WORLD TRADE  
ORGANIZATION  G/SCM/W/535 
12 April 2006 
 (06-1725) 
Committee on Subsidies  
and Countervailing Measures Original:   English 
 
 
  
PROCEDURES FOR EXTENSIONS UNDER ARTICLE 27.4 OF THE  
AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES 
 
 
Communication from Antigua and Barbuda;  Belize;  Barbados;  Dominica;  Dominican Republic; 
 
 El Salvador;  Fiji;  Grenada;  Jamaica;  Mauritius;  Papua New Guinea;  
 St. Kitts and Nevis;  St. Lucia;  St. Vincent and the Grenadines  
 
 
 The following communication, dated 10 April 2006, is circulated at the request of the 
Delegations of Antigua and Barbuda;  Belize;  Barbados;  Dominica;  Dominican Republic;  
El Salvador;  Fiji;  Grenada;  Jamaica;  Mauritius;   Papua New Guinea;  St. Kitts and Nevis;  St. 
Lucia;  and St. Vincent and the Grenadines. 
 
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I. INTRODUCTION  
1. The sponsors of this proposal are all small, vulnerable economies (SVEs) which suffer from 
the combined effect of diseconomies of scale ca used by the small size of their economies and 
administrations and by their physical isolation. The aggregate effect of the difficulties faced by small 
economies is that these economies are particularly vu lnerable and unable to fully and better integrate 
into the multilateral trading system and bene fit from the positive aspects of international 
liberalisation. It should also be recognised that  small, vulnerable economies account for a miniscule 
share of total world trade. 
II. REFLECTING THE INTERESTS OF SVES  IN THE AGREEMENT ON SUBSIDIES 
AND COUNTERVAILING MEASURES 
2. Paragraph 1 of Article 27 of the Agreem ent on Subsidies and Countervailing Measures 
(ASCM) recognises that “subsidies may play an im portant role in economic  development programmes 
of developing country members" and hence flex ibility for certain developing countries in the 
application of subsidies is recognised.  
3. In December 2002 the Committee on Subsidies and Countervailing Measures agreed that a 
number of developing countries, which met certain  criteria, would qualify for an extension to 
maintain their subsidy programmes under Article 27. 4 of the ASCM. This agreement was reached in 
line with paragraph 10.6 of the Doha Decision on Implementation which foresaw the development of 
an extension mechanism consisting of an annual review process and the submission of notifications in 
the interests of transparency. G/SCM/W/535 
Page 2  
 
  4. The programmes eligible for extension pursu ant to these procedures are export subsidy 
programmes in the form of (i) full or partial exemptions from import duties and internal taxes 
(ii) which were in existence not later than 1 September 2001, and (iii) which are provided by 
developing country members (iv) whose share of world merchandise export trade was not greater than 0.10%, (v) whose total GNI for the year 2000 as published by the World Bank was at or below 
US 20 billion, (vi) and who are otherwise eligible to  request an extension pursuant to Article 27.4, and 
(vii) in respect of which these procedures are followed. 
5. The small, vulnerable economies and their progr ammes which benefited from this extension 
are attached as Annex A.  The small, vulnerable economies that have benef ited from this extension 
have all maintained open and transparent di alogue with the Committee on Subsidies and 
Countervailing Measures.  The programmes have b een of great importance to the economic and 
financial needs of these economies and continue to  be important components of their development 
strategies. These programmes continue to enhance the economic viability of the enterprises which 
benefit from the schemes.  
III. THE SCOPE OF THE PROPOSAL   
6. The sponsors of this proposal believe that th e objective of “fuller integration of small, 
vulnerable economies into the multilateral trading system”
1 could be achieved in part by reaffirming 
the Article 27.4 procedures and extensions w ithin the context of the provisions of the 
14 November  2001 Doha Ministerial Decision on pro cedures for Extension under Article 27.4 of the 
ASCM by granting further extensions until the year 2018 . 
7. The sponsors of this proposal submit the following  modification to the procedures set forth in 
Document G/SCM/39 and call for the preparat ion of an addendum detailing 'Procedures for 
Extensions Under Article 27.4 for Certain De veloping Country Members' which would amend 
paragraph 1(e) of G/SCM/39 to state as follows:  
A. 'Through the calendar year  2018 , subject to annual reviews during that period to 
verify that the transparency and standstill requirements set forth in (3) and (4) are 
being fulfilled, Members of the Committee sh all agree to continue the extensions 
granted pursuant to 1(c)'.  
 
8. The extension procedures under Article 27.4 would hence be applicable to all of the members 
and the existing program mes referred to in Annex A2, in line with paragraph 2 of G/SCM/39. This 
extension process would be applicable from the end of 2007 through to the end of 2018  with identical 
procedures as indicated in G/SCM/39 paragraph 1(f) and 1(g). 
IV. TRANSPARENCY AND NOTIFICATION 
9. The proponents of this paper recognize the importance of and the need for transparency and 
predictability and hence would recommend that th e procedures in G/SCM/39 paragraphs 3 and 4 be 
retained. 
                                                      
1 WT/L/579, 2 August 2004  para 1(d) 
2 The proponents of this proposal recognise that the following countries have also benefited under the 
Article 27.4 'fast track' pr ocedures: Colombia, Costa Ri ca, Guatemala, Jordan, Panama, and Uruguay.  This 
proposal is without prejudice to any action taken by thes e aforementioned countries und er the Article 27.4 'fast 
track' procedures.  G/SCM/W/535 
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  ANNEX A 
  
 Antigua & Barbuda 
• Fiscal Incentives Act Cap 172 (December 1975) 
• Free Trade and Processing Zone Act No. 12 of 1994 
 
 Barbados  
• Fiscal Incentive Programme 
• Export Allowance 
• Research and Development Allowance 
• International Business Incentives 
• Societies With Restricted Liability 
 
Belize 
• Fiscal Incentives Act 
• Export Processing Zone Act 
• Commercial Free Zone Act 
  Dominica 
• Fiscal Incentives Programme 
 
 Dominican Republic 
• Law No. 8-90 to “Promote the Establishment of New Free Zones and Expand 
Existing Ones” 
  El Salvador 
• Export Processing Zones and Marketing Act, as amended 
 
 Fiji 
• Short-term Export Profit Deduction, to the extent that it does not include the Export 
Finance Facility (EFF) and the Export Credit Ratio (ECR) programs.  It is our understanding these are three distinct programs. 
• Export Processing Factories/Export Processing Zones Scheme 
• The Income Tax Act (Film Making and Audio Visual Incentive Amendment Decree 
2000) 
 
 Grenada 
• Fiscal Incentives Act No. 41 of 1974 
• Statutory Rules and Orders No. 37 of 1999 
• Qualified Enterprises Act No. 18 of 1978 
 
 Jamaica 
• Export Industry Encouragement Act 
• Jamaica Export Free Zone Act 
• Foreign Sales Corporation Act 
•
 Industrial Incentives (Factory Construction) Act 
 G/SCM/W/535 
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  Mauritius 
• Export Enterprise Scheme 
• Pioneer Status Enterprise Scheme 
• Export Promotion 
• Freeport Scheme 
 
 Papua New Guinea 
• Section 45 of the Income Tax 
  St. Kitts & Nevis 
• Fiscal Incentives Act No. 17 of 1974 
 
 St. Lucia 
• Fiscal Incentives Act, No 15 of 1974 
• Free Zone Act, No. 10 of 1999 
• Micro and Small Scale Business Enterprises Act, No. 19 of 1998 
 
 St. Vincent & Grenadines 
• Fiscal Incentives Act No. 5 of 1982, as amended 
 
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