RESTRICTED  WORLD TRADE  
ORGANIZATION  G/SCM/M/71 
5 February 2010 
 (10-0678) 
Committee on Subsidies  
and Countervailing Measures  
 
 
 
MINUTES OF THE REGULAR MEETING 
HELD ON 20 OCTOBER 2009 
 
Chairman:  Mr. Raimondas Alisauskas (Lithuania)  
 
 
1. The Committee on Subsidies and Countervailing Measures ("the Committee") held a regular 
meeting on 20 October 2009. 
2. The United States raised an issue under "oth er business" with respect to the alleged 
government assistance provided to Japan's se mi-conductor industry.  The Committee adopted  the 
agenda, as amended: 
A. NATIONAL LEGISLATION – REVIEW OF NOTIFICATIONS OF NEW OR AMENDED 
LEGISLATION OR REGULATIONS NOT PREVIOUSLY REVIEWED BY THE COMMITTEE .................2  
1. Bahrain ........................................................................................................................ ..............2  
2. Kenya .......................................................................................................................... ...............2  
3. Norway......................................................................................................................... ..............2  
4. Peru ........................................................................................................................... .................4  
5. United States.................................................................................................................. ............4  
B. NATIONAL LEGISLATION – PREVIOUSLY REVIEWED NOTIFICATIONS OF 
COUNTERVAILING DUTY LAWS/AND OR REGULATIONS ............................................................4  
1. Argentina ...................................................................................................................... .............4  
2. Dominican Republic............................................................................................................. .....5 
3. Egypt .......................................................................................................................... ................5  
4. El Salvador .................................................................................................................... ............5  
5. Honduras ....................................................................................................................... ............6  
6. Panama ......................................................................................................................... .............6  
C. SEMI-ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS ................................................7  
D. NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS ....................8  
E. TRANSITION REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF ACCESSION OF 
THE PEOPLE 'S REPUBLIC OF CHINA TO THE WORLD TRADE ORGANIZATION .............................8  
F. EXTENSION OF THE TRANSITION PERIOD UNDER ARTICLE 27.4  OF THE SCM  
AGREEMENT ..............................................................................................................................1 6 
1. Review of compliance with transparency and standstill obligations..................................16  G/SCM/M/71 
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  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 2009.........................18  
G. CHAIRMAN 'S PROPOSALS REGARDING THE STANDARD FORMAT FOR SEMI-ANNUAL 
REPORTS OF COUNTERVAILING MEASURES , AND THE MINIMUM INFORMATION TO BE 
PROVIDED IN CONNECTION WITH THE NOTIFICATION OF ALL PRELIMINARY OR FINAL 
COUNTERVAILING MEASURES AS REQUIRED UNDER ARTICLE 25.11  OF THE SCM  
AGREEMENT ..............................................................................................................................2 0 
H. 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  
I. DATE OF NEXT REGULAR MEETING ............................................................................................24  
J. OTHER BUSINESS ......................................................................................................................24  
K. ANNUAL REPORT ......................................................................................................................26  
 
