WORLD TRADE  
ORGANIZATION  G/SCM/Q4/JAM/6 
12 October 2006 
 
 (06-4933) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
PROCEDURES FOR EXTENSIONS UNDER  
ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES  
AND COUNTERVAILING MEASURES 
 
Replies to Questions Posed by CANADA1;  COLOMBIA2; 
JAPAN3;  PERU4 and the UNITED STATES5 
 
 
 The following communication, dated 12 October 2006, is being circulated at the request of the Delegation of Jamaica. 
 
_______________ 
 
CANADA
 
 Q1. Recalling that the objective of G/SCM/39 was to provide an extension of the transition period for the progressive elimination of export subsidy programmes of a number of Members, as called for in Article 27.4 of the SCM Agreement, we would ask the proponents of GSCM/W/535 and GSCM/W/537 to inform the Committee on Subsidies and Countervailing 
Measures of the individual efforts, if any, they  have undertaken to gradually bring these export 
subsidy programmes into conformity with their WTO obligations. 
 
Reply
 
  Jamaica is of the view that document G/SCM/39 contains only a fast track procedure to approve extensions under Article  27.4 of the ASCM.  This document neither reduces nor does it 
increase the rights and obligations under the ASCM .  Therefore, neither document G/SCM/39 nor 
Article 27.4 of the ASCM provide for a progressive  elimination of export subsidy programmes.  
  Moreover, Article 27.4 mentions a “progressive” elimination is the first sentence which refers 
to the phase out of the export subsidies within th e eight-year period mentioned in Article 27.2(b), a 
condition that is completely different to those regarding the subsidies programmes at issue.  
Additionally, Jamaica is of the view that the langua ge in Article 27.4 on “progressive elimination” is 
not mandatory.    In addition, Jamaica considers that its e xport subsidy programmes are fully in compliance 
with its WTO obligations under Article 27.4 of th e ASCM and under the procedures and conditions 
set forth in document G/SCM/39. 
                                                     
 
1 G/SCM/Q4/JAM/2 
2 G/SCM/Q4/JAM/1 
3 G/SCM/Q4/JAM/4 
4 G/SCM/Q4/JAM/5 
5 G/SCM/Q4/JAM/3/Rev.1 G/SCM/Q4/JAM/6 
Page 2  
 
   
 Nevertheless, Jamaica has been  undertaking efforts to review its overall system of taxation, 
including its incentives programmes, and will take  the pertinent decisions based on its specific 
economic, financial and development needs with in the context of its economic development 
strategies.   Q2. Could the proponents of both documents also explain how further extension of this 
phase out period would ensure that these efforts a re finally successfully undertaken in order to 
avoid a similar situation at the end of any new extended phase–out period for certain export subsidy programmes? 
 
Reply
 
 
 The proposal contained in G/SCM/W/535 refers only to the amendment of paragraph 1(e) of 
G/SCM/39.  The view of the proponents is to cont inue benefiting from the extension throughout 2018, 
based on their special economic, financial and de velopment needs.  Therefore, the rights and 
obligations contained in document G/SCM/39 an d Article 27.4 of the ASCM would remain 
unchanged.   Consequently, Jamaica would take a pertinent decision, based on its specific financial, economic and development needs and in accordance with the procedures and timelines established in 
the provisions mentioned above.  As a WTO Me mber, Jamaica has designed its development 
strategies to address these needs with a view to utilizing trade promotion as a tool for investment, 
employment, poverty alleviation and to achieve a beneficial integration into the world economy.  The 
continuance of the 4 programmes is essentia l to achieving national development objectives. 
 
Q3. Recalling that the previous extension of the phase out period for certain export subsidy 
programmes was for an additional six (6) years, could the proponents of the documents explain 
the rationale for a proposed extension of eleven (11) years. 
 
Reply
 
 
 As a small, open economy, Jamaica has deemed  it necessary to request a new extension based 
on its economic, financial and development needs.  In  fact, all of the beneficiaries can prove that the 
conditions that existed and justif ied the extension in 2001 still rema in.  These conditions have become 
even more profound given the increased competit ive challenges facing Jamaica in a constantly 
evolving multilateral trading system as well as in the face of domestic economic imperatives.  
Notwithstanding this, however, the 4 export subsidy programmes have proved to have very positive 
effects on the Jamaican economy in terms of, inter alia,  attracting foreign investment, increased 
foreign exchange earnings, job creation, diversifi cation of the productive sector, poverty alleviation, 
infrastructural development and human resource de velopment.  These programmes also contribute to 
rural development as some of the companies benef iting from the incentives are located in rural areas. 
 
