WORLD TRADE  
ORGANIZATION  G/SCM/Q4/VCT/5 
27 November 2006 
 (06-5700) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
PROCEDURES FOR EXTENSIONS UNDER 
ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES 
AND COUNTERVAILING MEASURES 
 
Replies to Questions Posed by CANADA1, COLOMBIA2, JAPAN3, and PERU4 
   The following communication, dated 21 November 2006, is being circulated at the request of 
the Delegation of St. Vincent and the Grenadines. 
 
_______________ 
 
 
CANADA
 
  
Q1. Recalling that the objective of G/SCM/39 was to provide an extension of the transition 
period for the progressive elimination of export subsidy programmes of a number of Members, as called for in Article 27.4 of the SCM Agreement, we would ask the proponents of G/SCM/W/535 and G/SCM/W/537 to inform the Committee on Subsidies and Countervailing 
Measures of the individual efforts, if any, they  have undertaken to gradually bring these export 
subsidy programmes into conformity with their WTO obligations. 
 
Reply
 
  St. Vincent and the Grenadines is of the view that document G/SCM/39 contains only a fast-
track procedure to approve extensions under Arti cle 27.4 of the ASCM.  This document neither 
reduces or does it increase the balance of rights and obligations under the ASCM.  Therefore, neither 
document G/SCM/39 nor Article 27.4 of the ASCM provide for a progressive elimination of export 
subsidy programmes.  
 Moreover, Article 27.4 mentions  "progressive" elimination in th e first sentence which refers 
to the phase to of the export s ubsidies within the eight-year period mentioned in Article 27.2(b), a 
condition that is completely differently to tho se regarding the subsidies programmes at issue.  
Additionally, it is clear from the language in Article  27.4 that such "progressive elimination" is not 
mandatory.  In consequence, Saint Vincent and th e Grenadines does not see any obligation to take any 
effort for gradual phasing out th ese export subsidy programmes. 
 
                                                     
 
1 G/SCM/Q4/VCT/2 
2 G/SCM/Q4/VCT/1 
3 G/SCM/Q4/VCT/3 
4 G/SCM/Q4/VCT/4 G/SCM/Q4/VCT/5 
Page 2  
 
   In addition, St. Vincent and the Grenadines c onsiders that its export subsidy programmes are 
fully in compliance with its WTO obligations.  As a matter of fact, the current  extensions have been 
granted to St. Vincent and the Gr enadines in accordance to Article 27.4 and under the procedures and 
conditions set forth in document G/SCM/39.  Additi onally, St. Vincent and the Grenadines have been 
undertaking efforts to phase out its export subsidy programmes. 
 
Q2. Could the proponents of both documents also explain how further extension of this 
phase-out period would ensure that these efforts a re finally successfully undertaken in order to 
avoid a similar situation at the end of any ne w extended phase-out period for certain export 
subsidy programmes?    
 Reply
 
  The view of St. Vincent and the Grenadines is to continue benefiting from the extensions to 
the programme throughout 2018, based on its special  economic, financial and development needs in 
accordance with the procedures and timelines est ablished in the provisions of the ASCM. 
  As a WTO member, St. Vincent and the Grenad ines has designed its development strategies 
to address these needs with  a view to utilize trade promotion as a tool for poverty reduction and to achieve a fruitful integration into the world econom y.  However, these goals could only be achieved 
with the full support and solidarity of the entire WTO membership.  
 
Q3. Recalling that the previous extension of the phase-out period for certain export subsidy 
programmes was for an additional period of 6 years, could the proponents of both documents explain the rationale for a proposed extension of 11 years?  
Reply
 
  The choice of the suggested date of 2018 should  be read in the light of the discussions that 
had taken before the adoption of G/SCM/39.  At  that time, the proponents of this document had 
already explained their concerns and the reasons  to eliminate their programmes over a long enough 
timeframe, possibly extending over 20 years.  In th e light of those discussions and taking into account 
the relevant and legitimate fina ncial, economic and development needs of St. Vincent and the 
Grenadines, the extension proposed in G/SCM/W/535 sh ould be regarded as an appropriate extension. 
  G/SCM/Q4/VCT/5 
 Page 3 
 
 
  COLOMBIA  
 
 
• Fiscal Incentives Act No. 5 of 1982, as amended 
 Q1. In the case of each of the programmes, please provide the most up-to-date information 
available regarding the number of beneficiary en terprises classified according to industrial 
sector. 
 
