. /.   WORLD TRADE  
ORGANIZATION  G/SCM/Q2/ZAF/10 
30 October 2008 
 
 (08-5260) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES 
 
Questions from MEXICO to SOUTH AFRICA  
 
 
 The following communication, dated 28 October 2008, is being circulated at the request of the delegation of Mexico.  
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  In its notification of 12 August 2003 made pursuant to Article 25 of the Agreement on 
Subsidies and Countervailing Measures (SCM Agreement)
1, South Africa reported that it did not 
grant or maintain any subsidy within the m eaning of Article 1.1 of the SCM Agreement. 
 
 Nevertheless, Mexico is aware of the ex istence of the Motor Industry Development 
Programme (MIDP), contained in South Africa's  Customs and Excise Act, which constitutes an 
incentive and support scheme for the automotive indus try.  The MIDP provides for the granting of 
Import Rebate Credit Certificates (IRCC) to  companies qualifying under the programme. 
 
 Mexico is also aware that the Government of  South Africa is currently modifying the MIDP 
with a view to implementing a new scheme to promote the automotive industry.   In the light of the foregoing and pursuant to  Article 25.8 of the SCM Agreement, Mexico 
requests South Africa to provide information on the following:  
 (a) MIDP
 
  - Bearing in mind that IRCCs are granted only to companies which export 
motor vehicles and/or automotive components, would South Africa please explain how the MIDP complies with Article 3.1(a) of the SCM Agreement? 
 
 - Bearing in mind that the nominal value of each IRCC rises as exports 
manufactured without the use of imported inputs increase, would South Africa please explain how the MIDP complies with Article 3.1(b) of the SCM Agreement? 
 
 - Would South Africa please indicate whether the benefits received by a 
component manufacturer under the incentive known as the Productive Asset Allowance are granted through IRCCs?  If not, how are they granted? 
 
                                                     
 
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   - If the benefits received by component manufacturers under the incentive 
known as the Productive Asset Allowan ce are not granted through IRCCs, 
how are these benefits consistent w ith Article 3.1(a) and (b) of the 
SCM Agreement? 
 
 (b) Termination of the MIDP and successor programme
 
  - When will the MIDP be terminated  and when will the successor programme 
enter into effect? 
 
 - Will there be a transition period betw een the two programmes and, if so, how 
will this transition work? 
 
(c) New programme
 
 
 - What will the new incentive and support programme for the automotive 
industry consist of? 
 
 - Will the new programme make the subsidy contingent upon (i) export 
performance or (ii) the use of domestic inputs over imported inputs? 
 
 - We are aware that speci al treatment may be applied to catalytic converters 
under the new programme.  What would this special treatment consist of? 
 
 - In the event of there being a new independent programme applicable to 
catalytic converters, what will this programme consist of and how will it 
work? 
  Mexico thanks South Africa for its cooperation in clarifying the above-mentioned points.  
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