WORLD TRADE  
ORGANIZATION  G/SCM/Q4/BRB/6 
9 October 2006 
 (06-4832) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
PROCEDURES FOR EXTENSIONS UNDER  
ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES  
AND COUNTERVAILING MEASURES 
 
Replies to Questions Posed by CANADA1;  COLOMBIA2; 
JAPAN3;  PERU4 and the UNITED STATES5 
 
 
 The following communication, dated 6 October 2006, is being circulated at the request of the Delegation of Barbados. 
 
_______________ 
 
 
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
 
  Barbados is of the view that document G/SC M/39 contains only a fast track procedure to 
approve extensions under Article  27.4 of the ASCM.  This document neither reduces nor does it 
increase the 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 a “progressive” elimination is the first sentence which refers 
to the phase out of the export subsidies within th e eight-year period mentioned in Article 27.2(b), a 
condition that is completely different to those regarding the subsidies programmes at issue.  
Additionally, it is our perspective that the language in Article 27.4 on “progressive elimination” is not 
mandatory.   
                                                     
 
1 G/SCM/Q4/BRB/2 
2 G/SCM/Q4/BRB/1 
3 G/SCM/Q4/BRB/4 
4 G/SCM/Q4/BRB/5 
5 G/SCM/Q4/BRB/3/Rev.1 G/SCM/Q4/BRB/6 
Page 2  
 
   In addition, Barbados considers that its e xport subsidy programmes are fully in compliance 
with its WTO obligations under Ar ticle 27.4 and under the procedur es and conditions set forth in 
document G/SCM/39.   Nevertheless, Barbados has been undertaking e fforts to examine the possibility of phasing out 
its export subsidies programmes.  In this regard, technical support from the WT O Secretariat, national 
discussions to examine the potential impact of  removing the export subsidy component on the 
economic and developmental landscape of the c ountry, and the initiation of work with other 
international organizations to ensure the export generating capacity of the manufacturing sector is 
expanded will be necessary. 
   
Q2. Could the proponents of both documents also explain how further extension of this 
phase-out period would ensure that these efforts a re finally successfully undertaken in order to 
avoid a similar situation at the end of any ne w extended phase-out period for certain export 
subsidy programmes?  
 
Reply
 
  The proposal contained in G/SCM/W/535 refers only to the amendment of paragraph 1(e) of 
G/SCM/39. The view of the proponents is to conti nue benefiting from the extension throughout 2018, 
based on their special economic, financial and de velopment needs.  Therefore, the rights and 
obligations contained in document G/SCM/39 an d Article 27.4 of the ASCM would remain 
unchanged.   Consequently, Barbados would take a decision on the possibility of any additional extension, 
at the appropriate time based on its specific fi nancial, economic and de velopment needs and in 
accordance with the procedures and timelines establis hed in the provisions mentioned above.  As a 
WTO Member, Barbados has designed its development strategies to address these financial, economic 
and developmental needs with a view to utilize trade promotion as a tool for poverty reduction, export 
diversification, employment and to achieve enha nced integration into the world economy. These 
programmes, are at this time, integral  components of these developmental plan. 
 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
 
 
 Article 27.4 of ASCM provides that “if a de veloping country Member deems it necessary to 
apply … [export] subsidies beyond the 8-year period [mentioned in article 27.2(b)], it shall not later 
than one year before the expiry of this period en ter into consultation with the Committee, which will 
determine whether an extension of this period is ju stified, after examining all the relevant economic, 
financial and development needs of the developing  country Member in question.  If the Committee 
determines that the extension is justified, the de veloping country Member c oncerned shall hold annual 
consultations with the Committee to determine th e necessity of maintaining the subsidies.”   
 Members that deemed it was necessary to appl y export subsidies, due to their particular 
characteristics and needs, requested extensions under this provision in accordance with the outcome 
of the negotiations in Doha c ontained in document G/SCM/39.  This provided for fast track 
procedures for the approval of the extensions.  Memb ers interested in obtaining these benefits have 
had to meet some criteria that justified the appr oval from the Committee in order to maintain their 
export subsidies.   G/SCM/Q4/BRB/6 
 Page 3 
 
 
   