The table below captures the information requested above.  
Name of Company Type of Business Approved Products/Services 
1. A&P Farms Manufacturing Chicken, chicken meat, eggs, other chicken 
products 
2. A. Knights Chicken Industry  Baby chickens 
3. ABS Painting and 
Trowel Plaster Unincorporated Manufacturing Paints, trowel plaster 
4. Alex Grant Inc Manufacturing Dresses, skirts, pants, tops, jackets, coats 
5. All Paints Manufacturing Body filler, dish washing liquid, other cleaning 
agents 
7. Allied Industries Ltd Assembling 
household appliances Washing machine, electrical stoves, 
refrigerator, pro gas stove 
9. Appetito Investments Ltd Manufacturing Ice-cream, yogurt, juices concentrate 
13. B&B Classic Windows and Doors Manufacturing  
14. Bay 43 Ltd Manufacturing Peanuts, potato and plantain chips, corn curls, 
dried sorrel 
15. Bigger Trucking and Blocks Construction Company Manufacturing Construction blocks 
16. Bijoux Josette  Approved detergent 
17. Blugh Sea Fisheries Ltd Fishing, 
manufacturing Lobster, conch, sea cucumbers, sea urchins, fish 
18. Bottlers St. Vincent Ltd Manufacturing Juice, pepsi, cola 
19. Bri-J Sales and Services 
Ltd Service Computer hardware and software 
20. Browne’s Construction 
Ltd Manufacturing Concrete roofing, 
Concrete floor tiles G/SCM/Q4/VCT/5 
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  Name of Company Type of Business Approved Products/Services 
21. Buccamnet Meat 
Products Ltd Manufacturing Meat and meat products 
22. Buhlers Yatchs Service Boat construction 
23. Camle’s Manufacturing 
Company Ltd Manufacturing Concrete roofing tiles, surface tiles, concrete 
wall tiles 
24. Can-DX-Press Manufacturing Chocolate 
25. Candy Manufacturing Company Ltd Manufacturing Candy 
26. Carapan Poultry Farms 
Ltd Manufacturing Whole chicken, choice parts & wings of poultry 
27. Carib Country 
Company Ltd Manufacturing Toilet lotion, aftershave lotion, perfume 
28. Carib Kleen Ltd Manufacturing H ousehold & industrial detergents 
29. Caribbean Apparel 
Manufacturing Co Manufacturing Clothing 
30.Caribbean Apparel Inc Manufacturing Ladi es high fashion wear, men's knitted sports 
wear, men's/children knitted T-shirt, polo shirt 
31. Caribbean Glass Fibre Ltd Manufacturing Fibre glass product 
32. Caribbean Glove Ltd Manufacturing Industrial gloves and mittens 
33. Caribbean Meat and 
Poultry Ltd  Fresh & frozen poultry meat, red meat 
cured/smoked, processed meat 
34. Caribbean Motor Company Ltd Manufacturing Vehicles, accessories 
35. Caribbean Resources 
and Technology Ltd Manufacturing Solar thermal hot water systems, solar energy 
peripherals 
36. Caribbean Sheet and Tabular Industries Ltd Manufacturing Desk, filing cabinets, bookcases, cupboard 
credenzas, chairs, shelving unit, tables, partitions, computer furniture, institutional 
furniture, customized sheet and metal items 
37. Cariwear Manufacturing Co Ltd Manufacturing Men’s knitted sport wear 
38. Casuals Ltd Manufacturing Dresses, hats, dolls, cosmetic bags, spectacle 
cases, handbags, beachwear and scarves 
39. Chase St. Vincent Ltd  Snacks, caramel vegetables, animal feeds, 
condiments and spices, peanut, butter 
40. Chateaubelair Winery  Wines, juices 
41. Commercial and Industrial Investment Ltd  Shoes and dry cleaning  G/SCM/Q4/VCT/5 
 Page 5 
 
