RESTRICTED  
  
G/SCM/M/93  
 
25 September 2015  
(15-4971)  Page: 1/22  
Committee on Subsidies and Countervailing Measures    
 
MINUTES OF THE REGULAR MEETING HELD 
ON 28 APRIL 2015 
CHAIR: MR EDUARDO MINORU CHIKUSA (BRAZIL) 
1.  The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 28 April 2015, convened in WTO/AIR/SCM/3 dated 17 April 2015. 
2.  The Committee adopted the following agenda: 
1   NATIONAL LEGISLATION - REVI EW 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   Armenia (G/ADP/N/1/ARM/1/S uppl.3-G/SCM/N/1/ARM/1/Suppl.1-
G/SG/N/1/ARM/1 /Suppl.1) ................................................................................................. 2  
1.2   Bahrain, Kingdom of (G/ADP/N/1 /BHR/3-G/SCM/N/1/BHR/2-G/SG/N/1/BHR/3 & 
G/ADP/N/1/BHR/3/Corr.1-G/SCM/N/1/BHR/ 2/Corr.1-G/SG/N/1/B HR/3/Corr.1) .......................... 2  
1.3   Brazil (G/ADP/N/1/BRA/3/S uppl.4-G/SCM/N/1/BRA/2/Suppl.11-
G/SG/N/1/BRA/3 /Suppl.2) ................................................................................................. 3  
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) ................................................................................................. 3  
1.5   Saudi Arabia, Kingdom of (G/ADP/N/1 /SAU/2-G/SCM/N/1/SAU/2 -G/SG/N/1/ SAU/2) ........... 3  
1.6   United States (G/ADP/N/1/USA/1/Suppl.18-G/SCM/N/1/USA/1/Suppl.18) .......................... 3  
2   NATIONAL LEGISLATION – CONT INUING REVIEW OF LEGISLATIVE 
NOTIFICATIONS PREVIOUSLY REVIEWED BY THE COMMITTEE ........................................ 3  
2.1   Qatar (G/ADP/N/1/QAT/2-G /SCM/N/1/QAT/2-G/SG/N/1/QAT/2) ....................................... 3  
3   SEMI-ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS 
(ARTICLE 25.11) - G/SCM/N/281 AND G/SCM/N/ 281/SUPPL.1  ...................................... 4  
4   PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: 
NOTIFICATIONS (ARTICLE 25.11) - G/SCM/N/280, G/SCM/N/282-283 AND 
G/SCM/N/285-287 ........................................................................................................... 6  
5   PROCEDURES FOR REVIEW OF 2015 NEW AND FULL NO TIFICATIONS ........................ 6  
6   IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS AND 
OTHER INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM 
AGREEMENT .....................................................................................................................  6 
7   CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM SCM 
ANNEX VII( B) ................................................................................................................ 1 0 
8   PERMANENT GROU P OF EXPE RTS .............................................................................. 10  
9   LOCAL CONTENT REQUIREMENT IN RENEWABLE ENERGY SECTOR SUBSIDY 
SCHEMES IN THE UNITED STATES – ITEM REQUESTE D BY IN DIA .................................. 11  
  G/SCM/M/93 
 
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  10   ELIMINATION OF EXPORT SUBSID IES FOR TEXTILES AND APPAREL BY 
INDIA PURSUANT TO ARTICLE 27.5 OF THE SCM AGREEMENT – REQUEST FROM THE UNITED STATES ...................................................................................................... 12
 
11   NON-NOTIFICATION BY INDIA OF ALLEGED SUBSIDIES CONTAINED 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) ................... 12  
12   NON-NOTIFICATION BY CHINA OF ALLEGED SUBSIDIES CONTAINED IN THE 
2011 AND 2014 REQUESTS BY THE UNITED STATES UNDER 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) – REQUES T FROM THE UNITED STATES .......................... 13
 
13   2012 AND 2014 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/C HN/50)................................................... 17  
14   2015 REQUEST TO CHINA FROM THE UNITED STATES REGARDING FISHING 
SECTOR SUPPORT PROGRAMS PURSUA NT TO ARTICLE 25.8 OF THE SCM 
AGREEMENT (G/SCM/Q2/CHN/52) ................................................................................ 19  
15   OTHER BU SINESS .................................................................................................... 21  
15.1   Japanese government support for MRJ Project – Item re quested by  Brazil ....................... 21 
16   DATE OF NEXT REGULAR MEETING .......................................................................... 22  
17   ELECTION OF  OFFICERS .......................................................................................... 22  
 
1  NATIONAL LEGISLATION - REVIEW OF  NOTIFICATIONS OF NEW OR AMENDED 
LEGISLATION OR REGULATIONS NOT PREV IOUSLY REVIEWED BY THE COMMITTEE 
(INCLUDING SUPPLEMENTAL NOTIFICATIONS OF EXISTING PROVISIONS NOT 
PREVIOUSLY REVIEWED) 
3.  The Chair noted that, in accordance with  the Committee's procedures (G/SCM/W/293), the 
new legislative notifications on the agenda were  those that had been circulated in all three 
languages not less than six weeks before the meeting. The deadline for written questions on 
these notifications was 7 April 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 18 May 2015. Written answers were due not later 
than 8 June 2015. 
5.  The primary review of the notifications would be held in the Committee on Anti-Dumping 
Practices, where all horizontal issues in additi on 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  Armenia (G/ADP/N/1/ARM/1/Suppl.3-G/SCM/N/1/ARM/1/Suppl.1-
G/SG/N/1/ARM/1/Suppl.1) 
6.  Written questions and answers with respect to this notification can be found in: 
 G/ADP/Q1/ARM/5-G/SCM/Q1/ARM/5-G/SG/Q1/ARM/2 - questions from the United States 
 G/ADP/Q1/ARM/6-G/SCM/Q1/ARM/6-G/SG/Q1/ARM/3 – replies to the United States 
 
7.  The Committee took note of the notification.   
1.2  Bahrain, Kingdom of (G/ADP/N/1/BHR/3-G/SCM/N/1/BHR/2-G/SG/N/1/BHR/3 & G/ADP/N/1/BHR/3/Corr.1-G/SCM/N/1/BHR/2/Corr.1-G/SG/N/1/BHR/3/Corr.1) 
8.  Written questions and answers with respect to this notification can be found in: G/SCM/M/93 
 
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   G/ADP/Q1/BHR/7-G/SCM/Q1/BHR/7-G/SG/Q1/BHR/7 – questions from the United States 
 G/ADP/Q1/BHR/8-G/SCM/Q1/BHR/8-G/SG/Q1/BHR/9 – replies to the United States 
 
9.  The Committee took note of the notification. 
1.3  Brazil (G/ADP/N/1/BRA/3/Suppl.4-G/SCM/N/1/BRA/2/Suppl.11-G/SG/N/1/BRA/3/Suppl.2) 
10.  The Committee took note of the notification.  
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) 
11.  Written questions with respect to this notification could be found in: 
 G/ADP/Q1/CMR/3-G/SCM/Q1/CMR/3-G/SG/Q1/CMR/3 – questions from the United States 
 
12.  To date, no written answers have been submitted.1  
1.5  Saudi Arabia, Kingdom of (G/ADP/N/1/SAU/2-G/SCM/N/1/SAU/2-
G/SG/N/1/SAU/2) 
13.  Written questions and answers with respect to this notification could be found in: 
 G/ADP/Q1/SAU/1-G/SCM/q1/SAU/1 -G/SG/Q1/SAU/1 - questions from the United States 
 G/ADP/Q1/SAU/2-G/SCM/Q1/SAU /2-G/SG/Q1/SAU/4 – replies to the United States 
 
14.  The Committee took note of the notification. 
1.6  United States (G/ADP/N/1/USA/1 /Suppl.18-G/SCM/N/1/USA/1/Suppl.18) 
15.  No questions were raised in respect of this notification. 
16.  The Committee took note of the notification.  
2  NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE 
17.  The Chair recalled that pursuant to the Committee's agreed procedures, to place a 
previously-reviewed legislative notification on the agenda of this meeting, a Member had to 
submit written questions not later than 16 Ma rch 2015. Members receiving any such questions 
were to submit written replies by 13 April 2015. 
2.1  Qatar (G/ADP/N/1/QAT/2-G/SCM/N/1/QAT/2-G/SG/N/1/QAT/2) 18.  Written questions and answers with respect to this notification can be found in: 
 G/ADP/Q1/QAT/1-G/SCM/Q1/QAT/1-G/SG/Q1/QAT/3 - questions from the United States 
 G/ADP/Q1/QAT/2-G/SCM/Q1/QAT/2-G/SG/Q1/QAT/5 – replies to the United States
2 
 
