RESTRICTED  WORLD TRADE  
ORGANIZATION  G/SCM/M/60 
13 September 2007 
 (07-3821) 
Committee on Subsidies  
and Countervailing Measures  
 
 
MINUTES OF THE SPECIAL MEETING  
HELD ON 26 APRIL 2007 
 
Chairperson:  Mr. Keiya Iida (Japan)  
 
 
1. The Committee on Subsidies and Countervailing M easures (the "Committee") held a special 
meeting on 26 April 2007.  As set forth in WTO/AIR/3000, the main purpose of this meeting was to continue the review of the 2005 new and full subsidy notifications.  In this regard, the Committee first 
examined 2005 new and full subsidy notifications th at had not yet been reviewed.  The Committee 
then reverted to certain 2005 new and full subsidy no tifications that had already been the subject of 
discussion at the special meeting held on 26 October 2006.
1  The Committee also decided on the 
procedures for the review of 2007 new and full subsidy notifications.   
A. REVIEW OF 2005  NEW AND FULL SUBSIDY NOTIFICATIONS THAT HAD NOT YET BEEN 
DISCUSSED  
2. The Committee had before it the 2005 new a nd full subsidy notifications of Argentina 
(G/SCM/N/123/ARG), Chile (C/SCM/N/123/ CHL), Honduras (G/SCM/N/123/HND/Add.1), 
Liechtenstein (G/SCM/N/123/LIE), Tunisia (G/S CM/N/123/TUN), Suriname (G/SCM/N/123/SUR) 
and Swaziland G/SCM/N/123/SWZ).   
3. The delegate of the United States  stated that his delegation had submitted written questions on 
the 2005 new and full subsidy notifications of Argentina and Tunisia.2   
4. The delegates of Argentina  and Tunisia  stated that they would refer these questions to their 
authorities.   
5. No comments were made on the 2005 new and fu ll subsidy notifications of Chile, Honduras, 
Liechtenstein, Suriname and Swaziland.  
B. CONTINUATION OF REVIEW OF 2005  NEW AND FULL SUBSIDY NOTIFICATIONS THAT HAD BEEN 
DISCUSSED AT THE SPECI AL MEETING HELD ON 26 OCTOBER 2006 
6. The Committee reverted to the 2005 new and full subsidy notifications of China 
(G/SCM/N/123/CHN), Hong Kong, China (G/SCM/N/123/HKG), Korea (G/SCM/N/123/KOR), New Zealand (G/SCM/N/123/NZL), Singapore (G /SCM/N/123/SGP), Qatar (G/SCM/N/123/QAT), 
Thailand (G/SCM/N/123/THA and Corr.1) a nd Turkey (G/SCM/N/123/TUR and Add.1.) 
1. China 
7. The Chairman
 stated that the 2005 new and full subsidy notification of China was contained 
in document G/SCM/N/123/CHN and that prior to th e special meeting held on 26 October 2006 the 
                                                      