 
  Name of Company Type of Business Approved Products/Services 
42. Cross Roads 
Development Company Ltd  Plaques, trophies, medal 
43. Davy Agro Industries 
Ltd Manufacturing Egg noodles 
44. Dawn Designer 
Collections Ltd Manufacturing Ladies, gents and children garments 
45. DMG Furniture 
Enterprises Manufacture Furniture 
46. East Caribbean Metal 
Industries Ltd Manufacturing Exhaust pipes, steel, metal bars, wire & 
galvanized nail and staples 
47. East Caribbean Packaging Ltd Manufacturing Cotton, polypropylene bags 
48.East Caribbean Plastics 
Industries Ltd Manufacturing PVC plastic products 
49. East Caribbean Rice 
Mills Ltd Manufacturing Edible oils, stock feeds 
50. Erica Country Style 
Products Manufacturing Teas, spices, dried fruits, jams, sauces, candied 
fruit jellies, gift packs 
51. Eustace Auto Supplies Service, 
manufacturing Shaping clutch, discs and brakes shoes, 
52. Exotic Manufacturing 
Company Ltd Manufacturing Soap 
53. Finishing and 
Furnishing Company Ltd Manufacturing Beds, tables, chai rs, general household furniture 
54. First Base Design Ltd Manufacturing Garments 
55. First Island Design Ltd Manufacturing T-shirts 
56. Framin Place Manufacturing PVC furniture, framing pictures 
57. Frisco Ltd Manufacturing Ice-cream 
58. G. Ferrari-Units Ltd. Manufacturing PVC furniture 
59. Gunn Communications 
Ltd Manufacturing Electronic security tags 
60. Island Bakeries Ltd Manufacturing Cookies, biscuits, wafers, bread, snacks 
61. Island Queen Ltd Manufacturing Knitted sweaters 
62. Island Classic Furniture 
Ltd. Manufacturing Antique furniture, windows, doors, frames, 
closets, vanity units, staircase, bars, tables, cupboards 
63. Jax Enterprises Ltd Manufacturing School uniforms 
64. Jessica Ltd Manufacturing Spices, herbal products G/SCM/Q4/VCT/5 
Page 6  
 
  Name of Company Type of Business Approved Products/Services 
65. Kama Industries Ltd Never received  
66. Kendra Aluminium 
Products Manufacturing PVC, glass products, windows, doors, frames 
67. Krave’s Manufacturing 
Co Ltd Manufacturing Cassava farine, breakfast cereal, biscuit, snacks 
68. La Soufriere Heavy 
Duty Batteries Ltd Manufacturing Automobile, marine batteries 
69. Montaque Products Manufacturing Jams , jellies, fruit juices, bottled water, 
70. Montaque Estates Ltd. Manufacturing Jams , jellies, cordial, marmalade, flavoured 
water, etc. 
71.  Mountain Top Natural Spring Water Manufacturing Spring water, farine, plantain and breadfruit 
chips vinegar, carbonated water, ketchup, mustard, fruit juices 
72. M&R Investment Company Processing Roti, chicken 
73. Nu Caribe Products 
Corporation Ltd Manufacturing Hand knitted and hand loomed sweaters and 
blouses 
74. Nutmeg PC Ltd Assembling Computers, servers 
75. Ocean Star (SVG) Ltd. Fishing Fresh fish, vacuum packed fish, frozen fish, 
fresh fish loin, smoked fish, fish balls, fish 
sticks, fish paste and canned fish products 
76. Paradise Investment Ltd Processing Chicken 
77. Pasta Enterprises Ltd Manufacturing Pasta products 
78. Patterson Caribbean 
Foods Processing Meat and meat products 
79. Procare Foods 
Company farming Incubators, hatchers , brooders, vaccines, pistol 
vac, etc. 
80. Riverside Farms Ltd Processing Poultry meat 
81. Robert Damjkaer (St. Vincent) Ltd Processing Sausages, luncheon meat, ham, chicken franks 
82. Rotoplastics St. Vincent 
Ltd Manufacturing Rotomoulded polyethylene water tanks, other 
plastic containers 
83. Sea Island Arts Manufacture Embroi dered table cloths, napkins, placemats 
84. Seven Stars Inc manufacture Post cards, Christmas cards 
85. Solid Surfacing 
International Inc Manufacture Countertop, vanities, sinks, desktop, tabletops, 
bathtubs 
86. Spring Studio Pottery Ltd Manufacture Hand-crafted pottery, ceramic items  G/SCM/Q4/VCT/5 
 Page 7 
 
