
offered to Delegations to consult their capitals and take a decision on the matter was not a 
reasonable timetable. Since 30 March 2018 and 2 April 2018 had be en non -working days for the 
WTO,  Members had only the period between 3 an d 6 April 2018 w hile additionally 6 and 
9 April 2018 had been non -working days for many Missions and Governments due to the Easter 
Holidays. The Chair had invited Delegations to start the selection process and participate at 
consultations on 9 April 2018, when many Diplomatic Missions had been closed.  
 
106.  Although the Chair had decided to extend the consultations additionally for one day, the 
period from 3 to 6 April was not enough to consult the capital and to inform other Members about 
the nominated experts.  
  
107.  Moldova acknowledged that all the candidates were well qualified to provide their expertise 
on the existence and nature of a WTO discipline related measure. However, the selection process 
had not been a correct and transparent one not just due to the timet able, but also because of the 
fact that some Members had voted for only one vacancy, whereas other Members had expressed 
their preferences for two vacancies. According to Moldova, there had been no clearly defined 
methodology for the selection process and Members had not been informed about it. For instance, 
what weight had been given to the vote of those Members who had expressed their preference for 
only one candidate, or whether there had been two separate clusters of candidates for each 
vacancy?  
 G/SCM/M/105  
 
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  108.  Along  with the principle of transparency, Moldova reiterated the importance of inclusiveness, 
meritocracy and balance in the PGE representation, as well as the need to revitalize the activity of 
the PGE starting with a new strategy in the selection process and its annual activity. Following the 
same selection procedures that had been applied in the last ten years would lead the same 
impasse and inefficiency of the PGE activity.  
 
109.  Moldova proposed the preparation of a report by the Secretariat with recommendations  to 
Members regarding ways in which PGE could be revitalized. Subsequently, Members should be 
given the opportunity (at the Secretariat and with their coordination) to have meetings with the 
candidates in order to assess the availability and the competenci es of the candidates not only on 
the subject of what a subsidy was, but also regarding their contribution to the revitalization of 
trade and active involvement in the activity of the PGE. This could be organized in Geneva or using 
modern communication tech nologies, such as web -conference chat. Moldova had provided such an 
opportunity to all Members in order to meet the nominated candidate in Geneva to address 
questions regarding the activity of the PGE and ways to improve its efficiency.  
 
110.  Moldova expected t o know views of all candidates on how they would strengthen the activity 
of the PGE through their expertise as well as their technical skills; and whether they had an 
appropriate level of language skills that would allow them to provide expertise in all th e WTO 
official languages. Bringing mind the fact that the PGE was supposed to be an independent group 
of experts – a body with quasi -judicial powers – principles of independence, meritocracy and 
competence should apply as in the case of panelists in the DS U. 
 
111.  Following the preparation of the report by the Secretariat, Moldova would adopt its position 
based on the proposals made therein and after having had an interview with all the proposed 
candidates.  
 
112.  Moldova expected that those aspects would allow the Ch air and the Secretariat to reassess 
the consultation process and it was open to cooperate on that matter and to organize a 
transparent round of consultations immediately after the Committee meeting, in order to conclude 
final results by September 2018.  
 
113.  Reiterating the importance of having a transparent process, Moldova requested the 
suspension of the consultation process, as it could not agree on the modalities. Finally, it noted 
that those remarks should not be taken as to prejudge the qualifications of a ny of the nominated 
candidates.  
 
114.  Korea, Republic of  appreciated the leadership and effort shown by the Chair throughout the 
selection process. Since the selection process had been suspended the previous year, the process 
had been undertaken in a prudent a nd transparent manner. After having prior consultations with 
interested Members the Chair had established the procedures on the basis of the agreement of the 
Membership. She had conducted consultations with Members on five candidates. Prior to the 
Chair's report on the results of the consultations no objection or comment had been raised by 
Members regarding the process. Unfortunately, one Member had not joined the consensus. 
Members' preference shown on the two candidates, Mr Rabih Nasser and Mr Jaemin Lee,  should be 
duly respected and the result of the consultations should be the base of any future decision. Korea 
could not agree on any move to re -open the process and urged the particular Member to join the 
consensus as soon as possible.  
 
