RESTRICTED  
  
G/SCM/M/95  
 
2 February 2016  
(16-0700)  Page: 1/27  
Committee on Subsidies and Countervailing Measures    
 
 
MINUTES OF THE REGULAR MEETING 
HELD ON 27 OCTOBER 2015 
 
CHAIR: MR MITSUHIRO FUKUYAMA (JAPAN) 
1. The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 27 October 2015, convened in WTO/AIR/SCM/6 dated 16 October 2015. 
 2. The Committee adopted the following agenda: 
1  NATIONAL LEGISLATION - REVIEW OF  NOTIFICATIONS OF NEW OR AMENDED 
LEGISLATION OR REGULATIONS NOT PREVIOUSLY REVIEWED BY THE 
COMMITTEE (INCLUDING SUPPLEMENTAL NOTIFICATIONS OF EXISTING PROVISIONS NOT PREVIO USLY REVI EWED) .................................................................... 2
 
1.1  Australia (G/ADP/N/1/AUS/2/Suppl.14 – G/SCM/N/1/AUS/2/Suppl.12) ............................... 2  
1.2  Qatar (G/ADP/N/1/QAT/3 – G/SC M/N/1/QAT/3 & G/SG /N/1/QAT/3) .................................. 2  
1.3  United States (G/ADP/N/1/USA/1/Suppl.19, 20, 21, and 22 - 
G/SCM/N/1/USA/1/Suppl.19,  20, 21, and 22) ....................................................................... 2  
1.4  Cameroon (G/ADP/N/1/CMR/1/S uppl.1-G/SCM/N/1/CMR/1/Suppl.1-
G/SG/N/1/CMR/1 /Suppl.1) ................................................................................................. 3  
2  SEMI-ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS 
(ARTICLE 25.11) - G/SCM/N/289 AND G/SCM/N/ 289/SUPPL.1  ...................................... 3  
3  PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: 
NOTIFICATIONS (ART ICLE 25.11) ................................................................................... 7  
4  ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR THE 
ELIMINATION OF EXPO RT SUBSIDIES ............................................................................. 7  
5  IMPROVING THE TIMELINESS AND CO MPLETENESS OF NOTIFICATIONS AND 
OTHER INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM 
AGREEMENT .....................................................................................................................  7 
6  PERMANENT GROU P OF EXPE RTS ............................................................................... 12  
7  JAPANESE GOVERNMENT SUPPORT FOR THE DEVELOPMENT OF REGIONAL 
AIRCRAFT – ITEM REQU ESTED BY BR AZIL ..................................................................... 13  
8  ELIMINATION OF EXPORT SUBSIDIES FOR TEXTILES AND APPAREL BY INDIA 
PURSUANT TO ARTICLE 27.5 OF THE SCM AGREEMENT – ITEM REQUESTED BY 
THE UNITED STATES ...................................................................................................... 14  
9  NON-NOTIFICATION BY INDIA OF A LLEGED SUBSIDIES CO NTAINED IN THE 
REQUEST BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM 
AGREEMENT – REQUEST FROM THE UNIT ED STATES (G/SCM/Q2/IND/20) ................... 15  
10  2012 AND 2015 REQUESTS TO CHINA FROM THE UNITED STATES PURSUANT 
TO ARTICLE 25.8 OF THE SCM AGREEMENT (G/SCM/Q2/CHN/46, G/SCM/Q2/CHN/46/SUPPL.1, G/SCM/Q2/CHN /52) ..................................................... 15
 
11  NON-NOTIFICATION BY CHINA OF A LLEGED SUBSIDIES CONTAINED IN THE 
2011 AND 2014 REQUESTS BY THE UNITED STATESUNDER ARTICLE 25.10 OF THE SCM AGREEMENT (G/SCM/Q2/CHN/42 AND G/SCM/Q2/CHN/51, PLUS 
G/SCM/Q2/CHN/51/CORR.1) – ITEM REQUESTED BY THE UNITED STATES .................. 20
 G/SCM/M/95 
 
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  12  NON-NOTIFICATION BY CHINA OF A LLEGED SUBSIDIES CONTAINED IN THE 
2015 REQUEST BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM AGREEMENT (G/SCM/Q2/CHN/53) – ITEM RE QUESTED BY THE UNITED STATES .......... 20
 
13  OTHER BU SINESS ..................................................................................................... 26  
13.1  CVD Investigation of the United States Regarding Sugar Originating in Mexico – 
Item Requested by Mexico ................................................................................................ 26 
14  DATE OF NEXT REGULAR MEETING ........................................................................... 27  
15  ANNUAL REPORT OF THE COMMITTEE ON SUBSIDIES AND COUNTERVAILING 
MEASURES TO THE COUN CIL FOR TRADE IN GOOD S (ARTICLE 32.7) ............................. 27  
 
1  NATIONAL LEGISLATION - REVIEW OF NOTIFICATIONS OF NEW OR AMENDED 
LEGISLATION OR REGULATIONS NOT PREV IOUSLY REVIEWED BY THE COMMITTEE 
(INCLUDING SUPPLEMENTAL NOTIFICATI ONS OF EXISTING PROVISIONS NOT 
PREVIOUSLY REVIEWED) 
3. The Chair noted that, in accordance with the Committee's procedures (G/SCM/W/293/Rev.1), 
the new legislative notifications on the agenda we re those that had been circulated in all three 
languages not less than six weeks before the meetin g. The deadline for written questions on these 
notifications had been 5 October 2015. 
 4. 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 16 November 2015. Written answers were due not later than 
7 December 2015.  
5. 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 their questions in this Committee to those specifically 
related to countervailing measures. 
 
1.1  Australia (G/ADP/N/1/AUS/2/Su ppl.14 – G/SCM/N/1/AUS/2/Suppl.12) 
6. Written questions and answers with respect to this notification can be found in: 
 
 G/SCM/Q1/AUS/17 - questions from the United States 
 G/SCM/Q1/AUS/18 – replies to the United States 
7. The Committee took note of the notification, questions, and answers. 
 
1.2  Qatar (G/ADP/N/1/QAT/3 – G/SCM/N/1/QAT/3 & G/SG/N/1/QAT/3) 
8. No questions were raised in respect of this notification. 
 9. The Committee took note of the notification. 
 
1.3  United States (G/ADP/N/1/USA/1/Suppl.19, 20, 21, and 22 - 
G/SCM/N/1/USA/1/Suppl.19, 20, 21, and 22) 
10. Written questions and answers with respect to this notification can be found in: 
 
 G/ADP/Q1/USA/27 – G/SCM/Q1/USA/27 – questions from the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu 
 G/ADP/Q1/USA/28 – G/SCM/Q1/USA/28 – replies to the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu1 
                                               
1 Circulated on 29 October 2015. G/SCM/M/95 
 
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  11. China noted that it had reviewed the notification of the United States with great interest and 
had some questions on the amendments made. As these concerned both antidumping and 
countervailing duties it would raise them in the Committee on Antidumping Practices.  
12. The Committee took note of the notification, questions, and statements made.  
 
1.4  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) 
13. 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 
14. To date, no written answers have been submitted.2  
 
15. The Chair, recalling the Committee's agreed procedures, informed Members that for new 
legislative notifications to be placed on the agen da of the April 2016 meeting, they would have to 
be circulated in all three languages by 14 March 2015. 
 
16. Australia, Colombia, India, Oman, Pakistan, and United Arab Emirates had submitted new 
legislative notifications which would be on th e agenda for review at the April 2016 meeting. 
Written questions concerning notifications to be reviewed should be submitted to the notifying 
Member and to the Secretariat by 7 April 2015. 
 17. Any Member wishing to place a previously-reviewed legislative notification on the agenda of 
the Committee's April 2016 regular meeting had to submit to the Member concerned and to the 
Secretariat written questions concerning that notification not later than 14 March 2016. The Member receiving such questions should submit its written answers not later than 11 April 2016. 
 
18. The Secretariat would circulate the usual triple-symbolled document containing these and the 
other pertinent deadlines shortly after the meeting.
3  
 
19. Some Members had 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 that had not yet made a legislative notification 
to do so as promptly as possible.  
 20. The Chair referred to the document G/SCM/N/18/Add.40 which contained the latest revision 
of the list of authorities competent to initiate and conduct investigations within the 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 notifications. 
 
21. The Committee took note of the Chair's statement. 
 
2  SEMI-ANNUAL REPORTS OF COUNTERVAI LING DUTY ACTIONS (ARTICLE 25.11) - 
G/SCM/N/289 AND G/SCM/N/289/SUPPL.1 
22. The Chair recalled that document G/SCM/N/289 and G/SCM/N/289/Suppl.1 had invited all 
Members to submit, not later than 15 August 2015, their semi-annual reports under Article 25.11 
of the SCM Agreement of countervailing duty actions taken in the period 1 January - 
30 June 2015. Document G/SCM/N/289/Add.1 provided the current status of Members' reporting for that period. Paragraph 1 of the document lis ted those Members reporting countervailing duty 
                                               
2 In accordance with the Committee's procedures in  G/SCM/W/293/Rev.1, any legislative notification in 
respect of which written answers to written questions have not been provided by the relevant deadline will be 
placed on the agenda of the Committee's subsequent regular meeting.  
3 G/ADP/W/493-G/SCM/W/565-G/SG/W/234 G/SCM/M/95 
 
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  actions during the period. Paragraph 2 listed the 38 Members that had notified having taken no 
countervailing duty action during the period. Af ter the document was circulated, Paraguay had 
submitted a nil notification. Paragraph 5 of the document listed the 34 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.  
23. The one-time notifications served a useful transp arency 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 Secretariat was ready to assist any Member in this regard. 
 
24. Unfortunately, the very large number of Members listed in paragraphs 3 and 4 of the 
document had not submitted a semi-annual report for January - June 2015. They were urged to do 
so as soon as possible.  
 
25. No comments or questions were raised concerning the semi-annual reports of Australia, 
Brazil, China, Egypt, Peru, the Russian Federation, or Turkey. 
 26. With respect to the semi-annual report of Canada , the Russian Federation expressed its 
concern over Canada's imposition of a provisional countervailing measure on certain hot-rolled 
steel plate originating in Russia. Russia had both significant systemic and particular procedural 
concerns with respect to the case. First, Canada  had failed to examine the accuracy and adequacy 
of the evidence in the petition to determine whet her there was sufficient evidence justifying the 
initiation of the investigation, and therefore had not met the standard for initiation provided in 
Article 11.3 of the SCM Agreement. Second, Canada  had breached the standard for application of 
provisional measures provided in Article 17.1(b) of the SCM Agreement by failing to demonstrate 
the existence of the alleged specific subsidies and the injury to the domestic industry caused by 
subsidized imports. Third, Canada had erred in rejecting in its entirety the information submitted by the Russian Federation, and totally relying on facts available.   
27. With respect to its systemic concern, Canada had considered the provision of natural gas and 
freight transportation services at regulated prices as subsidies, claiming that the prices constituted less than adequate remuneration, and thus conferred benefits to Russian producers. Canada's 
approach did not comply with WTO law, and price regulation was a natural and very important 
instrument in economic policy.  
28. The issue of its pricing policies had been discussed in detail during the accession of the 
Russian Federation to the WTO, and it had been confirmed that Russia's price regulation system 
was in full conformity with the WTO rules.  
29. Russia thus asked Canada to bring its measure into conformity with the SCM Agreement, and 
to reconsider its approach when deciding to apply final duties. Finally, it requested Canada to abandon its practice of considering price regulation as a countervailable subsidy. The Russian 
Federation would submit questions in writing and would follow up this issue at the Committee's 
next regular meeting.  
30. Canada stated that its response would be limited as the investigation was ongoing. The 
investigation had been initiated following the receipt of a properly documented complaint which 
had contained the elements required by Article 11.2 of the SCM Agreement. The requirements for 
domestic industry support, as defined in Article 11.4, also had been met. Accordingly, the 
Canadian investigating authority had examined the application and found that there was sufficient 
evidence that the product concerned had been subsidized and that this had caused or threatened to cause injury to the domestic industry to justify the initiation in accordance with Article 11.3 of 
the Agreement.  
 31. Canada noted that consultations had been undertaken in accordance with Article 13 of the 
SCM Agreement, and that the information pr ovided by Russia had been taken into due 
consideration by the investigating authority. The decision to take the provisional measure had been duly explained in the statement of reas ons issued by the investigating authority. 
 G/SCM/M/95 
 
