WORLD TRADE  
ORGANIZATION  G/SCM/Q4/DOM/6 
10 October 2006 
 (06-4847) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
PROCEDURES FOR EXTENSIONS UNDER ARTICLE 27.4 OF THE AGREEMENT 
ON SUBSIDIES AND COUNTERVAILING MEASURES 
 
Replies to the 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 the Dominican Republic. 
 
_______________ 
 
  We are attaching herewith replies to the qu estions put to the Dominican Republic by the 
delegations of the United States, document G/ SCM/Q4/DOM/3/Rev.1 and G/SCM/Q3/DOM/14;  
Japan, document G/SCM/Q4/DOM/4;  Colombia, document G/SCM/Q4/DOM/1;  Peru, document 
G/SCM/Q4/DOM/5;  and Canada, document G/SCM/Q4/ DOM/2;  in regard to the proposal submitted 
and sponsored by the Dominican Republic and a gr oup of countries on the procedures for extensions 
under Article 27.4 of the WTO Agreement on Subsid ies and Countervailing Measures, contained in 
document G/SCM/W/535 of 12 April 2006. 
 
                                                     
 
1 G/SCM/Q4/DOM/2. 
2 G/SCM/Q4/DOM/1. 
3 G/SCM/Q4/DOM/4. 
4 G/SCM/Q4/DOM/5. 
5 G/SCM/Q4/DOM/3/Rev.1 and G/SCM/Q3/DOM/14. G/SCM/Q4/DOM/6 
Page 2  
 
  CANADA
 
 
1. 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
 
 
 The Dominican Republic considers that document G/SCM/39 simply sets out the fast track procedure for approving extensions under Article 27. 4 of the SCM Agreement.  The document neither 
decreases nor increases rights and obligations under the Agreement on Subsidies and Countervailing 
Measures.  Neither document G/SCM/39 nor Article 27.4 of the SCM Agreement calls for progressive 
elimination of export subsidy programmes so we consider that the incentives programme we are 
implementing is fully in compliance with our WT O obligations and, moreover, it is clear that 
progressive elimination is not mandatory.   Nevertheless, the Dominican Republic h as made efforts by recruiting a number of 
consultancy services and has requested special assi stance to examine the various options for the 
amendment or elimination of any type of subsidy, af ter having considered the social impact this might 
have on the unemployment rate and other economic  variables of importance for our country's 
economic and social development.  
2. 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 in documents G/SCM/W/535 and G/SCM/W/535/Add.1 only refers to 
amendment of paragraph 1(e) of document G/SCM/39.   The proponents' objective is to continue 
benefiting from the extension until 2018 because of our special eco nomic, financial and development 
needs.  The rights and obligations set out in  document G/SCM/39 and Article 27.4 of the 
SCM Agreement would, therefore, remain unchanged. 
 
 Consequently, the Dominican Republic would ta ke the relevant decision on the basis of our 
specific needs, not only economic and financial but  also development, and in accordance with the 
procedures and time-frame laid down in the aforemen tioned provisions.  As a member of the WTO, 
the Dominican Republic has formulated and adopted various competition models for its industrial and 
manufacturing sector, some of them based on sectoral  incentives, and these have helped to develop 
sectors such as free zones, which have been an in valuable development tool that has contributed 
towards the Dominican Republic's economic and social development.   G/SCM/Q4/DOM/6 
 Page 3 
 