1 G/SCM/M/59. 
2 G/SCM/Q2/ARG/25 and G/SCM/Q2/TUN/8, respectively.  G/SCM/M/60 
Page 2  
 
  Committee had received written questions on this notification from the European Communities, 
Japan, Canada, the United States, Turkey, Australia and Mexico.
3  The delegate of China had 
provided oral responses to some of these questions at  the special meeting and had indicated that China 
would try to provide written res ponses to enable a meaningful discussion at the next meeting of the 
Committee.  The Chairman noted that the Committee had not received any written responses from 
China and asked whether China wished  to respond orally to these questions at this meeting and when 
China expected to be in a position to submit written responses. 
8. The delegate of China  stated that at the Committee's meeting in October 2006 China had 
delivered a comprehensive and detailed response to some general questions that had been posed on 
China's subsidy notification.  Since then the Ch inese authorities had been working very hard to 
prepare complete and comprehensive responses to al l the questions, and they had intended to submit 
the responses before this special meeting.  However, in March 2007 China's National People's 
Congress had passed a new income tax law for ente rprises, which had led to some fundamental 
changes of China's tax policies.  In addition, China had had to engage in dis pute settlement procedures 
regarding some subsidy issues, and it had been impossible for the small group of officials working on 
these matters to complete the answers before this meeting.  However, China would complete all the 
answers within the next few weeks and, following translation of the answers into English, written 
responses to all questions would be subm itted to the Committee in late June.  
9. The delegate of the European Communities  thanked China for providing some clarification on 
when the Committee could expect to receive written an swers to the questions that had been posed on 
China's subsidy notification.  He stressed that th e European Communities att ached great importance to 
the review of subsidy notifications.  He appreciat ed the difficulties in responding to a large number of 
detailed questions and took note of  the time schedule that China pr oposed for the submission of its 
written responses.   
10. The delegate of Japan  emphasized the need for China to en sure transparency with respect to 
its subsidies.  In its questions on China's subsid y notification Japan had sought clarification on three 
main issues: whether China's 2005 new and full subsidy notification included all the subsidy 
programmes subject to China's notification oblig ations under the WTO agreements; whether China 
had already eliminated all subsidy programmes that China had undertaken to eliminate in the context 
of its WTO accession; and whether China considered all the subsidy programmes contained in its 2005 new and full subsidy notification to be consis tent with WTO agreements.  Despite China's 
commitment to make an effort to submit written answ ers, China had not yet provided answers.  Thus, 
Japan's concerns on these three points had not been  addressed.  Japan expected China to provide 
sufficient answers and clear explanations on its su bsidy programmes as soon as possible.  The fact 
that dispute settlement had been initiated was not  a valid reason for China not to have submitted 
written answers to the Committee.  Dispute settlement and the review of subsidy notifications in the 
Committee were two distinct processes.  In addition,  many questions raised by Members dealt with 
measures that were not the subject of dispute settlement.   
11. The delegate of Canada
 reiterated the importance of th e notification of subsidies under 
Article 25 of the SCM Agreement  and looked forward to seeing the written responses of China to 
Canada's questions.  Regarding the changes in income  tax laws referred to by the Chinese delegate, he 
asked China to indicate whether, and if so, how, t hose changes had affected the programmes on which 
Canada had submitted questions.   
12. The delegate of Mexico  urged China to present as soon as possible written responses to the 
questions posed by Mexico and other Members so as to enable the Committee to have a substantive 
discussion on the nature and status of the programmes at  issue.  Mexico considered that this review by 
                                                      