19.  The Committee took note of the notification.  
20.  The Chair stated that in accordance with the Committee's procedures, any Member wishing 
to place a previously-reviewed legislative notifi cation on the agenda of the Committee's October 
2015 regular meeting must submit to the Member  concerned and to the Secretariat written 
                                               
1 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.  
2 Circulated on 5 May 2015, following the meeting. G/SCM/M/93 
 
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  questions concerning that notification not later than 14 September 2015. The Member receiving 
such questions should submit its written answers not later than 12 October 2015.   
21.  Finally, for new legislative notifications to be placed on the agenda of the October meeting, 
they must be circulated in all three langua ges by 14 September 2015, and written questions 
concerning such notifications should be submitte d to the notifying Member and to the Secretariat 
by 5 October 2015.   
22.  The Secretariat would circulate the usual triple-symbolled document containing these and 
the other pertinent deadlines shortly after the meeting.   
23.  The Committee took note of the Chair's statement. 
3  SEMI-ANNUAL REPORTS OF COUNTERVAI LING DUTY ACTIONS (ARTICLE 25.11) - 
G/SCM/N/281 AND G/SCM/N/281/SUPPL.1 
24.  The Chair recalled that document G/SCM/N/281 had invited all Members to submit not later 
than 15 February 2015, their semi-annual reports under Article 25.11 of the SCM Agreement of 
countervailing duty actions taken during the period 1 July through 31 December 2014. Document 
G/SCM/N/281/Add.1 provided the current status of Members' reporting for that period. 
Paragraph 1 of the document listed those Members reporting countervailing duty actions during the period. Paragraph 2 listed the 38 Members that had notified having taken no countervailing 
duty action during the period. Paragraph 5 of the document listed the 32 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.   
25.  One-time notifications served a useful tran sparency 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. 
26.  Unfortunately, the very large number of Me mbers listed in paragraphs 3 and 4 of the 
document had not submitted a semi-annual report fo r July - December 2014. They were urged to 
do so as soon as possible.   
27.  No comments or questions were raised concerning the semi-annual reports of Brazil, 
Canada, Egypt, the European Union, India, Mexi co, Peru, the Russian Federation, or Turkey.   
28.  Australia noted that it would submit a corrigendum to its semi-annual report in the near 
future.  29.  With respect to the semi-annual report of the United States , Turkey stated that the US had 
three CVD measures one ongoing original investigat ion on iron and steel from Turkey. In respect 
of the US findings on the alleged support prog ramme "Provision of Hot Rolled Coil for Less Than 
Adequate Remuneration (LTAR)", Turkey believed th at the US had been acting inconsistently with 
the SCM Agreement and had not taken into accoun t WTO Panel and Appellate Body decisions on 
the appropriate definition of a "public body". The US thus had calculated artificially high subsidy 
margins for Turkish iron and steel exporters. Turkey asked the United States to act consistently with WTO rules on CVD proceedings and to revise its findings.   
30.  China expressed concern over US CVD investigations on Certain Crystalline Silicon 
Photovoltaic Products from China. First, in a previous investigation of this product, the US 
Department of Commerce ("USDOC") had applied a "substantial change" criterion to the rules of origin, in accordance with which only solar panels produced in China and modules composed of 
cells produced in China could be within the scope of investigation. In the current investigation, 
however, the USDOC had changed that criterion, and included modules composed of solar panels 
produced outside of China in the scope of investigation. So, the US authorities applied different 
rules of origin to the same kind of product in two CVD investigations against China. China was 
very concerned and requested the US authority to correct this practice. Second, in the same investigation, the USDOC had found some new subs idy programmes during verification visits to G/SCM/M/93 
 
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  the Chinese enterprises, and had applied adverse fa cts available and punitive duty rates to those 
enterprises because they had not voluntarily disclosed those programmes to the investigating authority. China believed that the interested parties were not obliged to supply that information and that the US investigating authorities were incorrect in applying facts available and punitive 
duty rates.  
31.  The United States stated that it had cond ucted all proceedings in an open and transparent 
manner in line with US law and its international obligations, and had taken into account the views 
of all interested parties.  
32.  Regarding the concerns raised by Turkey, an issue in that case was whether certain entities 
in Turkey had constituted public bodies, and the evidence in those cases had strongly supported the finding that there were public bodies involved, which was consistent with the Appellate Body 
findings, for instance in DS 379. In fact, the US had modified its practice for determining whether 
entities were public bodies to specifically take into account the DS 379 decision, and this modification had been fully reflected in the investigation. The USDOC's rigorous investigatory 
process provided ample opportunity for all partie s to submit comments in writing and to request 
meetings. The US was ready to respond to any additional questions in writing.  
33.  Regarding China's intervention, there had been some scope issues in the case, and the US 
position on that was fully reflected in the USDOC' s decisions. The existing AD and CVD orders on 
solar cells and modules from China covered solar modules assembled in China using Chinese solar cells, but did not cover solar modules assembled in China using third country solar cells. The petition in the second set of investigations was seeking relief from other imports of solar 
modules assembled in China. The detailed analysis was available on the USDOC website. 
Regarding facts available, the US noted that its standard questionnaire asked companies to indicate whether they had received any other subsidies. Apparently, the answer to that question 
in the instant case had been negative, and th erefore when the US authority had come across 
those subsidy programmes during verification, it had had to put together information such that it could calculate the final rate for the programmes not covered in the questionnaire response. The 
US was ready to answer additional questions in writing.    
34.  Regarding the semi-annual report of Ukraine , the Russian Federation reiterated its concern 
over a CVD investigation initiated by Ukraine on 18 September 2014 on imports of light motor 
vehicles originating in Russia. Russia had strong  doubts as to the conformity with the SCM 
Agreement of the Ukrainian producers' application, which did not appear to meet the 
requirements in Article 11.2 of the SCM Agreem ent and could not justify initiation of the 
investigation. The application did not include sufficient evidence of the existence of subsidy, 
injury and causal link between the subsidized imports and the alleged injury. In addition, Ukraine 
had failed to meet the requirement in Article 13.2 of the SCM Agreement. The investigating 
authority had sent an invitation for consultations, but had not provided access to a non-
confidential summary of the confidential data, and as a result, the consultations had not taken 
place. Russia would continue to monitor the investigation closely.     
35.  Ukraine stated that the application by the domestic industry contained sufficient evidence 
showing that the Russian producers had been bene fiting from a number of subsidies granted by 
the Russian government. The increased subsidized imports of the passenger cars had caused 
material injury to the domestic industry of Ukraine. The Russian Federation's authorities had been invited for pre-initiation consultations, which had been held on 27 November 2013. During 
the investigation, Ukraine had been providing full opportunities for all interested parties to 
present relevant evidence and comments.      
36.  The Committee took note of all semi-annual reports submitted, and all statements made. 
37.  The Chair recalled that immediately followin g the meeting, the Secretariat would present a 
workshop on notifications of anti-dumping and countervailing duty actions, to clarify technical 
aspects of compliance with the notification requ irements and to bring to Members' attention 
common reporting errors.  
38.  The Committee took note of the Chair's statement.  G/SCM/M/93 
 