 In this regard and according to the above mentioned provisions, the Committee granted to a 
group of Members the authority to maintain export subsidies during a specific period of time subject 
to transparency and standstill conditions.  Barbados  was granted this extension period for its five 
notified programmes. 
 As provided in document G/SCM/39, the author ity granted to the beneficiary Members is 
valid until the end of 2007.  After this date, these  Members have either the possibility to seek a 
continuation of the extension, pursuant to Article 27.4 of the ASCM, or still have the final two years 
referred to in the last sentence of such Article. 
 Barbados, after an assessment at the national level, has deemed it necessary to request a new 
extension based on its economic, financial and deve lopment needs and the potential usefulness of the 
programmes to assisting Barbados’ fuller integration into the world economy.  It should be noted that 
the request is based on the original G/SCM/39 and th e criteria contained therein.  The conditions in 
Barbados, that existed and justified the extension in 2001, remain in existence at this point in time, 
although the export subsidies have had some positive e ffects such as the attraction of foreign direct 
investment, export base diversification and employment creation. 
 The choice of the suggested date of 2018 should  be read in the light of the discussions that 
had taken place before the adoption of SCM/G/SCM/ 39, as at that time, Barbados and the proponents 
of W/535 had expressed their needs and the reasons to eliminate their programmes over a long enough 
timeframe, possibly extending over 20 years.6  
 In this regard, Barbados is convinced that  a new extension will foster the export sectors, 
concretize some of the preliminary gains made so  far and contribute to pove rty alleviation and the 
creation of decent work.  The five programmes that  Barbados has notified have had a positive impact 
in a small country with a very limited export base and a miniscule participation in world trade.  They 
have been instrumental in the development and diversification of the export sector towards the 
production of manufactured goods, reducing the dependence on agricultural commodities and the 
negative impacts suffered due to the plunge of intern ational prices during the last years.  In addition 
there have been positive externalities such as empl oyment creation, the transfer and ownership of 
modern technology and know-how, as well as poverty reduction. 
 However, these positive effects still are not enough.  Members should bear in mind that 
Barbados’ economy is characterized by a number of elements which, cumulatively, results in a great 
deal of vulnerability.  For example, it should be noted, that none of Barb ados’ manufactured products 
has reached export competitiveness at  an international level, but rather the share of Barbados’ 
manufacturing sector in world total exports is 0.001 %. 
 Foreign direct investment in the form of new manufacturing plants and service providers is 
the key answer for developing our exports and benef iting from trade liberalization.  It is clear that 
export subsidies have been contributing to attract  foreign direct investment.  Over 400 foreign 
companies are performing under the various programmes.7  The taxes paid by these entities account 
for over 40% of Governments’ corporate tax revenue.  These numbers are significant for a small 
developing economy.  
 In light of this, Barbados is convinced that tr ade is a tool to achieve sustainable development 
and these programmes can assist in that regard.  The existing five programmes have proven to be 
effective components of Barbados’ development goals and remain impor tant tools for maintaining and 
                                                      
6 See G/SCM/38 
7 Across all sectors – agriculture, manufacturing and services. G/SCM/Q4/BRB/6 
Page 4  
 
  enhancing our trading capacity.  Although they are not the sole instruments required in developing a 
sustainable trade and development policy, they ha ve been valuable and served important purposes 
over the last few years. 
 As explained earlier, the proposal for an ex tension seeks a longer transitional period, under 
the same conditions as have been negotiated unde r the Uruguay Round Agreemen ts and subsequently 
during the Doha Ministerial Conference. In that regard, the proponents of document G/SCM/W/535 
and G/SCM/W/535 Add. 1, would like to propose some rationales for the timeframe proposed. 
 The subsidy programmes contribute to the implementation of policy objectives such as 
industrialization, diversification and employment , and also encourage imports - at duty free or 
reduced tariff levels – of raw materials and input s originating in develope d and other developing 
countries, thereby contributing positively to the multilateral trading system. 
 In addition, Barbados’ main export markets are highly concentrated in the EC, the US and its 
Caribbean neighbours and on average, Barbados has accounted for only  0.02%  of the total imports of 
goods in the US in 2005 and 0.04 % in the EC.  These figures confirm that Barbados’ potential to 
distort trade is truly insignificant and hence unlik ely to affect in a detrimental manner other WTO 
Members and producers in third markets. 
 Just as the programmes have proved useful ove r the past years, the maintenance of these 
programmes would maximize and consolidate their benef its.  As a matter of fact, their elimination at 
this juncture could jeopardize the economic and social contributions they have made to many 
countries. 
 In this sense, policies that promote econo mic diversification, and particularly the 
industrialization of the SVEs, have a strategic role to  play in reducing the vulnerability that affects the 
proponents.  This is the context in which th e subsidy programmes were designed and are being 
implemented.  While they are not the only policy instrument in the proponents’ diversification 
strategy, they certainly constitute one of the ma in elements of these strategies and have proved 
instrumental in fostering an important diversification process. 
 In consequence, Members should take into acc ount that the new extension is being required 
based on the relevant economic, fina ncial and development needs of the beneficiary Members.  These 
needs remain practically the same as they were illust rated to justify the extension and the fast track 
procedures in 2001.  The proposed date of 2018 is c onsistent with the discussions that had taken place 
before the adoption of SCM/G/SCM/39. At that time,  the proponents of this document had already 
expressed the reasons and the needs to elimin ate their programmes over a long enough timeframe, 
possibly extending over 20 years.  By definition, a development strategy cannot yield the desired 
results open a short and constrained period of time. Consequently, to ensure that developing countries 
are able to fully integrate and obtain real benef its from the multilateral trading system, development 
strategies have to be designed for the medium and long term.  
 Furthermore, the consistency and certainty which the current procedures under G/SCM/39 
allow are important for ensuring investor confidence.   The possibility under Article 27.4 to request an 
extension on an annual basis could erode this confid ence and investor certainty and given the limited 
administrative capacities of the proponents, it would be  burdensome to have to annually request an 
extension.  G/SCM/Q4/BRB/6 
 Page 5 
 
