WORLD TRADE  
ORGANIZATION  G/SCM/Q4/ATG/6 
23 November 2006 
 (06-5651) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
PROCEDURES FOR EXTENSIONS UNDER  
ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES  
AND COUNTERVAILING MEASURES 
 
Replies to Questions Posed by CANADA1;  COLOMBIA2; 
JAPAN3;  PERU4 and the UNITED STATES5 
 
 
 The following communication, dated 21 November 2006, is being circulated at the request of 
the Delegation of Antigua and Barbuda. 
 
_______________ 
 
 
CANADA  
 
Q1. Recalling that the objective of G/SCM/39 was to provide an extension of the transition 
period for the progressive elimination of export subsidy programmes of a number of Members, as called for in Article 27.4 of the SCM Agreement, we would ask the proponents of G/SCM/W/535 and G/SCM/W/537 to inform the Committee on Subsidies and Countervailing 
Measures of the individual efforts, if any, they  have undertaken to gradually bring these export 
subsidy programmes into conformity with their WTO obligations.  
  
Reply
 
  Antigua and Barbuda is of the view that document G/SCM/39 contains only a fast-track 
procedure to approve extensions under Article 27.4 of the ASCM.  This document neither reduces nor 
does it increase the balance of rights and obligatio ns under the ASCM.  Therefore, neither document 
G/SCM/39 nor Article 27.4 of the ASCM provide for a progressive elimination of export subsidy 
programmes.   
 Moreover, Article 27.4 mentions a “progressive” elimination in the first sentence which refers 
to the phase out of the export subsidies within th e eight-year period mentioned in Article 27.2(b), a 
condition that is completely different to those regarding the subsidies programmes at issue.  
Additionally, it is clear from the language in Article  27.4 that such “progressive elimination” is not 
mandatory.  In consequence, Antigua and Barbuda do es not see any obligation to take any effort for 
gradually phasing out these export subsidy programmes.  
 
                                                     
 
1 G/SCM/Q4/ATG/2 
2 G/SCM/Q4/ATG/1 
3 G/SCM/Q4/ATG/4 
4 G/SCM/Q4/ATG/5 
5 G/SCM/Q3/ATG/11-G/SCM/Q4/ATG/3/Rev.1 G/SCM/Q4/ATG/6 
Page 2  
 
   In addition, Antigua and Barbuda considers th at its export subsidy programmes are fully in 
compliance with its WTO obligations.  As a matter of  fact, the current extensions have been granted 
to Antigua and Barbuda in accordance to Article  27.4 and under the procedures and conditions set 
forth in document G/SCM/39.  
 Nevertheless, Antigua and Barbuda has been  undertaking efforts to phase out its export 
subsidies programmes.  Only one company has benefited from the programme since 2001.  The 
particular incentives have not been grante d to other enterprises since that time. 
 
Q2. Could the proponents of both documents also explain how further extension of this 
phase-out period would ensure that these efforts a re finally successfully undertaken in order to 
avoid a similar situation at the end of any ne w extended phase-out period for certain export 
subsidy programmes?     
  
Reply
 
 
 The proposal contained in G/SCM/W/535 refers only to the amendment of paragraph 1(e) of 
G/SCM/39.  The view of the proponents is to cont inue benefiting from the extension throughout 2018, 
based on their special economic, financial and de velopment needs.  Therefore, the rights and 
obligations contained in document G/SCM/39 an d Article 27.4 of the ASCM would remain 
unchanged. 
 
 Consequently, Antigua and Barbuda would take a prudent decision, based on specific 
financial, economic and developm ent needs and in accordance with  the procedures and timelines 
established in the provisions mentioned above.  As a WTO Member, Antigua and Barbuda has 
designed its development strategies to address these n eeds with a view to utilize trade promotion as a 
tool for poverty reduction and to achieve a fruitful  integration into the world economy.  However, 
these goals could only be achieved with the full support and solidarity of the entire WTO 
Membership.   
Q3. Recalling that the previous extension of the phase-out period for certain export subsidy 
programmes was for an additional period of 6 years, could the proponents of both documents 
explain the rationale for a proposed extension of 11 years?    
Reply
 
  The choice of the suggested date of 2018 should  be read in the light of the discussions that 
had taken place before the adoption of G/SCM/39.  At  that time, the proponents of this document had 
already explained their concerns and the reasons  to eliminate their programmes over a long enough 
timeframe, possibly extending over 20 years. In the light of those discussions and taking into account the relevant and legitimate financ ial, economic and development need s of Antigua and Barbuda , the 
extension proposed in G/SCM/W/535 should be regarded as an appropriate extension.   G/SCM/Q4/ATG/6 
 Page 3 
 
 
  COLOMBIA  
 
Q1. In the case of each of the programmes, please provide the most up-to-date information 
available regarding the number of beneficiary en terprises classified according to industrial 
sector. 
 