3 G/SCM/Q2/CHN16-22.    G/SCM/M/60 
 Page 3 
 
 
  the Committee of China's subsidy notifications w as independent of any pr oceeding under the WTO 
dispute settlement mechanism.   
13. The delegate of Australia  stated that his delegation was disappointed to be faced again with a 
lack of written answers to its questions.  He recalle d that at the previous special meeting China had 
said that it would submit its written answers in time to enable the Committee to have a meaningful 
discussion at the present meeting.  While he acknowle dged the point made by China about the strain 
on its resources, he urged China to come forth with  its answers and he looked forward to receiving 
China's answers in late June.   
14. The delegate of the United States  shared the concern of previous  speakers with respect to the 
lack of written responses from China to all the ques tions that had been submitted.  The United States 
appreciated the difficulty in answering numerous detailed questions, but transparency was an 
important principle underlying the SCM Agreement .  He noted China's commitment to provide written 
answers this coming June. 
15. The delegate of Turkey  echoed what the previous speakers had said and reiterated that Turkey 
was still looking forward to receiving China's writte n responses to the questions posed by Turkey. 
16. The delegate of China  thanked the previous speakers for their continued interest in China's 
notification.  He would convey the concerns expressed  to his capital.  He reiterated that his authorities 
were currently busy preparing the answers and he ex pected that this process would be expedited so 
that the Committee could have a meaningful and tr ansparent discussion of China's notification.  He 
also thanked some of the previous speakers for their understanding of the difficulties that China was 
currently facing with regard to handling various is sues relating to this notification.  While some 
delegations had stated that the review of subsidy notifications and dispute settlement were separate 
processes, in China these matters were dealt with by the same group of officials, who were also 
involved in other WTO-related work, including negoti ations on rules.  China would do what it could 
to provide written responses by the end of June.   
17. The Chairman  appreciated that China had acknowledged the concerns expressed by other 
delegations and said that he was very much encourag ed by the fact that China had indicated that it 
expected to submit its written responses by the end of  June.  Thus, he expected that at the next 
meeting of the Committee there would be a mean ingful, productive, discussion based on China's 
written answers to those questions.    
18. The Committee took note  of the statements. 
2. Hong Kong, China  
19. The Chairman  noted that the 2005 new and full subsidy notification of Hong Kong, China  
had been circulated in document G/SCM/N/123/ HKG.  Written responses of Hong Kong, China to 
questions posed by the United States had been  circulated in document G/SCM/Q2/HKG/7.   
20. The delegate of the United States  thanked the delegation of Hong Kong, China for its answers 
to the of the United States.   
21. The Committee took note  of the statements. G/SCM/M/60 
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  3. Korea 
22. The Chairman
 stated that the 2005 new and full subs idy notification of Korea was contained 
in document G/SCM/N/123/KOR and that Korea had responded in documents G/SCM/Q2/KOR/27 
and 29 to questions posed by Turkey and the United States.   
23. The delegate of the United States  thanked Korea for its answers to the questions of the 
United States and posed a follow-up question relating to the answers to questions 7 and 8 that dealt 
with, respectively, Articles 24 and 29 of the Framew ork Act on Marine Fishery Development.  Article 
24 of this Act related to the e xpansion of harbour facilities among other things, which raised the 
question whether a subsidy existed in the form of th e provision of infrastructure.  Article 29 of the Act 
had to do with development of new technologies rela ted to marine development.  In respect of both 
these provisions Korea had indicated in its responses to questions 7 and 8 that they were not specific 
within the meaning of the SCM Agreement.   In particular with respect to Article 29, however, it 
seemed to the United States that a law that provided subsidies for marine fishery development, at least 
on its face, appeared to be de jure  specific under the SCM Agreement .  He asked whether was any 
further explanation that Korea could provide with respect to its answer. 
24. The delegate of Korea  said that he would convey the question posed by the United States to 
his authorities. 
25. The Committee took note  of the statements.  
4. New Zealand 
26. The Chairman stated that the 2005 new and full subsidy notification of New Zealand was 
contained in G/SCM/N/123/NZL.  New Z ealand had submitted responses in document 
G/SCM/Q2/NZL/17 to questions posed by the United States.   
27. The delegate of New Zealand  stated that he would like to ta ke this opportunity to correct 
some figures in the last paragraph of G/SCM/ Q2/NZL/17.  The first figure mentioned in that 
paragraph – NZ $9.2 million – included goods and ser vices tax (GST).  The GST-exclusive figure was 
NZ$8.2 million.  The next figure in the third line, payments totalling NZ$35,887, should read 
NZ$38,887.  The amount disbursed to the project covering the 27 firms referred to in the fifth line, 
was NZ$26,826.32, including GST or NZ$24,114.96, excluding GST. 
28. The delegate of the United States  thanked New Zealand for this clarification. 
29. The Committee took note  of the statements.  
5. Singapore 
30. The Chairman  recalled that the 2005 new and full subs idy notification of Singapore had been 
circulated in document G/SCM/N/123/SGP.  Singapore had submitted responses in document 
G/SCM/Q2/SGP/12 to questions po sed by the United States.   
31. No comments were made.  
6. Qatar  
32. The Chairman  noted that the 2005 new and full subsidy notification of Qatar was contained in 
document G/SCM/N/123/QAT.  Responses of Qatar to questions posed by the United States had been 
circulated in document G/SCM/Q2/QAT/2.    G/SCM/M/60 
 Page 5 
 
