. /.   WORLD TRADE  
ORGANIZATION  G/SCM/Q2/ARG/29 
22 April 2009 
 (09-1905) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Follow-Up Questions from the UNITED STATES Regarding the  
New and Full Notification of ARGENTINA1 
 
  The following communication, dated 16 April 2009,  is being circulated at the request of the 
Delegation of the United States.  
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  We would like to thank Argentina for its res ponse to the United States' question regarding its 
new and full subsidies notification.  The following are some additional questions based on Argentina's 
response.   
 
Special Regime for Turnkey Exports
 
 
 In response to the United States' questions, Ar gentina stated that its regime for turnkey 
exports cannot be classified as a "specific subsid y" under the WTO Subsidies Agreement.  However, 
publicly available information indicates that this pr ogramme would meet that definition.  Specifically, 
this programme provides a financial contribution in the form of import duty rebates, which confer a 
benefit upon the recipients.  Further, the above-men tioned subsidy appears to have several conditions, 
one of which is that the domestic component ( physical goods and services) may not be less than 
60 per cent of the contractual f.o.b. value.  Argentin a's reply also confirms that contracting must take 
the form of "turnkey export contracts."  To the exte nt that the above-mentione d subsidy is contingent 
upon export or upon the use of domestic over importe d goods, this programme would appear to be 
deemed specific under Article 2. 3 the Subsidies Agreement.   
  Please explain further why Argentina's regime for turnkey exports does not qualify as being 
subject to the notification requirements of Article 25 of the Subsidies Agreement.  In addition, please 
explain how this programme is c onsistent with Article 3 of the Subsidies Agreement, given that 
subsidies under this programme appear to be c ontingent upon export and the use of domestic over 
imported goods.    Import Regime for Used Production Lines
 
 
 In response to the United States' questions, Argen tina stated that this regime does not meet the 
definition of a specific subsidy set out in Articles 1 and 2 of the Subsidies Agreement.  However, 
publicly available information indicates that this programme meets these criteria.  Specifically, this 
programme provides a financial contribution in the form of duty exemptions, which confer a benefit 
upon the recipients.  Further, Argentina's reply confirms  that one of the requirements to be eligible for 
                                                      
1 G/SCM/N/155/ARG. G/SCM/Q2/ARG/29 
Page 2  
 
  subsidies under this programme is the use of domestic  inputs.  To the extent that the above-mentioned 
subsidies are contingent upon the use of domestic over imported goods, this programme would appear 
to be deemed specific under Article 2.3 of the Subsidies Agreement.     Please explain further why Argentina's Import Regime for Used Production Lines  does not 
qualify as being subject to the notification requirement s of Article 25 of the Subsidies Agreement.  In 
addition, please explain how this programme is consis tent with Article 3 of the Subsidies Agreement, 
given that this programme appears to be continge nt upon the use of domestic over imported goods.     
 Imports of Goods Forming Part of  Large-Scale Investment Projects 
 
 
 In response to the United States' questions, Ar gentina stated that this programme does not 
meet the definition of a specific subsidy set out in Articles 1 and 2 of the Subsidies Agreement or a prohibited subsidy under Article 3.  However, this  programme provides a financial contribution in the 
form of tariff reductions, which c onfer a benefit upon the recipients.  As such, this programme meets 
the definition of a subsidy set out in Article 1 of th e Subsidies Agreement.  Further, Argentina's reply 
confirms that one of the requirements set by the implementing authority under this programme is the 
use of domestic inputs.  And while it is only one of a number of requ irements set by the implementing 
authority, to the extent that the above-mentioned subsidies are conditioned upon the use of domestic 
over imported goods, this programme would appear to be deemed specific under Article 2.3 of the 
Subsidies Agreement.   
 
 Please explain further why this programme  does not qualify as being subject to the 
notification requirements of Article 25 of the Subs idies Agreement.  In addition, please explain how 
this programme is consistent with Article 3 of th e Subsidies Agreement, given that this programme 
appears to be contingent upon the u se of domestic over imported goods.     
 
Cash Refund for Local Auto Parts
 
  In response to the United States' questions, Argen tina stated that this programme is consistent 
with Article III of the GATT 1994 as well as Article  3 of the Subsidies Agreement.  However, 
Argentina's reply confirms this programme provides a benefit to the auto parts industry in the form of 
a "payment of a cash refund on the value of purchases of local auto parts, i.e., those with a non-local 
content of not more than 30 per cent."  As such, the subsidies under this programme appear to be 
contingent upon the use of domestic over imported goods.  If so, this programme would be deemed 
specific under Article 2.3 of the Subsidies Agreement.    
 Please explain further why this programme  does not qualify as being subject to the 
notification requirements pursuant to Article 25 of the Subsidies Agreement.  In addition, please 
explain how this programme is cons istent with Article 3 of the Subsidies Agreement, given that this 
programme appears to be contingent upon the use of domestic over imported goods.  
  
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