RESTRICTED  WORLD TRADE  
ORGANIZATION  G/SCM/M/75 
3 February 2011 
 (11-0552) 
Committee on Subsidies 
and Countervailing Measures  
 
 
 
MINUTES OF THE REGULAR MEETING 
HELD ON 28 OCTOBER 2010 
 
Chairman:  Mr Robert Jui-song Fang (Chinese Taipei)  
 
 
A. NATIONAL LEGISLATION – REVIEW OF NOTIFICATIO NS OF NEW OR AMENDED 
LEGISLATION OR REGULATIONS NOT PREVIOUSLY REVIEWED BY THE COMMITTEE ..................2  
1. Croatia ........................................................................................................................ ...............2  
2. Guyana......................................................................................................................... ..............2  
B. NATIONAL LEGISLATION – PREVIOUSLY REVIEWED NOTIFICATIONS OF 
COUNTERVAILING DUTY LAWS /AND OR REGULATIONS ..............................................................2  
1. Bahrain ........................................................................................................................ ..............3  
C. SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS ...................................................3  
1. Australia ...................................................................................................................... ..............4  
2. Canada ......................................................................................................................... ..............4  
3. China.......................................................................................................................... ................4  
4. The European Union............................................................................................................. ....5 
5. India .......................................................................................................................... .................5  
6. Peru ........................................................................................................................... .................5  
7. United States.................................................................................................................. ............5  
D. NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS .......................8  
E. EXTENSION OF THE TRANSITION PERIOD UNDER ARTICLE 27.4  OF THE SCM AGREEMENT ..........8  
1. Review of compliance with transparency and standstill obligations....................................8  
2. Decisions under paragraph 1(d) of the Ge neral Council Decision of 27 July 2007 
to continue the extension of the tran sition period for calendar year 2011.........................21  
F. CONTINUATION OF DISCUSSIONS "ON WAYS TO IMPROVE THE TIMELINESS AND 
COMPLETENESS OF NOTIFICATIONS AND OTHER INFORMATION FLOWS ON TRADE 
MEASURES " UNDER THE SCM AGREEMENT ................................................................................22  
G. ELIMINATION OF EXPORT SUBSIDIES FOR TEX TILES AND APPAREL BY INDIA PURSUANT 
TO ARTICLE 27.5  OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES ........29  
H. DATE OF NEXT REGULAR MEETING ............................................................................................31  
I. OTHER BUSINESS .......................................................................................................................31  
J. ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS .........................................................31  G/SCM/M/75 
Page 2  
 
  1. The Committee on Subsidies and Countervailing Measures ("the Committee") held a regular 
meeting on 28 October 2010. 
2. The Chairman
 noted that the proposed agenda for this regular meeting had been circulated in 
WTO/AIR/3641, dated 15 October 2010 .  The delegate of Japan  raised the issue of Canada's certain 
measures affecting the renewable en ergy generation sector with a view  to reporting the current status 
for transparency purposes.  The delegate of the United States  indicated that they intended to discuss 
ongoing issues with respect to Members' notification obligations.  The Chairman  himself raised an 
issue under other business to explain to the Committee  the exchange of communications between the 
Chairman of the Working Group on Trade and Transfer of Technology and the Chairman. 
3. The Committee adopted  the agenda as amended. 
A. NATIONAL LEGISLATION – REVIEW OF NOTIFICATIONS OF NEW OR AMENDED LEGISLATION OR 
REGULATIONS NOT PREVIOUS LY REVIEWED BY THE COMMITTEE  
4. The Chairman  noted that under Item 2.A of the agenda of this meeting the Committee would 
review notifications of countervailing duty legi slation and/or regulations in accordance with 
procedures adopted by the Committe e at its special meeting in April 1996 (document G/SCM/W/293). 
5. These procedures provided inter alia  that at each regular meeting the Committee would 
consider notifications of new or amended legisla tions not previously reviewed by the Committee if 
such notifications had been circul ated to Members in all three wo rking languages at least six weeks 
prior to the scheduled date of the meeting. 
6. In accordance with this provision, the Co mmittee had before it at this meeting new 
notification of countervailing duty le gislation from Croatia and Guyana. 
1. Croatia 
7. Croatia's notification was contained in  document G/SCM/N/1/HRV/2/Corr.1 dated 
11 May 2010.  This corrigendum added one paragr aph to Article 32 of Croatia's regulation on 
anti-dumping and countervailing duty  investigations which the Committee had already reviewed.  
No delegation took the floor to comment or ask questions on this notification. 
2. Guyana 
8. Guyana's notification was contained in document G/SCM/N/1/GUY/1  dated 20 April 2010 
which stated that Guyana did not have countervailing duty legislation.  No delegation took the floor to 
comment or ask questions on this notification. 
B. NATIONAL LEGISLATION – PREVIOUSLY REVIEWED NOTIFICATIONS OF COUNTERVAILING 
DUTY LAWS /AND OR REGULATIONS  
9. The procedures contained in G/SCM/W/293 for the review of countervailing duty legislation 
provided that the Committee would revert to a previ ously reviewed legislative notification if written 
questions were submitted on such notification not la ter than six weeks in advance of the meeting. 
10. Pursuant to this provision, and in light of written questions posed, the Committee had before 
it at this meeting Bahrain's notificati on of countervailing duty legislation.  G/SCM/M/75 
 Page 3 
 
 
  1. Bahrain 
11. At the regular meeting held on 20 October 2009, the Committee had reviewed a notification 
received from Bahrain explaining that Bahrain had a Gulf Cooperation Council (GCC) Common Law 
on Anti-dumping, Countervailing Measures and Safe guards dated 22 December 2003 and a related 
regulation dated 11 October 2004, relevant to the Agreements on Anti-Dumping, Subsidies and 
Countervailing Measures and Safeguards, and that  the mentioned law and regulation would be 
notified to the Committee once their translation into  English is completed.  This notification was 
contained in document G/SCM/N/1/BHR/1.  Following that meeting, the United States had presented questions to Bahrain, circulated in document G/ SCM/Q1/BHR/3 dated 17 September 2010.  Bahrain's 
written replies to the US' questions had been ci rculated in document G/SCM/Q1/BHR/4 dated 
14 October 2010.  No delegation took the floor to comment or ask questions on this notification. 
C. 
SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS  
12. Document G/SCM/N/212 dated 1 July 2010 i nvited Members to submit, not later than 
31 August 2010, semi-annual reports  under Article 25.11 of the SCM Agreement of countervailing 
duty actions taken in the period 1 January - 30 June 2010. 
13. Reports on countervailing duty actions taken in the first half of 2010 had been received from 
Australia;  Canada;  China;  the European Un ion;  India;  Peru and the United States. 
14. As stated in paragraph 2 of document G/SC M/N/212/Add.1, 33 Members had informed the 
Committee that they had not taken any countervaili ng duty action in the first six months of 2010.  
Further, there was a very large number of Memb ers that had not submitted a semi-annual report for 
this period.  These Members were listed in para graphs 3 and 4 of document G/SCM/N/212/Add.1.  
The Chairman urged these Members to s ubmit such a report as soon as possible. 
15. The Committee, at its regular meeting on 20 October 2009, had adopted a one-time 
notification format for Members that did not have CVD legislation, which therefore had not conducted an investigation so far a nd which were unlikely to do so in the foreseeable future.  As of 
the date of this meeting, 16 Members had submitted one-time notifications.  The list of such Members 
was to be found in paragraph 5 of document G/SCM/N/212/Add.1. 
16. The Chairman stated that one-time notifications  served an important transparency purpose in 
the sense that they allowed to see a clearer picture of the level of compliance with the notification 
obligation pertaining to semi-annual reports of countervailing actions.  Further, they facilitated the 
bureaucratic aspect of notifications because once a one-time notification was made, the Member making that notification was no longer expected to submit semi-annual reports of countervailing 
actions until such time as circumstances changed.   He therefore urged Members that qualify for 
one-time notifications to submit such a notification in  due course.  He noted that Secretariat was ready 
to assist them if they were in doubt as to whet her they qualified to make such a notification. 
17. The delegate of Japan
 took the floor to make a comment with regard to document 
G/SCM/N/212/Add.1.  She stated that Japan had not taken any countervailing measures during this 
reporting period and therefore was one of the 33 Members which had notified no action taken.  
She expressed the view that even the non-existence of measures during the relevant reporting period 
had to be notified from a transparency point of view if the notifying Member had competent authorities.  The delegate encouraged Members th at took no action to notify that fact to the 
Committee in order to enhance tran sparency.  She also expressed agre ement with the Chair's comment 
on one-time notifications which served to clarify the status of those non-notifying Members. 
18. The Committee took note
 of the statement made. G/SCM/M/75 
Page 4  
 
  1. Australia 
19. The Chairman
 noted that the semi-annual report of Australia on countervailing duty actions 
taken in the first half of 2010 was contained in document G/SCM/N/212/AUS.  No delegation took 
the floor to comment or ask questions on this notification. 
2. Canada 
20. The semi-annual report of Canada on countervailin g duty actions taken in the first half of 
2010 was contained in document G/SCM/N/212/CAN.  No delegation took the floor to comment or ask questions on this notification. 
3. China 
21. The semi-annual report of China on countervailing du ty actions taken in the first half of 2010 
was contained in document G/SCM/N/212/CHN. 
22. The delegate of the United States
 took the floor to highlight a number of ongoing concerns 
that his delegation had with respect to China's conduc t in its CVD investigations against US exports to 
China.  The delegate stated that on previous occasions these concerns had been raised in bilateral and 
multilateral fora, including in this Committee.  Unfo rtunately, China's continued actions in these cases 
indicated that the US' concerns had not been addre ssed.  The delegate noted  that his delegation had 
previously discussed China's three CVD investiga tions of US exports, i.e. the investigation on 
electrical steel, chicken products and autos.  The c oncerns of the United States with respect to these 
investigations continued and the delegate summarized the highlights of the current status of the three 
cases.  With respect to the electri cal steel case, the delegate stated that his delegation had requested 
consultations with China on that case under the DSU ru les.  With respect to the chicken products case, 
he raised the issue of the evidentiary standard  China had applied when conducting a pass-through 
investigation.  In particular, the United States f ound it troubling that China had found that an upstream 
subsidy passed through multiple layers of distributi on, despite the fact that  the record evidence 
showed that the US prices paid by downstream us ers were consistent with world market prices.  
The Appellate Body had previously made it clear th at investigating authorities were not to presume 
that a subsidy to producer of an input product conferred a subsidy benefit upon unrelated producers 
who purchased the input in an arms length transacti on.  The delegate therefore invited China to 
explain what type of evidence it considered sufficien t to determine that alle ged subsidies provided to 
upstream suppliers had passed through to downstream  consuming industries.  With respect to the 
autos case, the delegate noted that the United States  had made a great effort to respond to China's 
questionnaires and had met all the deadlines but th at it appeared that the case was now dormant.  
He asked China what the next step would be in the autos case and when his delegation could expect 
that to happen. 
23. The delegate of China  emphasized that in its countervailing duty investigations China was 
fully respecting the WTO rules on countervailing measures.  China had initiated its first CVD 
investigation in 2009 and that currently it had three ongoing anti-subsidy cases against US products, 
as was reflected in its semi-final report submitted to the Committee.  The delegate also stated that 
China had been prudent in its use of counter vailing measures and that all of China's CVD 
investigations were consistent with WTO rules and China's domestic laws and regulations.  He stated 
that China had learnt a lot of experience fro m other Members when responding to the CVD 
investigations conducted by such other Members.  W ith respect to the investigation on electrical steel, 
the delegate stated that following the US request under the DSU, consultations  would be held between 
China and the United States in early November.  He  also stated that the United States had provided 
China with a list of questions and that his colle agues would provide detailed explanations and 
clarifications during the consultations.  With respect  to the pass-through issue in  the chickens case, the  G/SCM/M/75 
 Page 5 
 
 
  delegate of China stated that the US' comments ha d been received during this investigation and that 
China's points of view on this issue had been refl ected in the final determ ination and were also 
reflected in the disclosure to the US government.  Si nce this question was more technical and detailed, 
the delegate stated that his delegation wished to see the written list of questions from the United States 
and to exchange their points of view after the meet ing.  With respect to the autos case, the delegate 
pointed out that this case was still under the i nvestigation and that the Chinese investigating 
authorities had not made any decisions, whether preliminary or final.  The delegation of China remained open to comments from other interested  Members or parties and would continue the 
exchange of views on such matters. 
24. The Committee took note
 of the statements made. 
4. The European Union 
25. The Chairman  noted that the semi-annual report of the European Union on countervailing 
duty actions taken in the first half of 20 10 was contained in document G/SCM/N/212/EEC.  
No delegation took the floor to comment or ask questions on this notification. 
5. India 
26. The semi-annual report of India on countervailing du ty actions taken in the first half of 2010 
was contained in document G/SCM/N/212/IND.  No  delegation took the floor to comment or ask 
questions on this notification. 
6. Peru 
27. The semi-annual report of Peru on countervailing duty actions taken in the first half of 2010 
was contained in document G/SCM/N/212/PER.  No delegation took the floor to comment or ask 
questions on this notification. 
7. United States 
28. The semi-annual report of the United States on c ountervailing duty actions taken in the first 
half of 2010 was contained in document G/SCM/N/212/USA. 
29. The delegate of China  agreed with the comments of th e United States that both multilateral 
and bilateral fora were useful to highlight an d discuss the concerns of each Member concerning 
subsidies and countervailing measures.  She expr essed appreciation for the written replies from the 
United States to China's questions posed at the pr evious regular meeting concerning the threat of 
injury determination with respect to oil country tubular goods notified in the US' semi-annual report.  
China had two follow-up questions regarding the thr eat of injury issue in the same case and some 
other questions with respect to the CVD investiga tions.  Notwithstanding the fact that the record 
evidence only contained information and data th rough September 2009 and the USITC had not made 
its injury determination until May 2010, the USITC had explicitly refused to allow the submission of 
any additional evidence concerning possible changes in the US market conditions after the last quarter 
of 2009 and the first quarter of 2010.  In this lig ht, she invited the US delegation to explain why the 
ITC had refused requests to submit additional evid ence, given that its determination was based on 
threat of injury, rather than the current material  injury and, therefore, that the most up-to-date 
evidence should have been used.  In relation to th e second question, the delegate noted that USITC's 
determination had concluded that the domestic industry was vulnerable to future material injury 
notwithstanding that in 2008 alone, i.e. the last of the 4 years examined by the USITC, the domestic industry had earned $2 billion of operating profits which was $1.4 billion more than the industry's 
annual operating income over the previous three year s.  Moreover, this surplus profit from 2008 alone G/SCM/M/75 
Page 6  
 