115.  Brazil  indicated t hat the Chair had taken a prudent approach in pursuing that process with 
frequent and transparent communications with the Membership. The Chair had also been flexible 
enough to consider the extension of the consultation period as requested and also to allo w 
Members to show their preferences in written form. Brazil also thanked all delegations for their 
support to its candidate. It was unfortunate that the Chair was not in a position to recommend the 
two candidates who had received the most preferences from the Membership, especially when 
considering that no objections had been raised by any Member during the consultations. Brazil 
would not agree on any move to re -open the consultation process and would take the results as 
the only basis for decision of the C ommittee concerning the two vacancies in the PGE. Brazil 
expected that the Member who had raised concerns regarding procedural issues would soon be 
able to join the consensus.  
 G/SCM/M/105  
 
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  116.  Moldova, Republic of  noted that it had contacted the Chair and the Secretariat before the 
selection process had started during the consultations in order to request the postponement of the 
consultation process which was also organized on a non -working day for many diplomatic 
missions.  
 
117.  Moldova also indicated that several delegations  had stated that blocking the selection 
process was an action contrary to Moldova's position to revitalize the PGE. Moldova attached great 
importance to revitalizing the activity of the PGE. Unfortunately, during the last years, the only 
activity discussed  under that agenda item had been the selection of new members. Any blockage 
in the selection process did not mean that the PGE was not allowed to continue its activities. 
Members should consider the activity of the PGE more in deep by for example inviting the PGE to 
present a report about its activities which would allow to assess its efficiency ; the requests for 
dispute settlement advisory opinions ; whether those opinions have been taken into consideration 
by the Members concerned ; and the number of meetin gs held by the PGE since its creation. As a 
subsidiary body of the Committee, the PGE should be accountable in its activities therefore 
Moldova saw the selection process and the activity of the PGE as both linked to transparency.  
 
118.  Finally, Moldova underli ned that no delegation had approached for a bilateral constructive 
meeting since the last informal meeting on the results of the selection process.  
 
119.  The Committee took note  of the statements made.  
8  QUESTIONS TO CHINA F ROM THE EUROPEAN UNI ON AND THE UNITED STATES 
REGARDING POTENTIAL STEEL SUBSIDIES PURS UANT TO ARTICLE 25.8  OF THE SCM 
AGREEMENT – ITEM REQUESTED BY TH E EUROPEAN UNION AND  THE UNITED STATES  
120.  The United States  recalled that it had been concerned with the lack of transparency of 
China's industrial subsidy regime since 2001. It had raised questions to China under the old 
Transitional Review Mechanism, pursuant to Article 25.8 of the Agreement, under the normal 
Committee procedures and also counter -notified subsidy measures under Article 25.10.  
121.  It had raised questions and counter -notified numerous possible steel subsidy measures in 
China as steel was a vital sector in the US. China, however, had not notified the vast majority of 
its steel subsidy programmes.  
122.  The growth of the steel industry in China h ad been remarkable since China had become a 
WTO Member. Its steel capacity had grown over 500 per cent since 2001 and it accounted for half 
of the global steel production. The growth of capacity in China had outpaced the growth in 
demand. Its steel capacit y exceeded domestic demand by over 400 million tons.  
123.  In a market economy, when capacity outpaced demand, the owners of that capacity were 
threatened by financial loses which forced them to reduce capacity or exit from the market. In a 
market economy, when  there was excess capacity in an industry it would be difficult to obtain 
commercial financing for even more capacity investments. However, those fact patterns did not 
appear to apply in China.  
124.  The financial crisis in 2008 had led to a severe drop in globa l demand for steel. In China, 
however, the financial crisis had not affected the increase in capacity. Steel capacity in China had 
gone up substantially by over 332 million tons or 46 percent since 2009.  
125.  Ministry of Industry and Information Technology of China and many market analysts agreed 
that China's steel demand had peaked, and it had been declining  since 2013.  
126.  It was not surprising that China's excess production had spilled over to export markets while 
there was insufficient domestic demand. China's  exports had grown from less than 5 million tons 
to over 80 million tons between 2001 and 2017 which had led to a rise in trade remedy cases 
around the world against Chinese steel products.  
127.  According to China, the tremendous growth in capacity and exports – in both good and bad 
times - had been accomplished without a single specific subsidy while a superficial examination of 
the annual reports of several of the largest steel companies in China indicated the otherwise. In G/SCM/M/105  
 
- 15 - 
 
  those reports, under the title of "g overnment subsidies" or "government grants", many of China's 
top steel companies listed dozens of government -funded projects through the provision of grants.  
128.  The Article 25.8 questions co -submitted by the European Union and the US previous year 
asked abou t 160 government subsidies or government grants listed in the annual reports of six of 
the largest steel companies in China. More recent annual reports indicated the same general level 
of government subsidies. Not all those listed programmes might be notif iable under Article 25, but 
certainly there were more than the three non -specific programmes which China had claimed 
previously or the few other programmes that notified under different names or were not specified 
as claimed by China. If all those other pr ogrammes were from provincial and local governments as 
argued by China in other fora, why had they not been notified?  
 