 
  3. 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 proposed date of 2018 should be viewed in  the light of the discussions that took place 
prior to adoption of G/SCM/39.  At that time, th e proponents of this document had already explained 
their concerns and the reasons for phasing out th eir programmes over a sufficiently long period of 
time, approximately 20 years.6  Bearing in mind these discussions and taking into account the 
important and legitimate financial,  economic and development needs of the Dominican Republic, the 
extension proposed in document G/SCM/W/535 should not be seen as or related to a longer extension 
because we can in fact prove that the conditions wh ich existed and justified the extension in 2001 still 
exist.  
 The Dominican Republic, after undertaking an ev aluation at the national level, considered it 
necessary to request a new extension based on our financial, economic and development needs and 
because of the potential value of the programme in helping the Dominican Republic to achieve better 
integration into the global economy.   Furthermore, one of the main objectives in proposing the date of 2018 for renewal of the 
extension period is to guarantee pr edictability and certainty to busi ness persons and investors, who 
look towards the benefits of the authorized pr ogrammes.  We therefore consider that only a 
sufficiently long period of time would meet this important objective.   The export incentives have had an extremely positive effect in attracting foreign direct 
investment, on export diversification and on job creation.  Currently, over 75 per cent of the 
Dominican Republic's total exports come from companies which benefit from the programme 
provided in Law No. 8-90, and over 65 per cent of these are foreign companies which have invested 
in the Dominican Republic because of th e incentives provided under the programme. 
  The programme notified by the Dominican Repub lic has had an extremely positive effect on 
our country, which has a very limited export base and only participates to a minor extent in world 
trade.  It has proved an excellent instrument fo r diversifying and promoting exports through the 
adoption of various competition models in our i ndustrial and manufacturing sector, some of them 
based on sectoral incentives, and these have helped to  develop sectors such as free zones, which in 
turn have boosted job creation, transfer of technology, experience and know-how, improved export 
capacity, foreign currency, production chains, inter alia .  We thus consider that another of the 
objectives to be met through the new extension w ill be to continue boostin g development and the 
economy and helping to alleviate poverty in the Dominican Republic.   It is obvious that this programme has helped to attract foreign direct investment with the 
result that the beneficiary industries within  the free zones sector directly employ around 
190,000 Dominican citizens and it is estimated that  there are 300,000 indirect jobs, representing 
approximately 14 per cent of the Dominican Republic's labour force.   The existence of the incentives programme implemented by the Dominican Republic has 
proved to be an effective tool in reaching many  of the country's development objectives and has 
revitalized our economy over the past decade.  Na turally, it is not the only policy instrument, but is 
one of the key components of our development st rategy, fulfilling its goal by helping to promote 
diversification and industrialization since its im plementation and up to the last few years. 
                                                     
 
6 See document G/SCM/38. G/SCM/Q4/DOM/6 
Page 4  
 
   
 Another of the reasons why we are proposi ng the date of 2018 for extension of these 
programmes is that they do not only contribut e to achieving the aforementioned development 
objectives but also boost imports of raw materi als from developed and developing countries by 
applying a zero tariff rate and lower tariff levels, thus making a positive contribution to the 
multilateral trading system. 
  In addition, it must be emphasized that averag e participation in global trade by the proponents 
of document G/SCM/W/535 is very low, some 0.219 per cent.  Moreover, our main export markets 
are highly concentrated in the United States and th e European Union, two markets where there are 
many large competitors at the global level.  Th is shows that the size of the countries making the 
proposal, all small and vulnerable economies, is highl y insignificant and it is therefore most unlikely 
that the proposal will affect and be detrimental to other producers in WTO Member countries in third 
markets.  
 We also consider that maintaining the pr ogramme would maximize and consolidate its 
benefits.  The granting of incentives through the pr ogramme implemented in the Dominican Republic 
has created capacities that require the necessary period in which to mature and benefit from the 
investment, the labour market and the productivity they generate, thereby allowing the Dominican 
Republic's economy to move on smoothly to new models .  In fact, eliminating the programme at this 
stage would jeopardize the economic and social contribu tions that have been of benefit to many of our 
countries. 
  Lastly, it is important to stress that the proposed extension concerns a longer transition period under the same conditions as those negotiated in th e Uruguay Round agreements  and subsequently at 
the Doha Ministerial Conference.  Members should th erefore bear in mind that this new extension is 
being requested because of the specific economic, fi nancial and development needs of the beneficiary 
Members, which remain virtually the same as those put  forward to justify the extension and fast track 
procedure adopted in document G/SCM/39.   So as to ensure that the proponents are able to become fully integrated and obtain real benefits 
from the multilateral trading system, development st rategies should be designed for a medium and a 
long-term so as to ensure sustainabl e and sustained economic development. 
 
COLOMBIA
 
 
1. 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. 
 
Reply  
  The Dominican Republic only applies one  export incentives programme, covered by 
Law No. 8-90.  Currently, there are 566 beneficiar y enterprises, classified into some 15 industrial 
sectors, of which around 50 per cent are in the clothi ng, textiles and electronics branches.  For further 
details, see the Dominican Republic's notification for 2006, document G/SCM/N/146/DOM.   G/SCM/Q4/DOM/6 
 Page 5 
 
 
  2. Please explain why, under the above programme s, which have been in place for over ten 
years, it is still not possible to dismantle the prohibited subsidies. 
 
Reply  
 
 The Dominican Republic has adopted various  competition models for its industrial and 
manufacturing sector, some of them based on sectoral  initiatives, and these have helped to develop 
sectors such as free zones.   For the Dominican Republic, free zones have proved a valuable mechanism for attracting 
investment, building up export capacity, creating jobs, foreign currency, technology, production 
chains, etc.   The free zones programme, one of our country's special regimes, has been a catalyst for our 
economy over the past decade and the Dominican au thorities therefore find themselves obliged to 
maintain it. 
  The programme created by Law No. 8-90, whic h promotes the setting up of new free zones 
and the growth of those already existing, has shown itself to be an effective and profitable alternative 
inasmuch as it allows foreign and local companies to  engage in operations a nd take advantage of tax 
incentives and import facilities. 
 
