RESTRICTED  WORLD TRADE  
ORGANIZATION  G/SCM/M/67 
14 April 2009 
 (09-1753) 
Committee on Subsidies  
and Countervailing Measures  
 
 
 
MINUTES OF THE SPECIAL MEETING 
HELD ON 29 OCTOBER 2008 
 
Chairman:  Mr. Jun Kazeki (Japan ) 
 
 1. The Committee on Subsidies and Countervailing Measures ("the Committee") held a special 
meeting on 29 October 2008.  
2. The Committee adopted
 the agenda: 
A. CONTINUATION OF REVIEW OF 2007  NEW AND FULL SUBSIDY NOTIFICATIONS .......................1  
1. Albania........................................................................................................................ ...............2  
2. Argentina ...................................................................................................................... .............2  
3. European Communities........................................................................................................... .3 
4. Hong Kong, China ............................................................................................................... .....4 
5. Japan.......................................................................................................................... ................4  
6. Norway......................................................................................................................... ..............4  
7. Paraguay....................................................................................................................... .............5  
8. Ukraine ........................................................................................................................ ..............5  
B. CONTINUATION OF REVIEW OF 2005  NEW AND FULL SUBSIDY NOTIFICATIONS OF 
CHINA AND THE UNITED STATES ................................................................................................6  
1. China.......................................................................................................................... ................6  
2. United States.................................................................................................................. ............6  
 