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  4  PRELIMINARY AND FINAL COUNTERVAI LING DUTY ACTIONS: NOTIFICATIONS 
(ARTICLE 25.11) - G/SCM/N/280, G/SCM/N/282-283 AND G/SCM/N/285-287 
39.  The Chair reported that since the Committee's October 2014 regular meeting, notifications 
under Article 25.11 of preliminary and final counter vailing duty actions had been received from 
Australia, Brazil, Canada, the European Union, the Russian Federation, Ukraine, and the 
United States. Those notifications were listed in documents G/SCM/N/280, 282-283 and 285-287. 
40.  The Committee took note of the notifications. 
5  PROCEDURES FOR REVIEW OF 2015 NEW AND FULL NOTIFICATIONS 
41.  The Chair recalled that the 2015 new and full notifications were due on 30 June, and thus 
would be subject to review in special meetings  beginning with the one in October 2015. The 
Committee thus needed to decide on procedures for reviewing those notifications. During the last 
five notification cycles, the new and full notifications had been reviewed on the basis of the procedures set forth in G/SCM/117, first adopted in 2005. The Chair proposed that the 
Committee agree to conduct the review of the 2015 ne w and full notifications on the basis of the 
same procedures.  
42.  The Committee so decided. 
6  IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT 
43.  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 
updated a background note (G/SCM/W/546/Rev. 6), providing a snapshot of the level of 
compliance with the various notification oblig ations under the SCM Agreement since 1995.   
44.  During the October meeting a number of Members had indicated their willingness to 
continue discussions on ways to improve timeliness and completeness of notification obligations under the SCM Agreement, with the notification of subsidies being the most fundamental. 
Compliance with that important obligation remained low, undermining the transparency function 
of the Committee.  Unfortunately, 68 Members still had not made their 2013 new and full subsidy notification, although the deadline had been almo st two years earlier. Many of those Members 
either had never notified or had only done so in the distant past. Moreover, 59 Members still had 
not made their 2011 notifications, which had been due nearly four years earlier. The chronic low 
compliance with this fundamental transparency obligation constituted a serious problem in the proper functioning of the Agreement. 
45.  The Members that had not made their 2013 notifications were: Albania; Angola; Argentina; 
Bangladesh; Belize; Benin; Boli via; Brunei Darussalam; Cabo Verde; Cambodia; Central African 
Republic; Chad; China; Colombia; Côte d'Ivoire; Democratic Republic of Congo; Djibouti; Egypt; 
Fiji; the Gambia; Ghana; Guinea; Guinea-Bissau;  Guyana; Iceland; Indonesia; Kenya; Kyrgyz 
Republic; Lesotho; Malawi; Maldives; Mauritania; Mauritius; Mongolia; Montenegro; Morocco; Mozambique; Myanmar; Namibia; Nepal; Nicaragua; Niger; Nigeria; Pakistan; Paraguay; Philippines; Qatar; Rwanda; Samoa; Sierra Leon e; Solomon Islands; South Africa; Sri Lanka; 
Suriname; Swaziland; Tajikistan; Tanzania; The Fo rmer Yugoslav Republic of Macedonia; Tonga; 
Trinidad and Tobago; Tunisia; Uganda; United Arab Emirates; Vanuatu; Venezuela; Viet Nam; Zambia; and Zimbabwe. The Chair asked those Members to explain why they had not yet notified 
and to indicate when they might do so. No delegation made a statement. 
46.  The Chair urged Members that had not yet su bmitted their 2013 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 delegations could draw upon in working to rectify the situation, including the Secretariat Handbook on Notification Requirements for the G/SCM/M/93 
 
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  SCM Agreement and the two Geneva-based In ternship Programmes coordinated by the 
Secretariat.   
47.  The Chair recalled that at previous meetings, the Committee had discussed a proposal from 
the United States (G/SCM/W/557/Rev.1) regard ing the treatment of questions and answers 
under Articles 25.8 and 25.9 of the SCM Agreemen t. At the previous regular meeting, a number 
of Members had expressed interest in continuing to discuss this proposal, so the Chair had indicated that this item would be on the agenda of the present meeting.  
48.  The United States recalled that at the October meeting it had introduced its formal proposal 
that written answers to initial written questions under Article 25.8 are provided within 60 days 
and that follow-up questions be answered in 30 days. The discussion had been useful whether or not Members' initial reactions had been positive. While it was clear that Members were far from 
reaching consensus on that issue, the US continued to believe that the Committee should try to 
establish common sense procedures for responding  to questions submitted under Article 25.8. 
49.  All Members could recognize that there was a problem of non-response to Article 25.8 
questions, 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. 
50.  The proposal was no 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 wo rk 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. 
51.  The shared commitment to the principal of tr ansparency should unify Members in support of 
advancing that principal in practice, by adopting pragmatic procedures for the exchange of 
information as called for under Article 25.8 and 25.9 of the SCM Agreement. The US 
acknowledged 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 reco gnize the potential burden that proposal might 
present, in particular for lesser developed countries with significant capacity constraints, and remained willing to work with Members to fi nd 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. 
52.  The US called upon the Members raising the issue of capacity constraints to provide 
constructive ideas on how the proposal could be  improved to address those concerns. The US 
welcomed specific proposals from those who su pported and those who had reservations about 
the proposal on how the proposal could be modified in order to reduce the burden on those countries that had the most significant capacity constraints. The US remained flexible in finding a 
pragmatic solution that satisfied the underlying objective – which the United States assumed was 
shared by all Members – of enhancing the information exchange.     
53.  Canada agreed that subsidy notification and the Q&A process were fundamentally important 
transparency exercises. Canada expected Members to make every effort to provide their subsidy 
notifications and to reply to questions in a timely and complete manner. The US proposal was quite reasonable and Canada also could be flexible and pragmatic.  
54.  Australia considered that the US proposal had usefully identified a gap in the Committee's 
procedures for review of notifications. This should be approached, as the US had outlined, in the 
same manner as for regular Article 25.1 subsidy notifications. Greater clarity would encourage G/SCM/M/93 
 
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  compliance with the notification obligations and would improve completeness and timeliness of 
notifications. Australia remained flexible and open to further suggestions on how the proposal could be implemented.   
55.  Australia appreciated the Secretariat's updated background note (G/SCM/W/546/Rev.6), 
providing a snapshot of the level of compliance with the various notification obligations under the 
SCM Agreement since 1995. The document referred to Article 27.6 and stated that no developing countries had made an Article 27.6 notification . The document did not reflect the calculation 
requests made by other Members. It could be usef ul for the Secretariat to provide in an Annex to 
that document a factual picture of the notification s made under Article 27.6, consistently with the 
approach taken in the document on Article 25.8, which had a corresponding annex of related notifications. 
56.  Norway shared the concerns of other Memb ers about the chronic lack of compliance with 
notification requirements. It agreed with Canada that subsidy notifications and the Q&A process 
under Articles 25.8 and 25.9 were fundamentall y important transparency exercises. Norway 
expected Members to make every effort to prov ide their subsidy notifications and to reply to 
questions in a timely and complete manner. Norway supported the Secretariat's continuous updating of the background note on the level of compliance and the Secretariat's efforts in 
assisting Members. In this regard, Norway agreed with the suggestion by Australia to adjust the 
Secretariat background note by including an a nnex listing Article 27.6 requests. Norway fully 
agreed with the US proposal and believed that it would contribute to improve timeliness and completeness of notifications without disturbi ng the carefully crafted balance of the SCM 
Agreement.    
57.  The European Union appreciated the Secretar iat's update of the document setting out the 
state of play on the notifications. It was worry ing that from 2011 to 2013, compliance with the 
notification requirements had declined, with the percentage of the WTO Membership that had not 
notified increasing from 39% to 43% despite the repeated calls to improve it. The notification system was fundamental to the transparency wo rk of the Committee, and was in all Members' 
interest. Members should notify as quickly as possible all outstanding notifications and 2015 
notifications.  
58.  The EU supported the US proposal, which was a good complement to improving and 
increasing transparency in the work of the Committee. The EU was interested to hear any 
proposals from Members with capacity constraints as to how they might be able to deal with the 
US proposal.    
59.  Japan appreciated the Secretariat's continuous work in updating the background note. The 
lack of notifications undermined the functions of the Committee, and Japan hoped the note would 
raise Members' awareness of the importance of no tifications. Japan appreciated the US proposal 
and supported enhancing transparency. It welcomed the flexible and practical approach 
suggested by the US and others, looked forward to hearing other Members' views, and remained 
constructively engaged on the issue.  
60.  Chinese Taipei appreciated the Secretariat's ve ry useful background note. The lack of timely 
notifications was regrettable; Members should notify their subsidy programmes on time. Chinese 
Taipei appreciated the US initiative to improve th e notification process, and was open to further 
ideas on Article 25.8 and 25.9. 
61.  China recalled its previously-stated position on the US proposal, that first, no obligation for 
written questions posed pursuant to Article 25.8 and 25.9 could be found in the SCM Agreement. 
The proposal would impose a new substantive obligation which had no legal basis. Second, the US was likely to force developing members with capacity constraints onto a multi-task track. 
Nevertheless, it was important to improve transparency on notifications, and China respected 
Members' right to request information under Article 25.8. Those Article 25.8 questions could be addressed by recipient Members in formulating th eir new and full notifications, and in answering 
questions so related under Articles 25.1 to 25.5 and Article 26. 
62.  Brazil appreciated the Secretariat's update of the background note and supported Australia's 
proposal to modify it. With regard to the US proposal, Brazil valued the importance of G/SCM/M/93 
 