 However, these positive effects have been mitigat ed by endemic constraints, which is borne 
out in the level of Jamaica’s participation in worl d trade.  None of Jamaica’s manufactured products 
has reached export competitiv eness at an international level and its  share of world trade is miniscule. 
Jamaica is a highly open, trade-dependent country in  which imports and exports  of goods and services 
account for over 100 per cent of gross domestic pr oduct (GDP).  Rapid liberalization over the years 
has seen a disproportionate growth in imports over exports thereby contributing to an increasing trade 
deficit.  Jamaican producers face increasing challeng es both locally and in international markets.  The 
rapidly changing global landscape ha s generated new circumstances that will require great efforts 
from Jamaica to implement and adjust to the swif tly changing multilateral trading system, including 
the eventual results of the current round of Doha negotiations, which will put added pressures on  G/SCM/Q4/JAM/6 
 Page 3 
 
 
  Jamaica’s productive sectors, terms of trade and overall economic prospects.  It is crucially important 
for Jamaica to re-tool and upgrade its technologies,  adapt to new competitive conditions and expand 
exports to different markets in order to strengthen its international competitiv eness, at the same time 
reducing its reliance on exports of primary co mmodities, expanding the productive base and 
increasing productivity and employment. 
 
 The proponents of document G/SCM/W/535 a nd G/SCM/W/535/Add.1, including Jamaica, 
propose some other reasons for requesting an extension:   The main exports of the proponents, including Ja maica, are highly concentrated in the US and 
the EC.  Jamaica accounts for 0.02 per cent of total im ports of goods into the US market and 0.06 per 
cent of total imports of goods into the EU in 2005.  These figures attest to the fact that Jamaica has an 
insignificant share of world trade and does not have a detrimental effect on the exports of other WTO 
Members in third markets.  Additionally, Jamai ca’s incentives schemes are open to foreign investment 
as approximately 35 per cent of the companies in the free zones and 30 per cent of the companies 
under the Export Industry Encouragement Act have foreign participation.  
  The subsidy programmes also encourage imports - at duty free or reduced tariff levels – of 
raw materials and inputs originating in deve loped and other developing countries, thereby 
contributing positively to the multilateral trading system.  
 Evidence of the positive impact of the pr ogrammes on employment can be found in the 
annual notifications submitted by the proponents to  the Committee on Subsidies and Countervailing 
Measures.  In 2005, total exports from the free zones in Jamaica amounted to US$67.7 million and 
total employment was 4,853 persons – the majority  being women and young school leavers.  The 
Export Industry Encouragement Act currently pr ovides employment for approximately 600 persons, 
60 per cent of whom are women. 
  As the programmes have proved useful over the past years, their maintenance would 
maximize and consolidate their benefits.  There is  the concern that the elimination of the export 
subsidy programmes at this juncture could impair  the function of further economic development and 
economic viability.  While efforts will continue to  build domestic capacity and improve supply-side 
constraints, there is the compelling need for the continuation of the incentives programmes as Jamaica 
continues to improve its export penetration and enhance productive capacity.   An extension based on the procedures containe d in G/SCM/39 would contribute to investor 
confidence, predictability and certainty for invest ors in making commercial decisions and in keeping 
and attracting current and potential investors. 
  Members should take into account that the new extension which is being requested is based 
on the relevant economic, financia l and development needs of the beneficiaries Members.  These 
needs are practically the same as were used to jus tify the extension and the fast track procedures in 
2001.  The proposed date of 2018 is  consistent with the discussions that had taken place before the 
adoption of G/SCM/39.  At that time, the proponents of G/SCM/W/535 and G/SCM/W/535/Add.1 
had already expressed the reasons and the needs to eliminate their programmes over a long enough 
timeframe, possibly extending over 20 years.  A deve lopment strategy cannot yield the desired results 
overnight. Consequently, to ensure that developing c ountries are able to fully integrate and obtain real 
benefits from the multilateral trading system, development strategies have to be designed for the 
medium- to long-term. G/SCM/Q4/JAM/6 
Page 4  
 