  could have funded jobs and lost wages for more th an 12 years.  The Chinese exporters had argued that 
by earning so much surplus profits in 2008 the domestic industry could not possibly have been vulnerable to injury in 2009.  In this context, the delegate asked the US delegation to identify where in 
its decision the USITC had specifically addressed this  argument.  With respect to the third question 
concerning the CVD investigations, the delegate of China noted the USDOC 's requested that the 
government of China provide information about th e production and consumption of steel rounds and 
the ownership status of the 45 steel round suppliers of the respondents.  With respect to the information on production and co nsumption, the Chinese government had explained in its 
questionnaire response that the requested data was not available because steel round was not a 
commodity that was checked by the National Statis tics Bureau, and that China did not have those 
statistics at all.  For the ownership informati on, the Government of China had made tremendous 
efforts to collect and submit the requested informat ion, including the ownership structure of every 
supplier.  Information on the business registration li cence, the capital verification report, articles of 
association and annual reports of all 45 supplie rs was obtained from 14 different provincial 
governments and many more municipal and county gove rnments within a very limited time period.  
However, the USDOC had still applied adverse facts available regarding the Chinese market for steel 
rounds and the respondents' steel round suppliers sole ly for the reason that the Government of China 
had failed to provide some information, such as the production and consumption of steel rounds and 
ultimate owners of certain steel rounds suppliers.  In this light, the delegate asked whether the 
USDOC had taken due account of the difficulties experienced by the Government of China in 
providing the information which was not available or very difficult to obtain.  She also asked the 
US delegation to clarify why it had applied adver se facts available although the Government of China 
had already acted to the best of its ability to pr ovide the necessary informa tion and whether this was 
consistent with Articles 12.7 and 12.11 of the SCM Agreement and the relevant articles of the 
AD Agreement.  In the context of the last question,  the delegate of China noted that in a situation 
where the respondents purchased SOE-produced inpu ts from private-owned companies, the USDOC 
presumed that all or some portion of the bene fit was conferred on the responding OCTG producers 
through the trading companies without conducting any enquiry or analysis.  In this light, she asked the US delegation to clarify on what basis the USDOC  had presumed that the benefit had been passed 
through to the OCTG producers.  She asked whet her the USDOC had taken into consideration the 
precise role played by the trading companies in purchasing inputs from the SOEs and how it made 
sure that it had not excessively calculated the benefit conferred through the purchase. 
30. The delegate of the United States
 stated that with respect to the first couple of questions, his 
delegation had to send these back to the United Stat es and that would provide answers in writing to 
China.  With respect to the "facts available" issue, the delegate fu lly appreciated the difficulty China 
experienced in providing detailed information on gov ernment ownership of state enterprises.  At the 
same time, he pointed out that the US' requests were  reasonable, that China had failed to provide the 
requested information, and that the application of "facts available" was consistent with the 
US' obligation under the WTO rules.  He noted that the United States and China would be holding bilateral discussions on issues they had encountered  in their respective trade remedy practices.  
He encouraged China to raise thes e issues so that they could seek to explore ways to obtain the 
information by the USDOC, such as ownershi p information regarding Chinese government's 
ownership of state-owned enterprises.  With respect to  the issue of "facts available", the delegate also 
stated that it was a difficult question and that the United States had faced the same sort of problems 
with respect to China's investigations against the US' exports.  In this respect, he noted that there had 
been an instance or two where the information re quested by China was not available despite the 
United States' best effort.  Nonetheless China had app lied "facts available" in that case.  He reiterated 
as a general matter that the issue of "facts availa ble" was a difficult one and investigating authorities 
needed to establish certain facts to make their determ ination.  He stated that investigating authorities 
also had to take into account the ability of the respon dent to provide the information.  With respect to 
the pass-through issue, he noted that this issue was the subject of ongoing litigation before the WTO, 
therefore, he would only comment briefly on this question.  The United States believed that it fully  G/SCM/M/75 
 Page 7 
 
 
  accounted for the role played by the trading co mpanies in the transactions cited by China.  
As explained in the US' determinations, investig ations conducted by the USDOC fully accounted for 
the role played by the trading companies and ensu red that the amount of subsidization calculated was 
not excessive.  If China had any further questions on these matters, the US delegation requested China 
to submit such questions in writing. 
31. The delegate of China  stated with respect to the adve rse facts available issue that, as 
interpreted by Appellate Body in Japan – DRAMs , Mexico – AD Measures  on Rice  and EC – DRAMs , 
pursuant to the plain language of Article 12.7 of th e SCM Agreement, resorting to facts available was 
permissible only in limited instances, where the inte rested Member or the interested party refused 
access to necessary information within a reasonabl e period or otherwise failed to provide such 
information within a reasonable period, or significan tly impeded the investigation.  However, as the 
records in the OCTG cases showed, the Government of China had acted to its best ability to provide 
the information requested by the USDOC and ha d not refused access to necessary information nor 
significantly impeded the investigation.  Therefore,  she believed, the USDOC had acted inconsistently 
with the US' obligations under Articles 12.7 and 12.11 of the SCM Agreement by applying the facts 
available in this instance.  With respect to th e pass-through issue, i.e.  the inputs purchased from 
trading companies, the delegate of China agre ed that there was an ongoing dispute settlement 
proceeding on this issue.  She nevertheless wanted  to provide China's comments in this regard.  
She stated that since the trad ing companies involved might not have been acting purely as 
intermediaries on a transaction-by-transaction basis, or as a distributor or purchaser, the different role of the trading companies could influence the bene fit actually passed through to the SOE producers.  
However, her delegation had read the final determination of the USDOC and had found no reference 
in this determination to any evidence regarding th e precise role played by the trading companies from 
which the respondents purchased steel rounds, no r was there any indication that the USDOC had 
made inquiries in that regard.  The delegate e xpressed concern over the fact that the USDOC's 
methodology would possibly give rise to an excessive calculation of benefit in which case the 
USDOC would have acted inconsistently with th e US' obligations under Articles 1.1 and 14 of the 
SCM Agreement.  She expressed her delegation's willingness to discuss those issues with the USDOC 
in their bilateral meetings. 
32. The delegate of the United States
 stated with respect to the facts available issue that his 
delegation had noted China's points with respect to the Appellate Body reports.  However, he stated 
that in China's case against the United States there was an inciden ce where the United States had not 
refused access to the necessary information and the record would also show that the United States had 
acted to the best of its ability and had not impeded the investigation.  Yet, China had applied facts 
available.  The delegate stated that there remain ed the issue of what would happen in a situation 
where there was a certain gap in the facts that need ed to be fulfilled in some fashion and what one 
would do in those instances when one needed to have those facts to make a determination.  He pointed 
out that it was his delegation's position that when there was a need to fill the gaps in the factual 
record, the United States did so in a reasonable manner.  Secondly, with respect to the trading company issue, he stated that it was a general policy of the USDOC to look at the price charged by the 
trading company to the producer of the subject mercha ndise.  In that way, the nature of relationship 
between the trading company and the producer of the input product and the producer of the product 
under investigation would, at least implicitly, be take n into account.  Given this situation, it was the 
view of the US' delegation that the USDOC had acted reasonably and within the rules of the 
SCM Agreement. 
33. The delegate of China
 stated that the US delegation ha d not provided the right answers to 
China's concerns.  She invited the United States to give clarification on China's concerns.  
With respect to trading companies, she acknowledged the points made by the US delegation, but 
stated that her delegation would want to know th e reference in the USDOC's determination to see 
where was the basis for the decision on the benef it pass-through regarding the trading companies. G/SCM/M/75 
Page 8  
 
  34. The delegate of the United States
 stated that he would take China's questions and would 
respond to them in writing. 
35. The Committee took note  of the statement made. 
36. The Chairman  stated that this concluded the review  of semi-annual repor ts of countervailing 
duty actions taken in the period 1 January – 30 June 2010. 
D. NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS  
37. The Chairman stated that si nce the last regular meeting of the Committee on 27 April 2010, 
notifications under Article 25.11 of the SCM Agreem ent of preliminary and final countervailing duty 
actions had been received from Australia, Canada , China, the European Union, Peru and the 
United States.  These notifications were f ound in documents G/SCM/N/209-210, 213-216.  
There were no comments on any of these notices. 
E. EXTENSION OF THE TRANSITION PERIOD UNDER ARTICLE 27.4  OF THE SCM AGREEMENT  
38. As was indicated in the agenda for this meeti ng, under this item of the agenda the Committee 
would first review whether Members that had been granted an extension of the transition period for 
calendar year 2010 under the procedures contained in the General Council Decision of 27 July 2007 
(WT/L/691) had complied with the transparency and standstill requirements provided for in those 
procedures.  Thereafter, the Committee would adopt  decisions to extend the transition period for 
calendar year 2011 in accordance with the procedures contained in WT/L/691. 
39. Paragraph 1(f) of the General Council decision provided that Members benefiting from the 
continuation of an extension of the transition peri od for the elimination of export subsidies had to 
submit an action plan as an integral part of their 2010 annual updating notification.  The same 
paragraph also provided that the Committee "s hall undertake a mid-period assessment of each 
programme for which it has continued an extension under these procedures." 
40. The Committee had received annual updating notific ations from all of the 19 Members that 
benefited from extensions in acco rdance with the General Council decision.  The Secretariat paper 
circulated as JOB/SCM/1, dated 8 October 2010, and listed the programmes to which the Committee 
had agreed in 2009 to continue the extension of the transition period until 31 December 2010 and the 
updating notifications relating to those programmes that had been submitted by the Members in 
question.  The Secretariat paper also contained a model text for the decisions to be taken by the 
Committee regarding the extension of the transition period for calendar year 2011. 
1. Review of compliance with transparency and standstill obligations 
41. The procedures set forth in the General Counc il Decision in WT/L/691 provided for annual 
review by this Committee of compliance with ce rtain transparency and standstill requirements in 
paragraphs 2 and 3 of that Decision.  This a nnual review was based on a nnual updating notifications 
submitted by the Members in question.  At the Co mmittee's regular meeting held in October 2009, the 
Chairman had requested Members concerned to submit their notifications by 30 June 2010. 
42. The notifications received had been circulated in the G/SCM/N/211 document series.  
The Job document that had been circulated by the Secretariat on 8 October contained a table that 
listed these notifications.  Since the circulati on of this document, the Committee had received 
additional notifications from El Salvador and Belize.  G/SCM/M/75 
 Page 9 
 
 
  43. On 6 October 2010, the Chairman had held in formal consultations with Members which at 
that time benefited from extensions of the transiti on period for the elimination of export subsidies.  
In these consultations, they had discussed the procedur e that would be followed at this meeting with 
respect to the review of the annual notifications that the Committee had received from the beneficiary 
Members. 
44. On 14 October 2010 Member the Chairman had he ld with Members an informal Committee 
meeting, the purpose of which was to provide Member s with an opportunity to ask the questions that 
they might have with respect to the annual upda ting notifications submitted by the Members that 
benefited from extensions, as well as to allow the beneficiary Members to present explanations.  In the Chairman's view, this meeting had been fruitf ul in the sense that it had allowed Members to 
exchange views about the adequacy of some of the annual updating notificati ons received in 2010.  
Since this meeting, there had been important exch anges of questions and answers between some of 
the beneficiary Members and other Members. 
45. With regard to the updating notifications that had been received from the Members benefiting 
from these extensions, the Chairman proposed to re view such notifications on a Member by Member 
basis.  It was so agreed
. 
46. The Chairman  stated that Antigua and Barbuda had two programmes for which it at that time 
benefited from an extension:  1) Fiscal Incentiv es Act Cap 172 (December 1975) and 2) Free Trade 
and Processing Zone Act No. 12 of 1994.  Anti gua and Barbuda's 2010 up dating notification was 
found in document G/SCM/N/211/ATG. 
47. The delegate of Antigua and Barbuda  stated that pursuant to the General Council decision 
Antigua and Barbuda's notification had been presente d on 5 July 2010 with specific reference to the 
action plan.  The notification detailed that dom estic procedures necessary to eliminate export 
subsidies were to be implemented before the end of 2015, with respect to both Fiscal Incentives Act 
and the Free Trade and Processing Zone Act.  With regard to the first programme, the Fiscal Incentives Act, the delegate noted that although there were 35 companies which had received the 
benefits under the programme, there were no benefici aries.  The Ministry of Finance was preparing 
the Cabinet note for approval for the repeal of the Fiscal Incentives Act, which was expected to be 
completed by December 2012.  With regard to th e second programme, the Free Trade and Processing 
Zone Act, the delegate noted that there were no beneficiaries under that programme.  The authorities 
needed to engage in consultations to determine th e areas of the Act which might not be non-compliant 
with the WTO obligations.  Once this had been id entified, the Cabinet would approve those changes, 
and this would be followed by the legislative procedures.  Antigua and Barbuda estimated the 
completion of the process by December 2012.  An tigua and Barbuda expresse d its view that it had 
complied with the requirements of the General Counc il decision for the continuation of the extension 
of the transition period. 
48. The Committee took note
 of the statement made. 
49. The Chairman  noted that Barbados benefited from an extension with respect to five export 
subsidy programmes:  1) Fiscal Incentive Progr amme, 2) Export Allowance, 3) Research and 
Development Allowance, 4) International Business  Incentives, and 5) Societies With Restricted 
Liability.  Barbados' 2010 annual updating notif ication had been circulated in documents 
G/SCM/N/211/BRB and Corr.1 and Add.1.  Throu gh document G/SCM/Q2/BRB/4, Barbados had 
also replied to the questions posed by the Un ited States with respect to Barbados' 2009 annual 
updating notification.  The United States had presen ted written questions with respect to Barbados' 
2010 updating notification in document G/SCM/Q3/BRB/17.   Replies of Barbados to the questions 
posed by the United States had been ci rculated in document G/SCM/Q3/BRB/18. G/SCM/M/75 
Page 10  
 
