. /.   WORLD TRADE  
ORGANIZATION  G/SCM/Q4/BLZ/5 
11 October 2006 
 
 (06-4883) 
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 COLOMBIA1 
 
 
 The following communication, dated 10 October 2006, is being circulated at the request of 
the Delegation of Belize. 
 
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• Fiscal Incentives Act 
• Export Processing Zone Act 
• Commercial Free Zone Act 
 
Q1. In the case of each of the programmes, please provide the most up-to-date information 
available regarding the number of beneficiary en terprises classified according to industrial 
sector. 
 
Reply  
 
 There are approximately 24 companies benefiting from the subsidies programmes in the 
industrial sector.  
Q2. Please explain why, under the above progra mmes, which have been in place for over 
ten years, it is still not possible to dismantle the prohibited subsidies. 
 
Reply
 
  As noted above, only a small number of compan ies in the non-agriculture sector benefit from 
these programmes.  These programmes are an intricate part of the development strategy of Belize and 
allow Belize the space to move towards industriali zation, albeit at a slower pace than the typical 
industrial nation.  Additionally, because of the hi gh costs of doing business along with the associated 
structural difficulties peculiar to a small country, these programmes have stemmed from that desire to 
stimulate investment and at the same time, a creativ e attempt to bridge such structural difficulties.  
Belize, cognizant of the role that dependency on  one economic sector can mean for a country's 
stability, has utilized and continu es to utilize these programmes as part of its overall policy design 
towards diversification. 
 
                                                     
 
1 G/SCM/Q4/BLZ/1 G/SCM/Q4/BLZ/5 
Page 2  
 
  Q3. The basis for the extension request is that  Belize 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 its 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 
the prohibited subsidies?  Please explain why these characteristics of Belize's economy prevent 
the country from complying fully and satisfacto rily with WTO export subsidy disciplines.  
 
Reply
 
  These "distortions" are of a structural nature  which while cannot be overcome, can best be 
dealt with by policies aimed at mitigating some of the effects of these structural challenges.  The 
subsidies programmes are part of a wider attempt to deal with these difficulties. 
 
Q4. Please explain why the situation giving ri se to the request for extension requires the 
granting of prohibited subsidies until the year 2018, rather than an earlier date. 
 
Reply
 
  2018 is seen as a reasonable time for investors to  be assured of the predictability and certainty 
of the programmes.  Such a longer timeframe, as comp ared to the original five years should provide a 
reasonable time to ensure predictability and certainty .  Trade is dynamic, and from experience we can 
say that the original five years which was thought sufficient to allow for dismantling of these regimes, 
have proved otherwise, but an extension to 2018 would certainly prove adequate to make some 
adjustments.  Currently, Belize is struggling with the effects of the revised EU's banana and sugar 
regime and this, coupled with the prospect for fu rther liberalization at the multilateral and regional 
level in addition to an eliminati on of the subsidies programmes coul d have deleterious effects on the 
Belizean economy. 
 
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