 
A. NATIONAL LEGISLATION – REVIEW OF NOTIFICATIONS OF NEW OR AMENDED LEGISLATION 
OR REGULATIONS NOT PREVIOUSLY REVIEWED BY THE COMMITTEE  
3. The Chairman  stated that under Item 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 Committee at its special meeting in April 1996. 
4. These procedures provided inter alia  that at each regular meeting the Committee would 
consider notifications of new or amended legisla tion 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. 
5. In accordance with this provision, the Co mmittee had before it at this meeting new 
notifications of countervailing duty legislation fro m Bahrain;  Kenya;  Norway;  Peru and the 
United States. 
1. Bahrain 
6. Bahrain's notification was contained in docum ent G/SCM/N/1/BHR/1 dated 17 July 2009.  
No delegation took the floor to comment or ask questions on this notification. 
2. Kenya 
7. Kenya's notification was contained in document  G/SCM/N/1/KEN/2 dated 29 July 2009.  No 
delegation took the floor to comment or ask questions on Kenya's notification. 
3. Norway 
8. Norway's legislative notification was found in document G/SCM/N/1/NOR/4 dated 
2 June 2009.  The United States and the European  Communities had submitted questions regarding 
Norway's notification, through documents G/SCM/Q1/NOR/4 and G/SCM/Q1/NOR/5, respectively. 
9. The delegate of Norway  stated that the questions raised concerned the implementation of the 
WTO Agreement into the Norwegian domestic cust oms legislation.  This gave the Norwegian 
delegation the opportunity to outline some general asp ects of the legal status of the WTO Agreements  G/SCM/M/71 
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  in the Norwegian legal system, and the legal tec hniques employed to ensure full conformity with 
Norway's WTO obligations. 
10. The delegate of Norway first explained the relationship between Norwegian law and public 
international law.  Generally, it was usual to dist inguish between monistic and dualistic states.  In 
monistic states, treaties that bound the states were de emed to take immediate effect and as such would 
be applied by national courts and authorities. 
11. In dualistic states, such as Norway, a special act of implementation was, in principle, required 
in order for the treaty to apply as part of domestic law.  Such special acts of implementation were not 
necessary if domestic legislation was in harmony w ith the obligations of the treaty.  Thus, where 
legislation already conformed to the WTO obliga tions, there would be no need to promulgate a 
special law to implement the particular WTO obligations. 
12. However, domestic legislation had to clearly st ate, and circumscribe, the level of competence 
and the relevant body authorised to handle cases and take decisions in question – if decisions were 
required.  It was for this reason that both the new and the former Norwegian customs legislation 
included general references to safeguards, an ti-dumping measures and countervailing measures, 
authorizing the relevant Ministry to promulgate implementing regulations a nd take decisions.  As 
here, often the Act itself would only contain general principles coupled with an authorization to the 
relevant Ministry to develop the provisions further in implementing regulations.  This could be seen in 
the new Customs Act, where the Act itself contained only a condensed version of the main principles 
of the relevant WTO obligations regarding trade re medies.  Neither the former Act nor the present Act 
contained a full implementation of all the aspects of the relevant WTO Agreements. 
13. Actual investigations in trade remedy situ ations, however, would not, and could not, be 
undertaken before implementing regulations were in place.  Norway had in general followed a cautious 
line with respect to the use of all trade remedy measures.  No measure had been imposed by Norway under the Agreement on Subsidies and C ountervailing Measures in recent years, i.e. since the 
establishment of the WTO.  And the present Norwegian government had not signalled any change of 
this policy. 
14. Implementing regulations relating to the Agreem ent on Subsidies and Countervailing Measures 
were not in place under the previous Customs Act.  The government did not intend to promulgate any 
implementing regulations under the new Act. 
15. For this reason, Norway could generally c onfirm and assure that, if – hypothetically – 
Norway were to introduce implemen ting regulations in the future;  and, furthermore, if Norway – 
hypothetically – were to introduce an actual me asure against any imported product, then such 
measures would certainly conform to all Norway's WTO obligations. 
16. After this general statement, the delegate of Norway moved on to the specific questions raised 
by the United States and the Europ ean Communities.  However, he asked whether Norway's answers 
had to be given orally or if it would be convenient to read them when they were delivered to the 
Secretariat in writing. 
17. The delegates of the European Communities
 and the United States  stated that they did not 
need oral replies to their questions at this stag e and that they would wait for the written replies. 
18. The Committee took note  of the statements made. G/SCM/M/71 
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  4. Peru 
19. The Chairman
 stated that Peru's notification was contained in document 
G/SCM/N/1/PER/2/Suppl.1 dated 17 June 2009. 
20. The delegate of Peru  stated that 004 PSM published in the official journal dated 
19 January 2009 had repealed 006 PSM which referred to the implementation of Article 6 of the 1994 
Subsidies and Countervailing Measures Act.  006 PSM had been notified to the WTO 
on 2 March 2009 and circulated in document G/ADP/N/1/PER/2 – G/SCM/N/1/PER/2.  This 
regulated the standards in the multila teral agreements to prevent and correct distortions of competition 
in the market caused by dumping and subsidies.  To give greater predictability, the government of 
Peru had thought it would be appropriate to modify Supreme Act 006 2003 PSM in the following 
articles through the supreme decree:  Article 6- calculation of normal value and dumping margin, 
Article 44- anti-dumping rules, Article 52- deadline for giving back payments that were made which 
were not due, Article 60- changed circumstances, sunset and administrative reviews.  Supreme Decree 004 PSM added Articles 66, 68 referring to administrative regimes with regard to the 
collection of anti-dumping duties as well as returning such duties.  Finally, Supreme Decree 004 
PSM, in its Article 8, referred to normal values in the case of countries which were not market 
economies and the ability to contest such decisions. 
21. The Committee took note
 of the statements made. 
5. United States 
22. The Chairman  stated that the notification of the United States was contained in document 
G/SCM/N/1/USA/1/Suppl.8 dated 29 April 2009.  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  
23. The Chairman noted that procedures contained in G/SCM/W/293 for the review of 
countervailing duty legislation provided that the Committee would revert to a previously-reviewed 
legislative notification if written questions were  submitted on such notification not later than 
six weeks in advance of the meeting. 
24. Pursuant to this provision, and in the light  of written questions posed, the Committee had 
before it at this meeting notifications of counter vailing duty legislation from Argentina; Dominican 
Republic; Egypt; El Salvador; Honduras and Panama. 
1. Argentina 
25. At the regular meeting held on 7 May 2009,  the Committee had reviewed a notification 
received from Argentina with respect to a D ecree on the implementation of Argentina's Law 
No. 24.425.  This notification was contained in  document G/SCM/N/1/ARG/1/Suppl.8.  Following 
that meeting, Argentina had provided written replies to questions posed by the European Communities, the United States and Tu rkey.  These replies were found in documents 
G/SCM/Q1/ARG/22, 23 and 24, respectively.  Th e Committee had received follow-up questions on 
this notification from the United States which had been circulated in document G/SCM/Q1/ARG/25.  
Argentina had submitted its replies to these ques tions through document G/SCM/Q1/ARG/26 dated 
19 October 2009.  G/SCM/M/71 
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  26. The delegate of Argentina  stated that his delegation had provided replies to United States and 
to the Committee.  The replies were very simple an d easy to deal with.  However, the delegation of 
Argentina was ready to answer any questions or an y follow-up questions that the United States or any 
other delegation had with regard  to Argentina's notification. 
27. The delegate of Turkey  asked a follow-up question rega rding Argentina's response to 
question 1 from Turkey.  He asked if Argentina c ould explain whether the initiation date was before 
the publication of the decision in the official journal,  or after publication or on the date of publication.  
He also asked if the date of initiation of the inv estigation in the corresponding decision was officially 
published or not. 
28. The delegate of the United States  stated that they would decide whether they would put 
forward further questions after seeing the tran slated version of Argentina's replies. 
29. The delegate of Argentina  noted that the follow-up question from Turkey referred to the 
answers that Argentina had submitted through docume nt G/SCM/Q1/ARG/24.  He stated that if the 
delegation of Turkey considered presenting this question in writing, the delegation of Argentina 
would forward it to its capital to obtain an answer. 
30. The Committee took note  of the statements made. 
2. Dominican Republic 
31. The Chairman  stated that through document G/SCM/Q1/DOM/5, the United States had 
submitted questions regarding the notification ma de by the Dominican Republic contained in 
document G/SCM/N/1/DOM/2/Suppl.1.  The Dominican  Republic's replies to these questions had 
been circulated in document G/SCM/Q1/DOM/6.  No delegation took the floor to make comments on 
the replies of the Dominican Republic. 
3. Egypt 
32. The Chairman stated that through document G/SCM/Q1/EGY/8, Egypt had provided replies 
to questions posed by the United States in document G/SCM/Q1/EGY/7 regarding Egypt's 
notification contained in document G/SCM/N/1/EGY/ 2/Rev.1/Suppl.1.  No delegation took the floor 
to make comments on Egypt's replies. 
4. El Salvador 
33. The Chairman stated that through document  G/SCM/Q1/SLV/6, the United States had posed 
follow-up questions regarding El Salvador's notifi cation circulated in document G/SCM/N/1/SLV/3.  
El Salvador's replies to these questions had been  received shortly before the Committee's regular 
meeting on 7 May 2009.  These replies had b een subsequently circulated in document 
G/SCM/Q1/SLV/7.  At the previous meeting, the dele gate of the United States had mentioned that his 
delegation had not yet looked at El Salvador's re plies and it would inform the Committee of further 
questions that it might have. 
34. The delegate of the United States  stated that the delegation of the United States might submit 
further comments during the meeting of  the Committee on Anti-Dumping Practices. 
35. The Committee took note  of the statement made. G/SCM/M/71 
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  5. Honduras 
36. The Chairman
 stated that through document G/SCM/Q1/HND/1, the United States had 
submitted questions regarding the legislative no tification of Honduras circulated in document 
G/SCM/N/1/HND3. 
37. The delegate of Honduras  stated that his delegation would tr y to answer the questions raised 
by the United States and would provide written answers later to the Secretariat as well as to the 
delegation of the United States. 
38. First of all, an interested party had every right  to indicate its interest in being included in a 
procedure when it believed to be affected as provided for in Article 6.11 of the Anti-Dumping Agreement and Article 12.9 of the SCM Agreemen t.  There was no timeframe to indicate such 
interest.  With regard to confidential briefs or reports , and in spite of the lack of practice in this area, 
the delegation of Honduras believed that the inves tigating authority would give access to interested 
parties to any information which formed the basis for the carrying out of preliminary and definitive 
determinations in keeping with Article 6.4 of the Anti-Dumping Ag reement and Article 12.3 of the 
SCM Agreement.  Honduras believed th at the term "material injury" included threat of material injury 
as well as material retardation of the establishment of  a new industry.  The term "serious prejudice of 
a domestic industry" referred to situations where there was a significant general undermining of the 
position of a domestic industry.  With regard to th e intermediate review, Article 40 of the Central 
American Regulation stipulated that a measure could be revised at any time during its implementation and this in line with Article 11 of the An ti-Dumping Agreement and Article 21 of the 
SCM Agreement which laid down the requirements and relevant inform ation for the conduct of this 
review.  As to whether the investigating authorit y should automatically initiate a sunset review or 
should be requested to carry out this review, the de legate of Honduras indicated that when this was 
justified in line with Article 11.2 of the An ti-Dumping Agreement and Article 21.2 of the 
SCM Agreement, the investigating authority would start the examination to determine the need for 
maintaining the duty and this could be done on an ex officio basis or at the request of an interested 
party.  Interested parties, and in particular th e domestic industry, could request the initiation of a 
sunset review.  With respect to the procedure to be applied in the conduct of  a sunset review laid 
down in Article 11.3 of the Anti-Dumping Agreemen t and Article 21.3 of the SCM Agreement, the 
resolutions for opening or starting an anti-dumping investigation or in the case of countervailing 
measures and the imposition of provisional measure s and/or definitive measures would be published 
in the official journal of Honduras.  Such resolutions could be consulted online at www.sic.gov.hn. 
39. The Committee took note
 of the statements made. 
6. Panama 
40. The Chairman  stated that through document G/SCM/Q1/PAN/10, Panama had replied to 
questions posed by the Europ ean Communities in document G/SCM/Q1/PAN/6 regarding the 
legislative notification of Panama circulated in document G/SCM/N/1/PAN/2. 
41. The delegate of the European Communities  stated that his delegation would review Panama's 
written replies and that it did not have follow-up questions at this stage. 
42. The Committee took note  of the statement made.  G/SCM/M/71 
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  C. SEMI-ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS  
43. The Chairman  stated that document G/SCM/N/195 dated 14 July 2009 invited Members to 
submit, not later than 31 August 2009, semi- annual reports under Article 25.11 of the 
SCM Agreement of countervailing duty actions ta ken in the period 1 January-30 June 2009. 
44. Reports on countervailing duty actions taken in the first half of 2009 had been received from 
Australia; Canada; China; the European Comm unities; Japan; Mexico; New Zealand; Peru; 
South Africa; Turkey and the United States. 
45. As stated in paragraph 2 of document G/SC M/N/195/Add.1, 25 Members had informed the 
Committee that they had not taken any countervaili ng duty action in the first six months of 2009.  
Unfortunately, there was a very large number of Members 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/195/Add. 1.  
The Chairman urged these Members to s ubmit such a report as soon as possible. 
46. There were no comments on the semi-annua l reports of Aust ralia, Canada, the 
European Communities, Mexico, New Zealand, Peru , South Africa, Turkey and the United States. 
47. The delegate of the United States  highlighted several concerns his delegation had with respect 
to China's conduct in its ongoing CVD investigations  with against US exports.  In these proceedings 
which involved exports of steel a nd chicken products, it appeared that  some of China's actions could 
be inconsistent with its obliga tions under the SCM Agreement or inconsistent with positions it had 
taken in other fora.  Therefore, the delegate of the United States sought clarification from China 
regarding its actions.  First, the United States was concerned with how China treated information that 
parties had designated as confidential.  Specifically, in the ongoing investigation of US steel products, 
China's investigating authority, MOFCOM, had discl osed company confidential business information 
to the US Government.  This appeared to be contra ry to the provisions of the SCM Agreement dealing 
with the treatment of confidential information.   Specifically, that would be Article 12.4 of 
SCM Agreement.  There were also related provision s in China's Regulations which provided a similar 
level of protection to Article 12.4 of the SCM Ag reement.  It was the Un ited States' understanding 
that MOFCOM had not rejected the request for business confidential treatment.  Therefore, 
MOFCOM should not have disclosed the information without the company's permission which the company had not granted.  In the light of this problem, the United States sought further clarification from China regarding the standards it applied a nd the procedures it followe d with respect to the 
treatment of confidential information.  Specifically , the delegate of the United States invited the 
delegation of China to explain how its inves tigating authorities protected business proprietary 
information and under what circumstances one party' s confidential information could be released to 
another party in a case.  Secondly, the delegate of the United States asked that China clarify its 
position regarding the appropriate time-period that investigating authorities had to provide to respond 
to questionnaires in countervailing duty proceedings, particularly supplemental questionnaires.  In the 
ongoing WTO dispute China brought involving certain US CVD investigations, China had argued that 
Article 12.1.1 of the SCM Agreement required Member s to provide at least 30 days to respond to all 
questionnaires issued by an investigating authority.  Yet, in China's CVD investigation of US steel 
products, far less than 30 days had been allowed to respond to MOFCOM's questionnaires.  For a 
number of recent questionnaires, China initially had provided only 7 days to respond despite the large 
number of information requested in these questionnai res.  While some limited extensions had been 
provided, others had been denied even though th e preliminary determination was months away.  
Considering the apparently incons istent positions that China had ta ken, the delegate of the United 
States asked China to clarify what it believed the appr opriate time that investigating authorities had to 
provide to respond to questionnaires, especially  those issued after the initial questionnaire. G/SCM/M/71 
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  48. Finally, the delegate of the United States expressed concern that China had initiated 
investigations of subsidies in the steel and chicken products cases without sufficient evidence as 
required by Article 11.2 of SCM Agreement.  The best example was the chicken products 
investigation.  The subsidies alle ged in this case were primarily provided to farmers that grew various 
grain crops.  These programs did not provide any s upport for raising chickens.  While US farmers 
could sell grain that was eventually used to produce chicken feed, China had not required any 
evidence from the petitioner as to how the alleged s ubsidies to upstream input suppliers could pass 
through to benefit the producers of the subject merc handise which were at least one if not two stages 
downstream from the recipients of the alleged subsidies.  Despite th e absence of any evidence as to 
how alleged subsidy benefits to upstream suppliers could benefit downstream producers, China had 
initiated an investigation into the alleged upstream  subsidies.  The United States in its practice 
required very specific evidence before initiating upstre am subsidy investigations.  The delegate of the 
United States requested that China explain its sta ndard for initiating an investigation of an upstream 
subsidy or why in particular it ha d decided to initiate an upstream subsidy investigation in the CVD 
case with respect to US chicken exports. 
49. The delegate of China
 stated that the questions from th e US delegation were quite detailed 
and technical.  The delegation of China did not have sufficient time to scrutinise these questions at the meeting.  However, as an initial response, the delega te of China provided the following explanations:  
Firstly, China fully respected the requirements of pr otecting confidential inform ation prescribed in the 
WTO Agreement.  China would continue to be committed to this very important requirement.  
Secondly, as to supplementary responses, this w as a pending issue under the DSU.  There were no 
clear rules about the deadline for collecting the suppl ementary responses.  In its practice, China made 
sure that Members and other interested parties were given a reasonable pe riod and ample opportunity 
to submit evidence to the investigating authority.  MOFCOM had provided an extension to the US respondents when this was requested.  The delegate  of China indicated that his delegation looked 
forward to receiving written questions fr om the United States in due course. 
50. With regard to the semi-annual repor t of Japan, the delegate of Japan
 stated that the action 
contained in Japan's report pertained to the revoca tion of a countervailing measure as a result of a 
changed circumstances review. 
51. The Committee took note  of the statements made.   
D. NOTIFICATIONS OF PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS  
52. The Chairman  stated that following the regular meeting held on 7 May 2009, the Committee 
had received notifications under Article 25.11 of  the SCM Agreement of preliminary and final 
countervailing duty actions from Australia; Ca nada; the European Communities; Mexico; 
South Africa; Turkey and the United States.  These notifications were listed in documents 
G/SCM/N/191, 193, 194, 196, 197 and 199. 
53. No delegation took the floor to make comments on these notifications. 
E. TRANSITION REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF ACCESSION OF THE 
PEOPLE 'S REPUBLIC OF CHINA TO THE WORLD TRADE ORGANIZATION  
54. The Chairman recalled that paragraph 18 of the Protocol of Accession of the People's 
Republic of China to the World Trade Organization pr ovided that all subsidiary bodies, including this 
Committee, "which have a mandate covering Ch ina's commitments under the WTO Agreement or 
[the] Protocol shall, within one year after accession, review, as appropriate to their mandate, the 
implementation by China of the WTO Agreement and of the related provisions of [the] Protocol."  G/SCM/M/71 
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  55. China was to provide relevant information in advance of the review, including information 
specified in Annex 1A to the Pr otocol.  China could also raise issues relating to any reservations 
under Section 17 or to any other specific commitments made by other Members in the Protocol, in subsidiary bodies which had a rele vant mandate.  This Committee had to report the results of the 
review promptly to the Council for Trade in Goods.  Review was to take place after accession in each 
year for eight years, with a final review in year  10 or at an earlier date decided by the General 
Council. 
56. The Chairman indicated that the Protocol contained no procedures for the conduct of the 
transition review, except that China was to provide re levant information in advance of the review.  In 
this regard, Annex 1A specified that China was re quested to provide information on the following to 
the Committee in accordance with Article 18.1 of its Accession Protocol:  "Pricing Policies": (a) 
"application of existing or any other price contro ls and the reason for their use"; and (b) "pricing 
mechanisms of China's state trad ing enterprises for exported products".  The notification by China 
provided for in Annex 1A had been circulated in document G/SCM/N/198, dated 5 October 2009.  
The United States and the European Communities ha d submitted questions in the context of this 
transition review, which had been circulated  in documents G/SCM/W/548 and G/SCM/W/550, 
respectively. 
57. The delegate of the United States
 noted that the principal purpose of the transitional review 
mechanism was to examine China's compliance with its WTO obligations.  One of these obligations 
was to provide a timely and complete subsidy notifica tion.  After nearly five years as a WTO Member, 
China had submitted its first subsidy notification in  2006, covering the period 2001-2004.  While this 
was a positive step, the notification was largely incomp lete as it failed to include a single sub-central 
government measure. 
58. The delegate of the United States indicated that , as the United States had highlighted in prior 
submissions to the Committee, provincial and local au thorities in China played a very important role 
in implementing industrial policy, including subsidy policy.  Recent academic literature, for example, 
indicated that local governments were responsible fo r nearly 20 per cent of China's investment, much 
of which was misdirected into sectors with excess cap acity, such as steel.  Therefore, the notification 
of sub-central government measures by China was imperative.  The timeliness of China's subsidy 
notifications was also of obvious concern.  China lagging behind for four years in providing its subsidy notifications was particul arly troubling because some of Ch ina's subsidy programmes expired 
after two years.  Given this fact, the delays in  China's subsidy notifications effectively denied 
Members' ability to analyze and meaningful ly question China's subsidy programmes. 
59. In the light of these very significant issues, th e United States had been surprised when, last 
year, China had firmly rejected any implication that it had failed to fulfil its transparency commitments in the area of subsidies and failed to provide any specific timetable for bringing itself 
into compliance.  In accordance with Annex 1A(i) of China's Working Party Report and Article 18.1 
of China's Protocol of Accession, China was ob ligated to provide annual economic development 
plans, five-year programmes, and any industrial or sectoral programmes or policies promulgated by 
central and sub-central government entities.  Wh ile China had provided some limited information 
with respect to its national five-year plans, it a ppeared as though it had not provided any information 
with respect to the industrial policies and progr ammes of sub-central government entities.  The 
delegate of the United States therefore requested that  China identify and provide citations to all of the 
current provincial five-year plans and current prov incial programmes and policies at least for all 
sectors that the central government had deemed as basic, pillar, strategic or key industry 
(e.g., telecommunications, civil aviation, machiner y, autos, steel, base metals, chemical, etc.). 
60. The delegate of the United States continued that another of the obligations China had 
assumed upon joining the WTO was not to provide an y prohibited subsidies.  The United States and G/SCM/M/71 
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  other WTO Members had raised nume rous questions over the years with respect to what had appeared 
to be unreported subsidy programmes at various le vels of government that were contingent upon 
export performance or the use of domestic over im ported goods.  The United States continued to find 
these types of measures.  As an example, the dele gate of the United States quoted a statement from 
Hunan Province's 2009-2011 plan indicating that subs idies for products exported by ramie processing 
companies would be provided. 
61. The delegate of the United States added that in the context of subsidies provided for the use of 
domestic goods, China's recent plan for machinery established a risk compensation mechanism to encourage the first use of domestically-produced machin ery.  It was particularly troubling, as the end 
of the period for the transitional review mechan ism was approaching, to see China taking what 
seemed to be steps backward rath er than forward, by implementing what appeared to be new 
prohibited subsidy programmes at nearly all levels of  government.  This was not tenable, the delegate 
of the United States added, stressing that China needed  to meet its obligations  to provide a timely and 
complete subsidy notification covering all levels of government, and to terminate without delay any 
prohibited subsidies in place. 
62. A third obligation undertaken by China upon joining the WTO was that it would not 
influence, directly or indirectly, commercial decisi ons on the part of state-owned or state-invested 
enterprises, as set forth in paragraph 46 of the Working Party on China's Accession.  The delegate 
noted that the approximately 150 SOE holding comp anies owned by the State Assets Supervision and 
Administration Commission ("SASAC") controlled t housands of companies across a wide range of 
industries and accounted for most of the profits in the SOE sector.  Further, as had been noted in the 
last transitional review exercise, the General Offi ce of the State Council established a mechanism by 
which profits from SOEs would fund the re-organiza tion of state-owned enterprises, consistent with 
national industrial policies and planning.  China had not, in last year's trade review mechanism, addressed the fundamental issue of how state-owne d enterprises could operate on a purely commercial 
basis when they had to make investment decisions  in accordance with government industrial policy.  
If China's ownership and management decisions were not based on commercial considerations, 
subsidy issues could arise.  Given this, the delega te of the United States asked China how it intended 
to proceed with its plans for restructuring the SOE sector and at the same time meet its WTO 
obligation to operate its SOEs solely on a co mmercial basis, without government influence. 
63. Finally, the delegate of the United States noted  that China was obligated to notify to the 
Committee the application of any price controls and the reason for their use.  In the context of the 
significant rise in international oil prices the last  year, it had been widely  reported and acknowledged 
by the Chinese Government that the price of oil products had been held down by the government and 
that Chinese refineries received significant subsidi es to cover their losses.  The delegate of the 
United States requested that Chin a describe the current government price controls on oil products, 
how the government compensated companies for loss es incurred due to these price controls, and the 
current status of China's energy price reform effo rts, particularly with respect to fuel prices. 
64. The delegate of the European Communities
 expressed appreciation for the transitional review 
mechanism as a useful supplement for additional tr ansparency about China's trade regime and in 
particular about its subsidies policy in additi on to bilateral discussions and China's subsidy 
notification.  The delegate of the European Co mmunities added that China had submitted a subsidy 
notification in 2006 covering the period 2001 to 2004 and that in the last transitional review 
mechanism, the delegate of China had stated that China was working to update this notification which 
would cover years 2005-2008.  While the European  Communities appreciated the efforts undertaken 
by China to submit a complete and timely subsidy not ification, China had yet to submit its notification 
to the Committee, one year after the last transiti onal review mechanism exercise.  Two notifications 
were missing, one for the period 2005-2006 and th e second for the period 2007-2008. The delegate of 
the European Communities noted that it was also un clear whether China's next subsidy notification  G/SCM/M/71 
 Page 11 
 