 
  COLOMBIA  
 
Q1. Please provide for each programme the most  up-to-date information available regarding 
the number of companies which benefit from th ese programmes, classified according to the 
industrial sector. 
 Reply
 
  The number of companies are as follows:  
 Fiscal Incentives Programme – 17  
 Export Allowance Programme – 10  Research and Development Programme – 6  International Business Incentive Programme – 8  Societies with Restricted Liabilities Programme – 3 
 
Q2. Please explain why, although these progra mmes have been in place for more than 10 
years, it has not yet been possible to  dismantle the prohibited subsidies. 
 
Reply
 
 
 These programmes are constantly under review.  However, Barbados’ economy is facing 
rapidly rising imports occasioned by trade liberalization.  It has to encourage the export of goods in order to maintain the stability of the economy.  The programmes play a significant role in that regard.  
Without these programmes, Barbados’ foreign exch ange generation capacity will be compromised.  
 Q3. The justification for the request for an ex tension is that of being a small, vulnerable 
economy which suffers from the combined effect s of diseconomies of scale caused by the small 
size of the economy and administration and by its physical isolation.  If the above-mentioned 
elements of distortion are not overcome before 2018, would a new extension for the elimination 
of prohibited subsidies be requested?  Please explain why these characteristics of your economy do not allow your country to comply fully and satisfactorily with WTO disciplines on export 
subsidies.  
Reply
 
  The proposal contained in G/SCM/W/535 refers only to the amendment of paragraph 1(e) of 
G/SCM/39.  The view of the proponents is to contin ue benefiting from the extension throughout 2018.  
Therefore, the rights and obligations contained in  document G/SCM/39 and Article 27.4 of the ASCM 
would remain unchanged.   Assuming that Colombia is referring to “d istortion factors” as meaning the “relevant 
economic, financial and social needs” provided for in Article 27.4 of ASCM, please note that 
Barbados would take a pertinent decision on an ad ditional request for an extension, based on those 
needs in accordance with the procedures and timelines  established in the provisions mentioned above. 
  In addition, Barbados is of the view that , its programmes are fully compliant with the 
Article 27.4 provisions of the SCM agreement which enshrines special and differential treatment in 
the ASCM, as well as conformity with the procedur es in G/SCM/39.  The five programmes are fully 
and satisfactory in compliance with these relevant  WTO disciplines.  However there are important 
reasons why Barbados has not been in a positio n to eliminate its export subsidies and these are 
explained below in question 4.  G/SCM/Q4/BRB/6 
Page 6  
 
  Q4. Please explain why the situation which has prompted the request for an extension calls 
for allowing the granting of prohibited subsidies until 2018 and not earlier. 
 