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  32. As this was an ongoing investigation, other issues raised by Russia would be addressed in the 
final statement of reasons which would be issued following the final determination. Canada welcomed further comments and questions by Ru ssia, and took its international commitments 
under the SCM Agreement very seriously. The Cana dian investigating authority would apply final 
countervailing measures only when the evidence on  record substantiated the existence of subsidies 
causing injury to the domestic industry.   
33. Regarding the semi-annual report of the European Union , Turkey regretted the EU's 
initiation of consecutive anti-subsidy investigations against Turkish aquaculture products. As these 
investigations had serious adverse effects on small-scale enterprises and rural economic development, Turkey requested the EU to consider  the potential socio-economic outcomes of these 
investigations and to terminate the investigations on Turkish sea bass and sea bream without any 
measure.  
34. The European Union stated that the investigations had been initiated in accordance with the 
SCM Agreement, in particular the obligations provided for in Article 11. The socio-economic impact 
could be considered in the public interest analysis, and the Turkish Government was invited to 
make a contribution, which would be taken into account when making the final determination on 
this investigation.  35. With respect to the semi-annual report of India , China was concerned over India's CVD 
investigation on castings of wind operated electricity generators from China. First, the allegations 
fell short of WTO initiation standards. The application had failed to provide sufficient evidence on the existence of the alleged subsidies. Second, although the Government of China had clarified and 
proved with substantiated evidence in the pre-in itiation consultations and government responses 
to questionnaires that a large number of alleged subsidy programmes had already been rescinded, the investigating authority had included those programmes in the scope of the investigation, and 
had imposed an unreasonable burden on the resp onding parties by requiring them to provide 
detailed information thereon.. Third, the investigating authority had failed to ensure the interested parties of the right to defend their interests. The investigation had been initiated in May 2014 and the Government of China had submitted its ques tionnaire response in September 2014, yet the 
deficiency letter had not been issued until July 2015. During that long period there had been no 
preliminary finding, no public hearing and no disclosure of information. Only one month was left until the statutory time-limit of 18 months for completing the investigation. China hoped that the 
investigating authority would disclose the essential facts that would form the basis for the final 
decision in time for the interested parties to defend their interests. China urged India to make an objective and fair determination in compliance with the WTO rules.  
 
36. India stated that the investigation had been initiated based on the information provided in the 
complaint and all other available data. During the investigation, sufficient opportunities had been 
provided to all interested parties, including the Government of China, pursuant to the 
SCM Agreement. The investigation was still ongoing and the final findings would be issued in due 
course within the time limits provided in the SCM Agreement.  
37. Regarding the semi-annual report of Ukraine , the Russian Federation reiterated its concern 
on a CVD investigation initiated by Ukraine in September 2014 on passenger cars originating in 
Russia. Russia had strong doubts as to the confor mity with the SCM Agreement of the preliminary 
determination made by Ukraine. First, Ukraine had failed to take into account all of the 
substantiated facts submitted by the Russian parties concerning the existence of subsidies and benefits conferred to the Russian producers, which seemed to violate Article 12.7 of the SCM Agreement. Second, Ukraine had acted inconsis tently with Article 14 of the Agreement as it 
had failed to demonstrate the domestic use of calculated benefits to the recipient. Third, Ukraine 
had acted inconsistently with Article 15 because it had failed to properly evaluate all relevant injury factors and had not provided a reasonable explanation of the conclusion. The alleged injury 
could have been caused by other factors than Russian imports. Internal economic conditions and 
especially the sharp decline of demand in th e national market had not been considered 
appropriately by Ukraine. In addition, while the imports from Russia had decreased by over 70%, 
the imports from third countries, which occupied  90% of the market, had fallen by only 32%. 
Nevertheless, Ukraine had failed to provide an analysis on the injury caused by those other factors. In light of this evidence, Ukraine should have terminated the investigation without imposing final countervailing measures on the passenger cars. 
 G/SCM/M/95 
 
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  38. Ukraine stated that the investigation had been initiated in 18 September 2014 upon a 
complaint of the domestic industry that had contained sufficient prima facie  evidence that the 
Russian automobile industry had been benefiting from a number of subsidies granted by the Russian Government. The subsidized imports of the product concerned had affected the domestic 
industry of Ukraine, causing material injury. The investigation had been conducted in accordance 
with the provisions of the SCM Agreement. Russia had been invited to consultations before the initiation of the investigation, and the consultations had been held on 27 November 2014 and 
22 March 2015 in accordance with SCM Article 13. Ukraine had provided the opportunity to all 
interested parties to present evidence, participate in public hearings and provide written comments on the investigation. The position of the interested  parties as well as the position of the Russian 
authorities would be taken into consideration before making the final decision. 
 
39. With respect to the semi-annual report of the United States , Turkey stated that three CVD 
measures were in force and three original CVD investigations were still ongoing against Turkish 
origin iron and steel products. Turkey was concerne d that almost 18.5% of Turkey's exports to the 
US were subject to antidumping and CVD measures or investigations. Turkey believed that the US had been acting inconsistently with the provisions  of the SCM Agreement as well as the WTO Panel 
and Appellate Body decisions, particularly with respect to its public body determinations. Turkey 
had welcomed the Department of Commerce's re vision of its distorted HRS market finding 
following the determination of the Court of Inte rnational Trade. However, Turkey expected a 
similar revision of the Department's public body finding for Turkish iron and steel producers as 
soon as possible. 
 40. Russia expressed its concern over the US CVD investigation on certain cold-rolled steel flat 
products from the Russian Federation which had been initiated on 17 August 2015. The issue of 
state regulation of prices, which had been discusse d by Russia in relation to Canada's semi-annual 
report, was also fully applicable to this case.  
 
41. First, the petitioners' approach to comparing in ternal natural gas prices to market prices was 
unacceptable given the wording of Article 14(d)  of the SCM Agreement which provided that 
comparisons should be made with prevailing mark et conditions of the subject country. In Russia's 
view, any out-of-country benchmarks for comparis on created possibilities for arbitrarily chosen 
benchmarks which inflated the amount of benefit. Given that there was a substantial unregulated segment in the Russian gas market, Russia urged th e US to review the petitioners' approach and 
to use internal unregulated prices to calculate benefits.  
 42. Second, the US considered the provision of mining rights to be a subsidy. This was 
inexplicable because the provision of mining rights was not the provision of goods and services in 
accordance with Article 1 of the SCM Agreement. The US assumption created more questions than 
it answered, for example with regard to assessing  the adequacy of remuneration, given the fact 
that different mines required different amounts of  investment. Russia provided the mining rights 
on a transparent and competitive basis, and asked the US to consider those arguments during the 
ongoing investigation.  
43. China shared some of Russia's and Turkey's systemic concerns about the investigation 
practices of the US. It noted that US findings on  the provision of inputs for less than adequate 
remuneration were consistently made without a re asonable basis. For example, the US authority 
simply defined a company with state ownership as a public body or a private company as a public 
body controlled by the government because of th e existence of partisan organization in the 
company, or the personal political background of  the company executives. China also noted that 
the US authority often applied unjustified extern al benchmarks when calculating the benefit of 
subsidies, which artificially enlarged the benefits  of subsidies. The facts and arguments presented 
by the interested parties were often disregarded and the authority arbitrarily applied adverse facts available on the basis of non-cooperation, alth ough the responding parties had provided the 
information to the best of their ability. China urged the US to abide by the WTO rules, to refrain 
from the abuse of discretion and to conduct CVD investigations in a fair manner.  
44. The United States stated that it conducted all proceedings in an open and transparent manner 
in accordance with US law and its international obligations, and took into account the views of all 
interested parties.  G/SCM/M/95 
 
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  45. Regarding the concern raised by Turkey on pub lic body determinations, the US had modified 
its practice for determining whether entities were public bodies to specifically take into account the DS379 decision, and this modification had been fully reflected in the investigation.  
46. Regarding the questions raised by Russia, although the Russian CVD case was still ongoing 
and also was outside the reporting period, the US had some preliminary comments. There had been sufficient information to justify the initiation of a CVD case. The US recognized that the 
provision of goods and services and the overlap of the regulated pricing issues were the most 
difficult and contentious issues. The US urged Russia to participate in the investigation and confirmed that the Department of Commerce would take into account all the arguments.  
47. With respect to China's comments, the US reiter ated that on public body assessment it had 
changed its practice consistent with DS379. It continued to struggle with the preferential provision of goods and services and the issue of the appropri ate benchmark. It took into account the recent 
decisions of the Appellate Body and was seeking to  implement those decisions in a correct manner. 
The US disagreed that the arguments of the inte rested parties were totally disregarded in the 
context of a CVD investigation. All arguments and facts which were submitted within the 
appropriate time frames were taken into account. The US held hearings during which both sides 
could fully make their arguments, and it would address each and every comment that was made by each of the parties in its final determination.  
48. The Committee took note of all semi-annual reports submitted, and all statements made. 
 
3  PRELIMINARY AND FINAL COUNTERVAI LING DUTY ACTIONS: NOTIFICATIONS 
(ARTICLE 25.11) 
49. The Chair reported that since the Committee's April 2015 regular meeting, notifications under 
Article 25.11 of preliminary and final countervailing duty actions had been received from Australia, 
Canada, the European Union, Peru, and the United States. Those notifications were listed in 
documents G/SCM/N/288, 291-295.   50. The Committee took note of the notifications. 
 
4  ARTICLE 27.4 EXTENSIONS OF THE TRAN SITION PERIOD FOR THE ELIMINATION OF 
EXPORT SUBSIDIES 
51. The Chair recalled that Members that had been granted extensions under Article 27.4 
pursuant to the procedures in WT/L/691 were requ ired, under paragraph 2(c) of the procedures, to 
submit transparency notifications in respect of ea ch 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.   52. To date, Costa Rica, Dominica, El Salvador, Jordan, and Saint Vincent and the Grenadines had 
submitted these notifications, which had been circulated in the G/SCM/N/290 series. The Chair 
reminded the other Members with extensions to su bmit their notifications covering calendar year 
2014 as soon as possible. 
 
53. 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 the end of 2015. They 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 would be circulated early in 2016.  
54. The Committee took note of the Chair's statement. 
 
5  IMPROVING THE TIMELINESS AND COMP LETENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT 
55. The Chair recalled that since the request of the Chairman of the Trade Policy Review Body in 
spring 2009, the Committee had been discussing this matter, as reflected in the minutes of the 
previous meetings. At the request of Members, the Secretariat since then had prepared and G/SCM/M/95 
 
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  updated a background note (G/SCM/W/546/Rev.6), providing a snapshot of the level of 
compliance with the various notification ob ligations under the SCM Agreement since 1995. 
 56. The following Members had submitted their 2015 new and full notifications: Albania, Armenia, 
Canada, China, Costa Rica, Dominica, Ecuador, El  Salvador, European Union, Hong Kong China, 
Japan, Jordan, Korea, Liechtenstein, Macao, Mexico, Montenegro, New Zealand, Norway, Peru, 
Qatar, Saint Vincent and the Grenadines, Switzerl and, Chinese Taipei, Turkey, and Ukraine. In 
addition, Albania, Qatar, and Viet Nam had su bmitted their 2013 new and full notifications. 
 57. Unfortunately, compliance with the obligation to notify subsidies remained low. One hundred 
and six Members had not made their 2015 new and fu ll subsidy notification for which the deadline 
had been 30 June 2015. Sixty-five Members st ill had not made their 2013 new and full subsidy 
notification, although the deadline had been more than two years earlier. Further, 58 Members still had not made their 2011 notifications, which had been due more than four 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 functioning of the Agreement. 
 