 There can be no doubt that the free zones in the Dominican Republic are the sector that has 
the greatest effect on integration into the intern ational market, thereby contributing towards the 
Dominican Republic's political and social stability and to the creation of an adequate infrastructure, legal and administrative support. 
 
 Currently, over 75 per cent of our country's tota l exports come from enterprises which benefit 
from the free zone regime provided in Law No. 8-90, and over 65 per cent of these are foreign companies which have invested in the Dominican  Republic because of the advantages and/or 
incentives provided by the programme in Law No. 8-90.  
 We consider that continuing to implement this  programme is of the utmost importance for our 
country's economic and social development while at the same time it has been an important 
component in the economic development strategy.  E liminating it at this stage would jeopardize the 
economic and social contributions that have been of benefit to the Dominican Republic. 
 3. The basis for the extension request is that the Dominican Republic is a small, vulnerable 
economy which suffers from the combined effect of diseconomies of scale caused by the small 
size of its economy and administration and by it s physical isolation.  If the above distorting 
factors are not brought under control before 2018, would there be a request for a new extension 
for the phasing out of the prohibited subsidies?   Please explain why these characteristics of the 
Dominican Republic's economy prevent the country  from complying fully and satisfactorily 
with WTO export subsidy disciplines.  
Reply
 
  The proposal in documents G/SCM/W/535 and G/SCM/W/535/Add.1 only refers to 
amendment of paragraph 1(e) of document G/SCM/39.   The proponents' intention is to continue 
benefiting from the extension until 2018 because of our special eco nomic, financial and development 
needs.  The rights and obligations set out in  document G/SCM/39 and Article 27.4 of the 
SCM Agreement would, therefore, remain unchanged.  G/SCM/Q4/DOM/6 
Page 6  
 
   Consequently, the Dominican Republic would ta ke the relevant decision on the basis of our 
specific needs, not only economic and financial but  also development, and in accordance with the 
procedures and time-frame laid down in the aforemen tioned provisions.  As a Member of the WTO, 
the Dominican Republic has formulated and adopted various competition models for its industrial and 
manufacturing sector, some of them based on sectoral  incentives, and these have helped to develop 
sectors such as free zones, which have been an in valuable development tool that has contributed 
towards the Dominican Republic's economic and social development.   We also consider that, inasmuch as Article  27.4 of the SCM Agreement is the provision 
which allows special and differential treatment  under the Agreement, the programme we are 
implementing is fully and satisfactorily in compliance with the relevant WTO provisions. 
 
4. 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 proposed date of 2018 should be viewed in  the light of the discussions that took place 
prior to adoption of G/SCM/39.  At that time, th e proponents of this document had already explained 
their concerns and the reasons for phasing out th eir programmes over a sufficiently long period of 
time, approximately 20 years.
7  Bearing in mind these discussions and taking into account the 
important and legitimate financial,  economic and development needs of the Dominican Republic, the 
extension proposed in document G/SCM/W/535 should not be seen as or related to a longer extension 
because we can in fact prove that the conditions wh ich existed and justified the extension in 2001 still 
exist.  
 The Dominican Republic, after undertaking an ev aluation at the national level, considered it 
necessary to request a new extension based on our financial, economic and development needs and 
because of the potential value of the programme in helping the Dominican Republic to achieve better 
integration into the global economy.   Furthermore, one of the main objectives in proposing the date of 2018 for renewal of the 
extension period is to guarantee pr edictability and certainty to busi ness persons and investors, who 
look towards the benefits of the authorized pr ogrammes.  We therefore consider that only a 
sufficiently long period of time would meet this important objective.   The export incentives have had an extremely positive effect in attracting foreign direct 
investment, on export diversification and on job creation.  Currently, over 75 per cent of the 
Dominican Republic's total exports come from companies which benefit from the programme 
provided in Law No. 8-90, and over 65 per cent of these are foreign companies which have invested 
in the Dominican Republic because of th e incentives provided under the programme. 
  The programme notified by the Dominican Repub lic has had an extremely positive effect on 
our country, which has a very limited export base and only participates to a minor extent in world 
trade.  It has proved an excellent instrument fo r diversifying and promoting exports through the 
adoption of various competition models in our i ndustrial and manufacturing sector, some of them 
based on sectoral incentives, and these have helped to  develop sectors such as free zones, which in 
turn have boosted job creation, transfer of technology, experience and know-how, improved export 
capacity, foreign currency, production chains, inter alia .  We thus consider that another of the 
objectives to be met through the new extension w ill be to continue boostin g development and the 
economy and helping to alleviate poverty in the Dominican Republic. 
                                                     
 
7 See document G/SCM/38.  G/SCM/Q4/DOM/6 
 Page 7 
 
 
   
 It is obvious that this programme has helped to attract foreign direct investment with the 
result that the beneficiary industries within  the free zones sector directly employ around 
190,000 Dominican citizens and it is estimated that  there are 300,000 indirect jobs, representing 
approximately 14 per cent of the Dominican Republic's labour force. 
 