Reply
 
 Article 27.4 of ASCM provides that “if a de veloping country Member deems it necessary to 
apply … [export] subsidies beyond the 8-year period [mentioned in article 27.2(b)], it shall not later 
than one year before the expiry of this period en ter into consultation with the Committee, which will 
determine whether an extension of this period is ju stified, after examining all the relevant economic, 
financial and development needs of the developing  country Member in question.  If the Committee 
determines that the extension is justified, the de veloping country Member c oncerned shall hold annual 
consultations with the Committee to determine th e necessity of maintaining the subsidies.”   
 Members that deemed it was necessary to appl y export subsidies, due to their particular 
characteristics and needs, requested extensions under this provision in accordance with the outcome 
of the negotiations in Doha c ontained in document G/SCM/39.  This provided for fast track 
procedures for the approval of the extensions.  Memb ers interested in obtaining these benefits have 
had to meet some criteria that justified the appr oval from the Committee in order to maintain their 
export subsidies.  
 In this regard and according to the above mentioned provisions, the Committee granted to a 
group of Members the authority to maintain export subsidies during a specific period of time subject 
to transparency and standstill conditions.  Barbados  was granted this extension period for its five 
notified programmes. 
 As provided in document G/SCM/39, the author ity granted to the beneficiary Members is 
valid until the end of 2007.  After this date, these  Members have either the possibility to seek a 
continuation of the extension, pursuant to Article 27.4 of the ASCM, or still have the final two years 
referred to in the last sentence of such Article. 
 Barbados, after an assessment at the national level, has deemed it necessary to request a new 
extension based on its economic, financial and deve lopment needs and the potential usefulness of the 
programmes to assisting Barbados’ fuller integration into the world economy.  It should be noted that 
the request is based on the original G/SCM/39 and th e criteria contained therein.  The conditions in 
Barbados, that existed and justified the extension in 2001, remain in existence at this point in time, 
although the export subsidies have had some positive e ffects such as the attraction of foreign direct 
investment, export base diversification and employment creation. 
 The choice of the suggested date of 2018 should  be read in the light of the discussions that 
had taken place before the adoption of SCM/G/SCM/ 39, as at that time, Barbados and the proponents 
of W/535 had expressed their needs and the reasons to eliminate their programmes over a long enough 
timeframe, possibly extending over 20 years.8  
 In this regard, Barbados is convinced that  a new extension will foster the export sectors, 
concretize some of the preliminary gains made so  far and contribute to pove rty alleviation and the 
creation of decent work.  The five programmes that  Barbados has notified have had a positive impact 
in a small country with a very limited export base and a miniscule participation in world trade.  They 
have been instrumental in the development and diversification of the export sector towards the 
production of manufactured goods, reducing the dependence on agricultural commodities and the 
negative impacts suffered due to the plunge of intern ational prices during the last years.  In addition 
there have been positive externalities such as empl oyment creation, the transfer and ownership of 
modern technology and know-how, as well as poverty reduction. 
                                                      
8 See G/SCM/38  G/SCM/Q4/BRB/6 
 Page 7 
 
 
   
 However, these positive effects still are not enough. Members should bear in mind that 
Barbados’ economy is characterized by a number of elements which, cumulatively, results in a great 
deal of vulnerability.  For example, it should be noted, that none of Barb ados’ manufactured products 
has reached export competitiveness at  an international level, but rather the share of Barbados’ 
manufacturing sector in world total exports is 0.001 %. 
 Foreign direct investment in the form of new manufacturing plants and service providers is 
the key answer for developing our exports and benef iting from trade liberalization.  It is clear that 
export subsidies have been contributing to attract  foreign direct investment.  Over 400 foreign 
companies are performing under the various programmes.9  The taxes paid by these entities account 
for over 40% of Governments’ corporate tax revenue.  These numbers are significant for a small 
developing economy.  
 In light of this, Barbados is convinced that tr ade is a tool to achieve sustainable development 
and these programmes can assist in that regard.  The existing five programmes have proven to be 
effective components of Barbados’ development goals and remain impor tant tools for maintaining and 
enhancing our trading capacity.  Although they are not the sole instruments required in developing a 
sustainable trade and development policy, they ha ve been valuable and served important purposes 
over the last few years. 
 As explained earlier, the proposal for an ex tension seeks a longer transitional period, under 
the same conditions as have been negotiated unde r the Uruguay Round Agreemen ts and subsequently 
during the Doha Ministerial Conference.  In that regard, the proponents of document G/SCM/W/535 
and G/SCM/W/535 Add. 1, would like to propose some rationales for the timeframe proposed. 
 The subsidy programmes contribute to the implementation of policy objectives such as 
industrialization, diversification and employment , and also encourage imports - at duty free or 
reduced tariff levels – of raw materials and input s originating in develope d and other developing 
countries, thereby contributing positively to the multilateral trading system. 
 In addition, Barbados’ main export markets are highly concentrated in the EC, the US and its 
Caribbean neighbours and on average, Barbados has a ccounted for only  0.02% of the total imports of 
goods in the US in 2005 and 0.04 % in the EC.  These figures confirm that Barbados’ potential to 
distort trade is truly insignificant and hence unlik ely to affect in a detrimental manner other WTO 
Members and producers in third markets. 
 Just as the programmes have proved useful ove r the past years, the maintenance of these 
programmes would maximize and consolidate their benef its.  As a matter of fact, their elimination at 
this juncture could jeopardize the economic and social contributions they have made to many 
countries. 
 In this sense, policies that promote econo mic diversification, and particularly the 
industrialization of the SVEs, have a strategic role to  play in reducing the vulnerability that affects the 
proponents.  This is the context in which th e subsidy programmes were designed and are being 
implemented.  While they are not the only policy instrument in the proponents’ diversification 
strategy, they certainly constitute one of the ma in elements of these strategies and have proved 
instrumental in fostering an important diversification process. 
 In consequence, Members should take into acc ount that the new extension is being required 
based on the relevant economic, fina ncial and development needs of the beneficiary Members.  These 
                                                      