 
  would cover subsidies at the sub-federal level.  Subsidies provided by sub-national governments was 
an area specifically highlighted by Members in pa ragraph 173 of the Working Party Report on China's 
accession to the WTO.  The European Communities wa s therefore concerned that China might again 
provide an incomplete subsidy notif ication.  The delegate of the European Communities noted that the 
EC trade defence investigating authorities continue d to uncover subsidy schemes, in particular in the 
steel sector.  The existence of these subsidies had been confirmed by a number of independent studies 
and by the rapid growth of China's steel exports in recent years. 
65. China's continued failure to submit a comple te subsidy notification in due time left 
WTO Members with only one of two options: to tolera te China's disregard for the legitimate interests 
of its trading partners regarding transparency and no tification requirements;  or to resort to formal 
dispute settlement proceedings – a path – one coul d assume – both sides would prefer to avoid.  
Moreover, China appeared to use a practice whereby it restricted the export of certain raw materials 
which in turn depressed the prices of those raw mate rials when used in the downstream manufacturing 
industry.  This practice could effectively amount to  a subsidization of inputs for certain downstream 
products, and was often coupled with various in centives for exports of the downstream product. 
66. In the light of this, the European Communities was looking forward to receiving replies to the 
questions submitted ahead of the Committee meeting. 
67. The delegate of Japan  noted that Japan had not submitted written questions but wished to 
make certain remarks with regard to transparen cy.  Japan was concerned about China not having 
made the required 2007 and 2009 new and full subsidy notifications.  Considering the sound and fair 
function of the surveillance mechanism under th e SCM Committee, Japan urged China to submit 
these two notifications as required under Article 25 of the SCM Agreement. 
68. The delegate of Canada  thanked the delegations of the United States and the European 
Communities for their detailed communications an d the delegation of Japan for the comments it 
provided.  Canada agreed that the subsidy notifica tion process was an important transparency exercise 
and hoped that China would make every effort to submit its new and full notifications in a timely 
manner.  Canada shared the United States' con cerns about China's industrial policies and their 
linkages with respect to subsidisation.  On nume rous occasions, Canada had sought clarifications 
regarding China's iron and steel policy.  Canada's concerns centred on the high degree of intervention 
of the Chinese government in the direction and deci sion-making regarding the allocation of resources 
into and out of its steel industry, including subsidi sation.  Canada therefore shared the United States' 
interest in learning more about the relationship be tween China's national five-year plans and specific 
government policies.  The delegate of Canada noted the efforts of China's Ministry of Industry and 
Information to reduce and/or eliminate steel-mak ing capacity in China and requested that China 
provide any available information on any possible role that subsidization would or could play in this 
endeavour.  Canada looked forward to China's answer s on the leading role of state-owned enterprises 
in advancing industrial policies. 
69. The delegate of China  took note of the comments made by previous speakers and of the 
written questions raised by the delegations of th e United States and the European Communities.  
China had elaborated its positions  on many of these questions as reflected in the minutes of the 
Committee meetings at which previous reviews had b een held.  In addition, the delegate of China 
wished to make the following points in the transiti onal review by the Committee this year in response 
to questions put forward by other delegations and to comments made by previous speakers. 
70. On the issue of transparency, the delegate of  China informed the Committee that a draft of 
China's second subsidy notification was ready fo r examination and that work to submit the 
notification was at the final stage.  This second notification was to cover the period 2005-2008.  Upon 
the submission of this second notification, the clarity of the measures of the Chinese central G/SCM/M/71 
Page 12  
 