 A. C
ONTINUATION OF REVIEW OF 2007  NEW AND FULL SUBSIDY NOTIFICATIONS  
3. The first agenda item related to the continua tion of the review of 2007 new and full subsidy 
notifications.  These notifications had been circ ulated in the G/SCM/N/155/... series.  Before 
proceeding to the review of these notifications, the Chairman  drew Members' attention to the fact that 
only thirty-six Members had submitte d 2007 new and full subsidy notifi cations.  This meant that there 
remained a very large number of Members wh ich had not complied with their obligation under 
Article 25 of the SCM Agreement to submit a no tification of their subsidy programmes.   
4. The Chairman stated that this review of  subsidy notifications took place pursuant to 
procedures that had been adopted by the Comm ittee in 2005 which could be found in G/SCM/117.  
These procedures provided that the Committee would revi ew at each special meeting notifications that G/SCM/M/67 
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  had been circulated to Members in all three WTO working languages not later than 17 weeks before 
the date of the meeting.  The Chairman stated th at in accordance with th is provision, the Committee 
would at this meeting review 2007 new and full s ubsidy notifications submitted by the following 
Members: 
 Albania;  Argentina;  European Communiti es;  Hong Kong, China;  Japan;  Norway;  
Paraguay;  and Ukraine.   
 5. The procedures adopted by the Committee for th e review of subsidy notifications provided 
that written questions had to be submitted to the no tifying Member and to the Secretariat not less than 
thirteen weeks before the date of the meeting at which a notification was to be reviewed, and written 
responses had to be submitted not less than four w eeks before the date of that meeting.  Where a 
Member failed to provide written answers within the specified time period, it had to provide full oral 
answers at the meeting itself. 
1. Albania 
6. The 2007 new and full subsidy notification of Albania had been circulated in document 
G/SCM/N/155/ALB, dated 14 April 2008.  The Comm ittee had received questions on this notification 
from the Separate Customs Territory of Taiw an, Penghu, Kinmen and Matsu ("TPKM").  These 
questions were found in document G/SCM/Q2/ALB/1 .  Albania had submitted replies to these 
questions in document G/SCM/Q2/ALB/2.  No delega tion took the floor to comment or ask questions 
on Albania's 2007 new and full subsidy notification. 
2. Argentina 
7. The 2007 new and full subsidy notification of Ar gentina had been circulated in document 
G/SCM/N/155/ARG, dated 9 April 2008.  Written ques tions on this notification had been received 
from the United States.  These questions had been  circulated in document G/SCM/Q2/ARG/27 and 
Corr.1.  The Committee had received written replies from Argentina, which had been circulated in 
document G/SCM/Q2/ARG/28.  Given the very recen t circulation of this document, the Chairman 
invited Argentina to introduce its replies.  
8. The delegate of Argentina
 pointed to certain details rega rding Argentina's replies to the 
questions from the United States.  The delegate of Argentina started by expressing his appreciation for 
the interest the United States had shown in some of  Argentina's programmes.  However, the specific 
programmes that the US questions addressed did not sp ecifically relate to the notifications Argentina 
had submitted in accordance with the rules of the Committee.  Nevertheless, Argentina had submitted 
some replies to the United States and the dele gate of Argentina expressed the hope that the 
United States would find them comprehensive enough for the purposes of its inquiries.  The delegate 
of Argentina noted that the regimes addressed in the US questions were intended to be made available 
to all companies in the country regardless of na tionality and the relevant authorities would receive 
information for each case.  All the conditions for implementation were found in the relevant 
legislation.  In large investment projects, the goods had to be new and part of a complete and 
independent line submitted by the applicant and necessary for the implementation of the project in 
question.  The applicant also had to submit a certificate of quality control system with respect to accreditation under a contract with an international or ganization or institution.  The interested party 
also had to provide a technical opinion from an entity  specializing in the relevant type of project in 
order to have a suitable opinion from an interna tional body which would assess the technological level 
of the equipment, the fact that th e project was in line with the relevant requirements with respect to 
the production lines used.  Argentine authorities also  checked on the age of the equipment to make 
sure that the imported equipment had at least 50 per cent of its useful life ahead of it, they provided 
for contracting under export contracts on a turn key basis and there also had to be a national public  G/SCM/M/67 
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  tender for this.  The conditions ha d to be impartial and meet lega l and technical requirements with 
respect to the decision to be taken by  the application authority in each case. 
9. The delegate of the United States  pointed out that his delegation had received Argentina's 
answers just a few days before the meeting and that it would need to look at them a little further, and 
reserved the right to ask additional questions.  As  a general matter, he expressed the initial concern 
that there might be an export contingency elemen t or an import substitution element to some of 
Argentina's programmes.  If there were subsidies th at were contingent on e xport performance or on 
the use of domestic over imported goods, those programmes would be deemed to be specific 
regardless of the number of industries that used th em or whether objective criteria were met, etc. 
10. The delegate of Argentina  expressed his delegation's willingness to receive this question from 
the United States with further clarification regard ing such aspects of Argentina's programme which 
the United States thought implied export contingency or encouraged the use of national goods over 
imported goods.  As a brief response to the United St ates, the delegate of Argentina pointed out that 
there were no such provisions in the stated progr ammes and reported that his delegation was ready to 
provide further details on any question that the United States might bring on this matter. 
11. The delegate of the United States  noted that the questions submitted by his delegation were 
relatively clear and that the United States was citing Article 3 of the SCM Agreement.  The delegate 
of the United States stated that his delegation would submit another question or two in writing to 
Argentina which would reflect its earlier comments. 
12. The Committee took note  of the statements made. 
3. European Communities  
13. The Chairman  noted that the 2007 new and full subsidy notification of the 
European Communities was contained in documen ts G/SCM/N/155/EEC, dated 21 November 2007, 
and Addenda 1-27, which dealt w ith subsidy programmes in individual EU member States.   
14. The Committee had received questions on this no tification from Japan, the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu a nd the United States.  These questions were found 
in documents G/SCM/Q2/EEC/52, 53 and 54.  Th e European Communities had replied in document 
G/SCM/Q2/EEC/55 to questions from Japan and th e United States.  The Chairman invited the 
European Communities to take the floor and provide replies to the questions posed by the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu. 
15. The delegate of the European Communities  noted that his delegation had sent replies to the 
questions from the United States and Japan ahead of th e meeting.  With regard to the questions from 
the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, because they had only been 
received shortly before the meeting, the European  Communities had not had time to reply in writing 
before the meeting.  However, the European Communities was ready to provide a preliminary oral 
reply to questions 2 and 4 and proposed to submit all four written replies in one document as soon as 
possible after the meeting.  As regards question 2 as to what enterprises were qualified as small and 
medium-sized enterprises, the delegate of the Eu ropean Communities stated that an enterprise was 
considered to be small and medium-sized if it employed not more than 250 employees and had an 
annual turnover not exceeding €50 million and/or there was an annual balance sheet not exceeding 
€43 million.  If one of these conditions was not fulfilled, the company at issue would not be considered as a small and medium-sized enterpri se.  As to question 4 from the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu regarding the export development of small and 
medium-sized enterprises, the delegate of the Eu ropean Communities stated  that, as noted by the 
delegation of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, the programme G/SCM/M/67 
Page 4  
 