Reply  
  Based on in data available in 2005, 35 ente rprises benefited under the Fiscal Incentives Act.  
These enterprise operate in the following sectors: 
 
Sector  
 Firms/Companies  
 
Beverages   2 
Condiments  
 3 
Detergent  2 
Garments  6 
Light 
Industries   3 
Other  19 
 
Q2. Please explain why, under the above progra mmes, which have been in place for over 
ten years, it is still not possible to dismantle the prohibited subsidies.  
Reply
 
  Antigua and Barbuda’s economy is heavily de pendant on the export of a narrow range of 
services based around the tourism sector.  Additi onally, the subsidy programmes serve to support 
economic development and for diversif ication into other economic areas.  
 
Q3. The basis for requesting the extension is that Antigua and Barbuda is a small, 
vulnerable economy which suffers from the combin ed effect of diseconomies of scale caused by 
the small size of its economy and administration  and by its physical isolation.  If the above 
distorting factors are not brought under contro l before 2018, would there be a request for a new 
extension for the phasing out of the prohibit ed subsidies?  Please explain why these 
characteristics of Antigua and Barbuda 's econo my prevent the country from complying fully 
and satisfactorily with WTO export subsidy disciplines.  
Reply
 
  At this time, it is not anticipated that beyond 2018 there would be need for a further extension 
of the phasing out period.  A de termination would be made base d on the need and the prevailing 
provisions of the WTO SCM Agreement on granting extensions.  Nonetheless there are plans to 
reform the fiscal incentive programme at  the national level and regional level. 
 Also please see answer provided in 2 above.
 
 
Q4. Please explain why the situation giving ri se to the request for extension requires the 
granting of prohibited subsidies until the year 2018, rather than an earlier date. G/SCM/Q4/ATG/6 
Page 4  
 
   
Reply
 
  The choice of the suggested date of 2018 should  be read in the light of the discussions that 
had taken place before the adoption of G/SCM/39.  At  that time, the proponents of this document had 
already explained their concerns and the reasons  to eliminate their programmes over a long enough 
timeframe, possibly extending over 20 years.  In th e light of those discussions and taking into account 
the relevant and legitimate financ ial, economic and development need s of Antigua and Barbuda , the 
extension proposed in G/SCM/W/535 should be regarded as an appropriate extension.  
 
Also see answer given in 2 above.
  G/SCM/Q4/ATG/6 
 Page 5 
 
 
  JAPAN  
 
Q1. Please show the reasons why the lengthy exte nsion of 11 years is indispensable uniformly 
for all the export subsidy programmes referred to in the above documents.  
 Reply
 
  The choice of the suggested date of 2018 should be understood in light of the discussions that 
had taken place in 2000/2001 and led to the adoption of G/SCM/39 (the decision that allowed for the 
current extension).  At that time, the proponents of  this G/SCM/39 had expressed concern with respect 
a short extension would not allow time for the n ecessary structural transformation needed to wean 
industry off government subsidies.  Specifically, it was suggested that a timeframe of sufficient duration, and adequate to allow time for sectoral and macro-economic adjustment was required. In this context, the proponents offered that 20 years woul d be adequate.  In light of those discussions and 
taking into account the legitimate fiscal, economic and development needs of Antigua and Barbuda, 
the extension proposed in G/SCM/W/535 should be  regarded as an appropriate extension.  
  It should be noted that all of Antigua a nd Barbuda programmes generally share the same 
objectives, structure and design. Similarly, the economic imperatives that necessitate such 
intervention, prevail almost uniformly in the ec onomies of other proponents of G/SCM/W/535, hence, 
the rationale of a uniform timeframe is supported by  the similarities that exists between programmes 
and the intended policy effects they aim at.  Moreover, all proponents face the same structural 
weaknesses which justify th e proposed extension.  
  Finally, in this regard, it must be acknow ledged that Antigua and Barbuda, like the other 
proponents of G/SCM/W/535, have suffered the adve rse impacts of multiple external shocks.  These 
shocks have setback the realisati on of policy outcomes, desired and contemplated in G/SCM/39.  The 
combined effects of multiple natural disasters, externalities resultant from September 2001, as they 
relate to tourist arrivals, and the doubling of the wo rld market price for oil have all conspired against 
the fulsome insertion of Antigua and Barbuda and the other proponents into the global economy. 
  Antigua and Barbuda has applied and notifie d 2 programme.  The promotion of private 
investment is an integral part of the developmen t plan of Antigua and Barbuda as we continue to 
diversify production and reduce our reliance on a single industry, tourism.   
Q2. Please explain, one by one for each of th e export subsidy programmes referred to in the 
above documents, how each of those export subs idy programs are integrated in the development 
strategies of the relevant Me mber, why a further extension beyond 2007 is necessary for its 
economic and financial needs, and why the extens ion period has to be through to the end of 
2018. 
 