129.  According to steel company annual reports, several of China's steel companies had also 
received government equity infusions which were n ot surprising given that most of the largest 
steel companies in China were government -owned. While it was possible that none of the 
government equity infusions had provided a benefit to the recipient companies, the US and the EU 
had asked China to explain whether those government investments could be commercially 
justified.  
130.  The European Union  reiterated that compliance with the notification obligations under 
Article  25 of the Agreement was crucial for the effective work of the Committee. The submission of 
a subsidy notification was a step to meet the obligations under the Agreement but not sufficient 
without complete information on all specific subsidies. In this respect, the EU drew Members' 
attention to China's notifications which had not been complete as regards to subsidies 
administered either at sub -central level or in relation to particular sectors, including steel.  
131.  The EU acknowledged that some of the schemes m ight not be subject to notification 
requirements. However, it remained concerned that none of  the schemes identified in the 
questions appeared in any of China's notifications, including one notification regarding provincial 
schemes. It asked China to provide further information regarding subsidies received by Chinese 
steel companies, as identified  in the questions. The EU also asked China to indicate when China 
could  notify th ose and other schemes to the Committee, in accordance with its obligations under 
the Agreement.  
 
132.  Japan  supported, from the perspective of transparency, the discussion of this issue in the 
Committee.  
 
133.  Canada  expressed strong concerns about the lower rate of compliance with transparency 
obligations, which are fundamental to the operation of the Agreement. It noted that transparency 
in steel subsidies was a fundamental aspect in a ddressing the issue of overcapacity in this sector.  
 
134.  Norway  was of the view that overcapacity in the steel sector was a global issue which 
required collective, multilateral responses. According to Norway, while the WTO was the 
cornerstone of the multilater al trading system, the Global Forum on Steel Excess Capacity, in 
which Norway participates, was an important arena to strengthen the focus on the steel sector. 
Norway stated that work undertaken in the WTO and this Forum should be mutually supportive.  
 
135.  Further, Norway emphasized that transparency was the key to progress against 
overcapacity, and agreed with the need for more timely and complete notifications under the SCM 
Agreement.  
 
136.  China  noted that it had made efforts at clarifying the consistent concerns of the US and the 
EU on China's policies regarding the steel industries. China submitted in the Committee meeting in 
October 2017 a detailed explanation regarding some of the questions raised by the US and the EU, 
and was working on its replies to other questions. China was also working on its 2017 new and full 
notifications for both the central and the sub -central levels, which would take into account the 
relevant concerns of the US and the EU. 
 
137.  China also  reiterated its view that overcapacity was not an issue that should be discussed in 
the Committee.  
 
138.  The Committee took note  of the statements made.  G/SCM/M/105  
 
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  9  SUBSIDIES AND OVERCA PACITY – ITEM RE QUESTED BY CANADA, T HE 
EUROPEAN  UNION, JAPAN, MEXICO , AND THE UNITED STA TES (G/SCM/W/575)  
139.  The United States  recalled the paper on subsidies and overcapacity submitted by the 
European Union, Japan, Mexico, and the US6 which had referred to paragraph 10 of the Shanghai 
Ministerial Statement and paragraph 31 o f the Hangzhou Summit: "(…) subsidies and other types 
of support from governments or government -sponsored institutions can cause market distortions 
and contribute to global excess capacity and therefore require attention."  
140.  In document G/SCM/W/575 the co -sponsors focused on particular instances of below -market 
financing; specifically, the provision of low -cost lending by state -owned banks to state -owned 
industrial enterprises to increase aggregate demand during recession, and subsequent steps taken 
by the re levant governments to convert those loans to equity. The overarching point in instances 
of the creation and maintenance of overcapacity was that direct or indirect government ownership 
and control could result in political considerations dominating what sh ould have been exclusively 
commercial decisions. This was especially problematic when the state owned or controlled both the 
lender and borrower in a financial transaction.  
141.  During the Great Recession, some governments, with the aim to grow their local eco nomies 
and increase employment, had sought to stimulate demand through low -cost lending by state -
owned banks to state -owned industrial enterprises which had resulted in a dangerous environment 
for the creation of additional capacity insufficiency justified  by market factors. In those 
circumstances, overly optimistic projections of future demand, combined with abundant, cheap 
credit which was explicitly or implicitly guaranteed by the government, prompted large -scale 
investment projects in capital -intensive sectors. The result was distortions in the domestic market 
that spilled over into the international economy and distorted international trade patterns.  
142.  To the extent that the creation of new capacity or maintenance of economically 
unsustainable old capacit y was not market -based, the result could be oversupplied markets and 
excess productive capacity which could lead to a fall in prices and declining profit margins making 
repayment of loans more difficult as well as a drag on company finances. More important ly, if 
there was not a properly functioning exit mechanism or government owners could not make 
admittedly hard, commercial decisions to readjust capacity, it became extremely difficult to re -
align supply and demand.  
143.  To address the problem of overleveraged state-owned enterprises following a period of 
abundant cheap credit, a government could convert high -interest bank loans to relatively low -
return equity capital through state -owned banks or other financial institutions. While limiting debt -
to-equity swaps to financially healthy companies had been the stated policy guideline, there had 
been such transactions in several steel companies that had been struggling financially. Those types 
of debt -to-equity swaps that were not on commercial terms allowed strugglin g companies to 
remain in business and to continue producing instead of cutting capacity or entering the 
bankruptcy or exiting the market which exacerbated the overcapacity problem.  
144.  According to the US, the immediate question was how the subsidy disciplines  and 
transparency rules in the Agreement should be improved. One of the speakers at the seminar in 
fall 2017 on subsidies and overcapacity had suggested adding  a new paragraph to Article 5 that 
would establish a finding that a subsidy causes serious prejud ice where the subsidy was specific 
and a Member's capacity levels of a particular like product had suppressed and/or depressed prices 
of another Member's like product. But, could the capacity level of one Member be shown to 
suppress or depress prices for a nother Member? How should a country's competitive advantage or 
lack thereof, be taken into account?  
145.  The same speaker had also suggested amending Article 3 of the Agreement to consider 
certain below -market financing by government related entities as prohibi ted subsidies. The US 
indicated that a direct transfer to cover operating losses – a former dark amber type subsidy – was 
egregious and a candidate for a stronger discipline. But should all instances of debt forgiveness be 
considered prohibited, even if a private bank under the same circumstances would have taken the 
same steps ? 
                                                