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  transparency, but similarly to China, had concerns regarding establishing timelines, and was not 
convinced that the proposal would address the pr oblem of lack of notifications. Rather than 
increasing the number of notifications, it would only increase the administrative burden on Members that already had been fulfilling the notifi cation requirement. Brazil remained open to 
keep thinking about the issue and certainly considered transparency to be very important.   
63.  India appreciated the background note by the Secretariat. Regarding the US proposal, India 
recalled that the issue had been under discussion in the Committee already for some time. 
Members had heard both sides - proponents and Members with concerns, whether legal or 
related to domestic-constraints, and recalled its previous interventions. India appreciated the US statement, looked forward to alternative options that would take into consideration the constraints raised by developing Members ab out tight timelines, and was open to further 
discussion.  
64.  Regarding Australia's proposal, India recalle d that Article 27.6 of the SCM Agreement clearly 
provides that "[e]xport competitiveness shall exist either (a) on the basis of notification by the 
developing country Member having reached export competitiveness, or (b) on the basis of a 
computation undertaken by the Secretariat at the request of any Member." Developing and least-developed Members had resource constraints in regularly undertaking such calculations, so that 
the present option and practice for the Secretariat to undertake the computations was well-
accepted, and would be more accurate and would not require further cross-verification by the Members. Article 27.6 also stated that "[f]or the purpose of this paragraph, a product is defined as a section heading of the Harmonized System Nomenclature." India had raised previously in 
the Committee the issue of application of this Arti cle, such as the definition of the product, 
coverage of tariff lines, and where and when ex port competitiveness had been reached. Members 
had not arrived at any conclusion on any of these essential systemic clarification-related issues. 
Hence, Australia's proposal should be discussed among Members, taking into consideration the 
concerns it might raise for Annex VII countries. Further elaboration by Australia would certainly assist India to understand the logic of and the need for the proposed change.  
65.  The Russian Federation considered transparen cy crucial for the effective functioning of the 
WTO as a whole and the SCM Agreement in particular. As previously stated, Russia had a large 
economy and complex state structure. Imposing too-strict time limits would impede Members like Russia from providing comprehensive answers on time, for example on regional subsidies. 
Russia shared other Members' concerns that the US proposal might upset the balance of rights 
and obligations under the SCM Agreement and would increase obligations on Members. Russia requested the proponents to suggest reasonable time limits that would enable a Member to 
prepare appropriate answers in a timely manner.   
66.  New Zealand noted Members' agreement on th e importance of transparency and on the low 
level of compliance. Some Members, including Ne w Zealand, had submitted questions or answers 
late in the context of reviewing notifications at  the special meeting. However, the only real 
negative consequence that New Zealand saw in the late submission of questions or responses was that the matter in question would be put again in the agenda of the following meeting. Consequently, having a specific deadline for resp onding could only help Members to prioritise 
their work, and to know when a submission  was due, and would improve transparency. 
67.  The United States, took China's point that Article 25.8 and 25.9 did not require written 
answers, but noted that the Committee had agreed to written answers and questions for the 
normal review of subsidy notifications as a common sense approach for a fulsome exchange of 
information. To that. The US did not necessarily  oppose China's suggestion that perhaps answers 
to Members' Article 25.8 questions could fall within the next notification, but noted that under 
Article 25.9, answers to Article 25.8 questions were required to be submitted as quickly as 
possible and in a comprehensive manner. The ques tions themselves needed to be answered, if 
the answers were going to be provided in a notification.   
68.  Regarding Brazil's concern, the US remained flexible in considering how to take into account 
developing Members' interests. G/SCM/M/93 
 
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  69.  The US appreciated the Secretariat's effort s on the extremely helpful background note. It 
shared the concern over Members' poor and worsening track record in submitting their subsidies notifications, which should concern all Members. 
70.  The Chair stated that the Committee would have to come back to the proposals of both 
Australia and the United States at the next regular meeting. 71.  The Committee took note of the statements made. 
7  CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM SCM ANNEX VII(B)  
72.  The Chair recalled that, pursuant to the Doha Ministerial Decision on Implementation-
Related Issues and Concerns (document WT/MIN(01)/17, paragraph 10.1), Annex VII(b) to the 
SCM Agreement listed Members until their GNP per capita reached US$1,000 in constant 1990 dollars for three consecutive years. As of 1 January 2003, the methodology set forth in 
G/SCM/38, Appendix 2 had applied for making those calculations. In accordance with that 
Decision, since then the Secretariat had circulated annual notes in document series G/SCM/110 updating the GNP per capita figures for the Members listed in Annex VII(b) based on that 
methodology. The most recent version, Addendum 11, had been circulated in 2014. The 
Secretariat would circulate updated calculations during the summer, when the necessary World Bank data became available.
3 
73.  The Committee took note of the Chair's statement. 
8  PERMANENT GROUP OF EXPERTS 
74.  The Chair informed Members that the term of office of Mr Akio Shimizu as a member of the 
Permanent Group of Experts was expiring, and th at at the present meeting the Committee should 
elect a new member to replace him.  
75.  The Secretariat had received three nomination s to fill this vacancy, all of which had been 
received by the announced deadline: Professor Tsai-yu Lin from Chinese Taipei; 
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.  
76.  Concerning his consultations in respect of the nominees, and the current situation, the Chair 
stated that throughout the process he had done his best to follow all of the regular procedures in the Organization to assess the possibility of consensus around one candidate. He had made himself available to all interested Members and had held many consultations in a variety of 
formats. When the CVs were transmitted to Me mbers, he had announced timeslots when he 
would be available to consult with interested  Members. A sizeable number of Members had 
responded to this invitation, and had met with the Chair to express their views and 
preferences. Given that some delegations had requ ested additional time to receive instructions 
from capital regarding the nominees, the Chair had extended the initially announced period for consultations to ensure that he was able to hear from all delegations that wished to express 
views, and he had received views from those additional delegations. At that point, having 
extended the consultation period, he had had a clear picture of the situation, which was that among the three nominees, one had had more suppo rt than the other two. Further, of these 
latter two, one had had more support than the other. 
77.  The Chair had informed the three delegations that had nominated candidates of this 
assessment, to confirm with them whether they were able to join a consensus around the candidate that had received more support. However, one of these delegations had requested a 
further extension of the period for consultations, as it considered that there remained Members 
that still would have liked to express views. 
78.  The Chair had acceded to this request, agai n with the sole aim of listening to as many 
Members as possible. During the extended period, he had received additional views which in fact 
                                               
3 Addendum 12 was circulated on 6 July 2015. G/SCM/M/93 
 
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  had confirmed his initial assessment. In spite of  a preponderance of support for one candidate, 
the Chair had become aware that both of the leading nominations were being maintained by their respective delegations. Given the situation, he consulted with them further to try to reach the basis for consensus around one candidate, including the day before the meeting, until late in the 
afternoon. As of the end of the day before the m eeting, and in fact as of the time the meeting 
had begun, no additional delegations had contac ted him to express any views, and the situation 
thus remained the same. The Chair had communicated this to the three delegations just before 
the meeting, and unfortunately there had b een no movement in their positions.  
79.  Throughout the process, the Chair had tried to be as transparent and flexible as possible. He 
had made several extensions to the consultation period, had facilitated discussions among the delegations concerned, and had listened to all Members that chose to express views. 
Unfortunately, given the current situation, he had no basis on which to recommend the election 
of one of the nominees. The issue therefore would need to be taken up by his successor, and he 
hoped that it could be resolved within the briefest possible delay.   
80.  Japan appreciated the Chair's sincere efforts to intensively consult with Members and was 
disappointed that consensus could not be reached before the meeting. The vacancy in the PGE 
should be filled quickly. Japan understood th at one nominee had received support from the 
majority of Members and hoped that Members wo uld reach consensus shortly after the meeting. 
81.  Norway was disappointed that consensus could not be reached, and encouraged all 
Members, particularly the interested ones, to engage constructively and to reach convergence.   
82.  The Committee took note of the statements made. 
9  LOCAL CONTENT REQUIREMENT IN RENEWABLE ENERGY SECTOR SUBSIDY SCHEMES 
IN THE UNITED STATES – ITEM REQUESTED BY INDIA 
83.  India appreciated the responses provid ed by the United States in document 
G/SCM/Q2/USA/61. However, India found that, although it had requested information and 
clarification on renewable energy programmes maintained at the US sub-federal level, the US replies left certain issues unanswered. India was still examining the responses and might request 
further clarifications from the US.  
84.  The Russian Federation reiterated its concerns regarding some renewable energy sector 
programmes of the United States, in particular the support programmes in the States of 
Delaware, Minnesota and Connecticut. Russia had carefully examined the legal acts regulating 
the subsidies in question, which regrettably cont ained straightforward legally binding provisions 
requiring use of domestic over imported goods in order either to receive a subsidy or to receive additional benefit. The Delaware Renewable Energy Portfolio Standards Act provided that a retail 
electricity supplier would receive an additional  credit toward meeting the renewable energy 
portfolio standards established for solar or wind energy installations sited in Delaware, provided that a minimum of 50% of the cost of renewabl e energy equipment, including components, was 
manufactured in Delaware. The Minnesota Xcel Energy Solar Rebate Programme provided that to 
be eligible for rebate under this section, the PV module must be manufactured in Minnesota. Public Act 11-80 of Connecticut provided that the public utilities and regulatory authorities would provide an additional incentive up to 5% of the applicable incentive provided for the use of major 
system components manufactured or assembled in Connecticut, and another additional incentive 
up to 5% of the applicable incentive provid ed for the use of major system components 
manufactured or assembled in a distressed municipality. The SCM Agreement established a 
straightforward prohibition on subsidies contingent whether solely or as one of several other 
conditions upon the use of domestic over imported goods.  
85.  The US replies to India's questions gave a dditional evidence that the support programmes 
established, among other conditions, requirements to use domestic over imported goods. 
Unfortunately, the US replies did not explain how such subsidies could be in line with the WTO rules, in particular, how legally binding import substitution requirements contained in the abovementioned acts were not in violation of Arti cle 3.2, read with Article 3.1 (b), of the SCM 
Agreement. Russia called on the US to provide Members with well-based explanations on how the G/SCM/M/93 
 