  government which might constitute subsidies as de fined in the SCM Agreement would be greatly 
enhanced.  China would make all efforts in the coming few months to finalize the second notification 
and was particularly pleased that its transparency  obligation under the SCM Agreement for this four 
year period could finally be fulfilled.  The delega te noted that preparation of the second notification 
had been more complex than anticipated due to changes in recent years resulting from major reforms 
in China's income tax and value-added tax regimes. 
71. China would continue to work towards incorpora ting subsidies at the local level into future 
notifications.  The delegate of China at this tim e had difficulties in providing a specific time schedule 
for the submission of a notification that containe d sub-central measures, but noted that China's 
progress in submitting the first and second notifica tions had enhanced its confidence and would 
enable China to concentrate better its futu re efforts in fulfilling this difficult task. 
72. With respect to mechanisms to review s ubsidy programmes for consistency with the 
SCM Agreement, the delegate of China informed  the Committee that the Central Government of 
China or the State Council had inter-ministerial c onsultation procedures to ensure WTO consistency 
when new policies and measures were formulated, including those that may be related to the 
SCM Agreement. Other information on such mech anisms could be found in paragraph 74 of 
document G/SCM/M/66,  which recorded the tran sitional review undertaken last year in the 
Committee.  The Chinese delegation had, in that re view, provided detailed rep lies on this question.  
The delegate further informed the Committee that re gulations, rules and other administrative measures 
of both the central and local governments were review ed at intervals and that those abolished or no 
longer applicable would be published collectively. 
73. With respect to industry policy administrati on, the delegate of China first provided 
explanations on China's national five-year plans.  Th e national five-year plans were blueprints of the 
overall social and economic development of the nation to be achieved in every five years period.  The 
plans were approved by the National People's Congr ess and implemented by the State Council or the 
Central Government.  Likewise, local five-year plan s of an administrative region at or above county 
level were approved by the corresponding local people's congresses.  The national and local five-year 
plans were not necessarily inter-related as the goals and tasks set could differ in view of the different 
situations and development levels of different localities.  However, the general guiding principles of 
the plans would usually be consiste nt.  Achievement of the goals and tasks set in these five-year plans 
relied primarily on the fundamental role of the ma rket and the five-year plans contained no specific 
subsidy programmes.  In response to a question ask ed by the United States, the delegate of China 
indicated that the provincial five-year plans were available on the official websites of the relevant 
provincial governments. 
74. The delegate of China explained that i ndustrial policies were general guidelines for 
development of certain industries in order to achie ve development goals envisaged in the five-year 
plans.  Industrial policies aimed at promoting stru ctural adjustment and industrial upgrading so that 
the sectors concerned could develop in a steady, hea lthy and sustainable manner.  Industrial policies 
were usually formulated at the national level, and shared common features, notably the high priority 
given to resources and energy conservation, to th e reduction of emissions, and the importance placed 
on the strengthening of China's capacity for independent  innovation.  The delega te of China noted that 
local governments could draft their own industrial deve lopment plans, but that these plans had to be in 
line with the industrial policies at the national le vel.  As general guide lines, industrial policies 
contained no specific subsidy programmes.  Industrial policies were implemented through 
administrative measures, for exampl e access conditions for investment in various sectors.  Subsidy 
programmes were found in administrative measures a nd might or might not be related to industrial 
policies.  General policy statements such as the indus trial policies were not to be mistaken for subsidy 
programmes; for a subsidy programme to exist, th ere would have to be an administrative measure 
specifying at least the financial contribution and its utilization.  G/SCM/M/71 
 Page 13 
 
 
  75. The delegate of China then turned to the questi on of state-owned enterprises.  In China's view, 
the observance of industrial policies by state-owne d enterprises did not preclude such enterprises from 
operating on a commercial basis.  China also saw no  inconsistency between the Law of the People's 
Republic of China on the State-Owned Assets of En terprises (adopted on 28 October 2008) and its 
WTO obligations.  Article 6 of the Law clearly stat ed that the State as an investor or shareholder 
would observe the principles of separation of gove rnment from enterprise, separation of its public 
administration functions from those of an invest or or shareholder and non-interference in the 
independent management and operation of enterprises.  As to Arti cle 7, it reflected the areas that the 
State as an investor was interested in and there w as no indication in that provision that the State would 
not behave according to market economy principles. 
76. Regarding land administration, the delegate of China indicated that in China's view, it was 
only natural that projects not in accordance with industrial policies - in particular projects wasting energy and resources, polluting the environment, or  expanding production capacity already in excess - 
were not supplied with land.  He did not see a cont radiction between this a nd the supply of land on 
commercial conditions to projects consistent with industrial policy.  The provision of free or 
underpriced land used to be a subsidy offered by local authorities to investors, largely foreign 
investors, in the early years of China's opening up, this was no longer the case.  China had made it 
clear in the last review that a basic principle a dhered to by China in its economic reforms was to 
introduce market forces and have them play a funda mental role in the allocation of resources, 
including land.  Presently, land for industrial purpo ses in China could only be provided through public 
bidding procedures. 
77. In response to questions regarding civil aircraft, the delegate of China clarified that China had 
not formulated an industrial policy on the developm ent of the aerospace industry.  That said, "large 
aircraft" was one of the "16 national science and technology major projects", the implementation of 
which was the responsibility of the Ministry of Science and Technology.  These 16 projects would 
have a budget of around RMB 32.8 billion in 2009 and around RMB 30 billion in 2010.  The 
relevance of this to the SCM Agreement remained to  be clarified.  At this stage, China did not 
consider it appropriate for the Committee to address the issue of a Member's funding of science and 
technology development.  As to the relations hip between banks and the Commercial Aircraft 
Corporation of China Ltd, to his knowledge, onl y the Industrial and Commercial Bank of China Ltd 
had signed a letter of intention with the company.  Whether the Bank would provide loans to the company in the end and, if so, on what terms a nd conditions, remained to be determined by the Bank 
based on its judgement of benefits and risks of th e project.  The delegate of China also noted the 
reference made by the delegation of the United St ates to a subsidy programme of the Civil Aviation 
Administration of China (CAAC) concerning the deve lopment of regional aviation.  This programme, 
which concerned trade in services, was initiated l ast year for general services purposes, and was 
provided to airlines for their launch and operation of regional flights.  It was unrelated to the large 
aircraft project. 
78. With respect to the textiles sector and recen t industry support plan, the delegate of China 
indicated that after the outbreak of the financia l crisis, China had put forward (in February and 
March 2009) adjustment and reinvigoration plans for 10 industries, including textiles.  The ten plans 
were general policy guidelines and were implemented through specific implementing measures, 
including for example, raising export VAT rebate rate, lowering the purchase tax on certain vehicles, 
expansion of existing trade promotion schemes, and various projects to promote consumption.  China 
had notified these implementing measures to the WT O TPRB's financial crisis monitoring mechanism 
as they were staged.  The delegate of China also noted that some local governments drafted their own 
plans for certain sectors.  In the course of tack ling the financial crisis, China attached great 
importance to the consistency of the measures wi th its WTO obligations.  Issues raised in the 
questions addressed to China, such as those on alle ged prohibited subsidies, were basically general G/SCM/M/71 
Page 14  
 
  policy statements as found in relevant plans.  Th ey involved no confirmed subsidy programmes with 
specified amount of financial contribution and its utilization. 
79. Lastly, turning to fuel prices, the delegate of China indicated that the price of crude oil in 
China was interconnected with the international ma rket and subject to negotiations between buyers 
and sellers.  On processed oil, the price was now a government guidance price, where the benchmark 
price was set by the government based on prices on the international market, plus consideration of 
other relevant factors such as taxes, production costs, pr ofits at an appropriate le vel etc.  Retailers also 
had a margin within which they could decide  retailing prices.  Steps had been taken in 
December 2008 to reform the mechanism to set the benchmark price.  After the reform, the 
benchmark price would be adjusted more frequently provided that prices in the international market 
went beyond a certain level within a certain period. 
80. The delegate of the United States
 thanked the delegate of China for the answers provided, 
some of which were particularly helpful.  While expressing satisfaction at China's indication that its notification would soon be submitted to the Committ ee, the delegate of the United States considered 
that it was particularly disturbing that China would not be notifying subsidies at the sub-central level 
in that notification, given that the United Stat es had raised the issue in  the Committee for several 
years and that notifying these is critically important .  The United States had had significant experience 
examining Chinese sub-central measures and had f ound numerous measures that appeared to be 
inconsistent with China's obliga tions under the SCM Agreement.  Fo r these reasons, the delegate of 
the United States noted that it was disturbing that the central government was still unable to provide a 
timetable on when sub-central subsidy measures would be notified. 
81. With regard to the five-year plans, the dele gate of United States noted with interest the 
indication by the delegate of China that all five-year  plans at all levels of government were available 
on the internet.  The United States had been unable to find most provincial-level five-year plans, not 
to mention plans at more local levels and expr essed interest in obtaining the websites from China. 
82. The United States had, in its transitional re view mechanism submission and in its earlier 
intervention, cited to very specific plans that were  currently in place and that clearly appeared to 
provide subsidies.  While the United States accepted China's point that the five year plans were not 
exclusively about subsidy programmes, it noted that it was also clear to the Unit ed States that the five-
year plans - especially at the sub-central levels – did in fact provide subsidies that needed to be 
notified to the SCM Committee. 
83. Finally, the delegate of the United States re ferred to China's comments with respect to 
government science and technology programmes not  being an appropriate subject for the 
SCM Committee's consideration.  The question pos ed by the United States concerned the aerospace 
industry.  The delegate of the United States noted that there was a current dispute pending in the 
dispute settlement system that in a very significan t measure related to science and technology funding. 
In the view of the United States, science and t echnology funding progra mmes constituted potential 
actionable subsidies and hence were an appropriate subject for the SCM Committee. 
84. The delegate of the European Communities
 expressed appreciation at China's efforts to 
include subsidies at sub-central level in the next no tifications but regretted that China would not do so 
in its coming subsidy notification.  The Eur opean Communities was especially concerned about 
subsidies in the steel sector and requ ested China to do its utmost to in clude subsidies to this sector at 
the sub- federal level in the next notification.  Th e inclusion of subsidies at sub-federal level being 
part of China's obligations under the WTO Agreem ent, it was unacceptable that China had not been 
able to do so in its notifications, eight years af ter its accession to the WTO.  The delegate of the 
European Communities also noted that the delega te of China had not commented on the European 
Communities' last question concerning the practi ce (identified as part of EC trade defence  G/SCM/M/71 
 Page 15 
 