6 G/SCM/W/575, circulated on 13 April 2018.  G/SCM/M/105  
 
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  146.  More generally, the US asked what an appropriate policy response would be when an 
enterprise faced insolvency and whether government intervention should be contingent upon a 
credibl e restructuring plan designed to return the enterprise within a reasonable period of time to 
long term viability. What factors would be taken into account when determining whether a debt -
for-equity swap was on commercial terms? If the financing that led to  the debt initially had also 
been on non -commercial terms, should that be considered as well when determining if there was a 
subsidy element to the debt -to-equity transaction?  
147.  The US noted that while views might differ on those particular issues, the centr al questions 
remained clear: under what conditions should below -market financing be subject to stronger 
subsidy disciplines as well as transparency obligations?    
148.  Canada  noted that its co -sponsorship of the paper reflected its ongoing concern with the rol e 
of government interventions with respect to the global excess capacity in certain sectors which 
resulted trade and market distortions affecting all manufacturing economies. To be effective, 
government actions had to aim to address the underlying causes o f the excess capacity including 
subsidization and government intervention. In particular, the provision of below -market financing 
by state -owned banks and debt -to-equity swaps by government -owned or directed financial 
institutions were concerning. The WTO forum and the Committee in particular, were uniquely 
situated to the discussions on the role of subsidies on global overcapacity as well as how to 
address them. Canada urged Members to engage constructively and give through consideration to 
the aim of the paper which was to encourage further discussions among Members about how they 
could better address the specific forms of subsidies that were contributing to the global 
overcapacity and finding lasting long term solutions.  
149.   The European Union  reiterated tha t subsidies were one of the main contributors to 
overcapacity and they persisted in several sectors of the world economy. It recalled the previous 
paper in document G/SCM/W/572/Rev.1, in which the EU and other co -sponsors had suggested 
that subsidies which  contributed to overcapacity should be subject to more stringent disciplines. As 
regard to  the question of what such disciplines could be, the EU referred to the seminar on 
overcapacity organized on 2 October 2017, at which several of the speakers had drew  attention to 
the issue of below -cost financing.  
150.  The EU expressed its support to the views set out in document G/SCM/W/575 which covered 
two of the most egregious types of below -market financing: provision of below -cost lending by 
state-owned banks and als o the issue of debt -to-equity conversions which were particularly 
harmful in the context of contribution to overcapacity and which should be effectively addressed to 
restore a level playing field among Members.  
151.  According to the EU, however, the current WT O rules, in particular the SCM Agreement, did 
not allow Members to effectively tackle this type of subsidies which was regrettable given that 
ensuring a level playing field was currently the most pressing trade issue. The EU also joined the 
call made by Ca nada for all Members to start seriously considering possible ways to address that 
shortcoming of the Agreement including through strengthening of the existing disciplines.  
152.  Japan  noted that the market distorting measures by governments, including below -cost 
financing, was one of the major causes of the overcapacity problem in iron and steel, aluminium 
and semiconductor industries. It was important to discuss that issue in the Committee with a view 
to make a free and fair market by removing those measures. Th e proposal in document 
G/SCM/W/575 tried to review more concrete subsidies based on the discussions on the previous 
proposals in documents G/SCM/W/569 and G/SCM/W/572/Rev.1 as well as the seminar organized 
last year regarding the subsidies which might caus e overcapacities.  
153.  There were some ambitious elements in the proposal but it also included disciplines such as 
a direct transfer to cover operating losses – a former dark amber type subsidy which were 
stipulated in Article 6.1 of the Agreement. The proposal  pointed out what disciplines were not 
included and the shortcomings of the Agreement to deal with current global overcapacity issues. 
Japan encouraged the Committee to discuss that issue further.  
154.  Norway  agreed with the analysis that below market financing  would distort competition 
domestically, cause overcapacity if firms continued an unproductive production, and distort trade G/SCM/M/105  
 