9 Across all sectors – agriculture, manufacturing and services. G/SCM/Q4/BRB/6 
Page 8  
 
  needs remain practically the same as they were illust rated to justify the extension and the fast track 
procedures in 2001.  The proposed date of 2018 is c onsistent with the discussions that had taken place 
before the adoption of SCM/G/SCM/39. At that time,  the proponents of this document had already 
expressed the reasons and the needs to elimin ate their programmes over a long enough timeframe, 
possibly extending over 20 years.  By definition, a development strategy cannot yield the desired 
results open a short and constrained period of time.  Consequently, to ensure that developing countries 
are able to fully integrate and obtain real benef its from the multilateral trading system, development 
strategies have to be designed for the medium and long term.  
 Furthermore, the consistency and certainty which the current procedures under G/SCM/39 
allow are important for ensuring investor confidence.   The possibility under Article 27.4 to request an 
extension on an annual basis could erode this confid ence and investor certainty and given the limited 
administrative capacities of the proponents, it would be  burdensome to have to annually request an 
extension. 
Q5. What steps have been taken by Barbados  to eliminate the programmes covered by the 
request for an extension? 
 
Reply
 
 
 Barbados is continually reviewing the progra mmes to determine how best to make them WTO 
compatible.  However, the challenge is that this  will have to be done w ithout undermining investor 
confidence and precipitating a collapse of the export sector.  The amounts of the claims disbursed 
under the programmes are “de minimi s” by international levels, however, they are very significant 
and important to the Barbados economy.  
 
Q6. Are the programmes on Fiscal Incentive,  International Business Incentives and Tax 
Concessions for Societies with Restricted Liability granted only to domestic-funded legal 
entities?  
 Reply
 
 
 No.  The programmes are available to both international and domes tic funded legal entities 
 
Q7. For a company to be registered in Ba rbados and receive the Fiscal Incentive Act 
benefits, does it have to be constituted only by na tional partners?  If not, what is the percentage 
that is allowed for foreign participation?  Among the companies currently receiving tax benefits, how many have foreign participation?   
Reply
 
  There is no requirement for a company to be constituted only by nationals in order to obtain 
fiscal incentives.  There are no restrictions on the leve l of foreign participation. Of the seventeen (17) 
companies receiving Fiscal Incentives, five (5) have foreign participation.  
 
Q8. Under the International Business Incentiv es Programme, a guarantee period of 15 years 
is granted during which the licensed entities will be guaranteed the tax concessions.  In the event that the extension of the programme were not auth orised, what steps will be taken by Barbados 
for dismantling the programme and how will Ba rbados make compatible the enforcement 
period of the guarantees offered to these companies?   
  G/SCM/Q4/BRB/6 
 Page 9 
 
 
  Reply  
  The IBC Act makes provision for a 15 year guarantee to licensed entities.  A non-extension of this programme would have serious effects on the economy given the contribution of the International 
Business Sector.  Reneging on the guarantee would expose Barbados to lega l action and seriously 
undermine investor confidence in the country.   
  If the programmes were not renewed, Barba dos would not be in a position to issue new 
business with guarantees but the existing guara ntees will have to run their course.   
 
Q9. What is the difference between the “I nternational Business Incentives” and the 
“Societies with Restricted Liability” programmes?  In the event that the extension were not 
authorised and, taking into account that the maximum duration of a society with restricted 
liability is 50 years and a guarantee period of  30 years is foreseen for the granting of tax 
benefits, what steps will be taken by Barbad os for dismantling the programme and how will 
Barbados make compatible the enforcement p eriod of the guarantees offered to these 
companies?   
Reply
 
  Both International Business Companies and Inte rnational Societies with Restricted Liability 
are entities available for investor transaction use.  Basically, the former is a company and the latter a 
society.     In respect of the duration of a society, the le gislation has been amended to make this period 
indefinite.  The response to question eight (8) applies in respect of the guarantees. 
 