 
  Name of Company Type of Business Approved Products/Services 
87. Sprotties Silk Screen Printing Fabrics,  t-shirts, table mats, kitchen towels, 
head squares 
88. Standard Cap Industr y Manufacture Caps, hats 
89. St. Vincent Container 
Corp Manufacture Cardboard containers 
90. St. Vincent Brewery 
Ltd. Manufacture Beers, malts, stout, soft drinks 
91. St. Vincent Chemicals 
Ltd Manufacturing Detergents, cleaners 
92. St. Vincent Jewelry 
Manufacturing Co Ltd Manufacture Gold and silver jewelry 
93. St. Vincent 
Manufacturing Co. Manufacture Cigarettes, laundry soap 
94. St. Vincent Packaging 
Company Ltd Manufacturing Thermoformed product 
95. St. Vincent Paper 
Converters Ltd Manufacturing Toilet paper rolls, table & facial napkins, 
adding machine rolls, etc. 
96. SVG Paper Perfect Co 
Ltd Manufacturing Paper towels, toile t tissue, other paper products 
 
Q2. Please explain why, under the above progra mmes, which have been in place for over 
ten years, it is still not possible to dismantle the prohibited subsidies. 
 
Reply  
  First, St. Vincent and the Grenadines ec onomy is heavily dependent on the exports of 
bananas. With the dismantling of the preferen tial banana arrangement, St. Vincent and the 
Grenadines’ economy has become vulnerable to disl ocation.  Additionally, the subsidy programme 
serves  to support economic development.  In this regard, the subsidy programme is back loaded as in 
most developed countries and do not represent c ash outlays. Further, the diversification from 
agriculture over the past six years have seen the establishment of industrial production based on the 
fiscal incentive regime.  Most of these investment  agreements are of the group 1 enterprise status 
which has a duration of fifteen years.  The exports  of flour, pasta, furniture and aerated beverages 
cannot under any circumstances be considered as tr ade distorting at the multilateral level as they 
constitute only a small fraction of world exports.  
Q3. The basis for requesting the extension is th at St. Vincent and the Grenadines is a small, 
vulnerable economy which suffers from the combin ed effect of diseconomies of scale caused by 
the small size of its economy and administration  and by its physical isolation.  If the above 
distorting factors are not brought under contro l before 2018, would there be a request for a new 
extension for the phasing out of the prohibit ed subsidies?  Please explain why these 
characteristics of St. Vincent and the Grenadin es' economy prevent the country from complying 
fully and satisfactorily with WTO export subsidy disciplines. 
 G/SCM/Q4/VCT/5 
Page 8  
 
  Reply
 
  It is not anticipated that there would be need  for a further extension of the phasing out period 
beyond 2018.  This would be dete rmined based on the need and the prevailing provisions of the WTO 
SCM Agreements on granting extensions.  In addition, due to human capital deficiencies, 
transforming the subsidy regime in ways whic h would address national development objectives and 
our WTO obligations is extremely important.  Furthe r, contractual investment agreements between the 
government and the private sector requires exte nded periods in which it could be effectively 
grandfathered.  Q4. Please explain why the situation giving ri se to the request for extension requires the 
granting of prohibited subsidies until the year 2018, rather than an earlier date. 
 
Reply
 
 
 The Government of St. Vincent and the Gren adines, in keeping with the Organisation of 
Eastern Caribbean States (OECS) development strategy, is in the process of enhancing the macro-economic policy framework to bring it into conformity with internationa l best practice.  A master plan 
for national economic development with a twenty-twent y vision would be implemented.  In this plan, 
the strategic reliance on the productio n of goods to the focus on the competitive supply of services to 
the international market will be emphasised.  In addition, as one of the proponents of the document 
G/SCM/39, St. Vincent and the Grenadines would ha ve outlined and explained its concerns and the 
reasons to eliminate its subsidy pr ogramme over a long enough time frame. 
 Also see answer given in 2 and 3 above.
 
  G/SCM/Q4/VCT/5 
 Page 9 
 
 
  JAPAN  
 
 
Q1. Please show the reasons why the lengthy exte nsion of 11 years is indispensable uniformly 
for all the export subsidy programmes referred to in the above documents. 
 