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  and the global economy more broadly. It was clear that Members needed to have a focused 
discussion on how to deal with such financi ng in the Agreement. At the outset, below -market -
financing by governments was already actionable in line with other subsidies.  Norway was 
prepared to discuss whether that was sufficient, whether there was need for an outright prohibition 
as suggested for A rticle 3 of the Agreement, whether looking at the criteria for adverse effects was 
more conducive, or whether there were other possible measures. WTO Members should consider  
that how certain forms of for example debt -to-equity swaps could constitute a subs idy, how they 
should be notified to the WTO, and how they might be considered actionable.  
155.  Members had to improve the work related to subsidies notifications. Members had a shared 
interest in upholding the multilateral trading system centered on the WTO, and Members’ lack of 
compliance with their notification commitments was not acceptable. During the discussions, it was 
important to make clear that there was no direct correlation between a high degree of state 
ownership in an economy, and the provision by  government -related entities of below marked 
financing. According to Norway, it was important that state ownership was exercised professionally 
based on generally accepted principles of corporate governance, including respect for the division 
of roles betw een the state as a shareholder and the board. As a case in point, there was some 
state ownership in major Norwegian financial institutions which were managed precisely to ensure 
that no doubt might be raised about those financial institutions’ independenc e from the state. 
Their operations were completely independent of whether their customers were companies in 
which the state had a holding or privately owned companies. In this regard, transparency and the 
responsible exercise of state -ownership were key.  
156.  Mexico reiterated the importance of knowing to what extent subsidies were encourag ing 
excess capacity and it was expect ing to hear other Members' opinions on the paper submitted by 
the co -sponsors.  
157.  Chinese Taipei  noted that overcapacity was a global issue a nd one of the major challenges 
for the global economy. There were various causes contributing to overcapacity and some 
Members had previously indicated that economic downturn had been one of the reasons of it. G20 
recognized that subsidies and other types of support from governments or government -sponsored 
institutions could cause market distortions and contribute to global excess capacity. The 
Agreement had a central role as the Committee was a forum for Members to exchange views on 
subsidies. Chinese  Taipei was open to exploring what role subsidies such as below -market 
financing and low -cost lending were  playing on overcapacity.  
158.  Brazil  underlined that its capital was still working on the document and it would provide 
some initial comments. It shared the c oncern that distortions might be caused by below -market 
financing through which inefficient sectors were artificially maintained. This type of financing might 
cause excess exports and consequently drive down the prices in international markets, in 
particul ar while there was low demand. Brazil was interested  in taking part in further conversation 
in the Committee in the format that the proponents might feel more appropriate. It reserved its 
rights concerning its future positions on this topic.  
159.  China  recalle d its statement made at the beginning of the meeting and reiterated that the 
Committee was not the proper forum to discuss overcapacity. Overcapacity was a global, periodic 
and structural problem and the root cause was the slow recovery of the global econo my as well as 
the sluggish demand conditions since the international financial crisis in 2008, which had also been 
confirmed by the G20 Leaders.  
160.  Addressing the overcapacity issue  was requir ing collective action and global cooperation. 
China  was ready to t ake concreate action through the supply -side structural reform. In 2016 and 
2017, it had successfully reduced the steel excess capacity by over one hundred million tonnes 
which had cost China a hefty pr ice. Only in 2016 more than 200, 000 workers had been r e-located 
which w as more than the total number of steel workers in the US and Japan. China should not be 
the only one that was making painful efforts while other Members were watching or taking action 
in the opposite way. Referring to the rise of protectio nism in recent years, China noted that 
unilateral trade actions by some Members had triggered wide -spread concerns about trade war 
which could erode the business confidence which was vital for the global growth. The slow global 
growth in return would make it more difficult to fundamentally resolve the overcapacity issue. 
According to China, what Members missed about the overcapacity was not the real impact of 
subsidies but the attempts to shift the responsibility and blame off of some Members.  G/SCM/M/105  
 
