WORLD TRADE  
ORGANIZATION  G/SCM/N/177/SLV 
7 July 2008 
 
 (08-3255) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES 
 
Continuation of Extension under SCM Article 27.4 of the Transition Period for the  
Elimination of Export Subsidies Pursuant to the Procedures Contained in the  
General Council Decision in Document WT/L/691  
 
EL SALVADOR 
  
 The following communication, dated 30 June 2008,  is being circulated at the request of the 
delegation of El Salvador.  
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 I. FREE ZONE AND INWARD-PROCESSING WAREHOUSE PROGRAMME 
 Pursuant to paragraph 10.6 of the Decision on Implementation-Related Issues and Concerns 
set forth in document WT/MIN(01)/17, the request fo r an extension of the transition period under the 
procedures laid down in document G/SCM/39 and the WTO General Council Decision in 
document WT/L/691, and the SCM Committee D ecisions contained in documents G/SCM/65, 
G/SCM/65/Add.1, G/SCM/65/Add.2, G/SCM/65/ Add.3, G/SCM/65/Add.4 and G/SCM/65/Add.5 
concerning the free zone and inward-processing wa rehouse programme, El Salvador is pleased to 
submit this notification relating to the progra mme, in accordance with paragraph 2(a) of 
document WT/L/691.
1 
 El Salvador hereby wishes to confir m that, pursuant to paragraph 3(a) of 
document WT/L/691, the Free Zone and Inward-Processing Warehouse Programme satisfies the 
standstill requirements established therein.  
1. Title of the subsidy programme, if relevant, or brief description or identification of the 
subsidy 
 Incentives for firms operating in free trad e zones or in inward-processing warehouses. 
2. Period covered by the notification 
2007.   
                                                      
1 El Salvador's notifications pursuant to Article 27.4 of the Agreement on Subsidies and Countervailing 
Measures were circulated as documents G/SCM/N/38/SLV/Suppl.1, G/SCM/N/48/SLV/Suppl.1, 
G/SCM/N/60/SLV/Suppl.1 and G/SCM/N/71/SLV/Supp l.1.;  G/SCM/N/95/SLV and G/SCM/N/99/SLV;  
G/SCM/N/114/SLV and G/SCM/N/11 4/SLV/Corr.1;  G/SCM/N/123/ SLV and G/SCM/N/128/SLV;  
G/SCM/N/146/SLV;  and G/SCM/N/ 155/SLV and G/SCM/N/160 SLV.  G/SCM/N/177/SLV 
Page 2  
 
  3. Policy objective and/or purpose of the subsidy 
No changes have been made to the programme since the last updating notification.  
4. Background and authority for the subsidy (including identification of the legislation 
under which it is granted) 
A. B
ACKGROUND  
 For the reasons explained in previous notifica tions, El Salvador needs to improve the welfare 
of its people.  The benefits deriving from the pr ogramme, by creating opportunities to maintain and 
raise employment levels and, by extension, to improve the welfare of the Salvadoran people, are 
therefore essential for the country's economic and social development.  
 In this context, under the development progra mme in question, the number of people directly 
employed by enterprises benefiting under the E xport Processing Zones and Marketing Act amounted 
to 82,367 by the end of 2007.  As a result, numerous households now enjoy a secure source of 
income, employment opportunities, access to social secu rity, education, health, a pension plan, etc.  
Furthermore, these activities led to the creation of  164,734 indirect jobs, thus making a total of 
247,101 new jobs overall, acc ounting for 14 per cent of the Salvadoran labour force.  It should be 
noted that approximately 75 per cent of the jobs created through this programme are held by women, a large percentage of whom are heads of household.  This has given them the opportunity to improve 
the economic welfare of their familie s and afforded them greater acces s to health care, education and 
social security. 
 Exports from the in-bond assembly ( maquila ) industry amounted to US$1,801 million, 
constituting El Salvador's principal ex port product to third markets.  
 A total of 314 enterprises have benefited unde r the Law, of which 58 per cent are foreign 
companies and the rest domestic companies.  
B. L
EGISLATION  
 No changes have been made to the programme since the last updating notification.   
 
5. Form of the subsidy (i.e., gr ant, loan, tax concession, etc.) 
 No changes have been made to the programme since the last updating notification.  
 
6. To whom and how the subsidy is provide d (whether to producers, to exporters, or 
others;  through what mechanism;  whether a fixed or fluctuating amount per unit;  if the latter, 
how determined) 
 No changes have been made to the programme since the last updating notification.   
7.  Subsidy per unit, or in cases where this is  not possible, the total amount or the annual 
amount budgeted for that subsidy (indicating, if  possible, the average subsidy per unit in the 
previous year).  Where provision of per-unit s ubsidy information (for the year covered by the 
notification, for the previous year, or bo th) is not possible, a full explanation. 
 Given the nature and scope of the programme , no statistical data reflecting the amount of 
incentives per unit are available.  G/SCM/N/177/SLV 
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  8.  Duration of the subsidy and/or any other time-limits attached to it, including date of 
inception/commencement.   
 This will be in line with the international oblig ations undertaken by El Salvador, in particular 
under the SCM Agreement. 
9. Statistical data permitting an assessment of th e trade effects of the subsidy.  The specific 
nature and scope of such statistics is left to the judgement of the notifying Member.  To the 
extent possible, relevant and/or determinable, ho wever, it is desirable that such information 
include statistics on the production, consumpt ion, imports and exports of the subsidized 
product(s) or sector(s) .  
  G/SCM/N/177/SLV 
Page 4 COMPARATIVE TABLE 
 
(in US$ million)  
  
 2000 2001 2002 2003 2004 2005 2006 2007 
(a) World exports  7,782,600.0 7,510, 600.0 7,837,800.0 8,937,700.0 11,196,100 .0 12,640,600.0 14,716,900.0 17,019,465 
(b) Salvadoran exports  2,950.5 2,864.0 2,995.0 3,128.0 3,305.0 3,418.0 3,707.0 3,979.9 
(c) (b)/(a) 0.0379% 0.0381% 0.0382% 0.0350% 0.0295% 0.0270% 0.0251% 0.0234% 
(d) Salvadoran net maquila  exports  456.00 489.00 474.00 494 465 616 620 564 
(e) (d)/(a) 0.0059% 0.0065% 0.0060% 0.0055% 0.0042% 0.0049% 0.0042% 0.0033% 
 
 Source :  International Monetary Fund, Central Reserve Bank, Ministry of the Economy. 
 
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