Reply  
  The choice of the suggested date of 2018 should be understood in light of the discussions that 
had taken place in 2000/2001 and led to the adoption of G/SCM/39.  At that time, the proponents of 
this G/SCM/39 had expressed concern with respect a short extension would not allow time for the 
necessary structural transformation needed to wean industry off governments subsidies.  Specifically, 
it was suggested that a time-frame of sufficient durati on, and adequate to allow time for sectoral and 
macro-economic adjustment was required.  In this context, the proponents offered that 20 years would 
be adequate.  In light of those discussions and ta king into account the legitimate fiscal, economic and 
development needs of St. Vincent and the Gren adines, the extension proposed in G/SCM/W/535 
should be regarded as an appropriate extension.   It should be borne noted that the economic im peratives that necessitate a subsidy programme 
prevail  almost uniformly in the economies of th e proponents of G/SCM/W/535, hence, the rationale 
of a uniform timeframe is supported by the sim ilarities that exists between programmes and the 
intended policy effects they aim at.  Moreover, all proponents face the same  structural weaknesses 
which justify the proposed extension.     Finally, in this regard, it must be acknowle dged that St. Vincent and the Grenadines, like the 
other proponents of G/SCM/W/535, have suffered the adverse impacts of multiple external shocks.  
These shocks have setback the realisation of policy outcomes desired and contemplated in G/SCM/39 
 
Q2. Please explain, one by one for each of th e export subsidy programmes referred to in the 
above documents, how each of those export subs idy programs are integrated in the development 
strategies of the relevant Me mber, why a further extension beyond 2007 is necessary for its 
economic and financial needs, and why the extens ion period has to be through to the end of 
2018.  
Reply
 
  The Fiscal Incentives Act is a key component of  St. Vincent and the Grenadines’ investment 
promotion framework and efforts to diversify its economy.  It should be noted that only a limited 
number of enterprises benefit from the subsidy progr amme which take the form of import duties 
exemptions, income tax exemptions etc. The importa nce of the incentives grante d to the enterprise is 
critical to the financial, economic and developmen t needs of St. Vincent and the Grenadines.   
  By global standards, the figures are small but they are very significant for a small vulnerable 
economy like St. Vincent and the Grenadines.   
  The choice of the suggested date of 2018 should be  read in light of the discussions that had 
taken place before the adoption of G/SCM/39.  At  that time, the proponents of this document had 
already explained their concerns and the reasons  to eliminate their programmes  over a long enough 
timeframe possibly extending over 20 years.  In light of those discussions and taking into account the 
relevant and legitimate fi nancial, economic and development need s of St. Vincent and the Grenadines, 
the extension proposed in G/SCM/W/535 should be regarded as an appropriate extension. 
 G/SCM/Q4/VCT/5 
Page 10  
 
  PERU
 
 
 
Q1. Do the co-sponsors of proposal G/SCM/W/535 intend to extend only the programmes 
which have been notified to date under Ar ticle 27.4 of the Agreement on Subsidies and 
Countervailing Measures and which are included in Annex A of their proposal or do they 
intend to include any other export subsidy progr amme which fulfils the criteria set forth under 
2 in document G/SCM/39? 
 
Reply  
 
 The proposal contained in G/SCM/W/535 a nd G/SCM/W/535/Add.1 refers only to the 
amendment of paragraph 1(e) of G/SCM/39.  Ther efore, the intention of the sponsors of these 
documents is to continue benefiting from the ex tension until the end of 2018 and the conditions 
specified in G/SCM/39 would remain unchanged.  Th is clearly excludes the possibility to include any 
further programmes. 
 
Q2. Under what laws and enabling regulations are the programmes listed in Annex A of the 
proposal implemented? 
 
Reply  
 
 - Fiscal Incentives Act No.5 of 1982 amended by  - Act 20 of 1987  - Act 16of1991  Q3. Which sectors and products benefit from the programmes? 
 
Reply
 
  The major sectors benefiting from the programme include Manufacturing, Agro-processing and Assembling.  The major products included Ae rated beverages, Beers,  Pasta Products, Wheat 
Flour, Cardboard boxes. 
 
Q4. What amount is disbursed by the St ate to the programmes listed in Annex A? 
 
Reply
 
 
 The subsidy programme does not the take the fo rm of cash outlays.  The programme is back-
loaded and is based on waivers of import duties and taxes.   
__________