 
  investigations) which restricted the export of certa in raw materials and which could confer a subsidy 
on the downstream product.  The delegate of th e European Communities asked China to indicate 
whether it would respond to this question orally or in writing. 
85. The delegate of China  noted the follow-up comments made by previous speakers with respect 
to China's subsidy notifications and in particular th eir concerns with the lack of information provided 
concerning programmes at the sub-central level.  He  referred to China's positions in the reviews of 
previous years and stressed that China had alread y explained the tremendous capacity constraints it 
had in this regard.  China was aware of the requi rement to include sub-central subsidies in its 
notifications and its future efforts would concen trate on that aspect.  Responding to comments of 
other Members – in particular the United States – concerning the existence of large amounts of 
subsidy programmes at sub-central le vel, the delegate of China clarified that it was natural that China 
and its governments at different leve ls would have in place plans of di fferent levels, all stating guiding 
principles.  That said, in order to confirm the existence of a subsidy programme as defined by the 
SCM Agreement and for preparing China's subsid y notifications, very specific provisions and 
measures specifying the financial contribution and it s utilization were required.  Five years plans or 
industrial policies reflecting general policy statem ents should not be seen as subsidy programmes.  
With respect to the provincial websites on which the plans could be found, the delegate of China once 
again indicated that these websites were easily accessi ble and referred other Members to the official 
websites of the relevant provincial governments. 
86. The delegate of China also wished to clarify hi s earlier statement with respect to the aircraft 
sector: whether funding  with respect to science and tec hnology development should be regarded as 
relevant to the SCM Agreement and if so, to what ex tent it was relevant, remained to be clarified.  
Given this, China was of the view that this was not an appropriate subject for the SCM Committee to consider.  China had an interest in the dispute me ntioned by the United States in its intervention, and 
would follow its outcome.  With respect to th e question posed by the European Communities 
concerning export administration measures, China did not have a very clear position at this stage.  In 
China's view, export administration measures were  not an issue directly relevant to the 
SCM Agreement.  Whether such measures might cons titute subsidies to downstream industries was an 
issue to be further studied. 
87. The delegate of the United States
 reiterated that the US delegation had not been able to 
identify all the relevant websites of provincial govern ments containing their five year plans even after 
conducting Chinese language research.  The United Stat es had been able to identify the websites for 
some of the relevant provinces, but not for most of them.  In addition, locating plans below the 
provincial levels was extremely difficult.  The de legate of the United States reminded China of its 
obligation, under its Protocol of Accession to provid e these plans.  The delegate of the United States 
suggested that the United States a nd China work informally throu gh their Geneva representatives to 
obtain the website information. 
88. The delegate of the European Communities  thanked China for its comments. 
89. The delegate of China  considered that there was no need for future cooperation concerning 
the websites.  The 32 provincial level regions in  China's mainland all had their own official 
government websites, which were not difficult to lo cate.  No further information was provided with 
respect to plans below the provincial level. 
90. With regard to the Committee's report on the transitional review, the Chairman  noted that 
there were no guidelines for the report in the Protoc ol.  Following the review at the previous year's 
fall meeting, the Chairperson, acting on his own res ponsibility, had prepared a brief, factual report, 
with references to the documents concerned, and attaching the portion of the minutes of the meeting G/SCM/M/71 
Page 16  
 
  which related to the transition review.  He propo sed that the Committee ag ree to follow the same 
procedure.  It was so decided
. 
F. EXTENSION OF THE TRANSITION PERIOD UNDER ARTICLE 27.4  OF THE SCM  AGREEMENT  
91. The Chairman  stated that, as indicated in the agenda for this meeting, under this item of the 
agenda the Committee would first review whether Memb ers that had been granted an extension of the 
transition period for calendar year 2009 under th e procedures contained in the General Council 
Decision of 27 July 2007 (WT/L/691) had complied w ith the transparency and standstill requirements 
provided for in those procedures.  Thereafter, the Committee would adopt decisions to extend the 
transition period for calendar year 2010 in accordance with the procedures contained in WT/L/691. 
92. The Chairman recalled that paragraph 1(e) of  the General Council decision provided that 
"[a]Member receiving a continuation of an ex tension under these procedures shall take, from 
1 January 2008, the necessary internal steps with a view to eliminating export subsidies under the 
programme before the end of the final two-year ph ase-out period provided for in the last sentence of 
SCM Article 27.4.  These steps shall include c onsultations with releva nt government bodies and 
organisations and any necessary technical and/or legal assessments".  Paragraph 2(a) of the 
General Council Decision provided that "[b]egin ning with the updating notifications covering 
calendar year 2008, notifying Members also shall prov ide information regarding the actions they have 
taken pursuant to 1(e) and 1(f)".  Thus, the updati ng notifications required in 2009 had to contain 
information relating to the "internal steps" take n by Members with a view to eliminating export 
subsidies before the end of the final two-year phase-out period. 
93. In connection with these two items, the Chairman  drew Members' attention to a Secretariat 
paper that had been circulated as JOB(09)/131, date d 9 October 2009, which listed the programmes in 
respect of which the Committee had agreed in 2008 to  continue the extension of the transition period 
until 31 December 2009 and the updating notifications relating to those programmes that had been 
submitted by the Members in question.  The Secretar iat 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 2010. 
1. Review of compliance with transparency and standstill obligations 
94. 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 annual review was to be  based on annual, updating 
notifications submitted by the Members in questio n.  At the Committee's regular meeting held 
in October 2008, the Chairman had requested Memb ers concerned to submit their notifications by 
30 June 2009. 
95. The notifications received had been circulated in the G/SCM/N/192/xx document series.  The 
document that had been circulated by the Secretar iat on 9 October contained a table that listed the 
notifications received. 
96. The Committee had also received a written question from the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu regarding the notif ication of Antigua and Barbuda, circulated in 
document G/SCM/Q2/ATG/3 dated 11 August 2009.  Antigua and Barbuda had replied to this 
question through document G/SCM/Q2/ATG/4. 
97. With regard to the updating notifications th at the Committee had received from the Members 
benefiting from these extensions, instead of examin ing these notifications one by one, the Chairman 
asked whether any delegation wished to make comments on any of these notifications.  G/SCM/M/71 
 Page 17 
 
 
  98. The delegate of Japan  stated that Japan had a systemic interest in this issue.  Members would 
recall that between April 2006 and July 2007 inte nsive negotiations had taken place to reach 
consensus on the extension.  As a result of  theses negotiations, the Committee had achieved 
consensus.  The text had been heavily negotiate d with important commitments, including the action 
plan in 2010 to be submitted to the Committee with respect to the elimination of the export subsidies 
in 2015.  This year's important commitment was the notification on the so-called "internal steps" 
which Members had taken in 2008 in order to elimin ate the export subsidies.  Japan appreciated the 
enormous efforts by those Members who had submitted  their notifications.  Some Members were a bit 
late in terms of meeting the deadline of 30 June 2009.  However, finally the Committee had collected 
all the notifications, which was an encouraging sign.  Following systemic interest in internal steps the 
delegation of Japan carefully examined all the documen ts.  In some cases, the concrete internal step 
was not described sufficiently clearly.  The delegate of Japan left it to  the Secretariat and the Chair to 
make sure that the commitments under the General Council Decision were observe d.  The delegate of 
Japan stated that 2010 and 2011 would be important years with respect to the extension process under 
Article 27.4.  He reiterated that his delegation re lied on the Chairperson and the Secretariat to make 
sure that the commitment would be  respected in the coming years. 
99. The delegate of the United States  expressed agreement with the statement of the delegate 
of Japan.  As the Committee was going through the re newal of the Article 27.4 procedure, it was very 
important to the United States that the countries adopt plans to notify the subsidy recipients and to take internal steps to eliminate th e subsidies that were being provided.  Like Japan, the delegation of 
the United States would be looking very closely next y ear at this aspect of the notifications to ensure 
that the Members concerned were on the path to elimination of the subsidies. 
100. The delegate of Guatemala
 stated that, in keeping with paragraph 1(e) of General Council 
Decision WT/L/691, a Member receiving a continua tion of extension under these procedures had to 
take, from 1 January 2008, the necessary internal st eps with a view to eliminating export subsidies 
under the programme before the end of the fi nal two-year phase out period provided for the 
elimination of subsidies. 
101. With respect to the progress Guatemala had made regarding the subsidy programmes for 
which it had obtained an extension under Article 27.4,  the delegate of Guatemala stated, firstly, that 
Guatemala had complied with its obligations relati ng to transparency and standstill.  He reiterated 
Guatemala's commitment with each and every one of  the obligations contained in the General Council 
Decision as well as the elimination of exports subsidies before 31 December 2015.  Secondly, in 
keeping with paragraph 1(g) of the Decision, Guat emala had asked the WTO Secretariat to provide it 
with technical assistance to eliminate export subs idies included in the notified programmes.  As a 
result, a regional workshop followed by a nationa l workshop on the extensions laid down in 
Article 27.4 of the SCM Agreement had been held  in Guatemala city between 25-29 May 2009.  
Officials from Costa Rica, Guatemala, Panama and the Dominican Republic had participated in the 
regional workshop for a day and a half.  Those offi cials had received broad a nd detailed explanations 
on the obligations of these countries within the frame work of the SCM Agreement.  Similarly, they 
had taken the opportunity to analyse elements whic h had to be considered when it came to drafting 
trade and incentive policies.  Afterwards, each  delegation had met individually with the 
WTO Secretariat officials to raise specific doubts re lating to each country's specific situation.  The 
contribution of the WTO Secretariat staff had been very helpful. 
102. In the case of the national workshop for Guat emala, the activity had been divided into 
two parts.  The first part had been reserved for high level officials from the different government and 
private sector institutions that were interested and were related to each one of the programmes.  The 
second part had been devoted to technical officials, technocrats who were involved in the analysis and 
presentation of concrete proposals on this issue.  Both national activities had been highly helpful.  
Among the main conclusions of the first part of the national activity had been the creation of an inter-G/SCM/M/71 
Page 18  
 