Q10. What is the justification for the extensio n of the programme granted to societies with 
restricted liability taking into account that, acco rding to the information provided by Barbados 
(documents G/SCM/N/71/BRB, G/SCM/N/74/BRB, G/SCM/N/114/BRB), there is only one company that benefits from this programme?   
Reply
 
  Only one company made claims in 2002. Howe ver, an increasing number of Societies with 
Restricted Liability benefited from this programme.  This is the fastest growing sub-sector of the 
International Business Sector in the last few years.   Like the International Business Companies, they 
provide valuable employment; and generate foreign exchange and revenue to government from the 
payment of fees.   
 G/SCM/Q4/BRB/6 
Page 10  
 
  JAPAN
 
 
Q1. Please show the reasons why the lengthy extens ion 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 read in the light of the discussions that 
had taken place before the adoption of G/SCM/39.  At  that time, the proponents of this document had 
already explained their concerns and their needs re garding the importance of a long timeframe for the 
retention and subsequent elimination of thei r programmes, possibly extending over 20 years.
10  In the 
light of those discussions and taking into account th e relevant and legitimate financial, economic and 
development needs of Barbados, the length of time for a further extension as proposed in 
G/SCM/W/535 should be regarded as an appropriate timeframe.  
 
 In addition all of Barbados’ programmes genera lly share the same objectives, structure and/or 
design and these characteristics are also shared by the other proponents seeking an extension.  As a 
matter of fact, all of the proponents face the same st ructural constraints which justify the requirement 
of the extension.  Additionally, certain recent deve lopments in the trading environment such as falls 
in commodity prices, currency fluctuations, and th e erosion of traditional preferences and markets 
could hinder the enhanced integration of Barba dos and the other proponents in the global economy 
and would necessitate some form of adjustment assistance. 
  The uncertainty regarding the future of the negotiations in the Doha Round and the significant 
transformation in the global trading scenario tri gger new challenges that will require great efforts 
from domestic producers in SVEs that will resu lt in additional pressure being placed on these 
countries in terms of trade and overall economic pr ospects.  In addition Barbados still requires 
assistance in adjusting to the rules agreed to under the Uruguay Round.   Barbados has applied and notif ied only five programmes.  The se programmes have been very 
important to its export developmen t strategy and, notwithstanding the fact that they may not be 
performing optimally under the current global cond itions; they contribute to the enhancement and 
diversification of the minuscule export base of the country, create employment and have proved to be 
a useful tool for poverty alleviation.  For th ese reasons, it is indispensable to have a uniform
 extension 
for the five export subsidy programmes given the co llaborative and cumulative manner in which they 
interact and impact on Barbados’ export promotion strategy.  The relevant economic, financial and 
developmental needs are explained be low in the answer to question 2. 
 
Q2.  Please explain, one by one for each of the 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 information regarding each of the progra mmes notified by Barbados, including how these 
programmes are integrated into the development strategies of the country is available in the 
documents submitted in 2001
11 to obtain the current extension.  Furthermore, this information is 
available in each of the annual notifications th at Barbados has submitted to the Committee on 
                                                      
10 See G/SCM/38 
11 The document references for these submissions can be found in the Secretariat’s recent compilation   G/SCM/Q4/BRB/6 
 Page 11 
 
 
  Subsidies and Countervailing Measures in compliance with the transparency and standstill 
obligations.      In addition, the importance of these programme s is spelt out in documents pertaining to 
Barbados’ Trade Policy Review of 2002. Barbados is a small devel oping economy with virtually no 
natural resources but is highly open. It therefore needs to earn foreign exchange to pay for the goods 
and services it imports.  Within the last decade, Barbados abandoned its import substitution policies 
and is seeking to successfully implement an export led strategy.  Each programme is designed to be consistent with that strategy:  Fiscal Incentives Programme 
 
 This programme is intended to stimulate great er levels of production of selected products 
locally, regionally and in the international mark et.  Both local and foreign owned businesses which 
qualify must be engaged in the produc tion of an approved product.   
 