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  subsidies in question complied with the WTO commitments of the US, or how and when the US 
intended to bring the programmes into compliance with WTO rules.   
86.  The United States stated that it had answer ed India's questions a year earlier, that those 
answers were relatively clear, and that it remained ready to answer any additional written 
questions. 
87.  The Committee took note of the statements made. 
10  ELIMINATION OF EXPORT SUBSIDIES FOR TEXTILES AND APPAREL BY INDIA 
PURSUANT TO ARTICLE 27.5 OF THE SCM AGREEMENT – REQUEST FROM THE 
UNITED STATES 
88.  The United States recalled its view, based on the Secretariat's 2010 calculations, that the 
Indian textile and apparel sector had reached export competitiveness no later than 2007. 
Therefore, India had an obligation – at least since 2007 – to gradually 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. The Foreign Trade Policy also appeared to detail a new export subsidy programme available to the textile and apparel sector, the Merchandise Exports from 
India Scheme (MEIS), which merged five previo us schemes. The MEIS provided exporters an 
import duty credit based on the value of their exports and possibly 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 sectors covered by the programme and the United States was 
one of the covered export markets. India seemed to have taken a step backward in meeting its 
obligations under the SCM Agreement. The US ha d made clear to India that it would welcome 
further dialogue via DVC on these issues in the context of their continued bilateral engagement, 
but there had not yet been an opportunity for a meaningful discussion with all interested entities 
within the respective governments. Based on recent bilateral contacts, the US was hopeful that a substantive discussion could start and the issue could be resolved through dialogue. 
89.  India recalled its previous interventions on this issue, and was committed to meeting its 
obligations under the SCM Agreement in time . India expressed its commitment 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. Accordingly, India considered 
that since the information on the export compet itiveness was provided in 2010 and pursuant to 
Article 27.6(b), India would have to phase out the export subsidies after 2018. Many of the 
schemes were in the nature of remission or refund  of duties on inputs used in exported goods, 
which were not export subsidies schemes and so me of which had been discontinued since 2011. 
A number 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 the regarding domestic content 
requirement, domestically manufactured goods were entitled to apply for subsidies, as per the SCM Agreement. India would continue to meet bilaterally with the US, for the fulfilment and understanding of the commitments under the SCM Agreement. 
90.  The US disagreed with India in that, according to the Secretariat's calculations, India had 
reached export competitiveness in 2007, the star ting point of the phase out period, which ended 
in 2015. It appreciated India's comments on th e domestic content requirements and looked 
forward to any additional regulatory actions on that front. 
91.  The Committee took note of the statements made.   
11  NON-NOTIFICATION BY INDIA OF AL LEGED 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) 
92.  The United States commended India for a recent notification of numerous fisheries subsidies 
programmes at the sub-central level. Nonetheless,  India's most recent "new and full" subsidy 
notification had covered only three export subs idy programmes – all administered by the central G/SCM/M/93 
 
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  government - which represented only a fraction of the universe of programmes that should be 
notified. In the light of this situation, in Oc tober 2011 the US had submitted, pursuant to the 
procedures under Article 25.10 of the SCM Agreement, a list of approximately 50 subsidy programmes at both the central and sub-central levels, including all underlying legal measures 
establishing all 50 programmes, which should have been notified because they appeared to 
provide specific subsidies within the meaning of the Agreement. At previous meetings, India had stated that it was consulting with state governments with a view to gathering the necessary 
information to notify certain programmes. The US  requested an update on the progress of that 
process.  
93.  Canada recalled its previous interventions and echoed the concerns raised by the US about 
India not meeting its SCM transparency obligations. It appreciated India's notification on fisheries 
subsidies and certain preferential tax programmes, and India's oral replies to the US Article 
25.10 submission. These were not, however, substitutes for the required timely and complete subsidy notification, which all Members agreed was a fundamentally important transparency 
exercise. Canada welcomed India's statement that it intended to provide a full subsidy 
notification soon. 
94.  Norway shared the systemic concerns rais ed by the US and Canada. Subsidy notifications 
continued to be critical for transparency and th e proper functioning of the Agreement. Norway 
appreciated India's very good notification on fisheries subsides and looked forward to receiving a complete notification in the near future.  
95.  Australia attached the greatest importance to transparency and the WTO subsidy notification 
process, which enabled other Members to better understand the operations of such programmes 
and to assessing their impact on other Members'  trade interests. Australia appreciated India's 
efforts to notify its state level fisheries programmes and some central level programmes, 
including through its supplementary notification of November 2014, as well as the information on 
preferential tax regimes which India indicated it would soon notify.  
96.  India recalled that it previously had explai ned 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 exem ptions 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. Mo reover, in the Foreign Trade Policy 2015-2020, 
announced in April 2015, some schemes had been ra tionalized or withdrawn. With respect 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. India would notify the 
programmes in the near future. As part of that process, India recently had notified both central and sub-central fisheries subsidies as well as preferential tax programmes. Despite its resource 
constraints, India was committed to meeting its obligations under the SCM Agreement and to 
submitting its replies to the US request under Article 25.10.   
97.  The Committee took note of the statements made. 
12  NON-NOTIFICATION BY CHINA OF ALLE GED SUBSIDIES CONTAI NED IN THE 2011 
AND 2014 REQUESTS BY THE UNITED STATES UNDER 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) – REQUEST FROM THE UNITED STATES 
98.  The United States recalled that China had submitted only two subsidy notifications in its 14 
years of WTO Membership: in 2006, covering 2001-2004; and in 2011, covering 2005-2008. 
Both had been submitted well beyond the deadlin es for the periods covered, and China had yet 
to notify a single programme under the current 12th five-year plan, which was coming to a close. 
In terms of completeness, China had yet to notify a single subsidy administered by a local or provincial government. The 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 programmes designed 
to alleviate poverty and promote employment. The inclusion of such programmes inflated artificially the number of programmes reported. Following years of frustration and after fair G/SCM/M/93 
 
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  warning, in October 2011 the US had pursued th e "counter-notification" procedure of Article 
25.10, listing approximately 200 central and sub-central government subsidy measures and requesting China promptly to notify those programmes or to explain why they should not be notified. For transparency purposes, the US had in cluded translated copies of every underlying 
legal measure. 
99.  Although the US had made many of these points before, it was important to repeat a 
number of key observations regarding the subsidy measures included in its 2011 Article 25.10 
request.  
100.  First, over half of the programmes mentioned therein were at sub-central level, supporting 
the long-standing US position that sub-central programmes were critically important in China, as actual implementation of central government industrial subsidy policies was often, if not 
normally, the responsibility of the sub-central governments. It also appeared that sub-central 
governments had a degree of freedom to implement some programmes according to local conditions. This could complicate the nature of any central government "programme", as sub-
central governments might provide slightly different subsidies while implementing the central 
government "programme". 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. A subsidy notification from China that did not include 
sub-central programmes was simply not a full notification. 
101.  Second, the Committee previously had discusse d the 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 "blue prints" for 
China's subsidy programmes. 
102.  Third, certain Chinese subsidy programmes were in place 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, meaningful transparency, contrary to the intention 
of Article 25. China was coming up on its 13th five-year plan, but had yet to notify a single 
programme under the 12th five-year plan. 
103.  Fourth, insisting on a complete and timely notification of China's specific subsidy 
programmes had meaningful implications beyond the necessary transparency obligations. The 
200 subsidy measures identified in the submission  appeared to include some prohibited export 
and import-substitution subsidies, as well as actionable subsidies that had been found to be a 
direct and significant cause of harm to US industries.  
104.  Fifth, the fact that the US compiled and analysed all of the information included in both of 
its counter notifications – 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 after more than 14 years of WTO Membership. China had become the 
world's largest exporter and was verging on becoming the world's largest economy. Claims of capacity constraints – which China had made most recently in its trade policy review – were 
difficult to take seriously. In previous meetings, China had provided some information orally and 
had stated that numerous programmes from the US first counter-notification had already been notified. Although the information China had provided was a helpful, initial response to the US 
counter-notification, further discussions needed to be held on a bilateral basis, which China had, 
effectively, refused to do. 
105.  While the US appreciated the difficulty of the task China, or any Member, faced when 
compiling subsidy information that could not be an excuse for not submitting timely and 
complete notifications.  G/SCM/M/93 
 