 
  33. The delegate of the United States  thanked Qatar for its responses.  He then raised follow-up 
questions on two aspects of what seemed to be a single programme.4  First, regarding the exemption 
from taxes on exported products, he asked for further clarification as to precisely how that 
programme, or aspect of the programme, worked.  Second, with respect to another programme or 
another aspect of a single programme, he referred to  information that was on Qatar's web site which 
indicated that locally-produced items enjoyed a privilege of five per cent more than items 
manufactured in the Gulf States and ten per cent more  than items manufactured in foreign countries in 
government purchases.  The primary concern of the Un ited States in this respect was that there might 
be a prohibited subsidy element in either one or  both of these programmes.  Obviously, the first 
measure raised the question whether it involved a subsidy contingent upon export performance and 
the second measure raised the question whether it involved a subsidy contingent upon the use of 
domestic over-imported goods. 
34. The delegate of Qatar  stated that his delegation would pr ovide the clarification requested by 
the United States.   
35. The Committee took note  of the statements.  
7. Thailand 
36. The Chairman  noted that the 2005 new and full subsid y notification of Thailand had been 
circulated in document G/SCM/N/123/THA.  Resp onses of Thailand to questions posed by Turkey 
and the United States had been circulated in G/SCM/Q2/THA/17 and 19, respectively.   
37. No comments were made. 
8. Turkey 
38. The Chairman  stated that the 2005 new and full subsidy notification of Turkey was contained 
in document G/SCM/N/123/TUR and Add.1.  Th e United States had submitted questions on this 
notification (G/SCM/Q2/TUR/17), but the Committee had not yet received answers to these questions.   
39. The delegate of Turkey
 stated that he would provide preliminary oral responses and that his 
delegation would provide written answers in a couple of weeks.  Regarding the first question of the 
United States, which concerned the exemption from cust oms duties and fund levies, he stated that this 
was one of the measures provided under the gene ral investment encouragement programme.  The 
general investment encouragement programme c overed all investment activities related to the 
production of goods and services, research and de velopments and improve ment of quality and 
standards.  In order to qualify for an exemption from customs duties and fund levies or for any other 
investment encouragement measure, foreign invest ors had to apply to receive an investment and 
encouragement certificate from the General Directorat e of Foreign Investments.  Domestic investors 
had to apply, qualify, and receive their certificate from the General Directorate of Investment and 
Implementation.  Both of these General Director ates were part of the Under-Secretariat of the 
Treasury.  To receive investment encouragement ce rtificates, investors were required to submit an 
application letter accompanied by a number of supporting documents, including specific project 
proposals.  Once an investment encouragement certifi cate had been granted in respect of a particular 
investment project, the investor was eligible to benefit from the investment encouragement measures 
listed on the certificates.  If the exemption from customs duties and fund levies was included among these measures listed on the certificate, imports of machinery and equipment to be used in the 
production process would be subject to exemption.   
                                                     
 
4 The United States has also submitted these questions in writing.  See G/SCM/Q2/QAT/3/Rev.1.  G/SCM/M/60 
Page 6  
 
  40. Regarding the second question of the United States , the delegate of Turkey stated that the 
deduction from taxable income was neither a separate nor a new programme.  On the contrary, it was 
one of the components of the general fiscal regime.  The main purpose of this measure was to overcome the difficulties faced by Turkish exporters a nd service providers abroad with respect to the 
documentation of expenditures incurred abroad, par ticularly in respect of the purchase of services 
such as transportation and repair services.   
41. The delegate of the United States
 thanked Turkey for these answers.   With respect to the first 
programme, he asked Turkey to provide more detaile d information as to the particular criteria that 
investors had to meet to be eligible for investment encouragement certificates.  
42. The delegate of Turkey  said that Turkey would address this issue in its written responses.  
43. The Committee took note  of the statements.  
44. The Chairman  stated that it would be necessary for the Committee to revert to the 2005 new 
and full subsidy notifications of China, Korea,  Qatar, and Turkey at its next meeting.  
C. PROCEDURES FOR REVIEW OF 2007  NEW AND FULL SUBSIDY NOTIFICATIONS  
45. The Chairman  drew the Committee's attention to document G/SCM/N/155 of 
1 February 2007 inviting Members to submit their new and full notifications due in 2007 by 
30 June 2007.  He recalle d that the Committee had adopted special  procedures for the review of the 
2005 new and full subsidy notifications.5  These procedures provided for special meetings to carry out 
a review of the subsidy notifications, to be held in conjunction with the regular meetings of the 
Committee.  Only notifications circulated in a ll three working languages not less than 17 weeks 
before a meeting may be reviewed at that meeting.   The procedures also provided that the review of 
subsidy notifications was to be based on written que stions and written answers to be provided before 
the meeting.  Specifically, questions had to be subm itted not less than 13 weeks before the date of the 
meeting, and written responses to written questions  had to be submitted not less than four weeks 
before the date of the meeting.  He proposed that the Committee decide that the procedures set forth in 
document G/SCM/117 for the review over 2005 notifica tions also apply to the review of the 2007 new 
and full subsidy notifications.   
46. It was so agreed .  
47. The meeting was adjourned.  
__________ 
 
                                                      
5 G/SCM/117.