58. The Members that had not yet made their 2015 notifications were: Angola; Antigua and 
Barbuda; Argentina; Australia; Kingdom of Bahrai n; Bangladesh; Barbados; Belize; Benin; Bolivia; 
Botswana; Brazil; Brunei Darussalam; Burkina Faso ; Burundi; Cabo Verde; Cambodia; Cameroon; 
Central African Republic; Chad; Ch ile; Colombia; Congo; Côte d'Ivoire; Cuba; Democratic Republic 
of Congo; Djibouti; Dominican Republic; Egypt; Fiji; Gabon; the Gambia; Georgia; Ghana; Grenada; Guatemala; Guinea; Guinea-Bissau; Guyana; Haiti; Honduras; Iceland; India; 
Indonesia; Israel; Jamaica; Kenya; State of Kuwait; Kyrgyz Republic; People's Democratic 
Republic of Lao; Lesotho; Madagascar; Malawi; Malaysia; Maldives; Mali; Mauritania; Mauritius; Moldova; Mongolia; Morocco; Mozambique; Myanmar; Namibia; Nepal; Nicaragua; Niger; Nigeria; 
Oman; Pakistan; Panama; Papua New Guinea; Paraguay; Philippines; Russian Federation; 
Rwanda; Saint Kitts and Nevis; Saint Lucia; Samoa; Saudi Arabia; Senegal; Seychelles; Sierra Leone; Solomon Islands; South Africa; Sri Lanka; Suriname; Swaziland; Tajikistan; 
Tanzania; Thailand; The Former Yugoslav Republic of Macedonia; Togo; Tonga; Trinidad and 
Tobago; Tunisia; Uganda; United Arab Emirates; United States; Uruguay; Vanuatu; Venezuela; 
Vietnam; Yemen; Za mbia; and Zimbabwe. 
 
59. The Chair invited the Members that had not yet submitted their 2015 notifications to provide 
an update to the Committee on their progress in preparing these notifications.  
60. The United States stated that it was at th e very final stages of preparing its subsidy 
notification for 2015.4 
 61. Australia stated that it was actively working towards finalizing its 2015 subsidy notification 
and noted that its notification, which would probab ly be submitted by the end of the year, would 
reflect data through 30 June 2015, as it reflected its financial year. Australia was including sub-federal programmes in its notification therefore it took time. 
 
62. Brazil noted that it was restructuring its internal administrative organization and that it had 
been difficult to consolidate the departments with information on the programmes. It would 
finalize and circulate its notification soon. 
 63. The Chair urged Members that had not yet submitted their 2015 notifications to do so, and 
recalled that the Secretariat continued to be available for enquiries about 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 de legations 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. 
 
64. The Chair recalled that at the Committee's April 2015 regular meeting, a number of Members 
had indicated their willingness to continue discussions on the proposal from the United States 
                                               
4 G/SCM/N/284/USA was circulated on 18 November 2015. G/SCM/M/95 
 
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  (G/SCM/W/557/Rev.1) regarding the treatment of questions and answers under Articles 25.8 and 
25.9 of the SCM Agreement.  65. The United States recalled that at the October 2014 meeting it had introduced its formal 
proposal according to which written answers to initial written questions under Article 25.8 should 
be provided within 60 days and that follow-up questions should be answered in 30 days. The 
discussion had been useful whether or not Members' initial reactions to the proposal had been 
supportive. The US continued to believe that the Committee should try to reach consensus on 
common sense procedures for responding to questions submitted under Article 25.8. All Members could recognize that there was a problem and the US proposal was neither radical nor outside the bounds of what any Member should be expected to do when it received written questions 
regarding its subsidy regime, namely, to respond in writing and within a reasonable period of time, 
regardless of the provision under which the questions were submitted. Several Members repeatedly had expressed support for the proposal. 
 
66. The proposal was not different from the current practice of responding in writing within a 
reasonable time to written questions pertaining to regular Article 25 subsidy notifications, which 
promoted the information exchange called for in the relevant provisions of the SCM Agreement. 
The proposal aimed to ensure a similarly helpful information exchange with regard to questions submitted under Article 25.8 of the SCM Agreement. Although some Members were more diligent than others in responding to regular Article 25 questions, those procedures generally worked well 
and certainly were a key function of the work in the Committee. However, if those questions had 
been routinely unanswered or only answered after years of delay, the Committee would acknowledge that the exchange of information had been severely impaired. Unfortunately, that 
was the situation with respect to questions subm itted under Article 25.8 of the SCM Agreement. 
 67. The shared commitment to the principal of tran sparency should unify Members in support of 
advancing that principal in practice, by adopting pragmatic procedures for the exchange of 
information as called for under Articles 25.8 and 25.9 of the SCM Agreement. The US recalled the 
concern raised previously by some Members, that the US proposal would impede, rather than improve, the information flow by imposing strict deadlines on Members with capacity constraints. 
The US continued to recognize the potential burden that the proposal might present, in particular 
for lesser developed countries with significant capaci ty constraints, and it remained willing to work 
with Members to find a pragmatic solution. The US believed the underlying rationale of its proposal 
– to enhance information flows among Members – was fundamentally sound and firmly rooted in 
the SCM Agreement itself.  
68. The US recalled the previously-raised proposal  to respond to Article 25.8 questions in a 
Member's new and full notification and in responses to questions related to the new and full notification. This suggestion might have merit if the support measures identified in the Article 25.8 submissions were explicitly addressed in either a new and full notification or in responses to 
questions submitted in respect of the new and full  notification. The US was ready to hear other 
Members' views on that proposal.  
69. The US invited Members that had raised the issu e of capacity constraints during the previous 
meetings to suggest how the proposal could be improved to address the fundamental problem of 
lack of timely responses and even any response s to questions submitted under Article 25.8. The 
US welcomed specific suggestions from the Members on how its proposal could be modified to 
reduce the burden on the Members with significant capacity constraints. The US remained flexible 
in finding a pragmatic solution that satisfied the underlying objective – which the United States assumed to be shared by all Members – of enhancing the exchange of information under 
Articles 25.8 and 25.9. 
 70. Canada agreed that subsidy notification was a fundamentally important transparency exercise 
and expected Members to make every effort to provide notifications in a timely and complete 
manner. Canada believed in the importance of Q&A process and expected Members to comply with those obligations as well. Canada supported the US proposal and was open to exploring a 
mechanism to address Article 25.8 requests. It was flexible and ready to listen to Members' 
concerns over the proposal and their flexibilities in finding a solution to this important transparency issue.   G/SCM/M/95 
 
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  71. China appreciated the Secretariat's update on notification status. It attached great importance 
to transparency and considered that transparency obligations should be fulfilled in accordance with 
the relevant provisions under the WTO Agreements. As pointed out several times previously, China's view was that the requirements in the US proposal for making written answers and setting 
compulsory deadlines were inconsistent with the legal requirements of the SCM Agreement, and 
that such requirements could upset the balance of rights and obligations reflected in the relevant 
Articles. China believed that there was consensus among Members on fulfilling the transparency 
obligations under the SCM Agreement. Some Members were trying to urge the others to be more 
proactive in performing those obligations. Although the proposal might be made with good intentions, the results could be undesirable if the proposed suggestions went beyond legal requirements and the practical implem entation capability of Members. 
 
72. The US proposal not only would cause difficulties to LDC Members but also could pose huge 
challenges to both developing and developed Members. It would increase Members' workload and 
distract their attention from preparing notifications. This would not improve the timeliness of 
notifications as intended; rather it would cause further delays of notifications and replies to other Members' written questions thereon. This was conducive neither to meaningful transparency nor to 
"improving the timeliness and completeness of notifications". 
 73. In addition, as pointed out at previous meetings, any Member could raise requests at any 
time. It was not clear, however,  who could judge the appropriat eness of the Member's answers 
and by which standard the request could remain on the meeting agenda. Under such 
circumstances, the meeting agenda might be ex tended by requests for information one after 
another, which might result in the continued accumu lation or even perpetuation of agenda items. 
This deserved the attention of the Members. 
 74. China reiterated the importance of transpar ency and hoped that the relevant discussions 
would be conducted in a down-to-earth-manner. China believed that the Members did their best to 
fulfil their transparency obligations in accordance with the Articles of the SCM Agreement.  75. Japan was supportive of enhancing transparency under the WTO Agreements. Japan also 
welcomed the flexible and practical approach which the United States had suggested. It was 
looking forward to hearing other Members' ideas and remained constructively engaged in further discussion. 
 
76. Australia remained willing, ready, and flexible to consider this issue which was part of the 
Committee's routine work. In Australia's view, it was possible to reach a common understanding 
on establishing and completing its procedures for notification review. Australia saw some merit in 
the suggestion that Article 25.8 questions be addressed in subsequent new and full subsidy notifications, which might address capacity constraints and burdens of Members in providing replies. Australia remained ready to enter into discussions, in any format, of this and any 
alternative approaches.  
 77. Brazil had no answer to this problem, whic h affected developing Members. These Members 
were constrained in their capacity to fulfil their transparency obligations. Brazil remained open to 
this debate.  
78. Norway noted its concern over the serious lack of compliance with notification obligations. It 
supported the Secretariat's continuous updating of the background note on the level of compliance 
and the Secretariat's efforts in assisting Members. The US proposal seemed directly relevant to improving timeliness and completeness of notifications. Norway remained open and flexible to 
explore the possibility of such a mechanis m and looked forward further discussions. 
 79. India agreed that transparency was an im portant component of the SCM Agreement and 
essential for the smooth functioning of the multilateral trading system. India had consistently 
maintained that transparency imposed costs and therefore pragmatism was needed in imposing 
enhanced obligations. Developing and LDC Member s had capacity constraints and challenges in 
meeting enhanced obligations arising from additional reporting requirements.  
 80. India recalled its previously-expressed concern that the proposal went beyond the finely 
crafted balance resulting from the negotiations on  Articles 25.8 and 25.9. The word "written" had 
been included in Article 25.8 but carefully omitted from Article 25.9. Including it in the proposal G/SCM/M/95 
 
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  disturbed the negotiated balance. Proposed time limits for replies to questions received under 
Article 25.8 needed to be examined from the point of view of practicability. Such a strict time-
frame might not yield effective results. The prop osal stated that all pending questions would 
automatically remain on the agenda until a written reply was provided. In any case, as stated by 
China, any Member could request an item to be placed on the agenda. Furthermore, who would 
determine whether or not a question had been appropriately answered? India was open to discussion on this important issue. 
 
81. The European Union looked forward to seeing the notifications which had been promised at 
the meeting. The EU supported the US proposal which was a good complement to the written Q&A 
procedure, and hoped that Members could finally agree on a way forward. 
 