  institutional group responsible for the analysis and discussion of trade and incentive policy, which 
was convened by the Ministry of the Economy of Gu atemala.  The Ministry of the Economy and the 
Vice Minister of Investment and Competition had convened this inter-institutional group which would 
be responsible for, inter alia , preparing the action plan to be presented next year. 
103. Thirdly, the delegate of Guatemala indicated th at, in compliance with paragraph 1(e) of the 
General Council Decision, Guatemala had notified each beneficiary of the programme in question that 
there would be no export subsidies within the meani ng of Article 3.1(a) of the SCM Agreement.  Nor 
would the existing ones be maintained as of the end of calendar year 2015.  Th is statement served as a 
supplement to the notification presented by Guatemal a and the delegation of Guatemala was ready to 
provide any additional information required. 
104. The Committee took note
 of the statements made.   
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 2009 
105. The Chairman  stated 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 
to these procedures" subject to verification that th ere had been compliance with the transparency and 
standstill requirements. 
106. 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 contained in the Secretariat paper circulated on 9 October 2009. 
107. At the Chairman's propo sal, the Committee agreed1 to continue to extend the transition period 
for calendar year 2010 in respect of the programmes th at currently benefited from such an extension.  
It also agreed  that, based on the text of the model decision, the Secretariat prepare and circulate 
individual decisions pertaining to each of the prog rammes for which such requests had been received. 
108. The delegate of Barbados  thanked the Committee, on behalf of the beneficiaries of the 
Article 27.4 extensions under Ge neral Council Decision WT/L/691, for its decision to continue to 
extend the transition period for 2010 in respect of the programmes that currently benefited from such 
an extension.  The developing country beneficiar ies, like many other countries around the world, had 
been negatively affected by the economic crisis.  Th e delegate of Barbados stated that the Members 
benefiting from such extensions would continue  to respect the General Council Decision and the 
commitments contained therein.  As could be seen in  the notifications, such Members continued to be 
transparent and to provide responses to any questio ns raised.  These Members also took note of the 
comments made by Japan and the United States and w ould, as always, remain fully committed to the 
requirements of the Decision.  As could be seen by  the notifications, the Members concerned, through 
various forms, had informed the beneficiaries of  these programmes of the General Council Decision, 
specifically of the deadline date of 2015.  They had also provided information on the measures being 
taken to ensure that the programmes were consistent  with their WTO obligations.  Many of them had 
also benefited from technical discussions through regi onal seminars such as the one recently held in 
the Caribbean and in Guatemala, and through natio nal workshops.  They served to further sensitise 
their constituents as to the expectations of th e General Council Decision including the mid-period 
assessment due to take place in 2010. 
109. The delegate of Costa Rica  also expressed appreciation for the Committee's extension 
decision.  He indicated and reiterated that his delegation would continue to commit itself to the 
                                                      
1 A list of the decisions adopted by the Committee is contained in the Annex to these Minutes.  G/SCM/M/71 
 Page 19 
 
 
  transparency and standstill requirements in the Gene ral Council Decision.  Costa Rica had carried out 
necessary work to comply with the procedures related to the extension and woul d continue doing so in 
the future, especially as it related to commitments fo r 2010 and the action plan in order to bring to 
conformity Costa Rica's programmes subject to th e SCM Agreement.  He also expressed appreciation 
for the technical assistance provided by the WTO Secr etariat and the meetings held with some capital-
based officials.   
110. The delegate of Saint Lucia  made a statement on behalf of the Members of the Organization 
of Eastern Caribbean States, i.e. Antigua and Ba rbuda, Dominica, Grenada, Saint Kitts and Nevis, 
Saint Lucia, and Saint Vincent and the Grenadines .  She expressed appreciation for the extension 
decision by the Committee.  She stated that the fl exibilities afforded to the Members benefiting from 
such extensions had facilitated the development of local industries whose goals included export 
development, diversification and poverty reduction.  She stated that Members of the OECS were 
making every effort to comply with the General Council Decision to make such subsidy programmes 
WTO-compliant, and certainly to phase out these programmes by 2015. 
111. The delegate of Jordan  associated his delegation with the statement made by Barbados and 
stated that Jordan would continue respecting a ll the provisions of the General Council Decision. 
112. The delegate of Japan  expressed appreciation for the deta iled explanation provided by the 
delegation of Guatemala.  He stated that Guatemal a's experiences with respect to the regional seminar 
organized by the WTO Secretariat were encour aging for the Committee as it showed that the 
Secretariat had provided concrete, targeted assistance to the Members concerned.   He stated that the 
Committee could continue these efforts in order to im prove the quality of notifications to be made for 
the extensions under the General Council Decision.  He expressed satisfaction that every year all 
Members concerned made their notifications to the Committee. 
113. The Committee took note  of the statements made. 
114. The Committee agreed  to request the Members concerned to provide their updating 
notifications covering calendar year 2009 not later than 30 June 2010. 
115. With regard to the updating notifications in 2010, the Chairman  drew Members' attention to 
paragraph 2(a) of the General Council Decision whic h provided in part:  "Beginning with the updating 
notifications covering calendar year 2008, notif ying Members also shall provide information 
regarding the actions they have taken pursuant to 1(e) and 1(f)". 
116. Paragraph 1(e) provided:  "A Member receiv ing a continuation of an extension under these 
procedures shall take, from 1 January 2008, the necessar y internal steps with a view to eliminating 
export subsidies under the programme before the end of the final two-year phase-out period provided 
for in the last sentence of SCM Article 27.4.  Th ese steps shall include consultations with relevant 
government bodies and organisations and any necessar y technical and/or legal assessments.  In 
addition, from 1 January 2008 and in no case later than 31 December 2009, the Member shall notify 
each beneficiary under the programme indicating th at no export subsidies within the meaning of 
SCM Article 3.1(a) will be granted or main tained beyond the end of calendar year 2015". 
117. Paragraph 1(f) read:  "A Member receiving a continuation of an extension under these 
procedures shall provide, for transparency purposes, an action plan for eliminating export subsidies 
under the programme, as an integral part of th e annual updating notificati on submitted for the annual 
review to be conducted in 2010.  As part of this review, the SCM Committee shall undertake a mid-
period assessment of each programme for which it has continued an extension under these procedures.  
During this mid-period assessment, the SCM Committee sh all take stock of the steps undertaken as of G/SCM/M/71 
Page 20  
 
  that point by the notifying Member pursuant to 1(e) , and shall discuss the action plan provided by the 
Member". 
118. Footnote 5 to paragraph 1(f) provided clarity with  regard to the content of the action plan:  
"The action plan shall indicate how the Member intends to eliminate export subsidies under the 
programme not later than the end of the final tw o-year phase-out period provided for in the last 
sentence of SCM Article 27.4, including informat ion as to legislative changes, administrative 
amendments and/or other procedures as may be ne cessary, and whether any of these actions have 
been undertaken or are in the process of being un dertaken, including how the individual beneficiaries 
have been notified pursuant to 1(e)". 
119. Thus, in their updating notifications in 2010, Members benefiting from extensions 
under Article 27.4 had to provide in formation with regard to:  (i) the internal steps taken, as 
from 1 January 2008, with a view to eliminating export subsidies for which extensions had been 
granted, (ii) the ways in which beneficiari es of the export subsidy programmes benefiting from 
extensions had been notified, between 1 January 2008 and 31 December 2009, that such extensions 
would not go beyond the end of cal endar year 2015, and (iii) the ac tion plan for eliminating export 
subsidies benefiting from extensions. 
120. Based on the action plan to be submitted by the Members concerned, the Committee would 
conduct a mid-period assessment of each programme at  issue as part of the annual review to be 
conducted in 2010. 
G. C
HAIRMAN 'S PROPOSALS REGARDING THE STANDARD FORMAT FOR SEMI-ANNUAL REPORTS 
OF COUNTERVAILING MEASURES , AND THE MINIMUM INFORMATION TO BE PROVIDED IN 
CONNECTION WITH THE NOTIFICATION OF ALL PRELIMINARY OR FINAL COUNTERVAILING 
MEASURES AS REQUIRED UNDER ARTICLE 25.11  OF THE SCM  AGREEMENT  
121. The Chairman recalled that, at its meeting held on 29 October 2008, the Committee had 
agreed, in the light of recent decisions take n in the Committee on Anti-Dumping Practices on the 
standard format for semi-annual reports on anti-dump ing actions and on the minimum information to 
be provided in reports on preliminar y and final anti-dumping actions, to  hold informal consultations to 
consider whether it would be desirable to review the standard format for semi-annual reports and the 
minimum information to be provided in reports on  notifications of countervailing duty actions under 
Article 25.11 of the SCM Agreement. 
122. Through document JOB(09)/3, dated 29 January  2009, the previous Chair had submitted for 
consideration by delegations a proposal for a revisi on of the standard format for semi-annual reports 
under Article 25.11 of the SCM Agreement, which ha d amended the existing standard format to make 
it as far as possible consistent with the revised  standard format for semi-annual reports under 
Article 16.4 of the Anti-Dumping Agreement.  Th e previous Chair had al so submitted a proposal 
regarding the minimum information to be provided in reports under Article 25.11 on all preliminary 
or final countervailing actions.  This proposal had aimed at revising the decision on this matter taken 
by the Committee in 1995 to make it as far as possibl e consistent with the decision adopted by the 
Committee on Anti-Dumping Practices in 2006 regard ing minimum information to be provi ded under 
Article 16.4 of the Anti-Dumping Agreement. 
123. On 23 March 2009, informal consultations ha d been held to discuss these proposals.  The 
changes made after these consultations had been  reflected in document JOB(09)/3/Rev.1 dated 
6 April 2009 which was discussed at the Comm ittee's regular meeting held on 7 May 2009. 
124. Following the 7 May meeting, the Chairman had conducted informal consultations with 
Members on other improvements that could be made to the proposed new formats.  As a result of  G/SCM/M/71 
 Page 21 
 
 
  these consultations, he had introduced some changes to the proposed new notification formats which 
were reflected in document JOB(09)/3/Rev.2 dated 1 July 2009. 
125. On 3 July 2009, informal consultations had been  held to discuss the prop osals as circulated in 
JOB(09)/3/Rev.2.  During these consultations, sev eral Members had made comments on different 
aspects of the proposed new formats.  Based on th ese comments, the Chairman had made certain 
changes to the proposed notification formats which were subsequently reflected in JOB(09)/3/Rev.3 
dated 14 September 2009. 
126. The proposed formats, as contained in docume nt JOB(09)/3/Rev.3, had been discussed during 
the informal consultations held on 5 October 2009.  Following th ese consultations, the Chairman had 
made further changes to the proposed format for semi-annual reports of c ountervailing actions, which 
were reflected in document JOB(09)/3/Rev.4 date d 7 October 2009.  No major comments had been 
made about this document.  The Chairman had made minor textual modifications and circulated the 
proposed notification formats in document G/SCM/W/ 549 dated 12 October 2009.  Hence, in terms of 
their substance, there was no significant diffe rence between JOB(09)/3/Rev.4 and G/SCM/W/549. 
127. As mentioned in the draft annotated agenda faxed to all delegations  on 14 September 2009 
and in the airgram convening this meeting, the pr oposed new notification formats as circulated in 
document G/SCM/W/549 were before th e Committee for possible adoption. 
128. The Chairman stated that, based on the discu ssions among Members, his impression was that 
Members were ready to adopt the new notification fo rmats.  He therefore proposed the adoption of the 
notification formats as contained in document G/SCM/W/549 also including the comments made by the delegations. 
129. The Committee adopted
 the notification formats as contained in document G/SCM/W/549. 
130. The Chairman  thanked the delegations for their usef ul inputs and constructive comments in 
the process that had led to the adoption of the new notification formats.  He stated that the new 
formats would enhance transparency of the notif ication of countervailing actions significantly. 
131. The delegate of the United States  stated that it had been a long road if one looked at this issue 
historically.  It had first come up in the anti-dum ping context.  It had stalled there for a while.  
Consensus finally had been reached to go forward and the issue had become whether this should be 
moved over to the subsidy side.  Under the previ ous Chair, the process had moved forward building 
on the changes made not only on the anti-dumping side but opening up to further changes and responding to the Chair of the General Council's instruction to improve the timeliness and completeness of notifications.  In that context,  the Committee had had a lot of input from many 
different Members and had held ma ny meetings, both formal and info rmal, and at the end of the day 
made very significant improvement that constituted di rect and concrete response to the Chair of the 
General Council's request to look at how to impr ove the completeness and timeliness of notification 
obligations. 
132. The delegate of Canada
 expressed Canada's support for the adoption of this new format. 
133. The delegate of the European Communities  stated that this issue constituted a big step for the 
Committee and that his delegation viewed this as part of the process on improving the timeliness and 
completeness of notifications.  He indicated that  Members adopting CVD measures had the right to do 
so but they also had obligations with respect to transparency.  These constituted the two sides of one 
coin and the Committee had made sure with this ne w format that the transparency obligations would 
be substantially upgraded.  If at some stage the Ch air intended to report back to the Chair of the 
General Council on their suggestions or instruc tions about moving ahead on transparency and G/SCM/M/71 
Page 22  
 