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  161.  The Russian F ederation  noted that the need for urgent action to tackle overcapacity had 
been visible back in 2013 when the G20 Leaders had confirmed their commitment to address that 
challenge. The Global Forum on Steel Excess Capacity (the Forum) had been created then.  It was 
functioning and the Russian Federation expected that its work would bear fruit. The need for 
collective effort within the Forum was more obvious than ever.  
162.  The steps to overcome the excess capacity crisis were forming the future of the world trade . 
Therefore they should be made with special care. There were, however, incredible examples - the 
use of unprecedented trade barriers, such as the US Section 232 measures on steel and 
aluminium. The Russian Federation reiterated that imposing unilateral tr ade barriers would not 
contribute to eliminating overcapacity rather the only outcome would be putting the multilateral 
trading system under threat.  
163.  The Russian Federation warned Members against elaborating ways to react to overcapacity 
in parallel with t he joint efforts within the Forum. It expected the Forum to elaborate concrete 
policy solutions taking into account all factors of excess capacity, including subsidization and 
overuse of trade barriers. The Russian Federation expected that the outcome woul d show the most 
effective instruments, including the ones envisaged in the WTO normative base.  
164.  The Russian Federation also indicated that it  was premature to review possible amendments 
to subsidy disciplines at that stage noting that the existing ones migh t be sufficient. Besides, 
amending the Agreement might require long negotiations within the Negotiation Group on Rules 
while there was need for urgent solutions.  
165.   According to Australia  the Committee could take full consideration of the issue of 
overcapaci ty. It was a part of the work of the Committee to analyse the impacts of subsidies in a 
generic sense and to look at whether rules could be amended. The work of the Committee was 
quite distinct from the Global Forum on Steel Excess Capacity and the paper w as dealing with 
overcapacity as an issue not targeted in any particular product. It would be useful for the work of 
the Committee to look at the linkage between particular types of subsidies and their impacts on 
trade. Australia had long been a supporter o f developing clearer rules on below -cost financing 
which had been discussed during the Doha Round. As outlined in the paper, the impacts of below -
cost financing were worth further consideration. Australia also expressed its willingness to be 
involved in fu rther discussions on the matter.  
166.  The Committee took note  of the statements made.  
10  IMPLEMENTATION OF PA RAGRAPH 2 OF THE MIN ISTERIAL DECISION ON  FISHERIES 
SUBSIDIES (WT/MIN(17 )/64; 13 DECEMBER 20 17) – ITEM REQUESTED BY AU STRALIA, 
CANADA, THE EUROPEAN  UNION, ICELAND, NEW ZEALAND , NORWAY, AND THE 
UNITED  STATES  
167.  The United States  recalled that at the Ministerial Conference in Buenos Aires, Ministers had 
re-committed to the implementation of existing notification obligations under Article 25.3 of the 
Agreement wit h a view toward strengthening transparency with respect to fisheries subsidies. It 
also reiterated that the Members' record in meeting their subsidy notification obligation under 
Article 25.3 was dismal as more than half of all Members had not submitted th eir 2017 subsidy 
notification.  
168.  Some of the notifying Members had not notified all of their fisheries subsidies among which 
there were some of the largest producers in the world. For example, in 2014, China's Trade Policy 
Review had noted that approximately  30 fisheries programmes had not been notified which 
remained largely unnotified.  
169.  In light of the Ministerial directive from Buenos Aires, Members had to seriously re -commit 
themselves to meeting their existing notification obligations. In order to accompl ish that objective 
the Committee should undertake some concrete actions to ensure that all Members were in a 
position to provide their notifications.  
170.  Recalling the difficulties indicated by several Members in meeting their notification 
obligations in a tim ely manner the US suggested the following:  G/SCM/M/105  
 
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   The Secretariat could enhance its subsidy notification training/technical assistance, including 
by adopting the training to more specifically address notifications of fisheries subsidies.  
 
 Members could share best practices, in particular those Members that had consistently or 
recently provided complete fisheries subsidies notifications. For example, India and 
Argentina had recently provided comprehensive notifications. Other Members would likely 
benefit from l earning about the steps and procedures that those Members had followed to 
collect the relevant information and submit their notifications.  
 