82. Chinese Taipei echoed the previous views on the low level of responses to questions. The US 
proposal had value in calling for timely information on subsidy programmes. Chinese Taipei also 
recognized the difficulties of developing and LDC Me mbers in dealing with notification obligations.  
 83. New Zealand appreciated the Secretariat's snapshot report. It expected Members to make 
timely notifications and was open to explore procedures to improve the timeliness of all 
notifications in Articles 25.8 and 25.9. New Zealand considered the US proposal as a reasonable step and was willing to consider other options that Members might have to bridge the gap.  
84. The Russian Federation appreciated the Secretaria t's report and stated that its notification 
would be ready shortly and submitted in due cour se. Regarding the US proposal, compliance with 
transparency obligations was a crucial element fo r the effective functioning of the WTO and the 
SCM Agreement. At the same time, Russia was conc erned that the US proposal could increase the 
administrative burden for the Members that had a complex state structure and a large economy like Russia. Therefore, it asked the US to provide constructive ideas how the proposal could be 
improved to address these concerns and to take into account the interests of all Members. 
 85. Regarding the view that answering Article 25.8 questions could be a distraction from 
preparing a notification, the United States stated that it had been US practice not to ask questions 
under Article 25.8 if a Member had been notifying on a regular basis. Rather than using Article 25.8 questions in that context, the US would simply ask questions in the normal review of the Member's notification. It was only out of desperation, where a Member had not notified for a 
long period, that the US had used the Article 25.8 process. . 
 86. The US took note that written answers were not referred to in the Agreement itself. It was, 
however, practical common sense that written answers be provided for written questions. In the 
US view, all Members had had the experience of not being able to fully grasp answers that were provided orally. Therefore, as a practical matter, written answers were very helpful.  
87. Pursuant to Article 25.9, responses should be pr ovided as soon as possible. The US was of the 
view that Members had to look at how those prov isions were being adhered to by Members when 
no responses at all were provided, or when they were provided only after two or two-and-a-half 
years. 
 88. Finally, the US appreciated Australia's idea that Article 25.8 questions could be answered in 
the context of Members' normal new and full subs idy notifications provided that the answers or 
information directly related to Article 25.8 were explicitly referenced in the new and full subsidy notification.  
89. The Chair recalled that at a previous meeting,  the delegation of Australia had suggested 
adding a new annex to the compendium document, which would list all Secretariat calculations of 
export competitiveness pursuant to Article 27.6. He invited Members views and comments on that 
proposal. 
 90. Australia referred to the Secretariat's Background Note G/SCM/W/546/Rev.6, and stated that 
this document was a factual description of the notification obligations in the SCM Agreement. The 
last sentence of paragraph 19 of the Background Note, which included a description of the obligation under Article 27.5 and 27.6, stated that "no developing Member has made such a notification". In this regard, Australia did not believe that this reflected the reality of notifications G/SCM/M/95 
 
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  and requests made under this provision. Australia had raised the issue whether that sentence was 
correct, given the requests made by a number of Me mbers over the lifetime of that provision.  
 91. Australia suggested reflecting such requests in an annex similar to those listing the requests 
made by Members under other provisions. In particular, Australia suggested adding an annex 
similar to that for Article 25.8 to reflect -as a factual description- whether a Member had made a notification request. 
 
92. India asked Australia to explain the final purp ose of the proposed change, and to provide a 
written proposal so that Members would be able to consult better in their capitals. 
 
93. The United States, Mexico, New Zealand, and the European Union expressed support for the 
Australian proposal. 
 
94. In response to India's questions, Australia stated that the purpose of the proposal was to 
complete the useful document prepared by the Secretariat on the total range of the notifications required under the SCM Agreement, noting that  over the years, Members had been commenting 
on its completeness. Recalling that there had b een some suggestions raised by Members on the 
same document in the past, and given that it was just a suggestion to amend a Secretariat document, the need for a written proposal, as requested by India, was unclear.  
95. The Chair stated that it appeared that Members wished to continue discussions on these 
issues at the next regular meeting of the Committee. 
 
96. The Committee took note of all of the statements made. 
 
6  PERMANENT GROUP OF EXPERTS 
97. The Chair recalled that the term of office of Mr Akio Shimizu as a member of the Permanent 
Group of Experts had expired in the spring, an d that the Committee should have elected a new 
PGE member to fill the vacancy at its April regular meeting.  
98. The Secretariat had received three nominations to fill this vacancy, all by the announced 
deadline: Professor Tsai-yu Lin from Chinese Ta ipei; Professor Ichiro Araki from Japan; and 
Professor Jae-Min Lee from Korea. In accordance with the Committee's regular procedures, the 
CVs of the three nominees had been sent by fax to all Members, and the former Chair had 
conducted consultations prior to the Committee's Ap ril regular meeting, to seek consensus on a 
nominee to propose for election at that meeting. A full consensus had not been reached by the 
time of the meeting, however, and therefore no election had been held.  
 99. Following his election at the spring meeting, the Chair had asked the Vice-Chair Ms 
Katia Angeles Vargas to serve as the Chair for this issue, given that his delegation was one of 
those that had nominated an expert to fill the PGE vacancy. 
 100.  The Vice Chair had conducted consultations with the concerned delegations. As stated in her 
fax to the Committee dated 20 October 2015, the Committee had reached a consensus to elect 
Mr Araki to fill the vacancy on the PGE. The Chair thus proposed that the Committee elect Mr Ichiro Araki to the Permanent Group of Experts, for a term of office to expire in Spring 2020.  
 
101.  The Committee elected Mr Araki to the Permanent Group of Experts. 
 
102.  Korea joined the Committee in supporting the election of Mr Araki as the new PGE member 
and had some observations on the election process of the PGE members. First, it would be 
preferable that the Chair had at least disclosed non-sensitive information, such as the number of Members who expressed their views on the election , to the delegations whose nationals had been 
nominated. This would not only enhance transparency but also help to build consensus. Second, 
Korea agreed on the importance of timely election of a PGE member to replace an outgoing member. In this regard, Korea had always been willing to constructively contribute to efforts to 
build consensus. Any Member with such a willingness needed to be helped to do so over the course 
of the election process.   G/SCM/M/95 
 
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  103.  Brazil noted that during the election proc ess, when a Member came to the Chair and 
expressed support for a candidate, it trusted the Chair and the Secretariat to assess the support of 
all of the Members around a nominee. If all Memb ers had access to the votes as Korea suggested, 
this might disrupt the trust in the election proce ss. Brazil believed that Members should be careful 
in considering such a change to the process, yet remained open to any other considerations to 
increase transparency in the process.  
104.  Korea clarified that its intervention had not been a proposal, but only an expression of 
views. It reaffirmed its trust in the work of the Chair, the Vice Chair and the Secretariat.  
 105.  The Chair recalled that the term of Mr Zhang Yuqing would expire in the spring of 2016. 
Pursuant to the Committee's established procedures, early in the new year he would circulate a 
document setting a deadline for nominations and outlining how he would proceed with his consultations with Members. 
 
106.  The Committee took note of the statements made. 
 
7  JAPANESE GOVERNMENT SUPPORT FOR THE DEVELOPMENT OF REGIONAL AIRCRAFT – 
ITEM REQUESTED BY BRAZIL 
107.  Brazil stated that it had raised this issue in the Committee with a view to understand the 
interlinkages between the Mitsubishi Regional Jet Aircraft and the Japanese Government. With 
considerable difficulty, Brazil had been able to ge t some information on Japanese official support to 
the Mitsubishi Aircraft Project. So far, Brazil ha d not been able to understand the participation of 
the Japanese government in this project. 
 
108.  The Committee served as a forum to share detailed information, especially when requested, 
about subsidy programmes that might have a negative impact on the capacity of Members to fairly 
compete in an international market. In this light, Brazil had brought some additional questions 
together with the other questions that had not yet been answered.  109.  Based on publicly available information, Brazil understood that the Development Bank of 
Japan, a state-owned enterprise, planned to invest  over $US 800 million in the development of the 
Mitsubishi Regional Jet Project. Brazil asked Japan to confirm this information and to provide details, including the schedule of disbursements, interest rates, repayment terms, and any other 
information with regard to this operation. Brazil stated that the investment was planned under the 
recently ratified Japanese law called "Specifi c Investment Service". Brazil requested more 
information on this law and on the type of the investments carried out thereunder, particularly in 
relation to the aerospace sector and the provision of the support to the Mitsubishi Project. 
 110.  Japan stated that it attached great importance to the rules-based multilateral trading system 
under the WTO, and took very seriously its compliance with the rules and obligations of the 
SCM Agreement. Accordingly, since the establishment of WTO in 1995 Japan had never failed to 
comply with its obligations of subsidy notification. Additionally, Japan had developed its own domestic system to ensure transparency of subsidie s, irrespective of their specificity. The website 
of the Ministry of Economy, Trade and In dustry (METI) was one such example.  
 111.  Regarding the specific questions from Brazil, Japan had fully complied with the 
SCM Agreement, and had notified every subsidy which was specific in its 2015 notification.  
 112.  Regarding the first question, as an independent organization the Development Bank of Japan 
analysed individual investment cases and decided the investment conditions based on its analysis, 
on commercial terms. 
 113.  Concerning the second question, the "Specific Investment Service" had been introduced in 
May 2015. Based on this scheme, the Development Bank of Japan independently made individual 
investment decisions to private actors on commercial terms.  
114.  Brazil previously had raised the issue of the MRJ in this Committee and Japan had responded 
on several occasions not only in the Committee but also in the TPR and in bilateral meetings. Japan remained open to discuss this issue further.  G/SCM/M/95 
 
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  115.  Brazil understood from the answers that the ba sic analysis used by the Development Bank 
of Japan for any investment in any project was based on commercial terms. Brazil asked Japan to 
explain the meaning of commercial terms, because Brazil saw that there was no other standard or information that could be taken into account when the Development Bank of Japan was planning 
to invest in a given sector. Since 2008, Brazil ha d presented questions to Japan on this matter in 
many fora, such as bilateral meetings, plurilateral meetings, through their embassies in Tokyo and Brasilia, in this Committee, and in TPRs. In most  cases, however, Japan had refrained from sharing 
exact information which had been requested in Brazil's questions, or only had affirmed through 
generic replies that all of the programmes related to the project were in accordance with the multilateral disciplines. In Brazil's view, however, neither Brazil nor any other Member could assess the compliance of those programmes without specific details. Brazil regretted that Japan 
repeatedly had failed to share the specific information that Brazil had identified in the Committee. 
It urged Japan to share all of the details concerning the support granted by the Japanese Government as soon as possible. 
 
116.  Japan stated that it would refer the issue to its capital. 
 
117.  The Committee took note of the statements made. 
 
8  ELIMINATION OF EXPORT SUBSIDIES FOR TEXTILES AND APPAREL BY INDIA 
PURSUANT TO ARTICLE 27.5 OF THE SCM AGREEMENT – ITEM REQUESTED BY THE 
UNITED STATES 
118.  The United States recalled its view, based on th e Secretariat's calculations, that the Indian 
textile and apparel sector had reached export comp etitiveness no later than 2007. Therefore, India 
had had an obligation – at least since 2007 – to gr adually phase out export subsidies provided to 
numerous products in the textile and apparel sector , meaning that the eight year phase-out period 
had ended. While India's recently released Foreign Trade Policy for 2015-2020 recognized the need 
to terminate certain programmes, unfortunately it did not establish any procedural framework for 
doing so and appeared to target 2018 as the operat ive date for termination. Recent press releases 
indicated that the Government of India was set to introduce an "interest subsidy scheme" for exporters of handicrafts and ready-made garments which were included in the textile and apparel 
sector. Press reports indicated that the programme could be in effect for five years, which would 
be well beyond India's phase-out period. The Foreign Trade Policy also appeared to merge several export subsidies into one, the Merchandise Expo rts from India Scheme, which had been extended 
to the units located in Special Economic Zones. This programme provided exporters with an import 
duty credit based on the value of their exports,  and had a domestic content angle by providing a 
"higher reward" for exports with "high domestic content and value addition". Textile and apparel 
was among the targeted sectors and the United St ates was one of the targeted markets. This 
appeared to be a significant step backward for India in meeting its obligations under the 
SCM Agreement. The US had made clear to India that it welcomed further dialogue on these issues in the context of their continued bilateral engagement. Unfortunately, it had not been possible to 
schedule these discussions of knowledgeable governme nt officials. The US remained hopeful that a 
substantive discussion could start and that the issue could be resolved through dialogue.  
119.  India stated that it was committed to meeting its obligations under the SCM Agreement in 
time, and to engage constructively in the clarification of the obligations under Articles 27.5 
and 27.6, in particular the definition of product,  the coverage of tariff lines, where and when 
export competitiveness was reached and when the eight year phase-out period would begin. India 
considered that since the information on expo rt competitiveness had been provided in 2010, 
pursuant to Article 27.6(b), India would have to  phase out the export subsidies after 2018. As 
mentioned by the US on the Merchandise Exports from India Scheme, many of the schemes were 
in the nature of remission or refund of duties on inputs used in exported goods, which were not 
export subsidy schemes and some of which had been discontinued. A number of them had been removed from and/or rationalised in the Foreign Trade Policy of 2015-2020. Further, while the 
government had not set out any procedures regarding domestic content requirements, 
domestically manufactured goods were entitled to apply for subsidies, as per the SCM Agreement. 
India renewed its commitment to meet bilaterally with the US. India had received a request from 
the US which it was positively considering. 
 120.  The Committee took note of the statements made. 
 G/SCM/M/95 
 