  50. The delegate of Barbados
 made reference to paragraphs 1( d) and 1(f) of the General Council 
decision and confirmed that as mentioned in Barb ados' annual notification contained in document 
G/SCM/N/211/BRB submitted on 5 July 2010 and corresponding corrigendum and addendum, there 
had been no change in the standstill arrangements fo r the five programmes for which an extension had 
been granted, i.e. the Fiscal Incentive Progra mme, the Research and Development Allowance, the 
Export Allowance, the Internationa l Business Incentives, and the Socie ties With Restricted Liabilities.  
This notification document also included an action plan for eliminating export subsidies benefiting 
from an extension.  In addition to describing the elements of th e respective programmes, the action 
plan identified the actions to be taken, actions that had already been ta ken and concluded with a 
section on the process and sequencing of these acti ons relevant to all five programmes under 
reference.  In this respect, the delegate stated th at in all cases the offending provisions of the various 
acts under which these programmes were covered, had been identified.  The Barbados Government 
was actively engaged in a consultative process, invol ving the private sector, to develop a policy paper 
that would outline the steps necessary to amend the legi slative changes that would be required.  It was 
expected that the development of that policy paper would be completed shortly, although it was 
difficult place a definitive time limit on the process, as there could still be some changes required by 
the stakeholders when the final document were to be tabled for discussion.  Further details of the 
remaining steps towards the elimination of th ese programmes were elaborated in Barbados' 
notification.  These steps were intended to facilitate  a smooth transition both during and subsequent to 
the removal of benefits and the process would be  completed in time for Barbados to honour its 
commitment to make these progr ammes WTO-compatible by Decemb er 2015.  The delegate stated 
that her delegation had received a number of ques tions from the delegations of Australia and the 
United States.  Barbados' written replies had been circulated in document G/SCM/Q3/BRB/18.  The delegation of Barbados remained ready to fulf il the requirement of the provisions of the General 
Council decision WT/L/691. 
51. The Committee took note
 of the statement made. 
52. The Chairman  noted that Belize benefited from an  extension with respect to four 
programmes:  1) Fiscal Incentives Act, 2) Export Pr ocessing Zone Act, 3) Commercial Free Zone Act, 
and 4) Conditional Duty Exemptions Facility u nder the Treaty of Chaguaramas.  Belize's 2010 
updating notification had been circulated in documents G/SCM/N/211/BLZ and Addendum 1.  
Addendum 1 stated that Belize was not seeking an ex tension with respect to one of its programmes, 
i.e. "Conditional Duty Exemptions Facility under the Treaty of Chaguaramas".  The United States had 
presented written questions with respect to Be lize's 2010 updating notification in document 
G/SCM/Q3/BLZ/13.  Belize's replies to these questions  had been received the day before the meeting 
and circulated in document G/SCM/Q3/BLZ/14.  Adva nce copies of this document were available in 
the back of the meeting room for Members' informa tion.  No delegation took the floor to comment or 
ask questions on this notification. 
53. Costa Rica benefited from an extension with respect to two programmes, namely 1) the 
Free Zone Regime, and 2) the Inward Processing Regime.  Costa Rica's 2010 updating notification had been circulated in document G/SCM/N/211/CRI .  Through document G/SCM/Q2/CRI/11, Costa 
Rica had also replied to the questions posed by th e United States with respect to Costa Rica's 2009 
annual updating notification. 
54. The delegate of Costa Rica
 referred to paragraph 1(d) of  the General Council decision and 
Costa Rica's annual updating notification and stated th at Costa Rica had abided by the requirements of 
transparency and standstill as stipulated under th e General Council decision.  Moreover, and in 
accordance with paragraph 1(f) of the General Counc il decision, Costa Rica had submitted as part of 
its notification an action plan for each of the pr ogrammes for which it had requested an extension 
aimed at aligning these with the WTO standards and in particular with the SCM Agreement.  
The delegate reiterated that beneficiaries of the Duty Free Zone areas had been notified that no more  G/SCM/M/75 
 Page 11 
 
 
  export subsidies would be granted over and beyond 2015.  As part of  the action plan and the national 
development plan which had deve loped a strategy for investment promotion compatible with 
WTO rules an inter-institutional committee was set up to  evaluate the measures that had to be taken in 
this context.  This was done to allow beneficiaries to comply with what had been stipulated in the 
WTO as well as to promote a greater investment level, both from the local and the foreign side.  
Through this mechanism, Costa Rica had recently reformed its legislation so that it would be 
compatible with the GATT stipulations and the SCM Agreement through this Free Zone Regime.  
Through this mechanism, there was a study on the legi slative changes that were to be made in order to 
align these with the regime governing inward processing.   The delegate remained available to reply to 
any question that the Committee might wish to raise. 
55. The delegate of Colombia  stated at the outset that her delegation supported the decision to 
extend the transitional period under Article 27.4 of the SCM Agreement for the six beneficiary 
developing countries to which Colombia would presen t questions.  She expressed the need to have 
enough time to look over the action plans in order to  understand the dismantling of these subsidies in 
2015 and also the compliance with the transparency conditions set out in the General Council 
decision, particularly for countries with which Co lombia was strengthening its relations through free 
trade agreements.  With regard to Costa Rica, th e delegate noted the statement in Costa Rica's 
notification that Costa Rican authorities did not have enough information to determine the subsidies granted, particularly as part of the Inward Processi ng Scheme.  In that respect, the delegate asked 
Costa Rica as to how the level of benefit was id entified in order to determine the level of the status 
quo within the programme. 
56. The delegate of Costa Rica
 stated that paragraph 3(a) of the General Council decision 
established that the programmes for which an exte nsion was granted under the procedures would not 
be modified in such a way as to make them more  favourable than they were on 1 December 2001.  
The benefit granted under the Inward Processing Regime for which an extension was sought was 
similar to those set out in paragraphs a, g, h or e of Annex I of the SCM Agreement.  This benefit was 
established through law, and the rules were clearl y identified in the notification in G/SCM/N/211/CRI 
which contained the general law which modified the Law 13D Inward Processing Regime duties and 
their reforms.  The delegate stated that, as indicat ed in Costa Rica's notification, the benefit as 
established in the regulations and the law was not modified and was not rendered more favourable 
than it was on 1 December 2001.  The delegate stat ed that the standstill did not increase or decrease 
because of the use of this, but rather through the m odifications of the provisions of the regulations and 
the law.  This was why Costa Rica did not have information on the level of the subsidy offered. 
57. The Committee took note  of the statements made. 
58. The Chairman  recalled that Dominica had only programme with respect to which an 
extension had been granted, namely the Fiscal Incentives Programme.  Dominica's 2010 updating notification had been circulated in document G/SCM/N/211/DMA.  The United States had presented 
written questions with respect to Dominica's 2010 up dating notification which had been circulated in 
document G/SCM/Q3/DMA/11.  Dominica's replies to these questions had been circulated in 
document G/SCM/Q3/DMA/12 the day before the Committee meeting. 
59. The delegate of Dominica
 stated that pursuant to the transparency and standstill requirements 
of the General Council decision, Dominica had submitted its notification and action plan on 
15 July 2010.  The one programme that provided su bsidies to the beneficiaries, the Fiscal Incentives 
Act, was to be amended in order to  remove the export contingency elem ent.  The delegate stated that 
these procedures which involved consultations am ong the relevant ministries and departments, 
leading to a preparation of a policy paper for Cabine t's consideration and appr oval and the subsequent 
parliamentary debate, could take  between 3-12 months from the commencement of this process.  
The delegate also noted that as mentioned in Domini ca's action plan it was expected that this process G/SCM/M/75 
Page 12  
 
  would to be completed by 2013.  The delegate st ated that Dominica had received questions from the 
United States and Australia and that  it had replied to those questions. 
60. The Committee took note
 of the statements made. 
61. The Chairman  recalled that the Dominican Republic had only programme with respect to 
which an extension had been granted, namely th e Law No. 8-90 to "Promote the Establishment of 
New Free Zones and Expand Existing Ones".  Th e 2010 updating notification of the Dominican 
Republic had been circulated in document G/SCM/N/211/DOM.  The United States had presented written questions with respect to the Dominican Republic's 2010 updating notification which had been 
circulated in document G/SCM/Q3/DOM/15.  Repli es of the Dominican Republic to these questions 
had been circulated in document G/SCM/Q3/DOM/16. 
62. The delegate of the Dominican Republic
 stated that in order to comply with the standstill and 
transparency requirements of the General Council d ecision, the Dominican Republic had submitted its 
notification on 17 June 2010.  As part of its notif ication, the Dominican Republic had also submitted 
an action plan to phase out export subsidies.  The delegate stated that the Dominican Republic had 
received questions from the delegations of the Unite d States and Australia which had been answered 
on 21 October 2010.  The action plan firstly described the programme which included only the 
Law No. 8-90 promoting new free zones and the growth  of the existing ones.  Through this law, a tax 
deduction programme was created for goods and serv ices corporations which were involved in the 
production of goods installed within free zones.  The second part of the action plan described the 
institutional procedures and internal procedur es which were necessary for subsidy phase out.  
The National Free Zone Council was the official instituti on in charge of this.  The delegate stated that 
through decree 468-06 of October 2006, the executive branch had created a committee made up of the 
National Free Zone Council and the Dominican Association of Free Zones and the Competitive 
National Council to ensure that this free zone la w would be in accordance with international laws, 
including in particular, the SCM Agreement.  This  Commission with experts and inputs had prepared 
this legislation which would totally dismantle expor t subsidies.  The new bill had been introduced in 
the Senate on 6 July 2010.  It required approval by both houses, the Representatives and the Senate, as 
well as the signature from the execu tive branch.  It was estimated that this would take place in the 
ordinary legislative session which was to be finalized  in December 2010 so that legislation could enter 
into force by 2011.  Furthermore, in order to info rm the beneficiaries of the changes, the Dominican 
Republic had included resolutions  and permits for operation under Law 890 according to which the 
Dominican Republic, beginning in 2015, reserved its  right to revise or withdraw some of the 
incentives contained in Law 890 in accordance with  the decision taken by the SCM Committee. 
63. The delegate of Colombia  asked  why the annual updating notification of the Dominican 
Republic covered the period until 31 December 2011 as it should only refer to achieved facts and not 
to projections. 
64. The delegate of the Dominican Republic  stated that that  was a mistake in the notification.  
They put the date of 31 December 2011 because this was the end of the period for which an extension 
was sought and that in reality the notifi cation covered the period of up until 2009. 
65. The Committee took note  of the statements made. 
66. The Chairman  noted that El Salvador benefited from an extension with respect to the Export 
Processing Zones and Marketing Act, as amended.  El Salvador's 2010 updating notification had been 
circulated in documents G/SCM/N/211/SLV and Addendum 1. 
67. The delegate of El Salvador  stated  that his delegation had notif ied on 30 July 2010 the annual 
update of the programme for which El Salvador re quested the continuation of the extension for the  G/SCM/M/75 
 Page 13 
 