Export Allowance 
 
 This incentive is intended to stimulate exports to foreign markets (outside of CARICOM) and 
is not applicable to persons receiving bene fits under the Fiscal Incentives Act.     
 The Research and Development Allowance  
 This allowance is intended to encourage comp anies to undertake market research and product 
development.   International Business Incentives  
 The International Business Incen tive is intended to encourage th e continued diversification of 
the economy through the provision of high quality goods and services.  It is also intended to facilitate 
the creation of employment, the earning of foreign currency, and the transfer of technology.      The Societies with Restricted Liability  
 This programme is intended to assist the G overnment in widening the range of products 
available to investors in the international busin ess and financial services sectors.  It provides for 
incentives which are similar to those granted under th e IBC Act.  However, Partnerships and not only 
companies benefit from the concessions. 
  It is difficult to quantify all of the direct and indirect benefits of these programmes to the 
Barbados economy.  However, it is estimated that  the off-shore business sector  is the second largest 
sector in Barbados.  It employs a sizable number of persons.  The Fiscal Incentives Programme alone employs over 800 persons.  Less than 100 manufacturing companies make claims under the various 
programmes, however these companies account for ov er 42% of Government’s corporate revenue. 
 G/SCM/Q4/BRB/6 
Page 12  
 
  PERU
 
 
Q1. Is the intention of the co-sponsors of the proposal G/SCM/W/535 only to extend the 
programmes notified as of today under Article 27.4 of the Agreement on Subsidies and Countervailing Measures and which are included in Annex A of their proposal, or is it to 
include any other export subsidy programme wh ich complies with the criteria laid down in 
Article 2 of 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. Which are the laws on the implementation  of the programmes scheduled in Annex A of 
their proposal and which are the regulations under which these programmes are operationalised?  
Reply
 
 
 The relevant Barbados legislation is as follows:  
• Export Allowance Programme – Income Tax Ac t Cap 73 (Section 14A and the First Schedule 
of the Income Tax Act) 
 
• Research and Development Allowance Progra mme – Income Tax Act  Cap 73 (Section 12D 
and Part I of the Schedule of the Income Tax Act) 
 
• International Business Incentives – Inte rnational Business Companies Act Cap 71 
 
• Societies with Restricted Liability – Socie ties with Restricted Liability Act  Cap 318b 
 
• Fiscal Incentives Programme – Fiscal Incentives Act Cap 71 
 
Q3. Which sectors and products benefit from the programmes? 
 
Reply
 
  The manufacturing sectors and the products that benefited from the programmes are as 
follows : 
  
Sector/Area
   Nature Of Business  
 (a)  Chemicals Paint, Pain t Products, Plastic Products 
(b)  Health Manufacture of Pharmaceuticals 
(c)  Food Fish Processing; Catering; Biscuit Manufacturing  
(d)  Commercial/Housing Mfg of Steel Frames;  Boat Sails (e)  Textile Garments including Tee Shirts, etc. (f)  Beverage/Spirits Bottling and Blending; Mfg of Flavours  (g)  Wood Products Furniture and articles wood   G/SCM/Q4/BRB/6 
 Page 13 
 
 
  (h)  Other Industries Incl : Scrap Me tal Reclycling; Electrical components; 
Semiconductors Mfg Hair Care Pr oducts; Periodicals, Printing And 
Publishing;  Non-metallic Mineral Products, etc. 
 
Q4. How much did the State disburse for the programmes mentioned in Annex A? 
 
Reply  
 
 Disbursements were as follows : 
 
 Fiscal Incentives Act  
 Year 1999-2001, claims - $32,797,440  Year 2002-2003, claims - $12,523,576  Year 2003-2004, claims - $ 7,204,267  Year 2004 -2005 claims - $ 8,206,055 
 
 Research And Development 
 
 Year  2001-2002, claims - $126,196.20  Year 2003-2004, claims  - $300,561.84  Year 2004-2005, claims  - $1,948,522.95  Year 2005-2006, claims  - $2,264,752.80 
 
 Export Allowance
 
 Year 2001-2002, claims - $1,278.415   Year 2003-2004, claims - $406,493.   Year 2004-2005, claims - $693,763.  
 Year 2005-2006, claims - $530,759.  
  IBC’s And Societies With Restricted Liability
 
 Year 2001-2002, claims - $1,530.784.  Year 2003-2004, claims - $1,448.478.  Year 2004-2005, claims - $20,358.648.  
 Year 2005-2006, claims - $17,654.063. 
 Claims are in Barbados dollars (BDS $ 2 = US$ 1)  G/SCM/Q4/BRB/6 
Page 14  
 
  UNITED STATES
 
 
 Barbados has requested an extension for th e above listed programmes through calendar year 
2018, pursuant to the 2001 Doha Ministerial De cision on the Procedures for Extension under 
Article 27.4 of the ASCM.12 
 
Q1. We note that Barbados has stated “th ere has been no change in the standstill 
arrangements” for each of the programmes it ha s requested an additional extension.  We 
request that Barbados provide complete and updated information for the 2006 notification 
period for each of the above listed programmes.   
 
