. /.   WORLD TRADE  
ORGANIZATION  TN/RL/GEN/115 
21 April 2006 
 
 (06-1841) 
Negotiating Group on Rules Original:   English 
  
 
SUBSIDIES:  WITHDRAWAL OF A SUBSIDY 
 
Communication from Australia
 
 
  The following communication, dated 20 April 2006,  is being circulated at the request of the 
Delegation of Australia.   The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(06)/96), also be circulated as a formal document. 
 
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  Australia indicated at the February 2006 meeting of the Negotiating Group on Rules that it would bring forward a more elaborated proposal  on addressing the meaning and scope of what 
constitutes “withdrawal” of the subsidy as provide d under Article 4.7 of the WTO Agreement on 
Subsidies and Countervailing Measures (SCM). 
1  
  Australia notes the previous useful discussions including suggestions for clarifying the proposal.  Australia looks to working with other Me mbers in developing this proposal further.   
 
 In considering this proposal, Australia consider s it would be helpful to set out the following 
broad guidelines to clarify the scope of the proposal:  
(i) The text of SCM Article 4 should be clarified by setting out the parameters of what is 
required in order to “withdraw” the subsidy. 
 
(ii) In doing so, the text of SCM Article 4 should reinforce the obligation under SCM 
Article 3.2, that is, prohibited subsidies shall not be granted nor maintained.   
 
(iii) The standard of “withdrawal” will be met where the subsidy that is granted or maintained 
is terminated. 
 (iv) The parameters of “withdrawal” should take  into account the facts and circumstances 
surrounding the granting or maintaining of the subsidy.  In other words, “withdrawal” of the subsidy should take into account the nature of the measure in question, including 
whether the benefits of the subsidy are allocated to future production. 
 
                                                     
 
1 Previous submissions by Australia on this issue are contained in documents TN/RL/W/139, dated 
18 July 2003, TN/RL/GEN/35 (JOB(05)/41), dated 23 March 2005, and TN/RL/GEN/97 (JOB(06)/9), dated 
20 January 2006. TN/RL/GEN/115 
Page 2  
 
  o For example, where portions of a subsid y are allocated to future production and 
involve more than one payment, payments would be required to be terminated – no 
further payments could be made.  
 
(v) A Member would be required to outline to a panel what constitutes withdrawal of the 
subsidy in relation to the challenged measure.   
 
(vi) In response to the parameters required to be  outlined in (v) above, the panel would be 
required to make a finding to elaborate on what in broad terms would constitute 
“withdrawal” of the subsidy.   
 
(vii) Clarification of analogous provisions within  Article 7.8 in relation to “withdraw the 
subsidy” may also be helpful.   
 
PROPOSED TEXTUAL AMENDMENTS 
 
[4.4 bis A Member bringing a claim before a panel shall outline what in 
its view would constitute withdrawal of the subsidy.] 
 
4.7 If the measure in question is found to be a prohibited subsidy, the panel shall , in response to a specific claim required under paragraph 4 
bis, recommend that the subsidizing Member withdraw the subsidy [footnote 
*] without delay.  In this regard, the panel shall specify in its 
recommendation what would constitute withdrawal of the subsidy and
 the 
time period within which the measure must be withdrawn.  
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Footnote */4.7 bis  What constitutes withdrawal of the subsidy 
necessarily depends upon the facts and circumstances surrounding the 
granting of the subsidy, including, but not limited to, whether the 
subsidy granted continues to confer a benefit.   
 
A prohibited subsidy will be considered to be withdrawn where the 
prohibited subsidy granted or ma intained is terminated.  Where a 
prohibited subsidy continues to provide a benefit, further payments shall 
be terminated.  
 
[Alternatively: What constitutes  withdrawal of the subsidy necessarily depends on the 
nature of the measure in question including whether the benefits of the 
subsidy are allocated to future production. ] 
 
 
7.8 Where a panel report or an Appe llate Body report is adopted in 
which it is determined that any subsidy has resulted in adverse effects to the interests of another Member within th e meaning of Article 5, the Member 
granting or maintaining such subsidy sh all take appropriate steps to remove 
the adverse effects or shall withdraw the subsidy [footnote **
]. 
 
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Footnote **   As set forth in Article 4.7 of this Agreement.  
 
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