 
  transition period for the Export Processing Zones a nd Marketing Act also called as the Free Zone and 
Inward Processing Warehouse Programme.  In this no tification, El Salvador had included the action 
plan for complying with the General Council decision.   He referred to the economic and trade data 
which justified the transitional period and the cont ext in which El Salvador's action plan had been 
submitted.  Given the mid-term assessment be ing conducted as provided for under the General 
Council decision, this programme was important to El Salvador as one of the tools for stimulating the 
establishment of, increase in, investments in El Salvador and to improve the well-being of the El Salvadorian population.  By the end of 2009,  the programme was used by 256 companies, 
65,000 employees had benefited directly which allo wed them to access social security, education, 
healthcare and pensions.  The programme also al lowed for the creation of 130 jobs indirectly.  
The programme, thus, benefited and created 8.4 per cent of the labour force in El Salvador, 
80 per cent of the businesses that benefited fro m the programme were manufacturing companies 
which contributed $1.487 billion, i.e. 39 per cent of the value of El Salvador's exports.  It also created 
2.5 per cent of El Salvador's GDP in 2008.  Furthermore, the businesses operating under this 
programme had strengthened the production chains  which promoted better added value through, 
e.g., a complete package which allowed for technologi cal advances in this sector.  Furthermore, given 
the economic and financial crisis  which negatively affected the national economy, exports and 
remittances from El Salvadorians abroad suffered an annual decrease of 90 per cent and 9 per cent, 
respectively.  Credits for private investment s also dropped significantly and exacerbated the 
contraction in such sectors as construction, tourism,  manufacturing which further increased the effects 
of the economic recession.  The GDP dropped 3.5 per cent by the end of 2009.  The delegate stated 
that the crisis would not be over in the near futu re so the recovery of El Salvadorian economy was 
responding to the stimulation of markets, with whic h it had a strong relationship, predominantly with 
the US market.  He stated that the expected GDP  growth for 2010 was 1 per cent of GDP, below the 
average growth of El Salvador's main trading comp etitors.  The delegate also referred to the latest 
natural phenomena that affected the entire nationa l territory and which left damages amounting to 
$400 million which represented 9 per ce nt of El Salvador's total expor ts, or almost 2 per cent of its 
GDP for 2009.  These phenomena had also created  significant damage in public and private 
infrastructures which were at the service of productive  sectors.  The delegate noted that El Salvador's 
action plan contained the following sections:  1) proposal from El Salvador to comply with the procedures for the continuation of the extension of th e transition period;  2) description of the actions 
with respect to the technical efforts pertaini ng to the recommendations for compliance with the 
General Council decision, including the activitie s under the auspices of the inter-institutional 
committee for the analysis of th e incentives scheme for free zones and inward processing warehouses, 
and the study of the law in question.  In this secti on, there was also a description and details about the 
strategic general lines, developed by the relevant au thorities of trade policy of El Salvador.  There was 
also a section containing information on legisla tive and administrative changes and other necessary 
procedures.  This section detailed the process forese en under El Salvadorian law for the elimination 
and modification of the legal instruments regard ing the free zones and inward processing warehouse 
programme for its due consideration by the le gislative assembly.  The third section described 
measures which had been adopted or were being ad opted.  This section was for the follow up that had 
been consistently and systematically given to th e actions and processes meant to comply with the 
General Council decision before the end of 2015.  In  this sense, it also described the creation of the 
inter-institutional committee as well as its participan ts and the competencies of this committee.  
Furthermore, the inter-institutional committee revi ewed the Export Processing Zones and Marketing 
Act, which had been strictly used;  which observe d the rights and obligations under the current legal 
framework of El Salvador;  and which considered th e best practices in other countries and description 
of compliance situations with international trade law which informed the state of play of the work of 
the inter-institutional committee.  Finally, the actio n plan contained the description of the way in 
which each beneficiary had been notified.  Th e last section included information on how the 
notification for each beneficiary was carried out.  In conformity with section (e) of paragraph 1 of the 
General Council decision, actions ha d been taken by El Salvador to strengthen this notification 
through a permanent notification campaign adopted  since the General Council decision.  In the G/SCM/M/75 
Page 14  
 
  framework of the preparatory meetings for this review at this meeting some delegations had expressed 
their interest in El Salvador's notification.  Thus  the delegate of El Salvador wanted to expand on 
some of the points raised by some Members on  El Salvador's programme.  He mentioned the 
recommendations that had come out of the inter-ins titutional committee for the analysis of the free 
zones and inward processing warehouses.  In its actio n plan, El Salvador identified actions necessary, 
among others, for the compliance with the obligati ons under the General Council decision and also to 
notify about the measures recommended to dismantl e the programme by the deadline set out in the 
General Council decision.  He also wanted to give  more information about the legislative measures 
adopted or which were underway by virtue of th ese recommendations.  The delegate stated that the 
inter-institutional committee was working in order to  issue by 2011 a first draft of recommendations 
for the legislative measures nec essary in order to comply with the General Council decision to 
eliminate or modify the law under discussion.  Th ese recommendations would take into account the 
guidelines drawn up by the relevant trade policy aut horities of El Salvador, which were focussing on a 
series of key processes which would fully and comp lementarily facilitate the implementation of the 
legislative measures necessary to guarantee comp liance with El Salvador's international 
commitments.  This included strengthening public investment generally for the productive process;  
innovating technology and transfer of technology;  developing a marketing production strategy and 
attracting investment in order to create quality j obs;  strengthening the inclusion of the productive 
sector and taking advantage of market access.  The delegate also noted that these recommendations would provide the executive branch with the basi s upon which to begin the process of developing the 
bills which would be submitted to the Congress of El Sa lvador for their analysis and approval in order 
to ensure compliance with the commitments undert aken pursuant to the General Council decision.  
On the basis of the inter-institutional committee's recommendations, it was foreseen that the Ministry 
of Economy in 2012 would create a draft legal text necessary in order to comply with the General 
Council decision and this would be circulated to th e rest of the relevant agencies and governmental 
bodies in 2013-2014 if not before.  The delegate expressed hope to be able to submit the President's 
initiative through the Ministry of Economy of El Sa lvador for the due consid eration and approval of 
the bill of the legislative branch of El Salva dor necessary to comply with the General Council 
decision. 
68. The delegate of Colombia
 presented two questions.  First, with respect to the Free Zone and 
Inward Processing Warehouse Programme, particularly  looking at its coverage and considering that 
the Government of El Salvador had no statistical  figures to establish the exact amount of incentives 
per unit, it remained unclear how El Salvador could st ate that the level of existing benefits maintained 
the standstill which was established in 2009.  Second,  the delegate also asked to clarify how the 
delegation of El Salvador envisaged the dismantling of  the subsidies so that its application would not 
go over and beyond 2015. 
69. With respect to the status quo  and standstill, the delegate of El Salvador  stated that this 
Free Zone and Inward Processing Warehouse Programme did comply with the requirements set out in 
the General Council decision.  The standstill therefor e had been maintained since the granting of the 
extension up until the day of the meeting.  With respect to the second question, i.e., as regards the 
measures for eliminating subsidies, the delegate point ed out that in accordance with section 3 of its 
action plan, El Salvador had set up an inter-i nstitutional committee as one of its recommended 
activities and would come forward with recommendati ons on the draft bills and legal requirements in 
order to be in compliance with the General Council decision.  Such recommendations would also take 
into account some of the guidelines that had been give n by the authorities in charge of trade policy.  
The delegate stated that on the basis of reco mmendation made by the inter-institutional committee, 
El Salvador envisaged that in 2012 the draft lega l bill would be necessary in order to abide by the 
General Council decision and that this would be  discussed with other agencies and governmental 
bodies competent in this field.  Lastly, the delegate  stated that it was planned that during 2013-2014, 
and if possible before that, El Salvador would presen t the President's initiative through the Ministry of 
Economy of El Salvador for consideration and a pproval by legislative body.  This draft with  G/SCM/M/75 
 Page 15 
 
 
  necessary legislative measures for compliance with the General Council decision would be submitted, 
covering the programme. 
70. The Committee took note  of the statements made. 
71. The Chairman  noted that Fiji benefited from an extens ion with respect to three programmes:  
1) the Short-Term Export Profit Deduction, 2) the Export Processing Factories/Export Processing 
Zones Scheme, and 3) the Income Tax Act (Fil m Making and Audio Visual Incentive Amendment 
Decree 2000).  Fiji's 2010 updating notification had been circulated in document G/SCM/N/211/FJI 
and Corr.1.  The United States had presented writte n questions with respect to Fiji's 2010 updating 
notification in document G/SCM/Q3/FJI/19.  Fiji's re plies to these questions had been circulated in 
document G/SCM/Q3/FJI/20.  As mentioned in thes e replies, Fiji was not seeking an extension with 
respect to the "the Income Tax Act (Film Making and Audio Visual Incentive Amendment 
Decree 2000)".  No delegation took the floor to co mment or ask questions on this notification. 
72. The Chairman noted that Grenada benefite d from an extension with respect to:  
1) Fiscal Incentive Act No. 41 of 1974, 2) St atutory Rules and Orders No. 37 of 1999, and 
3) Qualified Enterprises Act No. 18 of 1978.  Grenada's 2010 updating notification had been 
circulated in document G/SCM/N/211/GRD.  Th rough document G/SCM/Q2/GRD/4, Grenada had 
also replied to the questions posed by the Un ited States with respect to Grenada's 2009 annual 
updating notification.  The United States had presen ted written questions with respect to Grenada's 
2010 updating notification in document G/SCM/Q3/GRD /12.  Grenada's replies to these questions 
had been circulated in document G/SCM/Q3/GRD/13. 
73. The delegate Grenada  stated that Grenada had presented its notification on 30 June 2010.  
The action plan therein detailed the domestic pr ocedures that Grenada would undertake or had 
undertaken in some instances to eliminate export subsidies before the end of 2015 for the Fiscal 
Incentives Act and the Qualified Enterprises Act.  There were no beneficiaries under those two 
programmes.  Furthermore, the delegate stated that  a new legislation, the Investment Promotion Act 
of 2009, had been passed through the Parliame nt and was waiting for the signature of the 
Governor-General for that to take effect.  This new legislation would repeal both the Fiscal Incentives 
Act and the Qualified Enterprises Act.  With regard  to the Statutory Rules and Orders of 1999 which 
were amended in 2009, the delegate stated that dut y free concessions were not  contingent on exports 
in this case.  She also stated that Grenada ha d replied to the question from the United States. 
74. The Committee took note  of the statements made. 
75. The Chairman  noted that Guatemala benefited from an extension with respect to three 
programmes, namely:  1) Exemption from Company Tax, Customs Duties and Other Import Taxes for 
Companies under Special Customs Regimes, 2) Ex emption from Company Tax, Customs Duties and 
Other Import Taxes for the Production Process Relating to Activities of Managers and Users of Free 
Zones, and 3) Exemption from Company Tax, Customs Duties and Other Import Taxes for the 
Production Process of Commercial and Industrial En terprises Operating in the Industrial and Free 
Trade Zone.  Guatemala's 2010 updating notifi cation had been circulated in document 
G/SCM/N/211/GTM. 
76. The delegate of Guatemala  stated that Guatemala had presented its annual updating 
notification on 30 June 2010.  As part of its notif ication, Guatemala had submitted its action plan in 
accordance with paragraph 1(f) of the General C ouncil decision.  The notification showed that 
Guatemala had abided by its commitment for transparency for the period 2010-2011.  
Moreover, Guatemala had not increased the favourability of the notified programmes, thus, complying 
with its obligation to maintain the standstill for su ch programmes.  Guatemala had also observed all 
the requirements for the continuation of the transition of the extension period as provided for in G/SCM/M/75 
Page 16  
 
  Articles 27.2(b) and 27.4 of the SCM Agreement.  Mo reover, the delegate pointed out that Guatemala 
had exchanged information on its notification and act ion plan with several Members who had raised 
questions informally.  These discussions had take n place in a constructive spirit and had made it 
possible to clarify pending doubts that were pending concerning Guatemala's actions so as to eliminate its export subsidies.  Guatemala was ready to reply to any request by Members for 
additional information.  He referred to the pr ogress made by Guatemala in proceeding towards the 
elimination of export subsidies.  The delegate also  presented Guatemala's action plan which consisted 
of our parts.  The first part provided a detailed description of subsidies contained in the notified 
programmes.  This description identified moreover t hose export subsidies that would be eliminated 
before 31 December 2015.  The preparation of the firs t section of the action plan proved to be a useful 
exercise for Guatemala as it made it possible to have an in-depth assessment and discussion on the 
programmes, as well as to limit those subsidies that w ould be modified or eliminated in the future.  
He stated that Guatemala found itself able to l ook for and to discuss solutions which would be 
required to guarantee full compliance with its obliga tions as regards export subsidies.  The delegate 
also stated that since Guatemala's three programmes under discussion had been approved by 
Guatemala's Congress their amendment or eliminati on also would require legislative approval.  
The second part of the action plan therefore contained a description of the domestic procedures that would be needed to approve new legislation.  The th ird part of the action plan described those actions 
that had been undertaken by Guatemala towards el iminating export subsidies and/or complying with 
Guatemala's obligations in accordance with the Genera l Council decision.  The delegate reiterated that 
Guatemala had complied with all of its obligations  and had taken actions to wards eliminating export 
subsidies.  In particular, Guatemala had notified th e beneficiaries of the special regimes that no export 
subsidies would be provided beyond 31 December 2 015.  A regional and national seminar had been 
organized with officials of the WTO Secretariat on the content of the General Council decision and 
the obligations that Guatemala had in the context of  the SCM Agreement.  Guatemala had also created 
an institutional group aimed at following up the seminar given by the WTO, and furthermore, 
promoted the process towards the dismantling of its  programmes.  It had also set up a technical 
working group to analyse these programmes and to compile information and further elaborate this 
action plan.  The fourth part of the action plan provided a series of activities, which started on 1 July 2010 and would last until 31 December 2 014, including an analysis of the possibilities 
available to Guatemala to align its programmes with the SCM Agreement, i.e. elimination or 
amendment of present subsidies. 
77. The delegate of Colombia
 acknowledged the actions undertaken  by Guatemala to dismantle 
subsidies by 2015, the notification made to the bene ficiaries and the setting up of a technical group 
that would facilitate to meet the deadline for the elimination of export subsidies.  She noted that 
Guatemala had programmes relating to exemption fro m income tax, customs duties and import tax but 
that in its notification, Guatemala had mentioned that no statistical information was available which 
would quantify the amount of benefits ensuing from these programmes.  The delegate therefore asked 
for further information as to the mechanism that Guatemala had at hand to ensure that it had not 
increased favourability in the notified programmes. 
78. The delegate of Guatemala  stated that the subsidies that Guatemala granted were of the kind 
covered under Article 1.1(a)(ii) of the SCM Agreem ent.  In accordance with paragraph 1(d) of the 
General Council decision, the continuation of th e extension was subject to compliance with the 
requirements of transparency and standstill.  Like wise, in accordance with paragraph 2(b) of the 
General Council decision, during the reviews by the SCM Committee, which were referred to in 
paragraph 1(f), other Members could ask the notif ying Members to provide details and additional 
clarification so as to maintain and ensure transp arency as regards "the scope, the coverage and the 
level and intensity of benefits or favourability fo r the programmes in question".  Footnote 6 of the 
General Council decision provided that "the scope, th e coverage and the intensity of benefits of the 
programmes in question would be de termined on the basis of legal instruments that the programmes 
are based on".  The delegate pointed out that Gu atemala did not have statistical information for  G/SCM/M/75 
 Page 17 
 