 Members could agree on a deadline (e.g.  30 September ) by which to provide their fisheries 
subsidies notifications, a nd any Member that had not notified by then to provide an 
explanation or status report.  
171.  The US was open  to other ideas that would help to ensure that all Members comply with the 
Ministerial directive from Buenos Aires to provide fisheries subsid ies notific ations under 
Article  25.3. It recalled that in addition to the question of how to improve compliance with the 
notification requirements in Article 25.3 it had proposed in prior meetings that the Committee 
considered ways to enhance and improve fisheries su bsidies notifications. In this regard, it had 
asked what other information might be needed to assess the trade and resource impacts that a 
fishery subsidy might have. Specifically, it had suggested that notifications included additional 
information on catc h data; status of the fish stocks; fleet capacity; and conservation and 
management measures to the extent available. The Committee should continue to consider that 
issue.  
172.  Finally, the US indicated that the ultimate goal was to provide greater transparency through 
notifications that was unique to fisheries subsidies programmes and allow a better understanding 
of the operation of notified programmes. The first step, however, was to adhere to the Ministerial 
Decision and to submit complete and timely notificat ions of fisheries subsidies.  
173.  Colombia  expressed its support for the commitment to the compliance with the Ministerial 
Decision. It could have a pinpointed exchange on that issue to see the best way forward to 
implement the decision and make progress. Colom bia was highly committed to the negotiations on 
fisheries subsidies.  
174.  The European Union  indicated that the Ministerial Decision had reaffirmed the commitments 
of Members to implement the existing notification obligations under Article 25.3 of the Agreement ; 
thereby strengthening transparency with respect to fisheries subsidies.  Although that commitment 
applied to fisheries subsidies specifically, Members should respect their existing notification 
obligations in all sectors in general.  
175.  Compliance with the n otification obligations, however, remained very poor. The discussion 
under agenda item 5 revealed that a staggering 85 Members had failed to make any notification, 
although the deadline to do so had expired in June 2017. Yet, transparency in the area of su bsidies 
was one of the crucial pillars of the Agreement. Non -compliance with existing obligations and the 
impossibility for other Members to address such non -compliance contributed greatly to the current 
dissatisfaction of some Members with the way the WTO  worked. Thus, the EU called on Members 
that had not fully complied with their existing notification obligation to do so as a matter of 
urgency.     
  
176.  Norway  added its voice to the importance of expeditiously following -up the Ministerial 
Decision. The fish eries subsidies negotiations were important for all sorts of reasons, and although 
not part of this Committee’s mandate, the Committee’s annual transparency exercise was of 
fundamental importance also in that area. When Norway had been working on the langu age of the 
Ministerial Decision, it had based itself on the knowledge that not all Members, or Members to a 
varying degree, had implemented their notification commitments. Consequently, not all Members 
had notified their fisheries -related subsidies.  
177.  Norway  reminded that the Chair of the Negotiating Group on Rules (NGR) had asked 
Members for the NGR meeting in May 2018, to make presentations and exchange information and 
experience on support to capital costs such as vessel construction, modernization, renova tion and 
to operating costs such as gear, bait, ice, fuel, and labo ur. G/SCM/M/105  
 
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  178.   Norway expected that Members would work to make the RNG discussions as meaningful as 
possible. It also expected that given those negotiations, most Members had a good overview of 
their own subsidies. To this end, Norway urged Members who granted fisheries subsidies, as 
mandated in Articles 25.1 and 25.3 of the Agreement to notify those subsidies. It also reminded 
that Article 25.1 required notifications no later than 30 June of each yea r.  
179.  Iceland  indicated that Ministers at the MC11 had recommitted to implementing the existing 
notification obligations under Article 25.3 of the Agreement. It was important to strengthen 
transparency with respect to fisheries subsidies. Unfortunately, the record of how well Members 
live-up to such existing notification obligation was poor. Iceland had been working hard to provide 
all its notification obligations and striving to close any remaining gaps. Its 2017 new and full 
subsidy notification had been re viewed at the special meeting of the Committee and it had no 
outstanding notification under the Agreement. Iceland acknowledged that it was a difficult and 
challenging task as it was a small delegation and its administration in capital was also small. 
Howe ver, it was a very important task which must be done.  
180.  The Secretariat could help Members in meeting their notification obligations. In the last TPR, 
Iceland had encouraged the Secretariat to increase its efforts to help all Members meet their 
notification  requirements. Just finding the information on what notification requirements were 
outstanding or what should have been notified and how best to do it could be challenging. The 
Committee on Agriculture, for example, had produced a very helpful, detailed an d easy to access 
guide with examples on how to notify. More efforts of that sort were needed.  
181.  It was necessary to look at concrete steps as to how to help Members implement ing the 
Ministerial Decision. The Secretariat could enhance its training and techni cal assistance for all 
Members adapting the training to focus specifically on fisheries subsidies and it would also be 
useful if Members shared their past practices. In addition, it would be beneficial if Members could 
agree on a deadline by which Members should provide the fisheries subsidies notifications and 
when the deadline passed, the Member should provide an explanation and report on progress. 
Iceland also supported the idea that the Secretariat prepared a compendium of all notified fisheries 
subsidi es that could become a living document to be expanded as notifications came in.  An extra 
effort was needed to fully comply with the existing notification requirements and with the second 
paragraph of the Ministerial Decision which should be done in parall el to the efforts at the NGR. In 
order to meet  the Sustainable Development Goals (SDG) target , Members needed to increase the 
transparency requirement so that they could better understand how the notified program mes 
could affect the sustainability. In the meantime, Members had to get a full picture of the subsidies 
provided to the fishing sector. Iceland encouraged Members with outstanding notification 
obligations to provide complete and timely notifications. Finally, Iceland also encouraged the 
Secretariat  to look at how it could help Members in meeting their transparency obligations.  
182.  Panama  noted that the Ministers had underscored the importance of complying with the 
obligations under Article 25.3 of the Agreement. Too often, there was a lack of transpare ncy and 
that was a crucial concern when it came to the fisheries subsidies negotiations. Transparency was 
needed to assess the effects that such subsidies could have on trade which would eventually help 
Members to design the proper and effective discipline s that could enable them to deal with trade 
distortions and make a better sustainable use of the resources. Fishing was very important to 
Panama as far as the income generated from exports as well as nutrition were concerned.   
 