  completeness of notifications, this would be good news  to report back.  He stated that there could be 
other areas the Committee could look at in terms of transparency but certainly this was an important 
deliverable which Members could report as the result of the Committee's collective effort. 
134. The delegate of Japan
 stated that his delegation had been supportive of the initiative by the 
General Council and the TPRB Chair with regard  to improving timeliness and completeness of 
notifications and other information flows on tr ade measures.  This was important given the 
unprecedented economic crisis that had increased protectionist sentiments.  After 15 years of experience as the WTO, Members could be proud of this improvement which would enhance the 
sanctions of surveillance on countervailing measures.   Japan also supported the EC's comment to 
report to the General Council given the timing of the regular Ministerial meeting.  This marked a good 
achievement by the Rules Committees. 
135. The delegate of New Zealand
 stated that New Zealand, like many other WTO Members, 
preferred more than less in respect of all notifications and considered that the new formats would oblige Members to be more transparent and responsible in the notification procedures. 
136. The Committee took note
 of the statements made. 
137. The Chairman  stated that it would be useful to clarify the date on which the new formats 
would become applicable.  He proposed that the ne w format for semi-annual reports of countervailing 
actions apply to the reports for the second half of 200 9, which would be submitted in 2010.  As for the 
format regarding the minimum information to be provided in connection with the notification of 
preliminary or final countervailing actions, he proposed  that it apply from 1 January 2010.  It was so 
agreed . 
H. CONTINUATION OF DISCUSSIONS "ON WAYS TO IMPROVE THE TIMELINESS AND 
COMPLETENESS OF NOTIFICATIONS AND OTHER INFORMATION FLOWS ON TRADE MEASURES " 
UNDER THE SCM  AGREEMENT  
138. The Chairman  stated that, as Members would recall,  on 23 March 2009, the Committee had 
held an informal meeting, pursuant to a request of  the Chairman of the Trade Policy Review Body, to 
discuss "ways to improve the timeliness and comple teness of notifications and other information 
flows on trade measures" in the context of the SCM Ag reement.  After the informal consultations held 
on 23 March 2009, the previous Chairperson had sent a note to the Chairman of the TPRB on the progress made.  In response to a suggestion by Me mbers at that meeting, on 31 March 2009, the 
previous Chairperson also had sent reminder lette rs to the 87 Members that had not yet submitted 
their 2007 new and full subsidy notifications.  Th e Committee had continued its discussions on this 
matter at the regular meeting on 7 May and the in formal meeting on 3 July.  At these two meetings, 
some Members had suggested to improve the annua l report of the Committee either by modifying 
some tables that were normally attached to it or by adding new tables.  To allow Members to visualize what those proposals would entail, the Chairm an had circulated doc ument JOB(09)/98 dated 
14 September 2009.  This document had been discussed at the informal meeting held on 5 October.  
Based on these discussions, the Chairman had made certain improvements to the draft annual report 
of the Committee.  The Chairman also recalled th at the whole idea behind having these discussions 
was to improve the timeliness and completen ess of the notification obligations under the 
SCM Agreement, notably the obligation to notify s ubsidies.  Unfortunately, the level of compliance 
with subsidy notification obligation had not  been improving since the Committee had begun 
discussions on this matter.  As of the date of th e meeting, only 29 Members had submitted their 2009 
new and full subsidy notifications, including those that  had made a nil notification.  The number of 
Members that had made their 2007 new and full subs idy notifications, which were due more than 
two years ago, was 42.  This was a very poor r ecord and the Committee had to focus its efforts on 
improving this situation.  G/SCM/M/71 
 Page 23 
 
 
  139. The delegate of China  stated that, in general, his delegation had been very supportive of the 
Committee's work which China believed was very im portant to enhance the transparency of these 
various provisions under this Committee.  He stat ed that the efforts of the Chairman and the 
Secretariat were very important and had helped the Committee to arrive at where it was now.  The delegate of China commended the improvements made  to the various annexes of the annual report, 
such as the insertion of a new column into Annex C to indicate the periods covered by the most recent 
subsidy notifications.  He also referred to the insertion of Annex G which would list out the requests 
for information under Article 25.8.  The Chinese de legation had recently  received an instruction from 
its capital on this matter.  In gene ral, the delegation of China supported the changes proposed by the 
Chair, but with respect to Annex G it had two slight  suggestions for further improvements.  The first 
related to the applicable date of these new rules becau se, in the view of the delegation of China, since 
these were new rules that the Committee had been developing under the inst ruction of the General 
Council, such rules had to apply only to the future  work of the Committee but not to its previous 
work.  Thus, the requests for information under Artic le 25.8 which had been pending or those requests 
submitted in the past, answered or not, were not su pposed to be included in this table.  Secondly, 
because this would be an annex to the annual repor t of the Committee, only those requests that had 
been submitted within this year had to be included and not those that had been tabled in the past.  
It would be more appropriate if these were taken care of by previous reports. 
140. The delegate of the European Communities
 stated that the issue of the timeliness of subsidy 
notifications had been discussed at the previous meeting and at that time the delegation of the 
European Communities had raised the problem that  some Members were frequent users of trade 
defence instrument on the one hand but on the othe r hand did not comply with WTO obligations.  
This could not go on and at that time the Europ ean Communities had already made some proposals as 
to how this could be improved but this was only a st arting point.  There was a lot that could be done in 
addition to what the European Communities had said th e last time.  For instance, the WTO Secretariat 
could put this on the agenda of the next special m eeting in order to discuss this in further detail.  
Members could also consider getting the permanent gr oup of experts involved in this process.  In the 
end, this group was jobless for the moment.  So  the Committee could also involve them and make 
proposals and that was how the Committee could go ahead and improve compliance with subsidy 
notifications.  Similarly, the WTO Secretariat could provide assistance to Members which did not comply with subsidy notification obligations.  They could assist these Members in order to enable 
them to submit their notifications in due time.  Th e due date for the last recent notification was mid-
year 2009 and the Committee had only received subs idy notifications from 29 Members.  This was a 
very poor record and something had to be done to improve this situation. 
141. The delegate of China
 asked what other improvements the Chair would like to propose for the 
Committee to adopt in order to respond to the reque st of the General Council and what the next step 
would be in that regard. 
142. The delegate of Japan  joined the EC's statement about the poor record of subsidy 
notifications.  Only 29 Members had submitted thei r 2009 notifications.  In response to the General 
Council and TPR Chairs, this was a central job th e Committee could pursue.  Perhaps the Committee 
could also do other things.  Regarding the issue of poor record of subsidy notifications, the Chair could encourage Members, by sending a letter or thr ough other means, to observe the deadline which 
had already been passed substantially.  Some of the assistance from the Secretariat on a target basis 
and concrete basis could also be very helpful.   The Committee had once di scussed the possibility to 
organize a seminar or other capacity building activities.   But it was chosen to organize more targeted 
activities to meet with the individuals that actually worked on the notifications of different Members.  
Japan was open to other possibilities to improve other aspects of transparency. 
143. The Chair
 recalled, in connection with the question ra ised by the delegate of China, that the 
Committee would have discussions on the annual repo rt of the Committee later during the meeting.  G/SCM/M/71 
Page 24  
 
  Second, he noted that the Committee had just made a very important decision by adopting the new 
formats for semi-annual reports which marked a majo r step forward that had to be reported to the 
TPRB and the General Council.  Third, the Co mmittee had established an informal mode of 
consultations looking into all the proposals from al l delegations and the Chai r intended to continue 
this form of consultations. 
144. The delegate of China
 stated that his understanding with regard to possible further 
improvements in the future was that some of those improvements would be applied, if not 
immediately, shortly after Members agreed on th em while some other improvements might merit 
further discussion and to which all Members, including China, were open.  He invited the Chairman to 
share with Members about possible further improve ments that the Chair could propose for adoption 
and which would become applicable shortly after ad option so that Members could have a clear idea as 
to where this process was going. 
145. The Chairman  stated that there were a few improvements that he had just mentioned.  One of 
those improvements was the new formats that had already been adopted.  Other improvements were 
contained in the draft annual report which had b een circulated but the Committee had not achieved 
consensus on that draft annual report and would di scuss the adoption of the report later during the 
meeting. 
146. The delegate of China  stated that he wanted to share w ith Members the new instructions he 
had just received from his capital.  He stated th at his understanding was that some of the proposed 
improvements for the annual report would be applie d soon.  He reiterated what he had said earlier 
with regard to the proposed Annex G concerning the information requests under Article 25.8 of the 
SCM Agreement.  China's request for further improv ement had two aspects:  Firstly, since those were 
new rules that had been developing in response to the request from the General Council, those rules 
should only apply to future actions such as the new requests or new answers, but not to the previous 
ones.  Secondly, this attachment had to list only re quests filed in the year to which the annual report 
pertained, not the previous requests. 
147. The Committee took note  of the statements made. 
I. DATE OF NEXT REGULAR MEETING  
148. The Chairman  stated that 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 Safe guards Committee had the same schedule.  In 
order to accommodate all three bodies' meetings, he proposed that the next meeting of this Committee 
would take place in the week of  26 April 2010.  It was so agreed . 
J. OTHER BUSINESS  
149. The delegate of the United States  stated that his delegation took the floor to register its 
concern with respect to certain government assi stance being provided for ALPIDA which was a 
Japanese DRAM producer.  A recent statement by several governments and authorities stressed that 
the competitiveness of companies and their pr oducts, not the intervention of governments and 
authorities, had to be the principle determinant of in dustrial success and international trade, and while 
the adoption and implementation of stimulus measures due to the financial crisis could be considered 
necessary, such assistance had to be provided in a market-oriented fashion to ensure the long term 
commercial viability of assisted companies a nd any such assistance had to be provided as 
transparently as possible.  It was in this context th at the US officials had been reading with concern 
various press articles and company documents indicating that ALPIDA would be receiving a very 
significant package of assistance.  This assistan ce package seemed to include the purchase of  G/SCM/M/71 
 Page 25 
 