  COLOMBIA
 
 
Q1, In the case of each of the programmes, pl ease provide the most up to date information 
available regarding the number of beneficiary en terprises classified according to industrial 
sector. 
 Reply
 
 
BENEFICIARIES UNDER 
EXPORT INDUSTRY ENCOURAGEMENT ACT 
 
AGRO 
PROCESSING ELECTRONIC 
ASSEMBLING APPAREL ANIMAL 
FEEDING 
5 1 3 1 
 
 
BENEFICIARIES UNDER  
THE JAMAICA EXPORT FREE ZONES ACT 
 
APPAREL ELECTRONIC 
ASSEMBLINGAGRO 
PROCESSING ANIMAL 
FEEDING ETHANOL 
PROCESSING
5 2 8 2 3 
 
 There are two (2) beneficiaries under the Indus trial Incentives (Factory Construction) Act.  
These beneficiaries provided factory space to companies involved in agro-processing and animal feeding activities. 
 
 There are currently only one hundred and fourt een (114) beneficiaries under the Foreign Sales 
Corporation Act. 
 
Q2. Please explain why, under the above progra mmes which have been in place for over ten 
(10) years, it is still not possible to dismantle the prohibited subsidies. 
 Reply
 
  Jamaica has adopted an outward-oriented deve lopment strategy in which great importance has 
been placed on the export manufacturing sector.  Over  the years, Jamaica has experienced a widening  
of its trade deficit from US$238 million in 1980 to  US$3.25 billion, representing a tenfold increase.  
The average growth rates of imports accelerated  to 7.6 per cent between 1992 and 2002 and in the 
same period export growth was at an annual rate of 1.1 per cent.  The 4 incentives programmes are 
designed to attract investment and increase exports.  It  is anticipated that, given their stated objectives, 
these 4 programmes will provide the basis for incr easing exports as a means of redressing the trade 
deficit.  Although the incentives regime is curren tly being reviewed, it has not been possible to 
dismantle the programmes given their important socio-economic impact.  
 
Q3. The justification for the extension request  is that Jamaica is a small, vulnerable 
economy which suffers from the combined effect of diseconomies of scale caused by the small 
size of its economy and administration and by it s physical isolation.  If the above distorting 
factors are not brought under control before 2018, would there be a request for a new extension 
for the phasing out of prohibited subsidies?  Please explain why these characteristics of Jamaica’s economy prevent the country from co mplying fully and satisfactorily with WTO 
disciplines on export subsidies.  G/SCM/Q4/JAM/6 
 Page 5 
 
 
   
Reply  
  The proposal contained in G/SCM/W/535 refers only to the amendment of paragraph 1(e) of 
G/SCM/39.  The view of the proponents is to contin ue benefiting from the extension throughout 2018.  
Therefore, the rights and obligations contained in  document G/SCM/39 and Article 27.4 of the ASCM 
would remain unchanged.   Assuming that Colombia is referring to “d istorting factors” as meaning the “relevant 
economic, financial and social needs” provided for in Article 27.4 of ASCM, Jamaica will take a 
pertinent decision on a request for an extensi on based on those needs in accordance with the 
procedures and timelines established in the provisions mentioned above. 
  Furthermore, Jamaica is of the view that its 4 programmes are fully compliant with Article 27.4 of the ASCM, which enshrines the prin ciple of special and differential treatment, as well 
as with the provisions contained in document G/SCM/39. 
 
Q4. Please explain why the situation which has prompted the request for an extension calls 
for allowing the granting of prohibited subsidies up to 2018 and not before. 
 
Reply
 
 
 As a small, open economy, Jamaica has deemed  it necessary to request a new extension based 
on its economic, financial and development needs.  In  fact, all of the beneficiaries can prove that the 
conditions that existed and justif ied the extension in 2001 still rema in.  These conditions have become 
even more profound given the increased competit ive challenges facing Jamaica in a constantly 
evolving multilateral trading system as well as in the face of domestic economic imperatives.  
Notwithstanding this, however, the 4 export subsidy programmes have proved to have very positive 
effects on the Jamaican economy in terms of, inter alia,  attracting foreign investment, increased 
foreign exchange earnings, job creation, diversifi cation of the productive sector, poverty alleviation, 
infrastructural development and human resource de velopment.  These programmes also contribute to 
rural development as some of the companies benef iting from the incentives are located in rural areas. 
 