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  9  NON-NOTIFICATION BY INDIA OF ALLEGE D SUBSIDIES CONTAINED IN THE REQUEST 
BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM AGREEMENT – REQUEST FROM THE UNITED STATES (G/SCM/Q2/IND/20) 
121.  The United States noted that India's new and full subsidy notification included a small 
fraction of the universe of programmes that should be notified under Article 25, and that therefore 
it was continuing to raise this issue until it saw a more fulsome notification by India. In the US view, the subsidy programmes in its submission should have been notified because they appeared 
to provide specific subsidies within the meanin g of the SCM Agreement. At previous meetings, 
India had stated that it was consulting with state governments to gather the necessary information to notify certain programmes. The US requested an update on the progress of that process and urged India to continue its efforts toward providin g a notification with a full picture of its subsidy 
regime. 
 122.  Canada recalled its previous interventions and believed that the notification of subsidies and 
the Q&A process under Article 25 of the SCM Agr eement were crucial for transparency. Canada 
appreciated India's previous oral replies to th e Article 25.10 submission of the US and its 
notification on fisheries subsidies and certain preferential tax programmes. These were not, 
however, adequate substitutes for a timely and comp lete subsidy notification  as required under the 
SCM Agreement. Canada therefore remained concer ned with India's approach to its transparency 
obligations. Canada had been pleased to hear during the last meeting that India intended to submit a full subsidy notification, and was disa ppointed not to have received it yet. Canada 
continued to encourage India to provide its full notification, which it looked forward to receiving 
and reviewing.  
123.  India recalled that its previously explanation that some of the programmes listed in the US 
request already had been included in India's previo us subsidy notifications; or did not need to be 
notified because they were either refunds or exempt ions of duties on inputs of products that were 
exported; or because they were not specific, were general infrastructure or pertained to services; 
or already had been withdrawn. Moreover, in  the Foreign Trade Policy 2015-2020 some schemes 
had been rationalized or withdrawn. With re spect to the remaining programmes, the central 
government had almost completed its consultations with the stakeholders, in particular with 
different departments as well as state governments, to gather the necessary information on the 
details and nature of the schemes. This was a time consuming process and India was doing its 
best to be able to provide its subsidy notification soon. 
 
124.  The Committee took note of the statements made. 
 
10  2012 AND 2015 REQUESTS TO CHINA FROM THE UNITED STATES PURSUANT TO 
ARTICLE 25.8 OF THE SCM AGREEMENT (G/SCM/Q2/CHN/46, G/SCM/Q2/CHN/46/SUPPL.1, G/SCM/Q2/CHN/52) 
125.  The United States recognized that China had co me to the meeting with its notification and 
appreciated that the notification came up to 201 4 .  T h e  U S  w o u l d  l o o k  a t  i t  v e r y  c a r e f u l l y  a n d  
compare it against the questions that it had asked under Article 25.8 and the various counter notifications that it had submitted over the year s. After a quick review, however, the US' first 
impression unfortunately was that it was similar to prior notifications of China; there were both 
over-reporting and under-reporting of programmes.   
126.  In terms of over-reporting, there was a special programme to alleviate poverty and the US 
was not sure that any of the Members were concerned with a programme that was not specific. In terms of under-reporting, the US noted that Ch ina had mentioned that sub-central programmes 
would be notified before the end of the year, which was appreciated and acknowledged by the US. 
The US reiterated that sub-central programmes were a key element of a full subsidy notification. 
The US also noted that China's notification included no steel programmes which the US had counter-notified earlier. In the US view, these potentially were subsidies under the SCM 
Agreement. Nor did there appear to be any prog rammes that had been implemented in the course 
of 2008 financial crisis. In addition, there were only three programmes related to fisheries, compared to about 30 programmes that the Secretariat had found in the context of China's Trade 
Policy Review. While the US was very appreciative of China's recent subsidy notification, it had not 
had the chance to review it in detail, and thus continued with the intervention prepared for this meeting. G/SCM/M/95 
 
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127.  The US recalled its 2015 Article 25.8 request with respect to fisheries support programmes 
in China, which was not fully covered in China's recent subsidy notification. In China's most recent TPR, in May 2014, the Secretariat had included in formation that it had uncovered on 30 support 
programmes for China's fisheries sector. The Secretariat's Report had noted that China had not 
notified any of these programmes to this Committee and further that China could not verify any of the information provided to it by the Secretariat. During the TPR meetings China had responded to 
Members' questions by stating that it needed more time to identify and verify information 
regarding these support programmes. A year and half  later China had neither notified any of these 
support programmes under Article 25 of the SCM Agreement nor provided any further information to Members. Beginning with the support programm es uncovered by the Secretariat in China's TPR 
report, the US had uncovered information on additional support programmes appeared to benefit 
China's fisheries sector, all of which had been the focus of the US Article 25.8 submission in 
April 2015. 
 
128.  The dire state of the world's fisheries had led to calls for greater disciplines on fisheries 
subsidies that contributed to overfishing and overcapacity, beyond the obligations of all Members 
to notify their subsidy programmes under Article 25 of the SCM Agreement. Eighty-five per cent of 
fish stocks were considered by the FAO to be fully exploited, overexploited, depleted, or in 
recovery. Members knew that there had been an ef fort to discipline fisheries subsidies at the WTO 
and in numerous other fora. While reaching an agreement on such disciplines had been difficult, 
countries had recognised that an initial step should be greater transparency with respect to the 
existing fisheries subsidy programmes. For example, in August 2014, at the 4
th APEC Ocean 
Related Ministerial Meeting, APEC Ministers had agreed to the Xiamen Declaration. Paragraph 21 of 
this Declaration stated: "In light of the Rio+20 outcome document, particularly paragraph 173, we 
encourage APEC members to further improve the tr ansparency and reporting of existing fisheries 
subsidies programmes through the WTO, and to elimin ate subsidies that contribute to overcapacity 
and over-fishing, and to refrain from introducing new such subsidies, without prejudice to the WTO 
Doha negotiations." China had never yet notified a single wild capture fishery programme. While agreement on disciplining fisheries subsidies had been difficult, as evidenced by the 
Xiamen Declaration, most concerned Members agreed that transparency was a critical first step. 
 
129.  Beyond the common characteristics of China's support programmes that the US had already 
discussed – five year plans at the central government and a variety of implementing measures 
taken at the sub-central levels of government - the number and variety of programmes in the US 
submission on China's fisheries support programmes was quite noteworthy. The list included income tax exemptions for deep water fishing enterprises; tax incentives for shipyards; a 
multitude of programmes for fishing vessel renovation and acquisition, including for distant water 
vessels; grants for new fishing equipment; subsidies for insurance; subsidized loans for processing facilities; fuel subsidies; preferential provision of  water, electricity and land; grants to explore new 
offshore fishing grounds; import duty exemptions; grants for establishing famous brands; and 
special funds for strategic emerging industries in the marine economy. For nearly all of the 
programmes cited in its Article 25.8 submission, the US had identified the underlying measure, which hopefully would assist in the eventual notification of these measures. 
 
130.  Pursuant to Article 25.9, China had been obligated to respond "as quickly as possible and in 
a comprehensive manner". It had been six months  since the US Article 25.8 submission, and the 
US had not yet received any answer from China. As the US had shown, in the absence of a 
response, the US would consider other options it had under the SCM Agreement.  131.  Among the standard set of questions in its Ar ticle 25.8 submission, which all flowed from 
Article 25 of the SCM Agreement, the US asked (1) if China had published the measures at issue in 
an official journal dedicated to the publication of all laws and regulations as required by China's Protocol on Accession; and (2) if China had made available a translation of those measures into 
one or more of the official languages of the WT O, as required by paragraph 334 of the Working 
Party Report.  
132.  The US noted that all of the big producers such  as the US, the EU, Japan, Korea, Australia, 
Brazil, and India had fishery subsidies, and th at they all notified them. The SCM Agreement 
allowed Members to provide nearly every type of subsidy and for whatever reason, fish products had not been a common source of trade friction. The US did not understand the reason for failing 
to notify a single wild capture programme in 14 years of membership. Given the rapid depletion of G/SCM/M/95 
 
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  the world's fisheries, the US again requested China to join those seeking a solution, which could 
start with Members putting all of their programmes on the table for all Members to see.  133.  Canada recalled its previous interventions and stated that, in the interest of efficiency, 
Canada's intervention applied to both the pres ent and the following two agenda items. Canada 
echoed the concerns of the US and other Members about China's failure to meet its transparency obligations under the SCM Agreement. Canada took great interest in the US Article 25.10 
submissions and Article 25.8 questions, and in  China's responses. The US requests were 
understandable reactions to the continued lack of timely and complete subsidy notifications from 
China. Submissions from other Members were not however, adequate or desirable substitutes for 
full notifications. Canada recognized that Members, developing country Members in particular, 
might have difficulties in providing subsidy noti fications and responding to questions from other 
members. Canada appreciated China's having replied orally to these requests, which it had done its best to note. Canada expected all Members, including China, to adhere to transparency 
obligations as clearly outlined in the SCM Agreement. When these obligations were not met, this 
impeded the rights of all Members. Canada was pleased to hear that China had submitted its full notification for the period of 2009-2014 for cent ral government programmes, and looked forward 
to reviewing it and to receiving the forthcoming sub-central notification. 
 134.  Japan supported the US initiative and looked forward to reviewing China's latest notification 
in detail. It was interested in the fisheries subsidies of China because China had the highest 
volume of fishery production in the world. 
 135.  Australia echoed the concerns raised by the Members on the importance of notifying subsidy 
programmes, and recalled its previous interven tions. Australia acknowledged that China was 
making efforts and welcomed the announcement that China had submitted its notification up to 2014. Australia added its voice to the concerns raised by the US regarding fisheries subsidies and 
the importance of transparency. 
 136.  The European Union supported previous speakers and encouraged Members to comply with 
their notification obligations under the SCM Agr eement. It saw ensuring transparency on the 
schemes that Members provided as fundamen tal to the work of the Committee. The EU 
appreciated the work of the US since 2011 on counte r- notifications, which had provided a lot of 
useful information. The EU welcomed that China had submitted a notification covering the years 
2009-2014, and hoped that it was fully comprehensive. The EU looked forward to receiving further 
notifications from China on sub-central level programmes before the end of the year, which it considered very important to a full, comprehe nsive and transparent picture of the subsidies 
provided by China. 
 137.  Regarding the US comments on under-reporting and over-reporting, China stated that each 
Member's obligation was to submit its own subsidy notification, and the judgement of what to 
notify was also up to the Member itself. China's third notification was available and the 
programmes therein were those deemed by China as notifiable subsidies pursuant to the SCM Agreement. China looked forward to the upcoming Q&A process based on its latest notification.  
 