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  106.   The US recalled that, prior to the Committee's autumn 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, textile and fish, as well as stimulus programmes covering a wide 
variety of industries of strategic importance to China.  
107.  The 2014 Article 25.10 submission was based entirely on programmes identified in the 
2012. The Article 25.8 information request to China that had been submitted two years before, to 
which China had never responded. Under Article 25.9, a Member had 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 
r e s p o n s e  f r o m  C h i n a ,  o r  a n y  t i m e f r a m e  a s  t o  w h e n  a  r e s p o n s e  m i g h t  b e  f o r t h c o m i n g .  T h i s  
submission included a list of 110 subsidy measures and, although not required to do so under the 
Agreement, the US had arranged for electronic access through the WTO website to translated copies of each measure. There were over 800 pa ges of translated subsidy measures that China 
was obligated to notify and, pursuant to its protocol of accession commitments, to publish in a 
single journal, and to make translations available to WTO Members. 
108.  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 subs idy 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 elimination of backward productive capacity.  
109.  China continued to be the largest steel expo rter in the world. Yet China had not notified a 
single steel subsidy measure. 
110.  The most recent counter-notification also included 13 wild capture fish programmes at the 
central and sub-central levels of government, including under the 11th and 12th five-year plans, 
as well as measures relating to fuel subsidies, a relatively common subsidy given to fishermen 
around the world, but which China had not yet notified. China continued to be the world's largest producer of fish, nearly three times as large as the world's next largest producer. Yet China had never notified a single wild capture fishery programme. 
111.  Twenty-six of the subsidy measures in the second counter-notification appeared to be 
stimulus plans. These covered, among other things, textiles, shipbuilding, non-ferrous metals, and light industry. The subsidies appeared to include: increased credit support; special funds to 
support research and development, and technolo gy transformation; financial rewards for the 
transformation of energy-saving technology; the state purchase and storage of products; and the 
suspension of social insurance payments. It a ppeared 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 governments were expected to intervene to avert disaster. The US governme nt had intervened, as had almost every other 
government in the world with the financial resources to do so. But the US also had notified its 
subsidies, as had many other WTO Members. 
112.  Despite the seriousness of the situation an d the obligations of all WTO Members, China had 
not notified a single stimulus measure, and in fact had not notified a single subsidy programme 
since 2008. China, as the world's largest exporter  and as a leader in this institution, had a 
responsibility to abide by its obligations, especi ally during times of crisis. As President Obama 
had said to then Vice President Xi Jinping in 2012, "We have tried to emphasize that because of 
China's extraordinary development over the last two decades, with expanding power and 
prosperity also come increased responsibilities." The US recognized that it was every WTO Member's right to decide the degree of government intervention in its economy. Every Member also had agreed that its subsidies were subject to WTO rules and to the transparency obligations 
that were central to the proper functioning of the Committee. The US was ready to meet 
bilaterally to discuss the specifics of the measures in the 2011 and 2014 Article 25.10 submissions. To date, China had refused to meet bilaterally.  G/SCM/M/93 
 
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  113.  The US urged China to abide fully by its subsidy notification obligations under the SCM 
Agreement, and stood ready to work with China to take concrete steps to move rapidly toward a subsidy notification that would present the full picture of its subsidy regime in a clear and transparent manner. 
114.  Canada recalled its previous interventions under  this item. In the interest of efficiency, and 
because the issues were related, Canada's statement applied to both the present 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 Ar ticle 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. However, submissions from other Members were not an 
adequate or desirable substitute for Members' fu lfilling their notification responsibilities. In 
previous Committee meetings, China had provided detailed oral interventions in response to the US Article 25.10 submission. Although Members mi ght have difficulties in providing subsidy 
notifications and responding to questions, these were nonetheless obligations of the SCM 
Agreement. Members had clearly and repeatedly expressed a strong interest in reviewing up-to-date subsidy notifications and receiving prompt re plies to questions posed under this Agreement. 
When those obligations were not fulfilled, it impinged upon the rights of all Members. Canada 
placed great importance on the transparency requirements of the SCM Agreement and urged 
China to meet those obligations.  
115.  Japan shared others' concerns and regretted that since its accession to the WTO, China had 
submitted only two notifications under Article 25. 2 of the SCM Agreement up to 2008. Although 
seven years had passed since then, China had never notified recent subsidies, while it had become the second largest economy, the largest trader and the largest steel producer in the 
world. Japan expected China to fulfil the WTO's fundamental transparency obligation. China had 
suggested its difficulty in collecting information from its sub-central governments. However, other Members also had similar difficulties. Making its local subsidy programmes more 
transparent would contribute to China's own cha llenge of improving its economic structure. In 
the Committee's previous meeting, China had shown its willingness to accelerate this work. Japan urged China to complete the work and submit the next notification as soon as possible.  
116.   Norway echoed the systemic concerns ra ised by the US, Canada and Japan. Timely and 
complete notifications were critical to the pr oper functions of the SCM Agreement and this 
Committee. Norway looked forward to receiving co mplete notifications from China as soon as 
possible. For the sake of efficiency, this statement also applied to the next agenda item. 
117.  Korea echoed statements made by previous speakers, including the importance of 
transparency and systemic concerns due to non- notification. Korea expected China to submit a 
notification in accordance with the WTO provisions. 
118.  Australia echoed the concerns raised by the US and other Members. The functioning and 
implementation of the SCM Agreement was of the highest importance to Australia. Strengthening 
the enforcement of the provisions of the SCM Agreement was a commitment articulated by the 
Australian government and reflected in its election policy statement of August 2013. The 
implementation of that policy had been announced by the government in December 2014. 
Australia acknowledged that China was making efforts in other notifications, such as the six-monthly reporting notifications, and that there might be difficulties in the preparation of the 
notifications, including ensuring that they were as comprehensive as possible. Determining 
whether a programme was a notifiable subsidy also could be challenging. However, concerns were high over the significant delay in receiving notifications, the absence of notifications over 
long periods of time and what that meant to Me mbers seeking to understand the potential impact 
that programmes might have on Members' trade interests, which was part of the notification process. The issue of providing assistance to do mestic industries was not under question, but in 
some cases there might be export contingent  programmes or programmes dependent on local 
content. The ability of Members to adequately review and understand the profile and 
interrelationship of China's subsidy programmes was significantly reduced. Programmes might have been discontinued and it was difficult to understand the profile of particular assistance to an 
industry sector. Australia urged China to comply with its subsidy notification obligations as soon 
as possible. For the sake of efficiency, Australia's statement also applied to the next agenda item.  G/SCM/M/93 
 
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  119.  The European Union supported previous spea kers and recalled its previous interventions on 
the issue. The two US counter-notifications should not be seen as a substitute or replacement to 
China's obligation to notify its subsidy schemes to the WTO. Given China's importance and significance in international trade terms, it was imperative that China notify all of its subsidy 
schemes, both at central and sub-central levels without further delay.    
120.  China stated that its statement under agenda item 13 would also cover this agenda item. 
121.  The Committee took note of the statements made. 
13  2012 AND 2014 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/50) 
122.  The United States noted that the Article 25.8 questions it had submitted in 2012 had 
formed the basis for its second counter-notification. Although the US could not find the 
underlying legal measures for six programmes mentioned in its 2012 Article 25.8 questions, it had seen evidence that government assistance had been provided or had continued to be 
provided. The US had not included those programmes in its second counter-notification, but 
instead had asked follow-up questions in the fo rm of a supplement to its original 2012 Article 
25.8 questions. The US had hoped that Chin a could provide answers to those limited 
supplemental questions, but that had not been the case thus far.  
123.  The United States also recalled that in April 2014 it had submitted another set of Article 
25.8 questions to China, which was in the fifth year of its 12
th five-year planning period. China's 
latest subsidy notification covered only up to 2008, and none of the more recent programmes in 
China's 12th five year plan. A full five year planning period was about to come to an end and 
China had not notified a single programme under the plan. This illustrated that many of China's programmes would have come and gone without being notified during the time that they were 
actually in effect. The result was little, if any, meaningful transparency, contrary to the intention 
of Article 25 of the Agreement. 
124.  The key industrial policy of the current five-year plan was the promotion of strategic 
emerging industries, which included: (1) new energy vehicles; (2) new materials; (3) 
biotechnology; (4) high-end equipment manufacturing; (5) new energy; (6) next generation information technology; and (7) energy conservation and environmental protection. In the absence of a timely subsidy notification covering this centrepiece of the China's 12
th five-year 
plan, the United States had been compelled to su bmit another set of questions under Article 25.8 
covering China's support regime for its strategic emerging industries. This policy had begun with measures announced by China's State Council in 2010. Subsequently, other central and sub-
central authorities had issued industrial policies for the 12th five-year planning period targeting 
the development of the strategic emerging industries.  
125.  Of particular note was the important role bestowed upon sub-central governments 
pursuant to the 'National Five-Year Plan for the Development of Strategic Emerging Industries': 
"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." 
This statement, and the plethora of sub-central measures – including specific funding measures – 
cited in the US Article 25.8 questions, supported the US view that a subsidy notification from China that did not include sub-central programmes was not a full notification. 
126.  Finally, while much of the language in the cited measures was rather broad and general, 
many of the measures mentioned or established special-purpose funds that would be used to support the strategic emerging industries. For example, a measure from the National 
Development and Reform Commission (NDRC) 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." 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."  G/SCM/M/93 
 