Reply
 
 
 The Fiscal Incentives Act is a key component of Antigua and Barbuda’s investment 
promotion framework and efforts to diversify its economy.   It should be noted that currently 35 firms ar e registered under the Fiscal Incentives Act.  The 
enterprises benefiting under form the provisions of  the Fiscal Incentives Act,  include those in the 
Manufacturing and light industry sectors. 
  Due to Antigua and Barbuda’s miniscule cont ribution to international trade, it cannot be 
suggested that these programmes, or the compani es benefiting under the fiscal incentives regime are 
trade distorting.    G/SCM/Q4/ATG/6 
Page 6  
 
   
 The choice of the suggested date of 2018 should  be read in the light of the discussions that 
had taken place before the adoption of G/SCM/39.  At  that time, the proponents of this document had 
already explained their concerns and the reasons  to eliminate their programmes over a long enough 
timeframe, possibly extending over 20 years. In the light of those discussions and taking into account 
the relevant and legitimate financial, economic a nd development needs of Antigua and Barbuda, the 
extension proposed in G/SCM/W/535 should be regarded as an appropriate extension.   G/SCM/Q4/ATG/6 
 Page 7 
 
 
  PERU  
 
Q1. Do the co-sponsors of proposal G/SCM/W/535 intend to extend only the programmes 
which have been notified to date under Ar ticle 27.4 of the Agreement on Subsidies and 
Countervailing Measures and which are included in Annex A of their proposal or do they 
intend to include any other export subsidy progr amme which fulfils the criteria set forth under 
Article 2 in document G/SCM/39? 
 
Reply  
 
 The proposal contained in G/SCM/W/535 a nd G/SCM/W/535/Add.1 refers only to the 
amendment of paragraph 1(e) of G/SCM/39.  Ther efore, the intention of the sponsors of these 
documents is to continue benefiting from the ex tension until the end of 2018 and the conditions 
specified in G/SCM/39 would remain unchanged.  Th is clearly excludes the possibility to include any 
further programmes. 
  
Q2. Under what laws and enabling regulations are the programmes listed in Annex A of the 
proposal implemented?  
Reply
 
 
• Fiscal Incentives Act, No 15 of 1974 
• Free Trade and Processing Zone Act No. 12 1994  
 
Q3. Which sectors and products benefit from the programmes? 
 
Reply  
 
 The programmes are not product or sector specifi c, and they have benefited a wide cross-
section of industries.  The major products incl uding aerated beverage, condiment, detergents, 
garments, private investment and capital for various Manufacturing and Services entities, light 
industries etc.   
Sector  Firms/Companies  
Beverages  2 
Condiments  3 
Detergent  2 
Garments  6 
Light 
Industries  3 
Other  19 
 
Q4. What amount is disbursed by the St ate to the programmes listed in Annex A? 
 
Reply  
  Government intervention in support of domestic  industry largely takes the form of revenue 
forgone.  Data pertaining to these programmes have not compiled. G/SCM/Q4/ATG/6 
Page 8  
 
  UNITED STATES
 
 
Q1. Please describe what efforts Antigua a nd Barbuda  has made to phase out the 
programme within the extension period that ha s already been granted, as provided under the 
“Procedures for Extension Under Article 27.4 for Certain Developing Country Members”.6  
Please further describe how Antigua and Barbuda will continue to ensure that the programme 
will be phased out, if an additional extension were granted.   
 
Reply  
 
 Antigua and Barbuda has tried in earnest to phase out the programmes, particularly engaging 
in policy driver diversification efforts needed  to augment economic activity in the industrial/ 
manufacturing industry and moving towards services.    
Q2. Please describe changes to the programme since 2001.  Also, please provide any updated 
or revised implementing legislation, and an y relevant amendments, unde r this programme and 
any accompanying regulations and decrees.   
 
Reply
 
  There have been no changes to this legislation since 2001. 
 
Q3. How many beneficiaries of this pr ogramme were there in 2001?  How many 
beneficiaries are there currently under the prog ramme?  What types of industries currently 
benefit under the programme?  
Reply
 
  In 2005, thirty-five (35) firms were registered under the Fiscal Incentives Act.  
Q4. Did Antigua and Barbuda undertake any comm itments to provide export subsidies to 
new beneficiaries beyond the year 2009?  If so, pl ease indicate the number of such beneficiaries 
by the year in which those commitments extend.  
Reply
 
  Antigua and Barbuda has not undertaken any co mmitments to provide export subsidies to any 
new beneficiaries beyond the year 2009. 
 
Q5. If available, please provide the amount of the subsidy provided under the programme 
for each year from 2001 through 2005.   
 
Reply
 
 
 Data pertaining to these programmes have not  compiled, and as such the tale cannot be 
completed.  
Q6. Please explain whether exports by qualif ying companies to CARICOM members are 
eligible for the benefits provided under this progra mme.  If not, please explain what benefits, if 
any, such exports to CARICOM countries are elig ible for, and the reason for differentiating 
among exports to CARICOM members and other exports.   
                                                     
 
6 G/SCM/39  G/SCM/Q4/ATG/6 
 Page 9 
 
 
   
Reply  
  There is no demarcation with respect to the or igin of the companies that qualify for benefits 
under the Antigua and Barbuda’s Fiscal Incentives Act.   The act is applied uniformly to encourage 
industrial development and to advance the integra tion of regional and domestic economies into the 
global environment.  There are no special bene fits accorded for exports to regional and or 
international markets under the Fiscal Incentive Act. 
 
Q7. Please explain whether there are any requirements that the receipt of benefits is 
contingent upon the use of domestic over imported goods.    
Reply
 
  No such local content requirements exist. 
 
__________