138.  China respected the rights of Members to raise requests pursuant to Article 25.8 of the SCM 
Agreement. Despite difficulties, China had carefull y studied, cross-checked and verified the policies 
and measures mentioned in the requests from the US while preparing its subsidy notification. 
China already had responded to some of these requests at previous meetings, and had included some of them in its recent notification. China would continue to clarify some of them. China would use the word "item" to refer to the policies and measures identified in the US submission, and the 
word "programme" to refer to those in China's notification. Specifically regarding 
G/SCM/Q2/CHN/52:  
 Item No. 1.1 referred to the Cooperative Agreement between China Pelagic Fisheries 
Association and China Minsheng Bank. It had been verified that China Pelagic Fisheries Association and China Minsheng Bank had signed a strategic financial cooperation 
agreement in Beijing on January 7, 2013. This was a commercial cooperation between 
the two parties and was not a subsid y subject to the SCM Agreement. 
 Item No. 1.5 concerned Accelerated Depreciation. It had been verified that the current 
taxation law of China contained no accelerated depreciation policies specifically for G/SCM/M/95 
 
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  fishing vessels. Since these policies were not specific to the fishing industry, they should 
not be regarded as subsidies for the fishing industry.  
 Item 1.2 claimed that enterprises engaged in breeding projects were eligible for a 
certain reduction of or exemption from enterprise income tax, which China had listed as 
programme No. 54 in its second subsidy notification. Further details were available in 
Table A3.3 Tax Preferences at the Central Level in the Secretariat Report of the Fifth Trade Policy Review of China. 
 Item No. 1.29 concerned preferential tax policies on imports of seeds (seedlings), 
breeding stock (fowl), fish fries (breeds), an d wild animals and plants kept as breeds, 
which China had listed as programme No. 78 and No.79 in its second subsidy notification. 
139.  The above-mentioned measures which had been notified by China had also been updated 
and reflected in the third subsidy notification that China had just submitted.  
140.  The United States appreciated the additional information provided by China on its 
Article 25.8 questions, which it would review. It no ted that there might be overlap with one or two 
programmes that had been notified. 
 
141.  The US recalled its initial Article 25.8 questions dated 2012, which had become a counter-
notification in 2014, in respect of which it had some questions remaining. The US had submitted a 
supplementary version of its original Article 25.8 questions because it could not verify that the 
programmes referred were still in existence. The US had seen websites and other evidence that 
these programmes were still in effect but could not find a legal measure. Even though it was not required by the SCM Agreement, in the two previo us counter-notifications the US had not included 
a programme unless it had the underlying legal measure in hand. Therefore, those programmes 
that remained from the 2012 Article 25.8 questions were the programmes on which the US had seen evidence but for which it had been unable to find the underlying legal measure. It would 
appreciate any answers from China.  
 142.  China noted that since the contents of G/SCM/Q2/CHN/46 (request 46) and 
G/SCM/Q2/CHN/51 (submission 51) highly overlapped it would provide clarifications to both: 
 
 Item No.2 in request 46 and Item No.1 in submission 51 both referred to "iron and steel 
policy". As had been verified by the relevant Chinese departments, China did not have 
preferential tax treatment directly granted to iron and steel enterprises, nor did it have 
preferential tax treatment especially for the purchase of domestically-produced equipment by iron and steel enterprises. 
 Item No.5 in request 46 and Item No.3 in submission 51 both referred to "stimulus plans 
subsidies". It was verified that China did not have enterprise income tax policies specially formulated for the adjustment and revitalization plans for ten major industries. The support rendered by the existing prefer ential tax policies had not been intensified 
due to the above plans. 
 In Item No.13 in request 46, the US had asked about details on the so-called "subsidies 
provided to civil aircraft." In China, banks se lected projects for loans on their own, within 
their own business scope. The loan interest was determined following business 
principles. Specific information could not be obtained as it involved trade secrets. 
143.  Those were clarifications on several items at the central government level in the US 
documents. As to items at the sub-central government level, China first recalled that the 
SCM Agreement did not give a clear definition of subsidy at the sub-central government level. According to China's understanding, subsidy at the sub-central government level referred to the subsidy policies where funds were completely or partially contributed by sub-central finances. In 
other words, programmes fully funded by the ce ntral government, where sub-central governments 
only formulated specific implementation policies, were not subsidies at the sub-central government level. 
 G/SCM/M/95 
 
- 19 - 
 
  144.  While preparing its notification on subsidies at the sub-central government level, China also 
had carefully studied, cross-checked and verified the items mentioned in the US documents. China 
had responded to some of them at previous m eetings, and would include some in the supplement 
to China's third notification to be submitted soon. As for items other than those, China would make 
clarifications based on the verifications made and information available.  
 145.  First, plans, opinions and catalogues promulgated by the sub-central government were 
documents of guiding nature, which did not involve specific subsidy policies:  
 
 Examples in request 46 include Item No.22 Subsidies to Enterprises Located in Industrial 
Cluster Zones in Foshan City; and three sub-items in Item No.24, i.e. Pearl River Delta 
Industrial Layout Integration Plan, Jiangmen City Economic and Social Development 12th 
Five-Year Plan and Ningbo City Iron and Steel Industry Adjustment and Revitalization Action Plan.  
 Examples in submission 51 included Item No . 1 Hunan Province Iron and Steel Industry 
Revitalization Implementation Plan, Item No. 13 Xuancheng City Iron and Steel Industry 
Adjustment and Revitalization Plan, Item No. 26 Xuancheng City Textile Industry 
Adjustment and Revitalization Plan, Item No. 32 Xuancheng City Non-Ferrous Metals 
Industry Adjustment and Revitalization Pl an, Item No. 22 Shandong Province Textile 
Industry Adjustment Revitalization Plan, It em No.35 Shandong Province Light Industry 
Adjustment Revitalization Plan, Item No. 40 Shandong Province Shipbuilding Industry 
Adjustment Revitalization Plan, Item No. 31 Ningbo City Non-Ferrous Metals Industry 
Adjustment and Revitalization Action Plan and Item No. 41 Rizhao City Shipbuilding 
Industry Adjustment Revitalization Plan. 
146.  Second, relevant policies existed but no subsidy had ever been granted pursuant to such 
policies:   
 For example, Item No. 33 in request 46, Pr eferential Support Measures of Relevant 
Government Agencies of Foshan City for Publicly-Announced 'Contract-Honouring and Promise-Keeping' Enterprises. 
147.  Third, subsidies claimed by the US that did not exist at all: 
 
 Examples in request 46 included Item No. 16 the support for establishing a textile 
circulation and innovation service platform in Xiaoshan District, Hangzhou City, Zhejiang 
Province; Item No. 25 the Subsidies to Enterprises Located in the Lianyungang Economic 
and Technological Development Zone (LETDZ); Item No. 26 the Subsidies to Enterprises Located in the Tianjin Economic-Technological Development Area (TEDA); Item No. 27 
Subsidies to Enterprises Located in the Suqian Economic Development Zone; Item 
No. 29 Chongqing Chemical Industrial Park  Preferential Policies and Item No.30 
Northeast Footwear Industrial Park Located in Liaoyuan City of Jilin Province. 
148.  Fourth, the sub-central governments unveiled specific implementation measures only for the 
purpose of carrying out the subsidy policies promulgated by the central government: 
 
 For example, Item No. 17 in request 46, Tr ade Promotion Fund for Agriculture, Light 
Industry and Textile Products, had already been notified in China's second subsidy 
notification. The documents issued by the governments of Fujian, Shandong, Jiangsu, Zhejiang and other provinces were only measures for concretely using the funds 
arranged by the central government, while the sub-central governments did not provide 
any supporting funds. 
 Examples in submission 51 included Item No. 54 through Item No. 66, which referred to 
documents formulated by governments at the sub-central level, concerning 
transformation of the foreign trade growth mo de of the textile industry, and supporting 
textile enterprises to "go global". Those measures only served the purpose of implementing the policy of the central government and the only source of funds was the 
central government. 
 G/SCM/M/95 
 
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  149.  The United States appreciated the detailed in formation provided by China and stated that 
this was a perfect example why Members needed written answers to written questions. The 
amount of detailed information had been wonderful but it had been very difficult to follow precisely and to track and tie back to the original documents. As a general point, with respect to the 
five-year plans and the fact that they might not be mandatory and/or only have a guiding nature, 
the US recalled that they had been referred to as the blueprints for subsidy programmes, a term 
with which the US was comfortable and with whic h it hoped that China also continued to be 
comfortable.  
 150.  China recalled the disagreement on the same matter at previous meetings and reiterated 
that the development plans and policies represen ted blueprints, not for subsidy programmes but 
for China's economic, social and industrial development, offering opinions of a guiding nature only 
and treating all market players in an open and fair manner in their implementation. These plans 
and policies had provided no support or specific subsidy, nor had they created obligations for 
central or sub-central governments to implement.  Therefore, they should not be regarded as 
programmes subject to the SCM Agreement and as  such the SCM Committee did not constitute a 
proper forum for discussing them.  
 
151.  With respect to the comment of the US on th e written Q&A process, China and the US were 
talking about the same thing from two different angles. As it had reiterated at previous meetings, if China had not received such a large amount of requests for information or counter-notifications, 
it could have submitted its notification earlier, and could have conducted a written Q&A process 
according to the normal review procedure for notifications. As it had put its latest notification on the table, China sincerely welcomed the US and all other Members to focus on that, to study it and 
to try to address their concerns through written questions posed in that context. China stood ready 
to provide written answers in due course.  
152.  The Committee took note of the statements made. 
 
11  NON-NOTIFICATION BY CHINA OF ALLE GED SUBSIDIES CONTAINED IN THE 2011 
AND 2014 REQUESTS BY THE UNITED STATESUNDER ARTICLE 25.10 OF THE SCM 
AGREEMENT (G/SCM/Q2/CHN/42 AND G/SCM/Q2/CHN/51, PLUS 
G/SCM/Q2/CHN/51/CORR.1) – ITEM REQUESTED BY THE UNITED STATES5 
12  NON-NOTIFICATION BY CHINA OF ALLE GED SUBSIDIES CONTAINED IN THE 2015 
REQUEST BY THE UNITED STATES UNDER ARTICLE 25.10 OF THE SCM AGREEMENT 
(G/SCM/Q2/CHN/53) – ITEM REQUESTED BY THE UNITED STATES  
153.  The United States informed Members that its statement would be about its 2011, 2014 and 
2015 counter notifications. The US recalled that its first counter-notification, in 2011, had reflected 
many years of frustration after asking China to submit its subsidy notifications for a long time. China's two subsidy notifications suffered not only from significant under-reporting, but also from substantial over-reporting of programmes that could hardly be considered "subsidies" under the 
SCM Agreement, such as social-welfare programm es designed to alleviate poverty and promote 
employment. The inclusion of such programmes inflated artificially the number of programmes reported and in the US view this seemed to be continuing. In its 2011 submission, the US had 
listed approximately 200 central and sub-central government subsidy measures and requested 
China to notify promptly those programmes or explain why they should not be notified. For transparency purposes, the US had included tran slated copies of every single underlying legal 
measure. 
 154.  Although the US had made many of these points earlier, it was important to repeat a 
number of key observations regarding the subsidy measures included in its 2011, 2014 and 2015 
Article 25.10 requests.  
 155.  First, over half of the programmes in its 2011 submission were sub-central in nature, 
supporting the long-standing US position that sub-central programmes were critically important in 
China, as actual implementation of central government industrial policies was often, if not normally, the responsibility of the sub-central governments which also played a significant role in 
                                               
5 Agenda items 11 and 12 were unif ied as both China and the United  States made their relevant 
statements under agenda item 11. G/SCM/M/95 
 