 
  quantifying the amount of the benefit under each of the notified programmes.  Guatemala had 
indicated this fact consistently in all of its no tifications from the very outset.  Therefore, the 
delegation of Guatemala saw no real link that Co lombia seemed to make between the amount of 
public income or revenue and the concept of favourability as established in the General Council 
decision.  For Guatemala, the variability of the am ounts of public revenues coul d not be considered as 
fitting into the scope, the coverage or the intensity of the benefits of the programmes in question.  
Moreover, such amounts were not determined on the basis of legal instruments embodying the 
programmes.  The delegate acknowledged that ther e would be an increase in favourability if, for 
example, the programmes were to add on other be nefits that were not covered in the notified 
legislation which would modify the existing benefits to make it more favourable, or if such benefits 
were granted to beneficiaries that were not origina lly taken into account in the notified legislation.  
However, the fact that there was more or less public  revenue or income because of the lesser or higher 
quantity of exports under these programmes did not m ean that the favourability of the programme had 
increased or decreased.  The delegate of Guatemala assured Colombia that the notified legislation had 
not been amended to be more favourable to be neficiaries.  Guatemala had not increased the 
favourability of its programmes and therefore had complied with its obliga tions under the General 
Council decision. 
79. The Committee took note  of the statements made. 
80. The Chairman  noted that Jamaica benef ited from an extension with respect to:  1) the Export 
Industry Encouragement Act, 2) Jamaica Export Free Zone Act, 3) Foreign Sales Corporation Act, 
and 4) Industrial Incentives (Factory Construction)  Act.  Jamaica's 2010 updating notification had 
been circulated in document G/SCM/N/211/JAM.  Through document G/SCM/Q2/JAM/8, Jamaica 
had also replied to the questions posed by the United States with respect to Jamaica's 2009 annual 
updating notification. 
81. The delegate of Jamaica  stated that in acco rdance with the General Council decision, Jamaica 
had submitted on 28 July 2010 its annu al notification for 2009 so as to  allow the Committee to review 
to ensure that Jamaica had met its transparency and standstill obligations.  An additional element of 
this year's notification was the inclusion of an ac tion plan submitted pursuant to paragraph 1(f) of the 
General Council decision.  The action plan containe d information on the steps already taken and those 
that were to be taken by the Jamaican author ities to eliminate export subsidy programmes by 
31 December 2015.  These steps included consulta tions among relevant stakeholders, beneficiary 
notification advisories to Cabinet and informa tion on how Jamaica intended to eliminate the 
programmes, i.e. by repealing the four existing pieces of legislation and replacing them with new 
WTO-consistent legislation.  The action plan also  contained information on the legislative process.  
The delegate stated that Jamaica had received a que stion from Australia on the action plan and that its 
response had been provided in writing.  The delegate stated that Jamaica would continue to take all 
the relevant steps to meet the commitments it ha d undertaken under the General Council decision.  
Internally, the process would be determined by both Jamaica's WTO obligations and other domestic 
reform processes.  Consultations would be a critical  component of this internal exercise which would 
be conducted diligently to ensure a smooth transitio n to new WTO-compliant regime.  The delegate 
expressed the view that Jamaica had complied w ith its standstill and transparency obligations. 
82. The Committee took note  of the statements made. 
83. The Chairman  noted that Jordan benefited from an ex tension with respect to the Partial or 
Total Exemption from Income Tax of Profits Ge nerated from Exports under Law No. 57 of 1985, as 
amended.  Jordan's 2010 updating notification had been circulated in document G/SCM/N/211/JOR. G/SCM/M/75 
Page 18  
 
  84. The delegate of Jordan
 stated that its delegation had submitted its annual notification on 
27 July 2010.  The notification included an ac tion plan in accordance with paragraph (f) of the 
General Council decision and contained the domes tic procedures necessary to eliminate the export 
subsidy programmes.  The delegate stated th at the responsible government entities had held 
consultations with the Chambers of Commerce a nd Chambers of Industry and other related bodies on 
the elimination of the export subsidy program by the end of 2015.  Moreover, various industry and 
trade associations had informed all the benefici aries that the programme would be terminated by 
31 December 2015, which constituted the maximum period for Jordan's commitment.  In addition, the 
Jordanian authorities had also explained the changes to  Jordan's legislation, i.e., the introduction to 
such subsidy programme in Jordan's temporary tax la w No. 28 for the year 2009.  With respect to the 
future actions, the delegate stated that Jordan was working on a piece of legislation in the form of a 
bylaw, which would be submitted to the Council of Ministers and would set clearly the end date of 
this programme. 
85. The Committee took note  of the statement made. 
86. The Chairman  noted that Mauritius benefited from an extension with respect to two 
programmes, namely:  1) Freeport Scheme – Customs Duty and Excise Duty Concession on 
Machinery and Equipment Imported into Freepor t, and 2) Freeport Scheme – Corporate Tax 
Exemption.  As indicated in Mauritius' annua l updating notification circulated in document 
G/SCM/N/211/MUS, however, Mauritius only sought an  extension for next year with respect to 
Freeport Scheme – Corporate Tax Exemption.  No extension was requested by Mauritius with respect 
to the Freeport Scheme – Customs Duty and Ex cise Duty Concession on Machinery and Equipment 
Imported into Freeport.  Through document G/SC M/Q2/MUS/9, Mauritius had also replied to the 
questions posed by the United States with respect to Mauritius' 2009 annual updating notification.  
The United States had presented written questio ns with respect to Mauritius' 2010 updating 
notification in documents G/SCM/Q3/MUS/16 and Co rr.1.  Mauritius's replies to these questions had 
been circulated in document G/SCM/Q3/MUS/ 17 circulated the day before the meeting. 
87. The delegate of Mauritius  stated that Mauritius  had a very residual programme of subsidies.  
Notwithstanding that, Mauritius had a very structured  and precise action plan to eliminate the Freeport 
Scheme.  The delegate stated that in spite of a ll constraints, such as the present economic downturn, 
and the Euro zone crisis, Mauritius was doing its best  to stick to its action plan.  The delegate also 
noted that Mauritius had presented written replies to  the questions submitted by the United States and 
informal replies to Australia's informal questions. 
88. The Committee took note  of the statements made. 
89. The Chairman  noted that Panama benefited from an extension with respect to two 
programmes:  1) the Official Industry Register, and 2) the Export Processing Zones.  Panama's 2010 
updating notification has been circulated in doc uments G/SCM/N/211/PAN and Corr.1.  Through 
document G/SCM/Q2/PAN/12, Panama had also replie d to the questions posed by the United States 
with respect to Panama's 2009 annual updating notification. 
90. The delegate of Panama  stated that on 7 June 2010 Pana ma had notified its action plan to 
eliminate export subsidies contained in Law 25 of  30 November 1992.  Panama had made progress in 
implementing its action plan, in particular, with regard to the necessary domestic measures to bring 
export subsidies in line with provisions 1-3 of the action plan, as indicated in document 
G/SCM/N/211/PAN dated 24 June 2010. 
91. The delegate of Colombia  expressed appreciation for Panama's notification of the actions 
taken in order to eliminate the measures, particul arly the establishment of a technical committee to 
identify the subsidies which were incompatible  with the WTO, as well as the sending of  G/SCM/M/75 
 Page 19 
 
 
  communications to exporters of the programme, and stressing that there would be no extension after 
this period of time and the bill which would brin g the export processing zones in line with the 
SCM Agreement.  The delegate referred to the f act that for the purpose of eliminating the export 
subsidies at issue, Panama had passed the La w No.11 on 4 January 2010 which would promote a 
system of incentives through issuing industrial certi ficates.  The delegate of Colombia asked the 
delegation of Panama to explain what  this incentives system consisted of. 
92. The delegate of Panama  stated that Law No.76 of 23 Janua ry 2009 implemented the industrial 
certification system which would be applied to industries through investment in the following areas:  research and development plans;  impl ementation of management and quality systems, 
environmental systems or national standards;  investment or reinvestment of utilities;  training of 
production team;  and increase in the manpower associ ated with production.  The investment was at 
the levels of 35 per cent for agro-industry and 25 per cent for the industry in general.  This percentage 
could be used for the payment of taxes and was in force for 8 years. 
93. The delegate of Colombia 
thanked all Members who had replied to Colombia's questions and 
stated that if Colombia had further questions, it wo uld approach the relevant Members subsequently.  
The delegate supported the decision to extend the transition periods for those Members' relevant 
export subsidy programmes and encouraged such Members to continue making their action plans 
more robust and to implement them so that they  enabled the elimination of these measures by the 
deadline set out for the least amount of conseque nces for their national products in markets. 
94. The Committee took note of the statements made. 
95. The Chairman  noted that Papua New Guinea benefited from an extension with respect to one 
programme, namely Section 45 of the Income Ta x.  Papua New Guinea's 2010 updating notification 
had been circulated in document G/SCM/N/211/PNG.  No delegation took the floor to comment or ask questions on this notification. 
96. The Chairman noted that Saint Kitts and Nevis benefited from an extension with respect to 
Fiscal Incentives Act, No. 17 of 1974.  The 2010 up dating notification of Saint Kitts and Nevis had 
been circulated in document G/SCM/N/211/KNA. 
97. The delegate of Saint Kitts and Nevis
 stated that her delegation had submitted its action plan 
on 6 August 2010.  The action plan detailed the domes tic procedures necessary to eliminate the export 
contingent elements of the Fiscal Incentives Ac t.  Beneficiaries under the programme had been 
formally notified.  The delegate further stated that it expected the procedures for legislative reform to 
make the Act WTO-compliant to be completed by J une 2011.  She also noted that her delegation had 
received questions from Australia  to which it had replied. 
98. The Committee took note  of the statements made. 
99. The Chairman  noted that Saint Lucia benefited from an extension with respect to three 
programmes:  1) Fiscal Incentives Act, No. 15 of  1974, 2) Free Zone Act, No. 10 of 1999, and 
3) Micro and Small Scale Business Enterprises Act, No. 19 of 1998.  Saint Lucia's 2010 updating 
notification had been circulated in document G/SCM/N/211/LCA.  The United States had presented 
written questions with respect to Saint Lucia's 2010 u pdating notification which had been circulated in 
document G/SCM/Q3/LCA/12.  Saint Lucia's repli es to these questions had been circulated in 
document G/SCM/Q3/LCA/13. 
100. The delegate of Saint Lucia  stated that pursuant to the transparency and standstill 
requirements of the General Council decision, Saint Lucia had presented its action plan and 
notification on 9 July 2010.  The action plan deta iled the domestic procedures that had already been G/SCM/M/75 
Page 20  
 
  undertaken and those which would be forthcoming to eliminate the export subsidies before the end of 
2015 in the Fiscal Incentives Act, the Micro an d Small Enterprises Act, and the Free Zone 
Act of 1999.  Saint Lucia expected that the amen dments to the Fiscal Incentives Act to remove the 
non-compliant elements would be completed by Ju ne 2011.  With regard to the Micro and Small 
Business Enterprises Act, amendments  to the formal programme would have implications for this 
programme.  Therefore, by virtue of amendments  to the Fiscal Incentives Ac t, the Micro and Small 
Business Enterprises Act would be amended.  With respect to the Free Zone Act, Saint Lucia noted 
that consultations and review of the Act were ongoi ng at the national and sub-regional level for policy 
amendments in advance of the 2015 deadline.  Th ere were only two beneficiaries under the former 
programme, and they had been notified pursuant to paragraph 1(e) of the General Council decision.  
The delegate stated that Saint Lucia
 had received questions from the delegation of the United States to 
which it had responded. 
101. The Committee took note  of the statements made. 
102. The Chairman  noted that Saint Vincent and the Gren adines benefited from an extension with 
respect to Fiscal Incentives Act No. 5 of 1982,  as amended.  The 2010 updating notification of 
Saint Kitts and Nevis had been circ ulated in document G/SCM/N/211/VCT. 
103. The delegate of Saint Vincent and the Grenadines  stated that Saint Vincent and the 
Grenadines had submitted its annual updating notifica tion on 8 July 2010.  The action plan detailed 
the domestic measures necessary to eliminate the expor t contingent elements in the Fiscal Incentives 
Act of 1982.  The delegate stated that the new legislation had been drafted for a new business 
development and investment policy which was intende d to streamline the administration of incentives 
programmes and provide equal treatment  of both local and foreign investors.  The delegate stated that 
this policy would be completed in advance of the 2015 deadline.  The beneficiaries had been notified 
pursuant to paragraph 1(e) of the General Council d ecision.  The delegate noted that Saint Vincent 
and the Grenadines had received questions from dele gations of Australia informally and that a 
response had been provided. 
104. The Committee took note  of the statements made. 
105. The Chairman  noted that Uruguay programme with resp ect to which an extension had been 
granted is the Automotive Industry Export Prom otion Regime.  Uruguay's 2010 updating notification 
had been circulated in document G/SCM/N/ 211/URY.  Through document G/SCM/Q2/URY/9, 
Uruguay had also replied to the questions posed by the United States with respect to Uruguay's 2009 annual updating notification.  The United States had presented written questions with respect to 
Uruguay's 2010 updating notification in document G/SC M/Q3/URY/12.  Uruguay's replies to these 
questions had been circulated in document G/SCM/Q3/URY/13. 
106. The delegate of Uruguay
 noted that  Uruguay had been complying with the procedures 
established by the General Council and that it had begun the process of eliminating these subsidies.  
The delegate also stated that Uruguay had replied in writing to the questions from the United States. 
107. The Committee took note  of the statements made. 
108. Having concluded the discussions on the notifica tions from Members that benefited from an 
extension under the General Council decision, the Chairman  proposed that the Committee agree that it 
had concluded its mid-term asse ssment and its annual review unde r the procedures in WT/L/691 of 
the transparency and standstill requirements cont ained in those procedures.  The Committee so 
agreed .  G/SCM/M/75 
 Page 21 
 