  was aimed to support small and medium-sized enterp rises whose main activities were in the field of 
production or/and services.  One of the forms of s upporting these small and medium-sized enterprises 
related to the information of their abilities in the ar ea of exports.  The progr amme was not contingent 
directly on export performance but rather it intended to create the knowledge needed for future export 
performance.  The only eligibilit y criteria was the limited number of employees and the maximum 
turnover for small and medium-sized enterprises as stated in the notification. 
16. The delegate of the Separate Customs Terr itory of Taiwan, Penghu, Kinmen and Matsu 
acknowledged the difficulty of submitting answers to  questions within a relatively short period of 
time, and stated that his delegation would wait for the EC's written responses. 
17. The Committee took note
 of the statements made. 
4. Hong Kong, China 
18. The Chairman  noted that the 2007 new and full subsid y notification of Hong Kong, China had 
been circulated in document G/SCM/N/155/HKG of 19 December 2007.  The Committee had not 
received any questions regarding this notifica tion.  No comments were made regarding the 
notification of Hong Kong, China. 
5. Japan 
19. The Chairman stated that the 2007 new and fu ll subsidy notification of Japan had been 
circulated in document G/SCM/N/155/JPN, dated 3 September 2007 and that the Committee had 
received questions on this notifi cation from the United States in document G/SCM/Q2/JPN/41.  Japan 
had replied to these questions in  document G/SCM/Q2/JPN/42.  
20. The delegate of the United States  noted that Japan's notification pertained to prefecture 
programmes and central government programmes.  With respect to both sets of programmes, there 
seemed to be some limitation in terms of geograp hical region.  Specifically, with respect to the 
prefecture programmes there appeared to be some limitation within the relevant prefecture.  With respect to what appeared to be central government  programmes, there seemed to be a limitation to 
certain regions within Japan as well.  Recalling Article  2.2 of the SCM Agreemen t, the delegate of the 
United States stated that if a certain region within  the jurisdiction of a granting authority benefited 
from government assistance and other regions did not,  that programme would be considered to be 
specific within the meaning of Article 2 of the SC M Agreement.  This in essence was a question about 
regional specificity and in the view of the United St ates if there was some lim itation to a region within 
the jurisdiction of the granting authority then the pr ogramme would be specific and had to be notified.  
He invited Japan to elaborate on this question. 
21. The delegate of Japan
 stated that he did not have an appr opriate answer at the moment.  If the 
United States submitted its question in writing, Japan would reply in writing too.   The delegate of the 
United States  stated that his delegation would provide written questions. 
22. The Committee took note  of the statements made. 
6. Norway 
23. The Chairman  stated that the 2007 new and full subsidy notification of Norway could be 
found in document G/SCM/N/155/NOR, dated 31 October 2007.  The Committee had received questions on this notification from the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu in document G/SCM/Q2/NOR/21 and Norway had provided written replies to these questions 
in document G/SCM/Q2/NOR/22.  No comments were  made regarding the notification of Norway.  G/SCM/M/67 
 Page 5 
 