 However, these positive effects have been mitigat ed by endemic constraints, which is borne 
out in the level of Jamaica’s participation in worl d trade.  None of Jamaica’s manufactured products 
has reached export competitiveness at an  international level and its share of world trade is miniscule.  
Jamaica is a highly open, trade-dependent country in  which imports and exports  of goods and services 
account for over 100 per cent of gross domestic pr oduct (GDP).  Rapid liberalization over the years 
has seen a disproportionate growth in imports over exports thereby contributing to an increasing trade 
deficit.  Jamaican producers face increasing challeng es both locally and in international markets.  The 
rapidly changing global landscape ha s generated new circumstances that will require great efforts 
from Jamaica to implement and adjust to the swif tly changing multilateral trading system, including 
the eventual results of the current round of Doha negotiations, which will put added pressures on 
Jamaica’s productive sectors, terms of trade and overall economic prospects.  It is crucially important 
for Jamaica to re-tool and upgrade its technologies,  adapt to new competitive conditions and expand 
exports to different markets in order to strengthen its international competitiv eness, at the same time 
reducing its reliance on exports of primary co mmodities, expanding the productive base and 
increasing productivity and employment. 
 
 The proponents of document G/SCM/W/535 a nd G/SCM/W/535/Add.1, including Jamaica, 
propose some other reasons for requesting an extension:  G/SCM/Q4/JAM/6 
Page 6  
 
   The main exports of the proponents, including Ja maica, are highly concentrated in the US and 
the EC.  Jamaica accounts for 0.02 per cent of total im ports of goods into the US market and 0.06 per 
cent of total imports of goods into the EU in 2005.   These figures attest to the fact that Jamaica has an 
insignificant share of world trade and does not have a detrimental effect on the exports of other WTO 
Members in third markets.  Additionally, Jamai ca’s incentives schemes are open to foreign investment 
as approximately 35 per cent of the companies in the free zones and 30 per cent of the companies 
under the Export Industry Encouragement Act have foreign participation.  
  The subsidy programmes also encourage imports - at duty free or reduced tariff levels – of 
raw materials and inputs originating in deve loped and other developing countries, thereby 
contributing positively to the multilateral trading system. 
  Evidence of the positive impact of the pr ogrammes on employment can be found in the 
annual notifications submitted by the proponents to  the Committee on Subsidies and Countervailing 
Measures.  In 2005, total exports from the free zones in Jamaica amounted to US$67.7 million and 
total employment was 4,853 persons – the majority  being women and young school leavers.  The 
Export Industry Encouragement Act currently pr ovides employment for approximately 600 persons, 
60 per cent of whom are women.   As the programmes have proved useful over the past years, their maintenance would 
maximize and consolidate their benefits.  There is  the concern that the elimination of the export 
subsidy programmes at this juncture could impair  the function of further economic development and 
economic viability.  While efforts will continue to  build domestic capacity and improve supply-side 
constraints, there is the compelling need for the continuation of the incentives programmes as Jamaica continues to improve its export penetration and enhance productive capacity.  
 An extension based on the procedures containe d in G/SCM/39 would contribute to investor 
confidence, predictability and certainty for invest ors in making commercial decisions and in keeping 
and attracting current and potential investors.   Members should take into account that the new extension which is being requested is based 
on the relevant economic, financia l and development needs of the beneficiaries Members.  These 
needs are practically the same as were used to jus tify the extension and the fast track procedures in 
2001.  The proposed date of 2018 is  consistent with the discussions that had taken place before the 
adoption of G/SCM/39.  At that time, the proponents of G/SCM/W/535 and G/SCM/W/535/Add.1 
had already expressed the reasons and the needs to eliminate their programmes over a long enough 
timeframe, possibly extending over 20 years.  A deve lopment strategy cannot yield the desired results 
overnight.  Consequently, to ensure that developi ng countries are able to fully integrate and obtain 
real benefits from the multilateral trading system, development strategies have to be designed for the 
medium- to long-term.   
Q5. Please provide statistical data demons trating the benefits derived from the 
implementation of the Industrial Incentive (Fac tory Construction) Act and the Foreign Sales 
Corporation Act. 
 