 
  109. The delegate of the United States  expressed appreciation for the timely replies that his 
delegation received to the questions presented to Me mbers benefiting from extensions and stated that 
his delegation found the statements made by various delegations very helpful in terms of filling out 
some details of the various action plans and provi ding the Committee with a greater understanding of 
how the programmes would be phased out.  The dele gate also expressed appreciation for the prior 
work done by the Secretariat, the Ch airman and all the interested parti es.  He also pointed out that the 
action plan was useful for all the Members in developing a way forward in terms of their own 
domestic political processes along with the notification of the beneficiaries.  Both the action plan and 
the notification requirement were useful to all tho se involved in terms of moving the process forward. 
110. The delegate of Australia  expressed appreciation for the notifications and action plans 
submitted by the Members benefiting from extensions  and the informal consultations previously 
undertaken by the Chairman.  Australia had inform ally asked questions to 11 Members on their action 
plans and received satisfactory responses from all of  them.  The delegate welcomed the steps that 
these Members were taking to phase out their export subsidy programmes by 2015 and reminded that 
in complying with their obligations under the Ge neral Council decision Members should ensure that 
any replacement programmes would be consiste nt with the other requirements of the 
SCM Agreement. 
111. The delegate of Canada  stated that there had been a constructive engagement both through 
informal consultations and throughout the meeti ng and expressed appreciation for those Members 
who were making progress and encouraged them to continue. 
112. The delegate of El Salvador  stated that El Salvador had important programmes in connection 
with the extension it was asking for.  He reiterated that El Salvador was aware of its obligations and 
commitments within the framework of this Committee and that it would continue to work to respect 
them.  For El Salvador, this extension process and these commitments were extremely important.  
El Salvador would continue its efforts to reach the target in the context of the General Council 
decision taken in 2007.  The delegate underlined th at, as the Ambassador of El Salvador, he had come 
to this meeting personally to try to indicate the im portance of this programme and stated that he would 
continue to do this and all his colleagues were also  working to ensure they respected El Salvador's 
commitments and obligations to the WTO. 
113. The delegate of New Zealand  expressed agreement with the statement by the United States 
that the action plans were useful for developing a way forward regarding certain Members' domestic 
procedures. 
114. The delegate of Japan  reiterated that Japan continued to ha ve a systemic interest on this issue 
and was looking carefully at all action plans submitted and listened carefully to the explanations made 
by the beneficiary Members on the requested exte nsions for the relevant transition periods.  
The delegate underlined the importance of the step s forward to eliminate export subsidies by the end 
of 2015.  She also noted that the Secretariat ha d extended technical support towards those beneficiary 
Members through regional workshops or seminars.  She stated that such technical cooperation 
activities had been very helpful in terms of getting th ings on track, and that therefore, this support by 
the Secretariat had to be extended further to help the beneficiary Members to come into conformity 
with the WTO Agreement. 
2. Decisions under paragraph 1(d) of the Gene ral Council Decision of 27 July 2007 to 
continue the extension of the transition period for calendar year 2011 
115. The Chairman  noted that the General Council decision of 27 July 2007 provided that "during 
the period 2008-2012 the Members of the Committee sh all agree to continue the extensions pursuant G/SCM/M/75 
Page 22  
 
  to these procedures" subject to verification that th ere had been compliance with the transparency and 
standstill requirements. 
116. In order to facilitate the decision-making process under this item, the Secretariat had prepared 
a model text for the decisions to be adopted by the Committee under this provision.  This model text 
was found in the Secretariat paper circulated on 8 October 2010.  This document contained a full list 
of programmes with respect to which the Co mmittee had approved extension requests at its 
2009 Autumn meeting.  There were no requests fo r extension with respect to three of these 
programmes, one pertaining to Belize, one to Fiji and one to Mauritius. 
117. The Chairman proposed that the Committee agr ee to continue to extend the transition period 
for calendar year 2011 with respect to the re maining programmes the Committee had discussed.  
The Committee so decided.
1 
118. The Chairman  also proposed that based on the text of the model decision in the job document 
the Secretariat prepare and circulate individual decisions pertaining to each of the programmes for which extension requests had been approved by the Committee.  The Committee so agreed
. 
119. Finally, the Chairman  proposed that the Committee agree to request the Members concerned 
to provide their updating notifications covering cal endar year 2010 not later than 30 June 2011.  
The Committee so agreed . 
F. CONTINUATION OF DISCUSSIONS "ON WAYS TO IMPROVE THE TIMELINESS AND 
COMPLETENESS OF NOTIFICATIONS AND OTHE R INFORMATION FLOWS ON TRADE MEASURES " 
UNDER THE SCM AGREEMENT  
120. The Chairman noted that following the request of 23 March 2009 from the Chairman of the 
Trade Policy Review Body, to discuss "ways to  improve the timeliness and completeness of 
notifications and other information flows on trade measures" in the context of the SCM Agreement, 
the Committee had discussed this issue at various in formal meetings as well as at its two regular 
meetings held in the course of 2009 and at the regular meeting in April 2010. 
121. As a result of these discussions, several steps had been taken which had contributed to the 
objective identified in the request from the Chairman  of the Trade Policy Review Body.  First, in 
April 2009, the Committee's Chairman had sent reminde r letters to those Members that had not made 
their 2007 new and full subsidy notifications as of the end of March 2009.  The previous Chair had 
done the same thing in April 2010 with respect to Members that had not yet made their 2009 subsidy notifications as of then.  Second, at the request  of Members, the Secr etariat had prepared a 
background note which had been circulated in document G/SCM/W/546 dated 28 April 2009 and 
which had offered a snapshot of the level of co mpliance with various notification obligations under 
the SCM Agreement since 1995.  This compendium  had been updated in Spring 2010 and circulated 
in document G/SCM/W/546/Rev.1 dated 16 April 2010.   Third, at the October 2009 regular meeting, 
the Committee had adopted new standard format s for the semi-annual reports of countervailing 
actions as well as the minimum information to be prov ided in connection with ad hoc notifications of 
countervailing actions.  At the same meeting, the Committee had also decided to add a new table to 
the its annual report which showed the time periods covered by the most recent subsidy notification 
made by each Member. 
122. At the last regular meeting of the Comm ittee, several Members had indicated their 
willingness to continue discussions on ways to improve timeliness and completeness of the 
notification obligations under the SCM Agreement.  As discussed before, the notification of subsidies 
                                                     
 
1 A list of the decisions adopted by the Committee is contained in the Annex to these Minutes.  G/SCM/M/75 
 Page 23 
 
 
  was by far the most important notification oblig ation found in the SCM Agreement and discussions 
held naturally focussed on this obligation.  Th e low level of compliance with this important 
notification obligation continued to undermine the transparency function of this Committee.  
The Chairman provided Members with the following up-to-date figures:  As of the day of meeting, 76 Members had not yet made their 2009 new and fu ll subsidy notification although the deadline had 
been passed by almost a year an d a half.  Many of these Members had not observed their previous 
subsidy notification obligations e ither.  This constituted an important problem that the Committee had 
to look into. 
123. In order to better understand the situation a nd to be able to assist these Members in 
connection with their future notif ication obligations, the Chairman invited these Members to explain 
to the Committee the reasons that had preclude d them from making their new and full subsidy 
notifications on time.  He underlined that his intention was not to question these Members but to invite them to share with the Committee the problems, if any, that they had experienced in this regard 
to see what the Committee could do to fix such problems. 
124. The Chairman read out the names of Members that had not yet made their 2009 new and full 
subsidy notifications: 
 
Angola Armenia Bahrain Bangladesh 
Belize 
Benin Bolivia Botswana Brunei Darussalam 
Burundi 
Cambodia Cameroon Cape Verde Central African Rep. Chad 
China 
Colombia Congo Congo, Dem. Rep. Côte d'Ivoire 
Djibouti 
Dominica Egypt Fiji Gambia Georgia Ghana 
Guinea-Bissau Guinea, Rep. of Guyana 
Haiti 
Iceland Indonesia Israel Kenya 
Kuwait 
Lesotho Maldives Mali Mauritania Mexico 
Moldova 
Mongolia Morocco Mozambique Myanmar 
Nepal 
Nicaragua Niger Oman Pakistan Panama Papua New Guinea 
Peru Philippines Rwanda 
St.  Kitts & Nevis 
Kingdom of Saudi Arabia Senegal Sierra Leone Singapore 
Solomon Islands 
South Africa Sri Lanka Swaziland Tanzania Togo 
Tonga 
Tunisia Uganda United Arab Emirates Uruguay 
Venezuela 
Viet Nam Zambia Zimbabwe  G/SCM/M/75 
Page 24  
 
  125. The Chairman invited the delegations of these Members which were present to come forward 
and explain to the Committee the reasons for their failure to meet the obligation to notify their 
subsidies. 
126. The delegate of China
 stated that  China had been working very hard on the preparation of a 
new subsidy notification in the last few years to update what had been reported at the Committee 
meeting in October 2009.  Progress had been made back in Beijing regarding this tremendous task.  
At the time of the meeting, the substantive work ha d been completed and that only procedural issues, 
including translation, were left.  The delegate st ated that China was hoping to make its notification 
before but since Spring 2010 the work on the notif ication had been interrupted because China was 
under trade policy review between 30 May and 30 June  and that the workload was far beyond China's 
expectations.  Due to China's capacity constraints and the trade policy review which the team working 
on the subsidy notification had to finish first, the work with regard to the subsidy notification had 
been postponed.  He stated that the work on notifi cation had been resumed, and that China would do 
its best to finalize this notification in a few months time.  The notification would cover the 
period 2005-2008.  Although technically it did not fit well within the notification intervals required by 
Committee, the overall picture regarding China's subsid ies at the central level would be complete and 
comprehensive, with the submission of this new no tification.  China's last notification covered the 
period 2001-2004.  China would also make an effort to adjust the timing of the notification and the 
period covered in its notif ications so that future notifications  would progressively correspond to the 
standard intervals required by the Committee. 
127. The delegate of Mexico  stated that Mexico was aware of its commitments and obligations in 
the framework of the SCM Agreement, in particul ar those under Article 25.  He acknowledged the 
importance of subsidy notifications in terms of providing transparency and the general 
implementation of the Agreement.  However, gi ven the administrative and procedural reasons, 
Mexico had not been able to comply with this  obligation.  The delegate expressed Mexico's 
commitment to update as soon as possible its s ubsidy notification so as to comply with the 
notification requirement.  The necessary actions had b een already carried out and an internal working 
group had been set up within various competent areas in order to submit Mexico 's subsidy notification 
to the Committee. 
128. The delegate of the United States  referred to the concerns raised by the United States in 2009 
and detailed the history of some Members' notificatio ns submitted previously.  Fi rst of all, he referred 
to the need to prioritize the focu s of the Committee's work.  He stat ed that there were many large 
exporting Members, including some G-20 members, who had not provided any subsidy notifications 
in a very long time.  He emphasized the need for those Members, which were sometimes 10 or 
15 years behind in their notifications, to redouble th eir efforts and submit their notifications as soon as 
possible.  Secondly, the delegate reiterated his delegation's concern with respect to sub-central 
government measures.  He stated that this was a ve ry crucial area that seemed to be ignored to an 
important degree.  Without the sub-central measu res being notified, other WTO Members would not 
be in a position to see the full picture of the subsid y regime in the territory of another Member.  
The delegate also raised the issue of Article  25.8 of the SCM Agreement, under which Members 
could ask questions to other Members with respect to  their subsidy programmes.  He stated that the 
United States had used Article 25.8 in the past prim arily to prompt other Members who were very far 
behind in their notifications to provide some answers with respect to some programmes and 
eventually prompt them to provide a full notificati on.  Given the fact that Article 25.8 provided for a 
very specific mechanism for Members to use to  ask other Members questions, this mechanism 
deserved greater attention in terms of whether an swers had been provided or  not to questions under 
Article 25.8.  Under Article 25.9, answers were to be provided to other Members' questions as soon as 
possible.  In expressing his disappointment that many of the US delegation's questions had gone 
unanswered or had only been answered after exte nsive delay, he urged the Committee again to 
consider other ways to prompt Members to answer  Article 25.8 questions in a timely fashion.   G/SCM/M/75 
 Page 25 
 