183.  Argentina highlighted its co mmitment to transparency and notification requirements in the 
area of fisheries subsidies which had been reflected in each of the proposals submitted to the NGR 
by Argentina and other Members in the Latin America Group.  
 
184.  New Zealand  referred to the Ministerial Decision and noted that subsidies to IUU fishing and 
overfishing were destructive to fish stocks. It was vital that Members meet the notification 
requirements so that they were able to better understand the programmes in place and their 
effects on fishing stocks as well as on the environment.   
 
185.  Japan attached great importance to improving Members' compliance with the notification 
obligations in the area of fisheries subsidies. Paragraph 2 of the Ministerial Decision was not a 
mere affirmation of existing obligations. Improving the implementation of existing notification 
obligations through paragraph 2 combined with enhanced fisheries subsidies notifications in the 
ongoing negotiations would significantly contribute to the proper  functioning and operationalization G/SCM/M/105  
 
- 22 - 
 
  of fisheries subsidies disciplines for which all Members should work collectively with the aim of 
adopting those disciplines by the next Ministerial Conference. Japan would continue working with 
other Members to enhance transparency through the fisheries subsidies negotiations.  
 
186.  Canada  welcomed the recommitment of Members in paragraph 2 of the Ministerial Decision 
on fisheries subsidies to implement their notification obligations with respect to fisheries subsidies. 
Fulfilment of the notification obligations was necessary to address the challenges related to IUU 
fishing and overfishing and also to deliver on SDG 14.6. There had been several discussions in the 
NGR on how to improve and enhance the transparency of fisheries subsidies programmes, which 
Canada welcomed and supported. Canada also noted that the enhanced disciplines on 
transparency of fisheries subsidies would only be useful if taken seriously and if Members complied 
with them. Canada trusted that Members would r espect and implement paragraph 2 of the 
Ministerial Decision.  
 
187.   Australia  noted that the transparency obligation was an important core obligation of the 
Agreement and it was pleased with paragraph 2 of the Ministerial Decision. It was important for 
Members  to include the fisheries subsidies in their regular subsidy notifications. The US had raised 
some useful suggestions to improve the notification requirement. Australia agreed that it would be 
useful for the Secretariat to adapt its training to more specif ically address fisheries subsidies 
notifications. Members could also benefit from learning about the processes followed by those 
Members which had provided very complete fisheries subsidies notifications.  This was an 
important process that the Committee s hould be going through in parallel to the negotiations on 
developing enhanced transparency rules on fisheries subsidies in the NGR. This would also help to 
build understanding of the operation of Members' fisheries programmes.  
 
188.  The Committee took note  of the statements made.  
11  OTHER BUSINESS  
189.  No Member raised any items under other business.  
12  DATE OF NEXT REGULAR  MEETING  
190.  The Committee decided  to hold its next regula r meeting during the week of 
22 October  2018, with the exact date to be confirmed in due course. A s usual, that meeting would 
be immediately preceded by a special meeting for review of subsidy notifications.  
 
13  ELECTION OF OFFICERS  
191.  The Committee elected Mr Pedro NEGUELOAETCHEVERR Y of Argentina as Chair, and 
Ms Michele LEGAULT DOOLEY of Canada as Vice -Chair, to take effect at the end of the meeting.  
192.  The meeting was closed.  
__________