Reply
 
  Please note responses provided to earlier questions. 
 
Q6. Given that the incentives granted under the programmes mentioned in the proceeding 
paragraph have a term of up to fifteen (15) yea rs, with the possibility of extension for a term 
equal to the initial term, what measures will Jamai ca take to ensure that the subsidies do not 
extend beyond the extension period established?  G/SCM/Q4/JAM/6 
 Page 7 
 
 
   
Reply  
  Extensions are not granted automatically.  Comp anies have to prove cause for extension.  It 
should be noted that this provision has never been applied. 
 
Q7. In order for a company to be registered or incorporated in Jamaica and to be eligible 
for subsidies under the Export Industry Encouragement  Act, must it be set up solely by national 
partners?  If this is not the case, then to what  extent may a foreigner participate?  How many of 
the companies currently enjoying the tax benefits have foreign participation? 
 Reply
 
  The investment environment for enterprises in Jamaica is regulated by the Companies Act, 
the Business Names Act and the Industrial and Provident  Act.  All companies, foreign or domestic, as 
well as individuals carrying on business in Jamaica, must be registered at the office of the Registrar of 
Companies. 
 
 A key component of Jamaica’s development strategy is encouraging foreign direct 
investment.  Foreign companies may invest th rough the establishment of a branch office, by 
incorporating a local subsidiary , by registering as an overseas co mpany, by establishing a joint 
venture or partnership or by registering as an overseas company. 
 
 Investment incentives in effect in Ja maica are open to foreign investors. 
 
 Thirty percent (30%) of the companies enjoyi ng EIEA status have foreign participation. 
 
Q8. Please provide statistical date on the number of companies benefiting under each 
programme and the industry sectors represented by these companies.  
Reply
 
  
 See response at Question 1. G/SCM/Q4/JAM/6 
Page 8  
 
  JAPAN
 
 
Q1. Please show the reasons why the lengthy exte nsion of eleven (11) years is indispensable 
uniformly for all the export subsidy progra mmes referred to in the above documents. 
 
Reply  
  The choice of the suggested date of 2018 should  be read in the light of the discussions that 
had taken place before the adoption of G/SCM/39.  At that time, the proponents of the document had 
explained their concerns and the reasons to eliminate their programmes over a long enough time 
frame, possibly extending over twenty years.  In light  of those discussions, and taking into account the 
relevant legitimate, financial, ec onomic, social and development needs of Jamaica, as we ll as the fact 
that the conditions which initially prevailed and n ecessitated the extension still exist, the proposed 
timeframe for the extension is appropriate. 
 
 Additionally, it is to be noted that all e xport subsidy programmes of the proponents share 
generally the same objectives, structure or design and the estimated period of adjustment of an additional eleven (11) years is consistent with th e time required to consolidate the policy development 
benefits of industrialization, di versification and employment across the export subsidy programmes. 
  The uncertainty regarding the future of the negotiations in the Doha Round and the significant 
transformation in the global trading system will pres ent new challenges that will require great efforts 
from domestic producers in SVEs and will definitiv ely put additional pressure to these countries in 
terms of trade and overall economic prospects.   Jamaica has applied and notif ied only 4 programmes.  These programmes have been the core 
of its export development strategy and, although they do not perform as robustly as would be desired 
under the current global conditions, they contribut e to investment, employment, enhancing and 
diversifying the minuscule export base of the country  and poverty reduction.  For these reasons, it is 
indispensable to have a uniform extensi on for the 4 export subsidy programmes.  
 
Q2. Please explain, one by one for each of th e export subsidy programmes referred to in the 
above documents, how each of these export subsidy programmes are integrated in the 
development strategies of the relevant Member, why a further extension beyond 2007 is necessary for its economic and fina ncial needs, and why the extension period has to be through 
to the end of 2018. 
 Reply
 
  The information regarding each of the programmes notified by Jamaica, including how these programmes are integrated into the development strategies of the country, is available in the 
documents submitted in 2001
6 to obtain the current extension.  Furthermore, this information is 
available in each of the annual notifications that  Jamaica has submitted to the Committee on Subsidies 
and Countervailing Measures in compliance with th e transparency and standstill obligations.    
 