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  127.  The United States urged Members to read through its questions, all of which had solid, 
document-based evidence.  In both the 2012 Arti cle 25.8 questions and in the latest submission, 
the US had asked whether the legal measures at issue had been published in a single official journal and translated into a WTO language – both of which were requirements under China's 
protocol of accession. China had had an obligation for over a year to provide information 
regarding these programmes "as quickly as possible and in comprehensive manner", as required by Article 25.9. The US hoped to hear from  China soon, but would not stand idly by. 
128.  China, responding to this Agenda Item 13 together with the previous Agenda Item 12, 
recalled that the two US counter-notifications to China pursuant to Article 25.10 
(G/SCM/Q2/CHN42, G/SCM/Q2/CHN51 and 51/Corr. 1), and the US written questions to China 
pursuant to Article 25.8 (G/SCM/Q2/CHN/46 and 46/Suppl.1, G/SCM/Q2/CHN50) involved 
hundreds of documents formulated by China's ce ntral and sub-central governments. China had 
been verifying the alleged programmes: some of  them were un-grounded or lacked official 
sources; others had been repealed or had expired, or had been covered by China's two previous 
notifications; and others should not have been notified at all. In addition, there were many 
overlaps within the submissions, especially the la test one. So far, China had clarified 62 of those 
policies. Although there was a capacity gap be tween China and developed Members, China paid 
high attention to fulfilling its transparency obligation, was doing its utmost to prepare its third 
subsidy notification, which it hoped would alleviate the US concerns in the six cited documents. 
129.  To offer Members a clearer picture of its progress on its subsidy notification since the 
previous regular meeting, China stated that the no tification taskforce was trying to overcome the 
difficulties of its limited human resources, heavy tasks and tough schedule and to focus on 
preparing China's third subsidy notification. The new notification covered subsidy policies of the central government between 2009 and 2014, and would, for the first time, contain sub-central 
level subsidy policies for the period, including expired policies. China believed that its third new 
and full subsidy notification would address Members' concerns, in particular those in the six US submissions to China. China hoped Members could appreciate the difficulties it encountered, 
China's tremendous efforts in preparing the notifi cation, and its steadfast determination to carry 
out its transparency obligation. China would try its best to submit the new subsidy notification before the Committee's autumn regular meeting.   
130.  The United States looked forward to receivin g China's third notification, covering the period 
2009-2014, before the Committee's autumn 2015 meeting. Some programmes in the 2011 
counter-notification might have overlapped with programmes that China had notified, and the US had been willing to discuss this, but not China. The US had devoted even more resources to the 
second counter-notification and did not believe that there was even a single overlap, although it 
would be happy to hear from China if so. The US  noted China's point that Members would see the 
tremendous efforts made by China, although the US had not seen any efforts within last four 
years. 
131.  Regarding its further progress on the complia nce of its trade policy and improvements in 
transparency, China stated that to comprehensively push forward the rule of law and effectively 
carry out WTO obligations, the General Office of  the State Council had issued the Notice on 
Further Strengthening the Trade Policies Compliance (Guo Ban Fa [2014] No.29) in June 2014, 
which required departmental rules and other measures, formulated by Ministries and Commissions at the central government level and local people's governments at all levels as well 
as their departments, that were related to or affe cted trade in goods, trade in services or trade-
related intellectual property, to comply with WTO rules and China's commitments. China was currently considering utilizing the trade policy compliance mechanism to collect central and local 
government policy information on subsidies, in order to improve the timeliness and completeness 
of subsidy notification. China would pre-examine relevant policies and make efforts to ensure their compliance with WTO rules and China's commitments to the WTO. 
132.  In March 2015, the General Office of the State Council had issued the Notice on Enhancing 
the Work of Translating Trade-related Departmental Rules into English (Guo Ban Han [2015] 
No.22), requiring that, in principle, English translation of departmental rules, relating to or affecting trade in goods, trade in services or trade-related intellectual property, be made publicly 
available by the issuing Ministries, Commissions or institutions directly under the State Council 
through its official website or other channels, before the relevant departmental rules were G/SCM/M/93 
 
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  implemented, and no later than 90 days afterwards under special circumstances. This was 
another important arrangement adopted by China to  improve the transparency of its trade policy. 
133.  The United States had seen the measures from the State Council, for which it commended 
China, and hoped that the first measure in particular would be used by all departments in both 
central and sub-central government entities to ensure compliance with all WTO rules. The US 
also had seen the State Council measures on translation and hoped that China would follow through with those measures as well. Finally, China had an obligation under its protocol of 
accession to publish in a single journal all trade related measures, and the US had not heard any 
specific progress on that front. 
134.  The Committee took note of the statements made. 
14  2015 REQUEST TO CHINA FROM THE UNIT ED STATES REGARDING FISHING SECTOR 
SUPPORT PROGRAMS PURSUANT TO ARTICLE 25.8 OF THE SCM AGREEMENT 
(G/SCM/Q2/CHN/52) 
135.  The United States noted that its most recent Article 25.8 request had arisen because of the 
number of programmes that the WTO Secretariat ha d found in the course of China's Trade Policy 
Review (TPR). The Secretariat's Report had noted that China had not notified any of 30 support programmes to this Committee and further that China could not verify any of the information 
provided to it by the Secretariat. During the ensuing TPR meetings, China had responded to 
Members' questions about these support programmes  b y  s t a t i n g  t h a t  i t  n e e d e d  m o r e  t i m e  t o  
identify and verify information regarding these programmes. To date, China had not notified any of these support programmes under Article 25 of  the SCM Agreement, nor had it otherwise 
provided any further information to Members.   
136.  Beginning with the support programmes uncovered by the Secretariat in China's TPR 
report, the US had uncovered information on additional support programmes appearing to benefit 
China's fisheries sector. Beyond the obligations  of all WTO Members to notify their subsidy 
programmes under Article 25 of the SCM Agreement, the dire state of the world's fisheries had led to calls for greater disciplines on fisheries subsides that contributed to overfishing and 
overcapacity. About 85% of world's fish stocks were considered by the FAO to be fully exploited, 
overexploited, depleted, or in recovery. The US recalled the efforts to discipline fisheries subsidies at the WTO and in numerous other fora. While reaching agreement on such disciplines was difficult, countries had recognized that an initial step should be greater transparency with 
respect to the fisheries subsidy programmes in place. 
137.  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 the Declaration stated: "In light 
of the Rio+20 outcome document, particularly paragraph 173, we encourage APEC members to 
further improve the transparency and reporting of existing fisheries subsides programmes through the WTO, and to eliminate subsidies that  contribute to overcapacity and over-fishing, 
and to refrain from introducing new such subsidies or from extending or enhancing existing such 
subsidies, without prejudice to the WTO Doha ne gotiations." Yet, China had never notified a 
single wild capture fishery programme. While agreement on disciplining fisheries subsidies had been difficult, most concerned Members agreed – as evidenced by the Xiamen Declaration – that 
transparency was a critical first step. The United States questioned when China would join the 
other concerned fishing nations and take that first step towards a sustainable oceans fishery regime. 
138.  Beyond the common characteristics of China's support programmes that already had been 
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 fishery 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 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 du ty exemptions; grants for establishing famous 
brands; and special funds for strategic emerging industries in the marine economy.  G/SCM/M/93 
 