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  providing funding for the programmes designed by the central government. China's argument that 
the sub-central government was only implementing a central government programme so that there was no need to call this a separate programme was a technical matter. In many instances the sub-central governments provided significant funding for various subsidy programmes in 
China. It seemed that the programmes very often were co-funded in part by the central 
government and in part by the sub-central gove rnment. The ongoing research by and actions of 
the US continued to demonstrate unequivocally the critical role played by sub-central governments 
in the implementation of subsidy policies in China. The US noted that a subsidy notification from 
China that did not include sub-central programmes was simply not a full notification.   156.  Second, the Committee previously had discussed th e importance of China's five-year plans. 
China had responded that five-year plans and other industry plans did not establish subsidy 
programmes. Whether or not this was true in a narrow, technical sense, it was nevertheless clear that China's industrial plans established industrial support policies under which actual subsidy 
programmes were implemented. At the previous meeting, there had been a rare instance of 
agreement between China and the US that China's five-year plans contained the "blueprints" for 
China's subsidy programmes. The US understood what China had been saying with respect to the 
fact that the five-year plan itself might not establish the programme per se , but what the US had 
seen was that the five-year plans laid out the blueprint and subsequently more definitive and more detailed plans would flow from the central governme nt ministries down to the provinces and cities. 
In this regard, the US considered the five-year plan an infrastructure of subsidy programmes in 
which the US was interested. 
 157.  Third, certain Chinese subsidy programmes were in effect for a short period, such as two 
years, and then were replaced by other measures. This underscored the importance of China 
notifying its subsidy programmes on a regular and timely basis. If this did not occur, many programmes would have come and gone without any notification while the programmes were 
actually in effect. The result was little, if any, me aningful transparency, contrary to the intention of 
Article 25. The US was seeing this again as the recent notification of China covered the period of 2009-2014. China was already looking at its next five-year plan which would presumably replace and revise some of the existing industrial support programmes. 
 
158.  Fourth, the fact that the US compiled and analysed all of the information included in its 
2011, 2014 and 2015 Article 25.10 submissions – much if not all from publicly available Chinese 
government sources – cast doubt on China's repeated claims that it lacked the ability to collect 
and report the same information, especially afte r more than 14 years of WTO Membership. China 
was the world's largest exporter and was verging on becoming the world's largest economy; claims 
of capacity constraints were difficult to take seriously. 
 159.  While the US appreciated the difficulty of th e task China, or any Member, faced when 
compiling subsidy information, that could not be an excuse for not submitting timely and complete 
notifications.  
 160.  The US recalled that, prior to the Committee's October 2014 meeting, it had filed the second 
Article 25.10 submission, counter-notifying 110 subsidy measures in China that had not been 
previously notified. The subsidy measures in that submission supported many products, including steel, semiconductors, textiles, and fish, as well as stimulus programmes covering a wide variety 
of industries of strategic importance to China.  
 161.  The 2014 Article 25.10 submission was based entirely on programmes identified in the 
US 2012 Article 25.8 information request to China which had been submitted two and a half years 
before. Under Article 25.9, a Member was obliged to respond "as quickly as possible and in a 
comprehensive manner" to such requests. The US had resorted to the Article 25.10 counter-notification mechanism only after two years had passed without any meaningful response from 
China, or any timeframe as to when a response might be forthcoming.  
 162.  The second counter-notification included 13 steel subsidy measures; three at the central 
government level and the remainder at sub-central levels. Most related to the central 
government's "adjustment and revitalization" policy, which was further applied through the 
provinces and then the cities. The specific subsidy programmes were provided at sub-central levels and included special funds for capital investment; loans for supporting the technical reconstruction 
of steel enterprises; financial incentives for power-saving technology; and incentives for the G/SCM/M/95 
 
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  elimination of backward productive capacity. China was the largest steel exporter in the world; yet 
it had not notified a single steel subsidy measure.  163.   The US noted that its second counter-notification included 13 wild capture fish programmes 
at the central and sub-central levels of government, including under the 11
th and 12th five-year 
p l a n s ,  a s  w e l l  a s  m e a s u r e s  r e l a t i n g  t o  f u e l  s u b s i d i e s ,  a  r e l a t i v e l y  c o m m o n  s u b s i d y  g i v e n  t o  fishermen around the world, which China had not yet notified. China was the world's largest 
producer of fish, nearly three times as large as the world's next largest producer; yet it had never 
notified a single wild capture fishery programme.  164.  Twenty-six of the subsidy measures in the second counter-notification were stimulus plans. 
These covered, among other things, textiles, ship building, non-ferrous metals, and light industry. 
The subsidies included: increased credit support; special funds to support research and development, and technology transformation; fina ncial rewards for the transformation of energy-
saving technology; the state purchase and storage of products; and the suspension of social 
insurance payments. The US noted that all of these measures had been implemented during the financial crisis, when China's economy and the world economy as a whole had been on the verge 
of collapse. Under such conditions, all government s were expected to intervene to avert disaster. 
The US government had intervened, as had almost every other government in the world; but it also had notified its subsidies, as had many other Members.  
165.  Despite the seriousness of the situation and the obligations of all Members, China had not 
notified a single stimulus measure, and in fact it had not notified a single subsidy programme since 2008 up until recently. The US noted that China, as the world's largest exporter and as a 
leader in this institution, had a responsibility to abide by its obligations, especially during times of 
crisis. The US recognized that it was every Memb er's right to decide the degree of government 
intervention in its economy. Every Member also ha d agreed that its subsidies were subject to WTO 
rules and to the transparency obligations that were central to the proper functioning of the 
Committee. It had been unfortunate that the US had had to file a second counter-notification. The US had waited for two years for answers from China and had taken action in response to China's complete inaction.  
 
166.  The US urged China to abide fully by its subsidy notification obligations under the 
SCM Agreement, and stated that it was ready to wo rk with China to take concrete steps to move 
rapidly toward a subsidy notification that would pr esent the full picture of its subsidy regime in a 
clear and transparent manner.  
167.  At the beginning of October, the US had filed its third Article 25.10 submission "counter-
notifying" 64 subsidy measures in China that had not been previously notified. The US had 
counter-notified over 350 subsidy measures in China overall. The subsidy measures in that most recent Article 25.10 submission related exclusively to China's "strategic emerging industries". 
Similar to the previous one, this Article 25.10 submission was based entirely on programmes 
previously identified in the US 2014 Article 25.8 information request to China, which had been submitted one year before. Under Article 25.9, a Member was obliged to respond "as quickly as 
possible and in a comprehensive manner" to such requests. The US had resorted to the 
Article 25.10 counter-notification mechanism only after a year had passed without any meaningful 
response from China or any time-frame as to when a response might be forthcoming. 
 
168.  China was in the final year of its 12
th five-year planning period that spanned 2011 to 2015. 
China's previous subsidy notification only covered the period up to 2008 and the recent notification 
was received at the end of its five-year planning period. By the time Members were able to look at 
the programmes at issue, China potentially would have moved on to a new set of industrial 
support policies.  
169.  The key industrial policy of the current five year plan was the promotion of strategic 
emerging industries which included the following product areas: (1) new energy vehicles, (2) new materials (a category that included textile products), (3) biotechnology, (4) high-end equipment 
manufacturing, (5) new energy, (6) next generation information technology, and (7) energy 
conservation and environmental protection. The policy had begun with measures announced by China's State Council in 2010. Subsequently, China's other central and sub-central authorities had issued industrial policies for the 12
th five year planning period that targeted the development of 
the strategic emerging industries. G/SCM/M/95 
 
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170.  The US noted the important role played by sub-central governments in implementing China's 
12th five year plan industrial policies. The National Five-Year Plan for the Development of Strategic 
Emerging Industries stated that "Local governments shall, in light of the priorities in the efforts to 
develop strategic emerging industries, and according to local actual conditions, focus on 
developing distinctive emerging industries with competitive edges, and avoid random development 
and redundant development." According to the US, this was a very specific central government 
directive to sub-central governments to develop their own policies consistent with the central 
government policy with respect to strategic emerging industries. In the US view, this statement and the numerous sub-central measures including specific funding measures, supported the point the US had been making earlier and had made repeatedly over the years; namely, a subsidy 
notification from China that did not include sub-central programmes was simply not a full 
notification.  
171.  The US noted that while much of the language  in the cited measures was rather broad and 
general, many of the measures established or mentioned special purpose funds that would be used to support the strategic emerging industries. A measure from the National Development and 
Reform Commission (NDRC), for exam ple, explained that the Special Fund for the Development of 
Strategic Emerging Industries was a "centrally budgeted special fund to support key technology breakthroughs, product innovation and development, and major demonstration and regional clustering for strategic emerging industries." In the US' view, when a special fund to support R&D 
efforts was seen, it sounded like a subsidy. The same NDRC measure explained that the monies in 
the Special Fund for the Development of Strategic Emerging Industries would "generally be appropriated in the form of grants, equity venture capital funds, etc." 
 
172.  The US regretted having to resort to Article 25. 10 once again, but given the lack of timely 
and complete subsidy notification from China, the lack of any meaningful response to the US 
Article 25.8 questions submitted one year ea rlier and the coming completion of the 12
th Five Year 
Plan without a single subsidy programme being notified, the US had had no other choice. The US urged China to notify these programmes immediately.  
173.  China urged Members to carefully study its recent notification in which they would find that 
the items mentioned in the submissions were already covered. 
 
174.  China noted that it had already addressed the 2014 submission in connection with the 
request No. 46 in the agenda item 10 and it would continue to make some clarifications on the 2011 submission in G/SCM/Q2/CHN/42 (submission 42): 
 
 Item No. 1 in the "Prohibited Subsidies" Section, in the first part of submission 42, 
concerned green technology subsidies, i.e. Special Fund for Industrialization of Wind 
Power Equipment. The policy had been im plemented until the end of 2009 and had 
expired and been terminated, had been listed as Programme No. 26 in China's second 
subsidy notification, and had been updated as Programme No. 25 in China's recently submitted third subsidy notification. 
 Item No. 14 in the "Actionable Subsidies" Se ction, in the first part of submission 42, 
concerned green technology subsidies, i.e. the Financial Subsidy Fund for Renewable and 
Energy-Saving Building Materials. It had been included as Programme No. 75 in China's 
third subsidy notification. Also in the same section, Item No. 15, the Financial Subsidy 
Funds for Promotion of High-Efficiency and En ergy-Saving Products had been included as 
Programme No. 74 in China's third subsidy notification. Item No.21, the Financial Assistance for Golden Sun Demonstration Project had been included as Programme 
No.68 in China's third subsidy notification. 
 Both Item No. 22 and Item No. 23 referred to the Financial Subsidies for Building 
Integrated Solar Photovoltaic Applications. Item No. 23 was the specific procedural 
provisions of Item 22; therefore these two were repeated enumerations by the US. It 
had been verified that Building Integrated Solar Photovoltaic Applications was a supporting direction of the Financial Assistance for Golden Sun Demonstration Project, 
i.e. Item No. 21 in the same Section of subm ission 42; accordingly they should not be 
regarded as an independent subsidy programme. As mentioned earlier, Item No. 21 had been included as Programme No. 68 in China's third subsidy notification. G/SCM/M/95 
 