 Recognising the importance of the export sector  to the country’s development, Jamaica has 
embarked on an export-oriented, private sector-led  development strategy aimed at facilitating the 
country’s integration into the global economy.  The major objectives of these 4 programmes are to 
facilitate and encourage investment and productiv ity in the export manufacturing sector through the 
incentives provided.  The manufacturing sector has been  identified as one of the strategic sectors in 
                                                      
6 See document G/SCM/W/538 ‘Index of Key Documents Related to Programmes Subject to 
Extensions Requested And Granted Under the Procedures  in G/SCM/39’ prepared by the WTO Secretariat.  G/SCM/Q4/JAM/6 
 Page 9 
 
 
  the economy which will act as a catalyst for growth a nd inter-sectoral linkages. Increased investment, 
output, productivity and gr owth in the manufacturing sector will provide the basis for achieving wider 
development policy objectives, such as the re duction of unemployment and poverty and increased 
income for the Jamaican people.   The incentive programmes were designed to meet developmental 
objectives of enhancing our export base, strengthe ning our competitiveness, building local capacity 
and increasing the flow of net positive return from i nvestments.  The rationale being that developing 
productive capacities is the key to achieving sustaine d economic growth, to sustained private capital 
inflow and a greater reliance on domestic resource mobilization.   These programmes have been integrated in our development strategies as the growth and 
competitiveness of the industrial sector is a major component of the Governme nt’s economic strategy 
as outlined in the country’s National Industrial Policy.   As a small, open economy, Jamaica has deemed  it necessary to request a new extension based 
on its economic, financial and development needs.  In  fact, all of the beneficiaries can prove that the 
conditions that existed and justif ied the extension in 2001 still rema in.  These conditions have become 
even more profound given the increased competit ive challenges facing Jamaica in a constantly 
evolving multilateral trading system as well as in the face of domestic economic imperatives.  
Notwithstanding this, however, the 4 export subsidy programmes have proved to have very positive 
effects on the Jamaican economy in terms of, inter alia,  attracting foreign investment, increased 
foreign exchange earnings, job creation, diversifi cation of the productive sector, poverty alleviation, 
infrastructural development and human resource de velopment.  These programmes also contribute to 
rural development as some of the companies benef iting from the incentives are located in rural areas. 
  However, these positive effects have been mitigat ed by endemic constraints, which is borne 
out in the level of Jamaica’s participation in worl d trade.  None of Jamaica’s manufactured products 
has reached export competitiveness at an  international level and its share of world trade is miniscule.  
Jamaica is a highly open, trade-dependent country in  which imports and exports  of goods and services 
account for over 100 per cent of gross domestic pr oduct (GDP).  Rapid liberalization over the years 
has seen a disproportionate growth in imports over exports thereby contributing to an increasing trade 
deficit.  Jamaican producers face increasing challeng es both locally and in international markets.  The 
rapidly changing global landscape ha s generated new circumstances that will require great efforts 
from Jamaica to implement and adjust to the swif tly changing multilateral trading system, including 
the eventual results of the current round of Doha negotiations, which will put added pressures on 
Jamaica’s productive sectors, terms of trade and overall economic prospects.  It is crucially important for Jamaica to re-tool and upgrade its technologies,  adapt to new competitive conditions and expand 
exports to different markets in order to strengthen its international competitiv eness, at the same time 
reducing its reliance on exports of primary co mmodities, expanding the productive base and 
increasing productivity and employment.   The proponents of document G/SCM/W/535 a nd G/SCM/W/535/Add.1, including Jamaica, 
propose some other reasons for requesting an extension:  
 The main exports of the proponents, including Ja maica, are highly concentrated in the US and 
the EC.  Jamaica accounts for 0.02 per cent of total im ports of goods into the US market and 0.06 per 
cent of total imports of goods into the EU in 2005.  These figures attest to the fact that Jamaica has an 
insignificant share of world trade and does not have a detrimental effect on the exports of other WTO 
Members in third markets.  Additionally, Jamai ca’s incentives schemes are open to foreign investment 
as approximately 35 per cent of the companies in the free zones and 30 per cent of the companies 
under the Export Industry Encouragement Act have foreign participation.  
 G/SCM/Q4/JAM/6 
Page 10  
 