 
  preferential stock by the Development Bank of Japan; a loan also by the Development Bank of Japan;  
private sector banking loans perhaps obtained with th e government assistance;  and an equity infusion 
by TMC which was a Chinese Taipei producer of DR AMs.  The delegate of the United States had 
several questions regarding the assi stance package.  First, he asked  whether the elements of the 
package, as he described them, we re correct.  Second, he asked what  were the terms and conditions of 
the preferred stock purchase and loan by the Deve lopment Bank of Japan.  He asked whether such 
terms and conditions would be the same as, or simi lar to, those that ALPIDA could have obtained in 
the market.  Third, he asked whether the Development Bank of Japan undertook a thorough commercial analysis of ALPIDA's financial situat ion prior to investing in and loaning money to 
ALPIDA.  Fourth, he asked whether the Government  of Japan guaranteed, implicitly or explicitly, the 
one billion dollars in loans ALPIDA received from pr ivate sector banks.  And finally, he asked what 
kind of shares Taiwan Memory Corporation would receive in connection with its planned equity 
investment in ALPIDA.  In closing, the delegate of the United States stated that his delegation was 
aware of government assistance being planned by Chinese Taipei to its DRAM producers which could 
overlap with the assistance being provided by the go vernment of Japan to ALPIDA.  He urged that 
any such assistance be provided in a market-orien ted fashion and as transparently as possible. 
150. The delegate of Japan
 started out by explaining the background and giving some detailed 
information about this case.  On 30 June 2009, the government of Japan had approved the business 
restructuring plan submitted by ALPIDA Memory In c. pursuant to the Act on Special Measures for 
Industrial Revitalisation.  Any measures whic h could be applied to the approved business 
restructuring plan were horizontal and did not limit access to a specific sector or sectors.  They were 
fully consistent with the WTO Agreement.  ALPIDA Memory Inc. was executing the approved 
business restructuring plan with various efforts, including issuance of shares of 30 billion yen to the 
Development Bank of Japan Inc.  The Developmen t Bank of Japan was an independently-operated 
organization and made investment and financing deci sions, in each case, taking the financial risk into 
consideration.  Financial services provided by the Development Bank of Japan were also horizontal 
and did not limit access to a specific sector or sector s.  In all regards, these services were fully 
consistent with the WTO Agreement.  The delega te of Japan took note of all the details of the 
question posed by the United States and stated that his delegation would be ready to further discuss 
this matter. 
151. The delegate of Japan also made a general re mark in relation to the surveillance mechanism 
within the SCM Committee.  Japan  regarded the surveillance mech anism within the SCM Committee 
quite important, especially during the time of the globa l financial crisis.  In this regard, he expressed 
concern over the failure of the United States to  submit its 2009 new and full subsidy notification 
under Article 25 of the SCM Agreement.  While ma ny Members, including Japan, had submitted their 
2009 new and full subsidy notifications in time, th e United States had passed the deadline and had not 
yet submitted its notification.  As a result, other Members of the Committee had no basis to scrutinize 
any relevant subsidies that could be provided by the United States.  This was a concern for Japan and 
the delegate of Japan urged the United States to submit its 2009 new and full subsidy notification as 
required under Article 25 of the SCM Agreement. 
152. The delegate of the United States  thanked the delegation of Japan for the answers to the 
United States' questions which were rather technical a nd lengthy in nature and stated that perhaps they 
would continue to discuss the assistance package either he re or in other fora.  Next, with respect to the 
United States' subsidy notification, the delegate of  the United States recognized that the United States 
was a little behind, not four years behind, but a coup le of years.  Unlike Ch ina, the United States 
could not say that they had a draft in capital, but, also unlike China, the United States' next 
notification would include sub-central measures as it ha d for many years.  He stated that they were 
working on the next notification and hoped to have it filed in the coming months. G/SCM/M/71 
Page 26  
 
  153. The delegate of China
 stated that Members witnessed interesting debates between Japan and 
the United States and asked the Chairman to make su re that these debates were properly reflected in 
the minutes.  That would help Members understa nd the actual notification situation of all the 
important players.  With regard to China's notificat ion, he stated that this issue had been debated 
extensively earlier in the meeting on China TRM.  He  stated that if a developed Member could fall 
behind by a few months, it should not be surprising if China as a developing Member fell behind for a 
few years. 
154. The Committee took note  of the statements made. 
K. ANNUAL REPORT  
155. 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 2009 prepared by the 
Secretariat had been faxed to all dele gations the week before the meeting. 
156. At the proposal of the Chairman, the Committee agreed  to discuss the draft report chapter by 
chapter and then let the Secretariat reflect these cha nges as well as the actions taken in this meeting in 
the draft report and come back with the updated version of the report. 
157. Following the discussions in the informal mode, the Chairman suggested that the Committee 
adopt the report on an ad referendum  basis with the understanding that the Secretariat would fax the 
draft report as amended in this m eeting to Members the day after the meeting and give them a last 
opportunity to comment until close of business on Friday , 23 October 2009.  After the last round of 
comments, the report would be circulated on Mond ay, 26 October 2009 and then transmitted to the 
Council for Trade in Goods.  It was so decided .2 
158. The delegate of the United States  expressed disappointment that two proposals his delegation 
had made were not reflected in the annual report.   The US delegation had had one proposal which 
would have indicated in the annual report which countries were notifying sub-central measures in 
addition to central measures.  Secondly, it had also had a proposal with respect to Article 25.8 of the 
SCM Agreement whereby the annual report of th e Committee would indicate which Article 25.8 
requests were still outstanding which, in the view of the US delegation, was an important issue to 
highlight and also to provoke the addressee of the Ar ticle 25.8 questions to answer those questions.  
Both proposals directly related to the request fro m the Chairman of the General Council to improve 
the timeliness and completeness of notifications.  W ith respect to completeness, sub-central subsidies 
went to that issue.  With respect to timeliness, the way Members had used Article 25.8 in the past was 
to use it when Members had fallen behind in their notif ications and to again prompt them to file their 
notifications in a timely manner.  That said, the US delegation was generally pleased with the improvements made to the annual report but had hope d that the Committee could have gone further. 
159. The delegate of China
 stated that his delegation always supported the Committee's work to 
respond to the task requested by the General Council.   China would continue to participate in these 
discussions in an open-minded manner.  China supported  the Chairman's intention to look forward to 
all possible ways to improve transparency.  Chin a would participate and accept any proposal which 
would be faithful to respond to the task requested  by the General Council as well as to faithfully 
reflect Members' existing obligations and rights under the SCM Agreement. 
                                                      
2 The annual report of the Committee was ci rculated in G/L/906 (26 October 2009).  G/SCM/M/71 
 Page 27 
 
 
  160. The Committee took note  of the statements made. 
161. The Chairman  adjourned the regular meeting of the Committee. 
 
_______________ 
 G/SCM/M/71 
Page 28  
 
  ANNEX 
 
CONTINUATION FOR CALENDAR YEAR 2010 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 20 October 2009  
 
 
Member Programme Document 
Fiscal Incentives Act Cap 172 G/SCM/50/Add.7 Antigua & 
Barbuda Free Trade and Processing Zone Act No. 12 of 1994 G/SCM/51/Add.7 
Fiscal Incentive Programme  G/SCM/52/Add.7 
Export Allowance G/SCM/53/Add.7 
Research and Development Allowance G/SCM/54/Add.7 
International Business Incentives  G/SCM/55/Add.7 Barbados 
Societies With Restricted Liability G/SCM/56/Add.7 
Fiscal Incentives Act  G/SCM/57/Add.7 Export Processing Zone Act G/SCM/58/Add.7 
Commercial Free Zone Act G/SCM/59/Add.7 Belize 
Conditional Duty Exemptions Facility under the Treaty of 
Chaguaramas G/SCM/60/Add.7 
Free Zone Regime G/SCM/61/Add.7 Costa Rica 
Inward Processing Regime G/SCM/62/Add.7 
Dominica Fiscal Incentives Programme  G/SCM/63/Add.7 
Dominican 
Republic  Law No. 8-90 to "Promote the Establishment of New Free 
Zones and Expand Existing Ones" G/SCM/64/Add.7 
El Salvador  Export Processing Zones and Marketing Act, as amended G/SCM/65/Add.7 
Short-Term Export Profit Deduction  G/SCM/66/Add.7 
Export Processing Factories/Export Processing Zones 
Scheme G/SCM/67/Add.7 Fiji 
The Income Tax Act (Film Making and Audio Visual 
Incentive Amendment Decree 2000) G/SCM/68/Add.7 
Fiscal Incentive Act No. 41 of 1974 G/SCM/69/Add.7 
Statutory Rules and Orders No. 37 of 1999 G/SCM/70/Add.7 Grenada 
Qualified Enterprises Act No. 18 of 1978 G/SCM/71/Add.7  G/SCM/M/71 
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  Member Programme Document 
Exemption from Company Tax, Customs Duties and 
Other Import Taxes for Companies under Special Customs Regimes G/SCM/72/Add.7 
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.7 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.7 
Export Industry Encouragement Act G/SCM/75/Add.7 
Jamaica Export Free Zone Act  G/SCM/76/Add.7 Foreign Sales Corporation Act  G/SCM/77/Add.7 Jamaica 
Industrial Incentives (Factory Construction) Act G/SCM/78/Add.7 
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.7 
Mauritius Freeport Scheme – Customs Duty and Excise Duty 
Concession on Machinery and Equipment Imported into 
Freeport  
Freeport Scheme – Corporate Tax Exemption  G/SCM/83/Add.7 
Official Industry Register  G/SCM/84/Add.7 Panama 
Export Processing Zones  G/SCM/85/Add.7 
Papua New 
Guinea Section 45 of the Income Tax  G/SCM/86/Add.7 
Fiscal Incentives Act, No. 15 of 1974  G/SCM/87/Add.7 
Free Zone Act, No. 10 of 1999  G/SCM/88/Add.7 Saint Lucia 
Micro and Small Scale Business Enterprises Act, No. 19 
of 1998 G/SCM/89/Add.7 
Saint Kitts 
and Nevis Fiscal Incentives Act, No. 17 of 1974  G/SCM/90/Add.7 
St. Vincent 
and the Grenadines Fiscal Incentives Act No. 5 of 1982, as amended G/SCM/91/Add.7 
Uruguay Automotive Industry Export Promotion Regime  G/SCM/92/Add.7 
 
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