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   Item No. 24, the Subsidy Funds for the Energy Regeneration and Utilization of Straws 
and Stalks had been included as Programme No. 69 in China's third subsidy notification. 
 Item No. 26, the Reduction of Vehicle Purchase Tax of the Passenger Vehicles of 1.6 
Litres and Below Displacements, had been included as Programme No. 24 in China's 
third subsidy notification. 
 Item No. 27, the High-Efficiency Lighting Products Promotion Financial Subsidy Fund, 
had been included as Programme No. 73 in China's third subsidy notification. 
 Most of the so-called measures mentioned in Item No. 1 through Item No. 8 in the 
second part of submission 42 concerning Famous Brand Export Subsidies were procedural provisions and did not include specific subsidy programmes. Among these items, Item No. 5 was about "Circular of Ministry of Commerce, China Export & Credit 
Insurance Corporation Concerning Utilizing Export Credit Insurance to Support the 
Development of Name Brand Export". It had been verified that China Export & Credit Insurance Corporation adhered to market oriented operation and did not provide any 
funding support or export subsidy to specific enterprises. Regarding cultivating and 
supporting famous export brands, the centra l government had only formulated guiding 
opinions and had never arranged relevant export brands fund. 
175.  Those were clarifications on several items at the central government level in submission 42. 
Items which were at the sub-central government level in submission 42 could be categorized as follows:   
 First, plans, opinions and catalogues promulgated by the sub-central government were 
documents of guiding nature, which did not involve specific subsidy policies:  
 Examples in the second part of submissi on 42 included Item No. 12, the Eleventh 
Five-Year Plan of Guiyang City, Guizhou Province; Item No. 43, the Opinion on 
Promoting Better and Quicker Development of Private Economy issued by Jiaxing City, Zhejiang Province; Item No. 56, the Opinions on Accelerating Open 
Economy issued by Lishui City, Zhejiang Province; Items No. 63 and 64, the Opinions 
of Jiangdong District, Ningbo City, Zhejia ng Province on Promoting Steady Foreign 
Trade Development; Item No. 78, Suggestions on the Implementation of Famous Brand Strategy issued by Jilin Province; Item No.79 Liaoning Provincial People's 
Government Proposals on Promoting Development of Private Economy; and Item 
No. 84, Proposals on Promoting the Development of Tianjin's Foreign Trade in a Sound and Fast Manner.  
 Examples in the "Actionable Subsidies" section in the fourth part of submission 42 
included Item No.24, the Industrial Structure Adjustment Guideline Catalogue of Jiangsu Province and Item No.28, the Opin ion of Liaoning Province Encouraging the 
Expansion of Opening-Up in Coastal Key Developing Areas. 
 Second, relevant policies existed but no subsidy had ever been granted in accordance 
with such policies: 
 Examples in the second part of submissi on 42 included Item No. 45, the Awarding 
and Promoting of Brand Export Commodities  of Ningxia Hui Autonomous Region; and 
Item 74, the Awarding of Brand Export Products of Shaanxi Province.  
 Examples in the "Actionable Subsidies" section in the fourth part of submission 42 
included Item No. 80, Promoting the Development of Small and Medium-Sized 
Enterprises in Liaoning Province. 
 Third, the subsidies claimed by the US did not exist at all: 
 Examples in the "Actionable Subsidies" section in the fourth part of submission 42 
included Item No. 21, Preferential Taxes of Haicheng City Government, Liaoning Province; Item No. 24, Policies for Encouraging Investments in Xuzhou Economic G/SCM/M/95 
 
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  Development Zone by Xuzhou, Jiangsu Province; and Item No. 32, the Exemption of 
Fees for Firms Located in Designated Geographical Areas in the City of Dalian in Liaoning Province. 
 Fourth, the sub-central governments unveiled specific implementation measures only for 
the purpose of carrying out the subsidy polici es promulgated by the central government: 
 For example Item No. 18 in the "Prohibited Subsidies" Section in the fourth part of 
submission 42, International Market Development Fund Grants for SMEs 
implemented by Shenzhen City.  
 Fifth, some policies were merely procedural documents or only involved appraising 
standards and did not constitute a separate subsidy policy: 
 Examples in the second part of the su bmission 42 included Items No. 33 and 34, 
Notices Concerning Export Brands of Guangdong Province; Item No. 60 and 61, 
Measures for the Administration of Famous Brand (Industrial) Products of Guangdong Province; Items No. 42 and 92, Notice of Ex port Brands of Jiangsu Province; Items 
No. 69 and 70, Notice on Confirmation of Export Brand Merchandises of Shanghai; 
Item No. 85 Notice on Selection of Tianjin's Export Brands; and Item No.91 Notice on the Result of the Survey of Yangzhou's Brand Exporters. 
 The sixth category covered subsidies which were not subject to the SCM Agreement: 
 Examples in the second part of submissi on 42 included Item No. 58, Implementing 
Rules of Support Policies for Patented Brands of Service Outsourcing Companies by Zhabei District, Economic Commission of Zhabei District, Shanghai; and Item No. 82, 
Some Proposals on the Promotion of Development of Shanghai's Service 
Subcontracting. 
176.  With respect to the last counter-notification of the US, namely the submission 53 
(G/SCM/Q2/CHN/53), which had been circulated one week before this meeting, a rough look 
showed it to be similar to the request 50 (G/S CM/Q2/CHN/50) of the US, which was not on the 
Committee's agenda. Both documents were about the supporting measures for strategic emerging 
industries. China could not agree with the statement in submission 53 that China "did not 
meaningfully respond to the written request for information of the US." Upon reviewing the minutes of previous regular meetings, one could easily find that each time China had tried hard to clarify the verifiable items in the US documents. Following this meeting, nearly 150 items would 
have been clarified by China. However, it seemed that the US had not carefully studied China's 
feedback; but instead, kept raising questions from  different angles and increasing the number of 
submissions and requests, imposing a heavy burden on China which had been going all out in 
preparing its third subsidy notification. China co uld only say that it had responded to the US 
concerns to the best of its capacity.  
177.  China recalled that at the previous regular meeting in autumn, the US had stated that "the 
US submitted Article 25.8 questions to China only du e to lack of subsidy notifications. If a Member 
provided a subsidy notification, it was unlikely that it would receive Article 25.8 questions." The US had reiterated this position during this meeting. Recently China had submitted its third subsidy 
notification. China hoped that the US could shift its focus to carefully studying China's notification 
and address its concerns in the notification review  procedure, and also allow China to focus on the 
Q&A process required by the notification review, to have adequate interactions with all Members, 
and to ensure the fulfilment of transparency obligations under the SCM Agreement. 
 178.  China noted that it would clarify some items in submission 53 according to the verification of 
certain items in request 50: 
 
 Special Fund for Strategic Emerging Industries had been included as Programme No. 81 
in China's third subsidy notification. China requested Members to refer to the notification 
for details. China noted that the following items were all plans and opinions promulgated 
by sub-central government which were documents of a guiding nature and did not involve any specific subsidy policies: G/SCM/M/95 
 
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   Item No. 4 in request 50 and Item No. 5 in  submission 53, Beijing City Opinion on 
Expediting the Development and Nurturing of the Strategic Emerging Industries; 
Item No. 7 in request 50 and Item No. 8 in submission 53, Shandong 12th Five-Year 
Development Plan for SEIs; Item No.13 in request 50 and Items No. 54, 55 and 56, 
Zhejiang 12th Five-Year Plan for the Development of Energy Technology and 
Equipment; Beijing 12th Five-Year Development Plan for the Biological and 
Pharmaceutical Industry; and Guangdong 12th Five-Year Development Plan for the 
LED Industry, respectively. 
 With respect to Item No. 6 in request 50 and Item No.7 in submission 53, i.e. Jiangxi 
Province's Measure on the Management of the Strategic Emerging Industry Investment Guiding Fund, China stated that relevant policies existed but no subsidies had ever been 
provided in accordance with such policies. 
179.  The United States was pleased to see that some of the programmes that it had counter-
notified in 2011 were included in the third subs idy notification of China. China had mentioned 
having clarified 150 measures, while the US had identified 350 measures. Therefore, assuming 
that the US accepted all of the information in China's notification, which might not necessarily be the case, there were still over 200 measures at issue. Thus, there remained a great amount of 
substance even if one accepted all of China's ar guments. The US was ready to shift its focus and 
would be looking at China's third notification in detail. It would provide any questions in writing, and looked forward to China's written answers.  
180.  The Committee took note of the statements made. 
 
13  OTHER BUSINESS 
13.1  CVD Investigation of th e United States Regarding Sugar Originating in Mexico – 
Item Requested by Mexico 
181.  Mexico expressed concern over the CVD investigation of the US on sugar originating in 
Mexico, in respect of the reasoning of the US Department of Commerce (USDOC) as well as the US 
International Trade Commission (USITC) in their final determinations. Although the determinations would not be applied at least for the time being, pursuant to the suspension agreements which had been negotiated in the context of the investigat ion, Mexico wished to express its disagreement 
with and concern over the determinations.  
 182.  Regarding the final determination by the USDOC, there had been a considerable percentage 
point increase in the countervailing duty rates compared with those calculated in the preliminary 
determination. This increase was almost entirely  due to the fact that the USDOC had found that 
the Mexican government had forgiven the debt owed to it by the sugar producers. Mexico had 
three observations on this. 
 183.  First, the USDOC's findings had not taken into  account all of the evidence that had been 
provided in the questionnaire responses and during  the verification visits. That evidence showed 
that far from being forgiven, legal actions had been undertaken to collect the debt. The USDOC 
had not taken into account the evidence showing that the government was actively suing repayment and that it had a reasonable expectation of being repaid. Given that there had been no 
debt forgiveness, there was neither a financial contribution nor a benefit, and thus no subsidy as 
per the SCM Agreement.  
184.  Second, the evidence filed included a Federal cour t ruling to the effect that the expropriation 
had involved only the assets and not the liabilities of the sugar producers. Thus, contrary to what the USDOC apparently presumed, the Mexican government had not absorbed the debts of the sugar producers. Furthermore, the indemnification provided by the Mexican Government for the 
expropriation of the assets was lodged in a guarantee fund specifically for the repayment of the 
debts owed to the Mexican Government and other creditors.   
185.  Third, Mexico could not find in the determination an analysis of the specificity of the 
supposed subsidies, as required by the Agreement.  G/SCM/M/95 
 
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  186.  Concerning the injury determination by the US ITC, the definition of the coverage of the 
product subject to investigation, and the likeness to that product of the domestic product appeared to be incompatible with the SCM Agreement. In addition, the determination had not taken into account all known economic factors, because it was based only on the increased burden on 
government income and price support programmes, without considering that the domestic industry 
had demonstrated positive performance in all indicators.   
187.  In addition, the increase in Mexican sugar imports had only displaced imports from other 
origins because even when the imports of Mexican sugar had increased, total imports had fallen, and the US industry's market share had increase d (and there had been no price undercutting by 
the Mexican sugar), which also raised concerns regarding the sufficiency of the USITC's causation 
analysis. Furthermore, the USITC should have taken into account all factors other than the imports 
that also could have caused injury, which apparently it did not do, or at least not in an adequate manner. 
 
188.  The United States noted that on 19 December 2014, the USDOC had signed agreements 
with the Mexican sugar producers and exporters and the Government of Mexico, respectively, 
suspending the AD and CVD investigations. The suspension agreements would remain in place with 
the issuance of the USDOC's affirmative final determinations in both of the investigations, and pending the issuance of the USITC's final de terminations. These agreements continued to 
authorize Mexican producers and exporters to export sugar to the US without regard to AD or CVD 
duties but subject to export limits and minimum prices. The US would respond to any written 
questions that Mexico might have regarding the US determinations.  
189.  The Committee took note of the statements made. 
 
14  DATE OF NEXT REGULAR MEETING 
190.  The Committee decided to hold its next regular meeting during the week of 25 April 2016, 
with the exact date to be confirmed in due course. As usual, that meeting would be immediately 
preceded by a special meeting for review of subsidy notifications.  
15  ANNUAL REPORT OF THE COMMITTEE ON SUBSIDIES AND COUNTERVAILING 
MEASURES TO THE COUN CIL FOR TRADE IN GOODS (ARTICLE 32.7) 
191.  The Committee adopted its Annual Report (2015) to the Council for Trade in Goods.
6 
 
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6 G/L/1133-G/SCM/146.