   The subsidy programmes also encourage imports - at duty free or reduced tariff levels – of 
raw materials and inputs originating in deve loped and other developing countries, thereby 
contributing positively to the multilateral trading system.   Evidence of the positive impact of the pr ogrammes on employment can be found in the 
annual notifications submitted by the proponents to  the Committee on Subsidies and Countervailing 
Measures.  In 2005, total exports from the free zones in Jamaica amounted to US$67.7 million and 
total employment was 4,853 persons – the majority  being women and young school leavers.  The 
Export Industry Encouragement Act currently pr ovides employment for approximately 600 persons, 
60 per cent of whom are women. 
 
 As the programmes have proved useful over the past years, their maintenance would 
maximize and consolidate their benefits.  There is  the concern that the elimination of the export 
subsidy programmes at this juncture could impair  the function of further economic development and 
economic viability.  While efforts will continue to  build domestic capacity and improve supply-side 
constraints, there is the compelling need for the continuation of the incentives programmes as Jamaica 
continues to improve its export penetration and enhance productive capacity.   An extension based on the procedures containe d in G/SCM/39 would contribute to investor 
confidence, predictability and certainty for invest ors in making commercial decisions and in keeping 
and attracting current and potential investors. 
 
 Members should take into account that the new extension which is being requested is based 
on the relevant economic, financia l and development needs of the beneficiaries Members.  These 
needs are practically the same as were used to jus tify the extension and the fast track procedures in 
2001.  The proposed date of 2018 is  consistent with the discussions that had taken place before the 
adoption of G/SCM/39.  At that time, the proponents of G/SCM/W/535 and G/SCM/W/535/Add.1 
had already expressed the reasons and the needs to eliminate their programmes over a long enough 
timeframe, possibly extending over 20 years.  A deve lopment strategy cannot yield the desired results 
overnight.  Consequently, to ensure that developi ng countries are able to fully integrate and obtain 
real benefits from the multilateral trading system, development strategies have to be designed for the 
medium- to long-term.  
  G/SCM/Q4/JAM/6 
 Page 11 
 
 
  PERU  
 
Q1. Do the co-sponsors of proposal G/SC M/W535 intend to extend only the programmes 
which have been notified to date under Ar ticle 27.4 of the Agreement on Subsidies and 
Countervailing Measures and which are included in Annex A of their proposal, or do they 
intend to include any other export subsidy progr amme which fulfils the criteria set forth under 
2 in document G/SCM/39?  
Reply
 
 
 The proposal contained in G/SCM/W/535 and G/SCM/W/535/Add. 1 refers only to the 
amendment of paragraph 1(e) of G/ SCM/39.  Therefore the intention of Jamaica and other sponsors of 
these documents is to continue be nefiting from the extension until the end of 2018 and the conditions 
specified in G/SCM/39 would remain unchanged.  Th is clearly excludes the possibility to include any 
further programmes. 
 
Q2. Under what laws and enabling regulations are the programmes listed in Annex A of the 
proposal implemented?   
Reply
 
 
 Annex A identifies the relevant legislati ons under which the export subsidy programmes 
operate, i.e. the Export Industry Encouragemen t Act; the Jamaica Export Free Zones Act; the 
Industrial incentives (Factory Construction) Ac t; and the Foreign Sales Corporation Act. 
 
Q3. Which sectors and products benefit from the programme? 
 Reply
 
  Pursuant to the ASCM, goods producing sect ors benefit under the Jamaica Export Free Zones 
and Export Industry Encouragement Acts. Benefi ciaries currently are th ose in agro-processing, 
electronic assembling, apparel, ethanol processing and the food processing subsectors.  Service 
providers in distribution,  data processing, ITC also benefit under the Jamaica Free Zones Act.  
Although the EIEA also extends to service provide rs, there are no beneficiaries under the programme 
at this time.   
 