 
  In particular, the possibility of an annex to th e annual report which had already been discussed in 
2009.  Notwithstanding the fact that this could be  a worthy endeavour, the format proposed in 2009 
for that table did not identify the Member to whom  the questions had been directed but rather those 
Members which had asked the questions.  In the vi ew of the US' delegation, it was important to 
identify the Member to whom the questions had b een directed, indicating also whether the Member 
had answered the questions.  He urged the Committe e to look at this question and examine whether 
there was any process by which Members could keep the focus on Article 25.8 questions and whether 
or not those questions had been answered by the re levant Members.  The delegate expressed the wish 
to review in detail the status of certain Members in  meeting their notification obligations.  First, with 
respect to Malaysia, prior to submitting its subsidy notification in 2009, Mala ysia had not submitted a 
notification since 1995.  The delegate stated that  Malaysia's 2009 notificat ion had only covered the 
period 2007-2009.  Therefore, there was a ten-year  gap between the periods for which Malaysia 
provided a notification.  In 2006, after more th an 10 years in which Malaysia had not provided a 
notification, the United States submitted Article 25. 8 questions to Malaysia.  In September 2010, 
Malaysia had provided written answers to these questi ons.  The delegate noted that under Article 25.9 
Members were obligated to respond to questions unde r Article 25.8 as quickly as possible.  Turning to 
India, the delegate of the United States noted that India had made its subsidy notification in the week 
that preceded the Committee meeting.  Before this  notification India had not submitted notifications 
since 2001, which meant a nine-year gap between notifications.  Even though a 9-year period had 
elapsed, India had only provided a notification cove ring the period 2004-2009.  In this case, there was 
a missing period of three years for which no notifica tion had been provided.  The delegate expressed 
deep concern with the fact  that India had only notified what appe ared to be at most 3 export subsidy 
programmes.  While recognising that the governme nt of India had been reducing its direct 
involvement in its economy, it was difficult to be lieve that there were just 3 export subsidy 
programmes in India, not to speak of other domestic  subsidies that were subject to the notification 
requirement.  The delegate of the United States noted  that, for example, both the United States and the 
European Union had conducted numerous CVD i nvestigations in which several programmes 
maintained by India had been found countervailabl e.  These included i) the export-oriented units 
programme, which was a complement to the special  economic zones, and provided tax holidays and 
exemptions, as well as sales tax exemptions;  ii)  the steel development fund loans under which 
consumers were compelled to pay a levy, the proc eeds of which were channelled back to a select 
groups of steel processors;  iii) the export pr omotion capital goods scheme under which producers 
could import capital equipment at reduced rates of  duty by agreeing to earn convertible foreign 
exchange equal to 4-5 times the value of imported capital goods within 5 years.  The delegate also 
stated that there was a pre- and post-export financing mechanism, and a duty entitlement passport scheme which enabled exporting companies to earn import duty exemptions in the form of passport credits.  The list of measures that had been found countervailable in the past could go on an on.  
These were measures that had been found to be count ervailable in the past.  The delegate also noted 
that in recent administrative reviews, domestic industries in the United States had uncovered what 
appeared to be dozens of other pr ogrammes maintained in India at State level.  In the light of the 
United States' CVD findings and additional genera l knowledge on India's governmental policies to 
support its industries and exports, it was difficult for the United States to accept that there were just 
three export subsidies in India and that this re presented the universe of their export subsidies.  
The delegate asked what would have happened if  the United States submitted a subsidy notification 
covering only three programmes and whether Members would have considered it to be complete.  
He underlined that India was a very large emergi ng economy that had enjoyed tremendous benefits 
from the rules-based trading system and that it had the responsibility to fully comply with its 
obligations under the same rules-based trading system .  He urged India to re-examine its notification, 
and carefully consider whether add itional programmes had to be include d.  Finally, he mentioned the 
situation with respect to China.  China had acceded to the WTO in 2001.  In 2006, China had 
provided its first subsidy notif ication covering the period 2001- 2004.  This notification was 
considered significantly deficient in the sense that, among other things, it provided no information on sub-central government measures.  In 2009, China had stated that a draft of its second subsidy G/SCM/M/75 
Page 26  
 
  notification covering the period 2005-2008 was ready for examination and that work to submit the 
notification was at the final stage and China would make all efforts in the following few months to 
finalize the second notification.  The delegate not ed that Members had heard essentially the same 
thing from China in this meeting and reiterate d the importance of China submitting a notification 
which included sub-central measures.  The United Stat es' work with China had indicated that a great 
deal of governmental assistance was provided by Ch ina at sub-central level and therefore without 
notifying sub-central measures a notification from China would be essentially incomplete.  
The delegate emphasized that barring a change in  the direction of these notification issues, the 
Committee had to continue to examine not only th e timeliness of the notifications but also the 
question of what constituted a complete notification.   In general, the United States was beginning to 
question certain Members' commitment to the oblig ation they had under the rules-based trading 
system from which they reaped such enormous bene fits.  In future, the United States would have to 
consider other mechanisms under the SCM Agreement,  such as Article 25.10, to prompt Members to 
adhere to their obligations and obtain some sma ll fraction of the transparency envisioned by the 
SCM Agreement.  It was unfortunate that it had come  to this.  He indicated that it was not the United 
States' view that reliance on Articles 25.8 and 25 .10 was sufficient to obt ain the transparency 
envisioned by the SCM Agreement.  It was up to  every Member to notify all of its subsidy 
programmes that met the criteria in Article 25.  If Members failed to take their obligations seriously 
the United States feared that Members would be f acing a further decline and potential breakdown of 
the notification obligations under the SCM Agreement. 
129. The delegate of Japan
 stated that she welcomed discussions on this topic and supported the 
EU's suggestion to maintain this item on the ag enda of this Committee's meeting until improvements 
were made and a good record of notifications was ac hieved.  Japan attached great importance to the 
notification and surveillance schemes stipulated in Part VII of the SCM Agreement.  She shared the 
US' concern with regard to unans wered Article 25.8 questions sugges ting that it would be helpful if 
the Secretariat could identify which questions had no t been answered.  She also shared concerns not 
only about the poor notification record but also the poor content of the notifications as this severely 
undermined the effectiveness of the notification a nd surveillance scheme under the SCM Agreement.  
The rules-based multilateral trading system was supported by each Member fulfilling their obligations.  The current situation in the special  session of the SCM Committee was that only those 
Members carrying out their obligations by notifying on time were subject to examination by all Members, while those not notifying their subsidies s lip out of this surveillance system.  This was a 
very unfair and dangerous situati on as it could provide further disincentives to notify.  This vicious 
cycle had to be broken.  It was necessary to fu ndamentally improve this situation from a systemic 
point of view.  She recalled that all Members were  benefiting from the rules-based multilateral trading 
system and that they had to meet their obligations if they wanted to continue to benefit from the 
system.  She urged non-notifying Members to take immediate action to fulfil their obligation. 
130. The delegate of Australia
 stated that full and proper notifications were critical to ensure 
transparency and encourage public dialogue between Me mbers, and that this wa s an issue of systemic 
importance.  He expressed concern on some of the r ecent notifications, including India's notification.  
Australia's concern with respect to India's notifica tion also pertained to the issue of completeness.  
There were four key issues that stood out to Aust ralia regarding these notifications:  First, as the 
United States had mentioned, the notification did not appear to cover all the programmes.  He stated 
that in India's trade policy review there were so me programmes which were referred to that did not 
appear in the subsidy notification.  Also, there were some other programme s announced recently that 
were not included in the notification.  Second, the notification did not seem to cover sub-central 
programmes.  Third, it did not cover all time  periods, indicating a significant gap between 
notifications.  Fourth, the notification did not a ppear to include all of the information on the 
programmes that were notified.  With respect to some of the notified programmes, the notification 
stated that data was not available on the exact amoun t and duration of the subsidy.  This notification  G/SCM/M/75 
 Page 27 
 
 
  came to Australia's attention very recently, altho ugh it was not the only notif ication with which they 
had concerns. 
131. The delegate of the European Union  joined other Members which had already raised their 
concerns.  She expressed deep concern in the lack  of notifications from several Members.  As had 
already been pointed out, some Members had not notified any programmes for the last 15 years or 
more.  Those who had notified more recently left significant time gaps .  The European Union attached 
great importance to the notification system and worri ed that, if this continued, there might be a 
breakdown of the system in general because this s eemed to be a vicious circle.  She urged those 
Members who had not notified in recent years to comp lete the time lag and submit their notifications 
as soon as possible.  The European Union looked forward to these notifications, and in particular 
China's notification.  Having registered concer ns over the blatant incompleteness of some 
notifications, the European Union was now in the process of reviewing the no tifications submitted in 
detail.  Considering the lack of information in  some, and based on the fact that some of the 
programmes found in the EU's practice on CVD inv estigations were not found in the relevant 
Members' notifications, the delegate of the Eur opean Union urged these Members to complete or 
update their notifications forthwith so th at they can be considered complete. 
132. The delegate of Canada  stated that her delegation was fully supportive of the statements 
made.  Her delegation continue d to believe that timeliness and completeness of all required 
notifications was of the systemic importance to all WTO Members and remained supportive of the 
efforts to improve the notification record of this Committee. 
133. The delegate of New Zealand  echoed the concerns raised by many Members about a large 
number of Members who had not complied with the no tification requirement.  He stated that the low 
level of compliance tended to undermine all th e good work the Committee had done recently to 
improve timeliness and completeness of subsidy notifications.  Transparency was one of the main 
principles of the WTO as a rules-based system.  On e of the means of achieving transparency was to 
provide timely and complete WTO notifications, and adequate subsidy notifi cations under Article 25 
were no exception. 
134. The delegate of India  stated that India's notification ha d been made after a long gap due to 
coordination problems in data collection from different ministries and agencies administering subsidy programmes.  India had made an attempt to fulfil th e obligation as it, too, attached high importance to 
this process.  India was making concerted efforts to improve its system of notification not only in this 
Committee but also in other Committees.  The delegate would convey the concerns expressed by 
other delegates to the capital for further reactio n and specific replies.  With respect to the 
US' intervention regarding the CVD investigations conducted against India, the delegate of India 
stated that while it was not possible at this stage to talk in detail about each of these programmes, his 
delegation disagreed with the United States that all these programmes were in the nature of an export 
subsidy.  On the contrary, most of India's e xport promotion programmes countervailed by the United 
States and some other developed country Members we re in the nature of remission of duties payable 
on inputs used for the production of exported good s and, as such, could not be treated as export 
subsidies.  Regarding the benefits of the rules- based system, all Members, including India, had 
benefited from the system.  India assured the Committee that, like all others, India was also 
committed to meeting its obligations. 
135. The delegate of Malaysia
 stated that in 2009 Malaysia had made its new and full notification 
which covered the period 2007-2009 and acknowledged that there was a gap in the notification.  
However, he stated that the notification for 2007- 2009 already covered the prior period.  Malaysia 
was aware of its obligation to provi de a timely notification and was working hard to comply with that 
obligation. G/SCM/M/75 
Page 28  
 
  136. The Chairman
 brought to the Committee's attention two issues that were related to the 
discussions on this matter.  First, he mentioned a development in electronic notifications sent to the 
Secretariat.  Although most Members submitted notifications related to the SCM Agreement 
electronically, others still submitted such notifications  by fax.  Some preferred to send electronically 
and by fax so as to receive confirmation of receipt.  The Secretariat had discussed this issue with the 
Central Registry of Notifications (CRN).  The Ch airman stated that the automatic generic receipt 
message sent by CRN to Members had recently been  replaced by a message reflecting the subject 
matter.  e.g. it would now indicate in its subject box what the Member had included in the subject box 
of the incoming e-mail.  This would provide Member s with the needed confirmation, eliminating the 
need to send any such notification by fax.  All Memb ers needed to do was to indicate in the subject of 
their message the exact title of the notification.  The Chairman expressed his hope that this would 
assist Members in moving to paperless work. 
137. The Chairman referred to replies to written questions presented by Members.  The Committee 
had certain procedures for the review of the notifi cations of legislation and the notifications of 
subsidies.  Both of these procedures provided for an exchange of written questio ns and written replies.  
These procedures were being followed by the Committee with no major difficulty and they 
contributed significantly to the transparency of Members' actions.  However, Members sometimes 
happened to submit written questions outside the c ontext of the review of the notifications of 
legislation or the review of subsidy notifications.  Examples of this were:  1) the written questions 
with respect to the annual updating notifications f iled by Members benefiting from extensions of the 
transition period for the elimination of export s ubsidies under Article 27.4 of the SCM Agreement, 
and 2) the written questions submitted by Members unde r Article 25.8 of the SCM Agreement.  Even 
though there were no specific procedural rules that required Members receiving such written 
questions to submit written replies, for the sake of tr ansparency, it would be better if such questions 
were answered in writing.  The Chairman th erefore urged the Members receiving any written 
questions to reply to them in writing. 
138. The Chairman asked the delegations whether the Committee should continue to discuss the 
issue of timeliness and completeness of the notificati ons at its future meetings.  The delegate of the 
United States  stated that his delegation attached import ance to this topic and had identified a number 
of unresolved issues and many of them were shared by other delegations.  Thus he suggested keeping 
this item on the agenda of the next meeting.  The Un ited States also considered  that this was an issue 
that merited discussion between now and the next meeting to see what the Committee could do to 
improve what was becoming a more and more poor track record in terms of notifications. 
139. The delegate of the European Union  stated that her delegations also had raised its concerns 
and the importance that it attached to the timelines s and completeness of notifications.  Given the 
concerns raised by various Members, the European  Union thought it would be a very good idea to 
keep this issue on the agenda for the next meeting as well. 
140. The delegate of Japan  supported the idea of continuing to discuss this issue at the next 
meeting. 
141. The delegate of Canada  also supported continued discussion of this issue. 
142. The Committee took note  of the statements made.  G/SCM/M/75 
 Page 29 
 