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  139.   For nearly every programme cited in the US Article 25.8 submission, the US had identified 
the underlying legal measure which hopefully would assist in the eventual notification of these programmes.  
140.  Among the standard set of questions asked by  the United States, all of which flowed from 
Article 25 of the SCM Agreement, the US also asked 1) if China had published the measures in an 
official journal dedicated to the publication of al l laws and regulations, as required by China's 
Protocol of Accession, and 2) if China had made available a translation of those measures into 
one or more of the official languages of the WTO, as required by paragraph 334 of the Working 
Party Report. 
141.  As one over-arching point, all of the big producers - the US, the EU, Japan, Korea, 
Australia, Brazil, and India - had fisheries subsidy programmes, and they all notified them. The 
SCM Agreement allowed Members to provide nearly every type of subsidy. For whatever reason, 
fish products had not been a common source of trade friction. The US simply did not understand China's failure to notify a single wild capture programme in 14 years of membership. Given the 
rapid depletion of the world's fisheries, the US  again requested China to join those seeking a 
solution - a solution that could start with putting all of the programmes on the table for all to see. 
142.  Norway shared the concerns raised by the US  States and noted that the level of notification 
of fisheries subsidies to the WTO in general seemed to be very low. This should be of significant 
concern for all Members. The state of the world's fisheries was alarming. There was overwhelming evidence that fisheries subsidies co ntributed to overcapacity and over-fishing and 
thereby to the existing crisis in the world's fish stocks. Transparency on such subsidies continued 
to be critical. Norway urged all Members to improve transparency on and reporting of fisheries subsides to the WTO. Norway was encouraged by  China's working to complete its third subsidy 
notification, and hoped that the latter would include support programmes to the fishing sector.  
143.  Australia considered that transparency in fisheries subsidies was particularly important. It 
was mindful of the calls in other fora for improv ing the transparency and reporting of fisheries 
subsidies programmes through the WTO. As the US had correctly identified, fisheries specific 
subsidies were notifiable, irrespective of Members' positions in the Doha negotiations and the stage of those negotiations. Transparency through notifications made no judgement on the legal status of the programmes and certainly not on whether or not the programmes had adverse 
effects on fisheries stocks. Australia urged China to come forward with its third subsidy 
notification before the October meeting. 
144.  Japan supported the US initiative regarding China's non-notification of support programmes 
that seemed to be specific. Japan was interested in China's fisheries subsidies because China had 
the highest volume of global fishery production and as Japan's neighbouring country shared the sea. Among the programmes listed in the document, of particular interest were: 1.6 
"Government Investment to Develop New Fishery and Technology" and 1.25 "Construction 
Fisheries Facilities". These programmes might lead to an increase of fisheries production and capacity, and Japan was interested in learning what kind of measures China was implementing to prevent over-fishing and overcapacity.  
145.  New Zealand appreciated that China was working on its third subsidy notification, looked 
forward to reviewing that notification, and hoped that it would cover relevant fisheries 
programmes, in which New Zealand had a particular interest. Transparency was an issue of 
systemic importance, particularly with regard to such fisheries subsidies programmes, as 
illustrated by New Zealand's questions to other Members regarding notified and non-notified fisheries programmes, in this Committee as well as in Trade Policy Reviews. New Zealand 
emphasised its interest in the programmes identified by the United States.     
146.  Korea echoed interventions from previous speakers, appreciated China's efforts to update 
its subsidies notification and asked China to make the same efforts with regard to fisheries 
subsidies.  
147.  China stated that the US had submitted to China the Article 25.8 request for information 
regarding fishing sector support programs just  one week before the meeting, making it G/SCM/M/93 
 
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  impossible for China to respond in a comprehensive way at the meeting. China would forward 
this submission to competent authorities for verification. A first look at it indicated some of the same problems as in previous US submissions, i.e. that some items had ambiguous descriptions or various sources of information, or identified  no competent authorities, executors or project 
scope, while others were un-grounded or already had been covered by China's two notifications 
to the WTO. For instance, Item 1.2 regarding Corporate Tax Relief in G/SCM/CHN/52 had been Program 54 in China's subsidy notification in G/SCM/N/155/CHN and G/SCM/N/186/CHN. As for 
Item 1.29 regarding Duty Free Importation of Aquatic Breeds, China had notified its subsequent 
policy in Program 78 and 79 of China's two subsidy notification. China would study the new US request in detail.   
148.  The United States noted that China had been a Member for 14 years and might have 
notified one or two programmes that related to wild capture fisheries, but there had not been a 
single capture fisheries programme that China had notified in 14 years. Half of the programmes had been raised in China's TPR of July 2014. The US hoped that China would include fisheries 
subsidies in its third subsidy notification which it expected by the autumn regular meeting. 
149.  The Committee took note of the statements made. 
15  OTHER BUSINESS 
15.1  Japanese government support for MRJ Project – Item requested by Brazil 
150.  Brazil noted that Japan, in its most recent  new and full notification, had notified only one 
programme for the aerospace sector, namely "Subsidy of Expense to Investigate the 
Development of Next Generation Airplanes". However, based on public information, Brazil 
understood that additional support might have  been provided for the development of the 
Mitsubishi Regional Jet (MRJ) through other pr ogrammes during the period covered by Japan's 
notification. Brazil requested information regarding such other support for the MRJ provided by 
any level of government or public body in Japan during the relevant period. More specifically, 
first, in both 2011 and 2012 the Ministry of Econ omy, Trade and Industry (METI) had spent 3.3 
billion yen on the eco-friendly high performance re gional jet, MRJ Project. This information could 
be found at METI's budget breakdowns by project in 2011 and 2012, both available at METI's 
website. Brazil asked Japan to indicate whethe r these funds were related to the "Subsidy of 
Expense to Investigate the Development of Next Generation Airplanes" or, if not, to explain how the programme providing the funds worked, how it was funded and criteria for receiving funds.  
151.  Second, METI had provided funds directly to the Mitsubishi Aircraft Corporation during both 
2011 and 2012. This information could be found at METI's website in the disclosures of information on subsidies for the same period of April to June in both 2011 and 2012. Brazil asked 
Japan to explain under what programmes such funds had been provided and how the relevant 
programmes worked, including an identification of criteria for receiving funds.  
152.  Third, Brazil asked Japan to identify in detail all of the financial support that it had provided 
for development and sales of the MRJ during the period covered by its most recent new and full 
notification and to identify the programmes under which such support had been provided.  
153.   Japan stated that it attached great importance to the rule-based multilateral trading 
system under the WTO, and took very seriously the compliance with rules and obligations of the 
SCM Agreement. Accordingly, Japan had never fail ed to comply with its obligations of subsidy 
notification since the establishment of WTO in 1995, as could be seen in the Secretariat background note. Additionally, Japan had deve loped its own domestic system to ensure 
transparency of subsidies, irrespective of their specificity. The METI website, referred to by 
Brazil, was an example.  
154.  Regarding the specific questions from Brazil, Japan emphasized that it had fully complied 
with the SCM Agreement, and had notified every subsidy which was specific in its latest 2013 
notification. This responded to the third question of Brazil.  
155.  Regarding the first question, the project was not related to the "Subsidy of Expense to 
Investigate the Development of Next Generation Airplanes" program. The project was an R&D G/SCM/M/93 
 
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  project implemented under the "Industrial Technology R&D" which covered R&D for developing 
certain kinds of technology that would be applied across all manufacturing industries, such as railroad, automobiles and aircraft. Therefore, this project did not have to be notified. 
156.  Concerning the second question, there were two types of subsidies in the referred 
websites: (1) "Industrial Technology R&D" and (2) "R&D for Advanced Technology Development 
with regard to Rationalizing Energy Use". "Industrial Technology R&D" was the same program that Japan had already mentioned, as not be ing specific. "R&D for Advanced Technology 
Development with regard to Rationalizing Energy Use" was not specific to a certain industry since 
it was a subsidy that was provided to various industries for the purpose of technology development for forming carbon fibre composite. Therefore, this subsidy did not have to be notified. 
157.  Brazil had raised the issue of the MRJ in this Committee and Japan had responded in 
several opportunities not only in this Committee but also in the TPR and bilateral meetings. Japan remained open to discuss this issue further. 
158.  The Committee took note of the statements made. 
16  DATE OF NEXT REGULAR MEETING 
159.  The Committee decided to hold its next regular meeting during the week of 
26 October 2015, 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. 
17  ELECTION OF OFFICERS 160.  The Committee elected by acclamation Mr Mitsuhiro FUKUYAMA of Japan as Chair, and 
Ms Katia ANGELES VARGAS of Peru as Vice-Chair, to take effect at the end of the meeting. 
161.  The Chair appreciated the work of his Vi ce-Chair, Mr Vegard Emaus of Norway, who had 
assisted him in all aspects of his work, and thanked the Secretariat. 
162.  The meeting was closed. 
 
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