Q4. How much did the State disburse for these programmes? 
 Reply
 
  There are no financial disbursements by the state under these programmes. G/SCM/Q4/JAM/6 
Page 12  
 
  UNITED STATES
 
 
Q1. Please describe what efforts Jamaica has made, if any, to phase out the programme 
within the extension period that has already b een granted, as provided under the ‘Procedures 
for Extension Under Article 27.4 for Certain De veloping Country Members’.  Please further 
describe how Jamaica will continue to ensure that the programmes will be phased out if an 
additional extension were granted.  
Reply
 
 
 Jamaica has been undertaking efforts to review  its overall system of taxation, including its 
incentives programmes, and will take the pertinent d ecisions based on its specific economic, financial 
and development needs within the context of its economic development strategies.  
 
Q2. Please describe changes to the Programmes since 2001.  Also please provide any updated 
or revised implementing legislation, and any relevant amendments, under these programmes 
and any accompanying regulations and decrees.  
Reply
 
  Jamaica’s programmes are fully compliant with Article 27.4 of the ASCM and the provisions 
contained in document G/SCM/39.   
 
 It should be noted, however, that the EIEA w as amended in 2002 to cover the Services Sector 
which is not covered under the ASCM.  It should be further noted that there have been no grants to 
any service providers.  A copy of the amending legislation will be provided. 
 
Q3. How many beneficiaries of these Programmes were there in 2001?  How many 
beneficiaries are there currently under each of  these Programmes?  What type of industries 
currently benefit under the programmes? 
 
Reply
 
 
 The number of companies benefiting from  the programmes as at September 2001: 
 
Incentive Regime No. of companies 
Export Industry Encouragement Act 
 Jamaica Export Free Zones Act 
 
Industrial Incentives (Factory Construction) Act  Foreign Sales Corporation Act  15 
 48 
 
3  520 
  G/SCM/Q4/JAM/6 
 Page 13 
 
 
   Current beneficiaries under each of the programmes: 
 
BENEFICIARIES UNDER 
EXPORT INDUSTRY ENCOURAGEMENT ACT 
 
AGRO 
PROCESSING ELECTRONIC 
ASSEMBLING APPAREL ANIMAL 
FEEDING 
5 1 3 1 
 
BENEFICIARIES UNDER  
THE JAMAICA EXPORT FREE ZONES ACT 
 
APPAREL ELECTRONIC 
ASSEMBLINGAGRO 
PROCESSING ANIMAL 
FEEDING ETHANOL 
PROCESSING
5 2 8 2 3 
 
 There are two (2) beneficiaries under the Indus trial Incentives (Factory Construction) Act.  
These beneficiaries provided factory space to comp anies involved in agro processing and animal 
feeding activities.   There are currently only one hundred and fourt een (114) beneficiaries under the Foreign Sales 
Corporation Act. 
 
Q4. Did Jamaica undertake any commitments to provide export subsidies to new beneficiaries beyond the year 2009?  If so, please indicate the number of such beneficiaries by 
the year in which those commitments extend. 
 
Reply
 
  Jamaica has not undertaken any commitmen ts to provide export subsidies to new 
beneficiaries beyond 2009. 
 
Q5. If available, please provide the amount of the subsidy provided under these programmes 
for each year from 2001 through to 2005. 
 
Reply
 
 
 There are no financial disbursements by the state under these Programmes.  
 
Q6. Please explain whether exports by qualif ying companies to Caricom members are 
eligible for the benefits provided under these prog rammes.  If not, please explain what benefits, 
if any, such exports to Caricom countries are e ligible for, and the reason for differentiating 
among exports to Caricom members and other exports. 
 Reply
 
  In practice beneficiaries under the Free Zones Act have been exporters to third country 
markets i.e. markets outside of the Caricom region.   There is no legal obstacle to companies exporting 
to Caricom being denied benefits under the Act. 
 G/SCM/Q4/JAM/6 
Page 14  
 
  Export Industry Encouragement Act
 
 Q7. Under this programme, an approved manufac turer has production that is “geared for 
non-Caricom markets”.  Please explain the re ason for differentiating among exporters to 
Caricom members and other exports. 
 Reply
 
  This Programme was designed to encourage expor ts to third country (non-Caricom) markets.  
Caricom is a regional common market and hence would not qualify as a third country market. 
 
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