Reply  
  The last notification was made in July 2006.  There have been no changes to the programmes. 
Claims made for the 2005 -2006 period are as follows: 
 
Research And Development 
 
  Year 2005-2006, claims  - $2,264,752.80  Export Allowance
 
  
 Year 2005-2006, claims - $530,759.   IBC’s And Societies With Restricted Liability
 
  
 Year 2005-2006, claims - $17,654.063. 
 Claims are in Barbados dollars (BDS $ 2 = US$ 1) 
 
Q2. Please describe what efforts Barbados ha s made to phase out these programmes within 
the extension period that has already been granted, as provided under the “Procedures for 
Extension Under Article 27.4 for C ertain Developing Country Members."
13  Please further 
describe how Barbados will continue to ensure th at the programmes will be phased out, if an 
additional extension were granted.   
 
Reply  
 
 The programmes are currently under review. Barbados has been undertaking efforts to 
examine the possibility of phasing out its export s ubsidies programmes.  In this regard, technical 
support from the WTO Secretariat, national discussions  to examine the potential impact of removing 
the export subsidy component on th e economic and developmental landscape of the country, and the 
initiation of  work with other inte rnational organizations to ensure  the export generating capacity of 
the manufacturing sector is expanded will be necessary. 
 
Q3. Please describe changes to the progra mmes since 2001.  Also, please provide any 
updated or revised implementing legislation,  and any relevant amendments, under these 
programmes and any accompanying regulations and decrees. 
 
 
                                                      
12 G/SCM/W/535 
13 G/SCM/39  G/SCM/Q4/BRB/6 
 Page 15 
 
 
  Reply  
  There have been no changes to the programmes since 2001. 
  
Q4. How many beneficiaries of these pr ogrammes were there in 2001?  How many 
beneficiaries are there currently under each of these programmes?  What types of industries 
currently benefit under the programmes?   
Reply
 
 
 A total of eighteen (18) companies bene fited from the four (4) programmes in 2001-
2002,while for 2004-2005(the last year of complete d statistics) the number of companies totaled 
Thirty-two (32).     The types of industries that currently benefit from the programmes are :-  
 
By Sector/Area
 Nature Of Business  
 (a)  Agriculture Fish Processing (b)  Health Manufacture of Pharmaceuticals (c)  Food Catering; Biscuit Manufacturing  
(d)  Commercial/Housing Mfg of St eel Frames; Paints; Boat Sails 
(e)  Textile Garments including Tee Shirts, etc. (f)  Beverage/Spirits Bottling and Blending; Mfg of Flavours   (g)  Other Industries Incl : Scrap Metal Reclycling; Electrical components; 
 Semiconductors Mfg Ha ir Care Products;  
 Periodicals,Printing And Publishing ; etc. 
 
Q5. Did Barbados undertake any commitments  to provide export subsidies to new 
beneficiaries beyond the year 2009?  If so, please indicate the number of such beneficiaries by 
the year in which those commitments extend.  
Reply
 
 
 Barbados has not given any commitments to pr ovide export subsidies to new beneficiaries 
beyond 2009.  Q6. If available, please provide the amount of the subsidy provided under these programmes 
for each year from 2001 through 2005.   
 
Reply
 
  Disbursements were as follows : 
 
 Research And Development 
 
 Year  2001-2002, claims - $126,196.20  Year 2003-2004, claims  - $300,561.84  Year 2004-2005, claims  - $1,948522.95 
 
 Export Allowance
 
 Year 2001-2002, claims - $1,278.415   Year 2003-2004, claims - $406,493.   Year 2004-2005, claims - $693,763.  G/SCM/Q4/BRB/6 
Page 16  
 
    
 IBC’s And Societies With Restricted Liability
 
 Year 2001-2002, claims - $1,530.784.  Year 2003-2004, claims - $1,448.478.  Year 2004-2005, claims - $20,358.648.  
 
Claims are in Barbados dollars (BDS $ 2 = US$ 1)  
Q7. Please explain whether exports by qualif ying companies to CARICOM members are 
eligible for the benefits provided under these prog rammes.  If not, please explain what benefits, 
if any, such exports to CARICOM countries are e ligible for, and the reason for differentiating 
among exports to CARICOM members and other exports.    
Reply
 
 
 Exports to CARICOM countries benefit from the programmes 
 
Q8. Please explain whether there are any requirements that the receipt of benefits are contingent upon the use of domestic over imported goods.   
 
Reply
 
 
 For the programmes in question, there are no requirements on the use of domestic over imported goods.  
__________