 
  G. ELIMINATION OF EXPORT SUBSIDIES FOR TEXTI LES AND APPAREL BY INDIA PURSUANT TO 
ARTICLE 27.5  OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES  
143. The Chairman  noted that this agenda item was added at the request of the delegation of the 
United States. 
144. The delegate of the United States  noted that, in February 2010, the United States had 
requested the Secretariat to calculate the export competitiveness of textile and apparel products from 
India, pursuant to Article 27.6 of the SCM Agreemen t.  In March 2010, the Secretariat released its 
calculations and, shortly thereafter, released some  revisions.  In the US' view, the calculations 
provided by the Secretariat clearly demonstrated that India had become export competitive in the area of textile and apparel products.  The United States w as interested to know whether India had 
identified existing export subsidy programmes provided to its textiles and apparel producers for which 
it could be entitled to an 8-year phase-out peri od under Article 27.5 of the SCM Agreement.  
He recalled that when discussing this issue at the previous meeting, India had several questions and raised a couple of legal issues.  While the United States recognised the points that India had made, in 
the US' view, regardless of how those legal issu es were settled, under an y interpretation of the 
relevant articles of the SCM Agreement, India was export competitive with respect to its textile and 
apparel products and was therefor e under an affirmative obligation to begin phasing out its export 
subsidy programmes.  In that context, the delegate  expressed his delegation's concern that at the end 
of August 2010, India had extended three programmes th at were due to expire and which appeared to 
benefit the textile and apparel sector in India.  In the view of the United States, the extension of these 
programmes was inconsistent with India's oblig ation to begin to phase out its export subsidy 
programmes.  The three programmes at issue were:  i) duty entitlement passport unit scheme, ii) focus 
product scheme and iii) export promot ion capital goods scheme.  The delegate of the United States 
asked for an explanation as to why India was conti nuing to provide export subsidies to its textile and 
apparel producers and continuing to extend progra mmes rather than to begin phasing them out.  
Finally, he asked India to consider  putting together an action plan to eliminate its export subsidies that 
were provided to its textile and a pparel producers.  He also asked th e Chairman to begin an informal 
process of examining the phase-out of India's export subsidies with respect to textile and apparel 
products. 
145. The delegate of India
 stated that India was carefully exam ining the report of the Secretariat.  
In the intervening period, India had requested some additional data which the Secretariat had 
provided.  While India was working on this, the de legate reiterated India's request made at the 
previous meeting, i.e. to first evolve a common understanding and clarity in the Committee on the 
relevant provisions before proceedi ng further in the matter.  This was a systemic issue that concerned 
all Members.  To begin with, among other issues ra ised at the previous meeting, Members required 
clarity on the definition of product under Article 27.6.   This Article provided a definition as a section 
heading of the harmonized system nomenclature.  There was, to India's understanding, no compound 
term like "section heading" using the HSN.  It was either section which referred to a group of 
chapters, or heading which referred to commodities de fined at a four-digit level.  He disagreed with 
the United States' view that whatever way these le gal issues were resolved India would be export 
competitive.  This simplification would not help at  the implementation level because the results would 
be different in terms of both coverage of ta riff lines where export competitiveness was reached and 
when it was reached if the share in  world trade were to be computed, in respect of section or heading 
level.  This was also revealed in the Secretaria t's computations.  Clarity on the definition of product 
was the starting point for phasing out any subsidies.  India was of the view that Members had to devote their attention on this definitional issu e as per the procedure laid down by the WTO.  
Secondly, with respect to the issue raised by the United States on the extension of three programmes, 
i.e. the DEPB, the FPS and the EPCG, the delegate of I ndia stated that while he did not have details of 
the specific programmes, he would like to reiterate  that some of these programmes were not in the 
nature of an export subsidy but rather in the nature of remission of duties payable on inputs for use in G/SCM/M/75 
Page 30  
 
  the production of exported goods, which could not be treated as export subsidies.  Regarding the 
drawing of an action plan for phasing out subsidies,  the delegate of India stated that phasing out 
export subsidies under an action plan would be premature unless Members had clarity on the 
interpretation of the relevant provisions, i.e. secti on heading and when the obligation actually started.  
He therefore requested, as a course of action, that  the matter be discussed in the Committee first to 
develop an agreed interpretation of the relevant pr ovisions as per the procedures on the subject.  India 
was committed to meeting its obligations under th e Agreement but wanted to have clarity and a 
common understanding on certain issues.  The delega te requested the Committ ee to get these issues 
clarified. 
146. The delegate of Australia
 stated that export subsidies were  the most trade-distorting types of 
subsidies and that was why they had the strictes t disciplines, they were prohibited in the Uruguay 
Round.  As part of that package, there was some fl exibility for developing countries to enable some of 
them to continue giving export subsidies in some circumstances and as part of the balance that was 
struck, there were two overarching principles that played an important part in that balance:  transparency and graduation or phasing out export subsidies.  Under agenda item 2(a) 
Members had had a very constructive discussion  during the meeting.  Members had all these 
programmes notified to the Committee and had a discussion about how those programmes would be 
phased out in accordance with WTO obligations.  Au stralia was of the view that the principles of 
transparency and graduation were applied to all flexibilities for export subsidies. 
147. The delegate of Canada
 underlined that Members should not lose sight of the original intent 
of this particular part of the Agreement which was to provide temporary accommodation that would 
allow developing countries to transition to full disci plines.  She supported Australia' view that export 
subsidies were of a particular importance gi ven the trade distortions they could cause.  
The Committee had had an open discussion on transpar ency and it should keep that aspect in mind as 
well in discussing this particular issue. 
148. The delegate of the United States  stated that if India had particular issues with the calculations 
made by the Secretariat, the delegation of India should identify them.  However, he expressed the 
view that the calculations were very solid and w ould not change the outcome, i.e. that India was 
export competitive with respect to textile and appa rel products.  Secondly, he recognised and agreed 
with India that the definition of a product in this  provision was ambiguous.  However, he noted that 
there were essentially two ways in which the product c ould be interpreted:  it could be interpreted to 
mean commodities defined at the four-digit level or it could be interpreted as referring to a group of 
harmonised tariff schedule chapters.  He stated that even if one took the larger category, the group of 
chapters, India had become export competitive as of  2007;  specifically India was over 3.25 per cent 
of world trade in 2005 and 2006.  That was th e most favourable interpretation from India's 
perspective.  If one looked at commodities at the four-digit level, India had become export competitive in particular product areas much earlier than 2007.  There was no doubt that India had 
become export competitive in textile an d apparel products prior to 2007. 
149. The delegate of India
 disagreed with the US' proposition that if one looked at the section 
level, this would be the most favourable interpre tation for India because it was not only an issue of 
time but an issue of coverage as well.  Therefore,  by looking at the section level and at four-digit 
coverage level, the coverage of tariff lines changed dramatically.  India was not sure that by adopting 
a particular interpretation just because it appeared to be favourable would really help Members.  
Therefore, the delegation of India preferred to have some clarity on the issue. 
150. The Committee took note  of the statements made.  G/SCM/M/75 
 Page 31 
 
 
  H. DATE OF NEXT REGULAR MEETING  
151. The Chairman  stated that the Committee had agreed at its meeting of 21 February 1995 that 
regular meetings normally would be held in the last week of April and in the last week of October.  
The Committee on Anti-Dumping Practices and the Sa feguards Committee had the same schedule.  
In order to accommodate all three bodies' meetings, the Chairman proposed that the next meeting of 
this Committee take place in the week of 2 May 2011.  It was so decided . 
I. OTHER BUSINESS  
152. The Chairman recalled under this agenda ite m the Committee had received requests from 
Japan and the United States. 
153. The delegate of Japan  conveyed information about the cons ultations with Canada regarding 
the Feed-in Tariff Programme in the State of Ontari o, Canada.  Japan appreci ated Canada's answers 
circulated in document G/SCM/Q2/CAN/42 to questi ons submitted by Japan which were circulated 
on 22 April 2010 in document G/SCM/136.  With regard  to this issue, the delegate of Japan informed 
the Committee that on 13 September 2010 Japan had requested consultations with the government of 
Canada pursuant to paragraph 4 of Article  XXII.1 of the GATT 1994, Article 8 of the 
TRIMS Agreement and Articles 4.1 and 30 of the SCM Agreement.  The European Union and the 
United States had joined the consultations.  As of  the date of the meeting, both Japan and Canada 
were working very hard to resolve this problem. 
154. The delegate of Canada  confirmed that consultations were  under way and that her delegation 
looked forward to working with Japan on this issue. 
155. The delegate of the United States  stated that his delegation's initial intention was to give an 
intervention under other business which it had alread y given under agenda item F.  Rather than 
repeating that long intervention, he reiterated his de legation's concern with respect to the continuing 
failure of many Members to provide any subsidy no tification or lack of timeliness and completeness 
thereof. 
156. The Chairman  himself referred to an issue under "o ther business".  He informed Members 
that in response to a query from the Chairman of the Working Group on Trade and Transfer of 
Technology, he had sent a written memo on Septem ber 1st 2010 indicating that there had been no 
discussions, submissions, or other developments in the SCM Committee since 2002 on the issue of 
trade and transfer of technology.  Copies of th e letter from the Chairman of the Working Group on 
Trade and Transfer of Technology and of the reply from the Chairman of the Committee were 
available in the back of the meeti ng room for Members' information. 
157. The Committee took note  of the statements made. 
J. ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS  
158. The Chairman  stated that pursuant to Article 32.7 of the SCM Agreement, the Committee was 
required to review annually the implementation a nd operation of the Agreement, taking into account 
the objectives thereof, and to inform annually the Co uncil for Trade in Goods of developments during 
the period covered by the review.  A first draf t of the annual report for 2010 prepared by the 
Secretariat had been faxed to all delegations last week.  Copies of the draft were available in the 
meeting room. G/SCM/M/75 
Page 32  
 
  159. Before starting discussing the report, the Chairman  noted some recent changes that had been 
made to the report:  1) In Annex B, the 2007 new and full subsidy notification of India had been 
added, 2) The legislative notifications of  Brazil and Gabon, circulated in documents 
G/SCM/N/1/BRA/2/suppl. 4 and G/SCM/N/1/GAB/1, r espectively, had been added to Annex D. 
160. The Chairman
 proposed to discuss the draft report chapter by chapter and then let the 
Secretariat reflect these changes as well as the actions taken in this meeting in the draft report and 
come back with the updated version of the report.  He also proposed to do this in the informal mode.  
It was so agreed . 
161. Following the discussions in the informal mode, the Committee adopted  the annual report for 2010.2 
162. The Chairman  adjourned the regular meeting of the Committee. 
 
 
                                                      
2 The annual report (2010) was circulated in document G/L/937 dated 29 October 2010.  G/SCM/M/75 
 Page 33 
 
 
  ANNEX 
 
CONTINUATION FOR CALENDAR YEAR 2011 OF EXTENSION UNDER SCM 
ARTICLE 27.4 OF THE TRANSITION PERIOD FOR THE ELIMINATION 
OF EXPORT SUBSIDIES PURSUANT TO THE GENERAL COUNCIL 
DECISION OF 27 JULY 2007 (WT/L/691) 
 
Decisions Adopted by the Committee on Subsidies and Countervailing Measures 
on 28 October 2010 
 
 
Member Programme Document 
Fiscal Incentives Act Cap 172 G/SCM/50/Add.8 Antigua & 
Barbuda Free Trade and Processing Zone Act No. 12 of 1994 G/SCM/51/Add.8 
Fiscal Incentive Programme G/SCM/52/Add.8 
Export Allowance G/SCM/53/Add.8 
Research and Development Allowance G/SCM/54/Add.8 
International Business Incentives G/SCM/55/Add.8 Barbados 
Societies With Restricted Liability G/SCM/56/Add.8 
Fiscal Incentives Act G/SCM/57/Add.8 
Export Processing Zone Act G/SCM/58/Add.8 Belize 
Commercial Free Zone Act G/SCM/59/Add.8 
Free Zone Regime G/SCM/61/Add.8 Costa Rica 
Inward Processing Regime G/SCM/62/Add.8 
Dominica Fiscal Incentives Programme G/SCM/63/Add.8 
Dominican 
Republic Law No. 8-90 to "Promote the Establishment of New Free 
Zones and Expand Existing Ones" G/SCM/64/Add.8 
El Salvador Export Processing Zones and Marketing Act, as amended G/SCM/65/Add.8 
Short-Term Export Profit Deduction G/SCM/66/Add.8 Fiji 
Export Processing Factories/Export Processing Zones 
Scheme G/SCM/67/Add.8 
Fiscal Incentive Act No. 41 of 1974 G/SCM/69/Add.8 
Statutory Rules and Orders No. 37 of 1999 G/SCM/70/Add.8 Grenada 
Qualified Enterprises Act No. 18 of 1978 G/SCM/71/Add.8 G/SCM/M/75 
Page 34  
 
  Exemption from Company Tax, Customs Duties and Other 
Import Taxes for Companies under Special Customs Regimes G/SCM/72/Add.8 
Exemption from Company Tax, Customs Duties and Other 
Import Taxes for the Production Process Relating to 
Activities of Managers and Users of Free Zones G/SCM/73/Add.8 Guatemala 
Exemption from Company Tax, Customs Duties and Other 
Import Taxes for the Production Process of Commercial and Industrial Enterprises Operating in the Industrial and Free Trade Zone G/SCM/74/Add.8 
Export Industry Encouragement Act G/SCM/75/Add.8 
Jamaica Export Free Zone Act G/SCM/76/Add.8 
Foreign Sales Corporation Act G/SCM/77/Add.8 Jamaica 
Industrial Incentives (Factory Construction) Act G/SCM/78/Add.8 
Jordan Partial or Total Exemption from Income Tax of Profits 
Generated from Exports under Law No. 57 of 1985, as amended G/SCM/79/Add.8 
Mauritius Freeport Scheme – Corporate Tax Exemption G/SCM/83/Add.8 
Official Industry Register G/SCM/84/Add.8 Panama 
Export Processing Zones G/SCM/85/Add.8 
Papua New 
Guinea Section 45 of the Income Tax G/SCM/86/Add.8 
Fiscal Incentives Act, No. 15 of 1974 G/SCM/87/Add.8 
Free Zone Act, No. 10 of 1999 G/SCM/88/Add.8 Saint Lucia 
Micro and Small Scale Business Enterprises Act, No. 19 of 
1998 G/SCM/89/Add.8 
Saint Kitts and 
Nevis Fiscal Incentives Act, No. 17 of 1974 G/SCM/90/Add.8 
St. Vincent 
and the Grenadines Fiscal Incentives Act No. 5 of 1982, as amended G/SCM/91/Add.8 
Uruguay Automotive Industry Export Promotion Regime G/SCM/92/Add.8 
 
 
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