 
  7. Paraguay 
24. The Chairman turned to document G/SCM/N/ 155/PRY, dated 16 April 2008, which contained 
the 2007 new and full subsidy notification of Paragua y.  The United States had posed questions on 
this notification, which had been circulated in  document G/SCM/Q2/PRY/5.  The Committee had just 
received written replies to these questions from Paraguay. 
25. The delegate of Paraguay  stated that Paraguay's responses to the questions posed by the 
United States were found in G/SCM/Q2/PRY/6 and that his delegation was ready to reply to any 
further questions that the United States might have. 
26. The delegate of the United States  reserved the right to ask follow-up questions.   
27. The Committee took note  of the statements made. 
8. Ukraine 
28. The Chairman  recalled that the 2007 new and full subs idy notification of Ukraine had been 
circulated in document G/SCM/N/155/UKR, dated 26 May 2008.  The Committee had received written questions on this notification from the Un ited States and Turkey, which could be found in 
documents G/SCM/Q2/UKR/1 and 2.  The Comm ittee had received replies from Ukraine to the 
questions of the United States, which had been ci rculated in document G/SCM/Q2/UKR/3.  However, 
Ukraine had not yet replied to the questions from Turkey.  
29. As to Turkey's first question about the regula tions on the special customs zone regime, the 
delegate of Ukraine
 stated that Article 11 of the law of Ukraine on the general principles of creation 
and functioning of a special free ec onomic zone defined a ll functions and authorities of the body on 
the economic development and management of the speci al free zones.  This body provided the general 
conditions of its functioning and the exclusive co mpetence of the body under economic development 
within the limits of functioning of free special zone  included all the definitions, abbreviations, trends 
of development, development network.  This was fully described in Ukraine's written answer. 
30. Regarding the second question, the delegate of Ukraine confirmed that none of the 
programmes in the sectoral economic zone granted pursuant to Ukraine's newly adopted legislation 
provided for contributions that were contingent  upon export performance or the use of domestic 
inputs over imported ones. 
31. With regard to the eligibility criteria for the sectoral programmes on ship building, the 
delegate of Ukraine confirmed that according to th e resolution of the Cabinet of Minister of Ukraine 
on approving the procedure of the inclusion of shi pping enterprises to the lis t of enterprises for each 
state support activity of shipping industry were implemen ted.  The delegate of Ukraine also stated that 
by this regulation the Minister of Industrial Polic y had just defined the ship-building enterprises by 
their special criteria that Ukraine had explained in its written response. 
32. As to the automotive sector, the delegate of Uk raine confirmed that the contributions to this 
sector were not contingent upon export performance or the use of domestic inputs, and that this sector 
did not enjoy any privileges.  The delegate of Uk raine stated that his delegation would submit its 
written responses to Turkey's questions after the meeting. 
33. The delegate of Turkey  stated that his delegation reserved  the right to ask follow-up questions 
after deliberating on Ukraine's replies. 
34. The Committee took note  of the statements made. G/SCM/M/67 
Page 6  
 
  B. C
ONTINUATION OF REVIEW OF 2005  NEW AND FULL SUBSIDY NOTIFICATIONS OF CHINA AND 
THE UNITED STATES  
1. China 
35. The Chairman  recalled that at its special meetings held in October 2007 and April 2008, the 
Committee had continued its review of the 2005 new and full subsidy notifica tion of China (document 
G/SCM/N/123/CHN).  Since the special meeting held in April, China had provided written replies in 
document G/SCM/Q2/CHN/38 to questions posed by  the European Communities.  China had also 
replied in document G/SCM/Q2/CHN/39 to questions posed by Turkey. 
36. The delegate of Turkey  stated that his delegation needed further clarification on the VAT 
exemption system of China and that Turkey might ask additional questions on that subject. 
37. The delegate of China  pointed out that his delegation was looking forward to receiving 
Turkey's questions in written form. 
38. The Committee took note  of the statement made. 
2. United States 
39. The Chairman  stated that at the special meeting in April 2008 the Committee had considered 
the 2005 new and full subsidy notification of the Unite d States.  This notification was contained in 
document G/SCM/N/123/USA, dated 15 November 2007.  The United States had provided written 
replies in document G/SCM/Q2/USA/35 to questions  posed by Canada, the European Communities, 
China and the Separate Customs Territory of Taiw an, Penghu, Kinmen and Matsu.  The Chairman 
also recalled that the delegate of China had indicated  that his delegation wished to have more time to 
study these replies.  
40. The delegate of China  stated that his delegation did not have follow-up points to make but 
reserved its right to revert to this agenda item of  the review of the 2005 new and full notification by 
the United States if further questions were received from the relevant ministries or agencies back in 
Beijing. 
41. The delegate of the United States  pointed out that this had been an outstanding issue for two 
meetings and that although China had had an o pportunity to ask follow-up questions it had not done 
so.  He stated that if China had follow-up questions, it should rai se them in this meeting and not 
continue to keep this agenda item open. 
42. The delegate of China  noted the US point and stated that his delegation would push its capital 
and the relevant ministries to submit in a timely ma nner any further questions that China might have.  
43. The Committee took note  of the statements made. 
44. The Chairman  adjourned the special meeting of the SCM Committee. 
 
__________