 The existence of the incentives programme implemented by the Dominican Republic has 
proved to be an effective tool in reaching many  of the country's development objectives and has 
revitalized our economy over the past decade.  Na turally, it is not the only policy instrument, but is 
one of the key components of our development st rategy, fulfilling its goal by helping to promote 
diversification and industrialization since its im plementation and up to the last few years. 
  Another of the reasons why we are proposi ng the date of 2018 for extension of these 
programmes is that they do not only contribut e to achieving the aforementioned development 
objectives but also boost imports of raw materi als from developed and developing countries by 
applying zero tariff rate and lowe r tariff levels, thus making a positiv e contribution to the multilateral 
trading system.   In addition, it must be emphasized that averag e participation in global trade by the proponents 
of document G/SCM/W/535 is very low, some 0.219 per cent.  Moreover, our main export markets 
are highly concentrated in the United States and th e European Union, two markets where there are 
many large competitors at the global level.  Th is shows that the size of the countries making the 
proposal, all small and vulnerable economies, is highl y insignificant and it is therefore most unlikely 
that the proposal will affect and be detrimental to other producers in WTO Member countries in third 
markets.  
 We also consider that maintaining the pr ogramme would maximize and consolidate its 
benefits.  The granting of incentives through the pr ogramme implemented in the Dominican Republic 
has created capacities that require the necessary period in which to mature and benefit from the 
investment, the labour market and the productivity they generate, thereby allowing the Dominican 
Republic's economy to move on smoothly to new models .  In fact, eliminating the programme at this 
stage would jeopardize the economic and social contribu tions that have been of benefit to many of our 
countries. 
  Lastly, it is important to stress that the propo sed extension relates to a longer transition period 
under the same conditions as those negotiated in the Uruguay Round and subsequently at the Doha 
Ministerial Conference.  Members should therefore bear in mind that this new extension is being 
requested because of the specific economic, financ ial and development needs of the beneficiary 
Members, which remain virtually the same as thos e put forward to justify the extension and rapid 
procedure adopted in document G/SCM/39.   So as to ensure that the proponents are able to become fully integrated and obtain real benefits 
from the multilateral trading system, development st rategies should be designed for a medium and a 
long-term so as to ensure sustainabl e and sustained economic development. 
 
5. Are both domestic and foreign persons eligib le for the programme benefits stipulated in 
Article 5, Chapter II of Law No. 8-90? 
 Reply
 
  Yes, both Colombian and foreign persons ma y benefit from the programme stipulated in 
Chapter II, Article 5, of Law No. 8-90.  G/SCM/Q4/DOM/6 
Page 8  
 
  6. Law No. 8-90, to promote the establishm ent of new free zones and the expansion of 
existing ones provides that the fiscal benefits shall have a duration of either 15 or 20 years 
(Article 28), with users being able to request the renewal of their operating licences, which entails extension of the benefits.  What measur es have been envisaged for the gradual phasing 
out of this programme in the event that the extension is not granted? 
 
Reply
 
  Even though Law No. 8-90 envisages 15 to 20 years of operation, this does not imply that the enterprises would continue to receive the incentives in effect at the time of receiving their licence 
and/or free zone permit and they must respect the changes in the mech anisms and/or incentive 
programmes envisaged.  
7. What percentage of export production by the free zone enterprises is taken into account 
when deciding on eligibility for the programme?  If no specific percentage is required, could it 
be said that the main requirement for eligibility under the programme is to obtain a licence to 
operate in a free zone? 
 
Reply
 
  The requirements for setting up in free zones and the granting of an operating licence under 
the free zones regime are set out in Article 14 of Law No. 8-90;  it can be seen from these that the 
percentage of production for export by enterprises situ ated in the free zones is not taken into account. 
 
8. Does the programme under Law No. 8-90 provid e for types of incentive other than the 
full or partial exemption from import duties a nd internal taxes? Can the Dominican Republic 
supply further information on, and explain the rati onale for, the special benefits referred to in 
Article 29 of Law No. 8-90? 
 
Reply
 
  Article 29 provides preferential treatment for enterprises established in the border areas 
between the Dominican Republic and Haiti because  these geographical areas are usually sparsely 
populated and there is little economic and social development.  
JAPAN
 
 
1. 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 proposed date of 2018 should be viewed in  the light of the discussions that took place 
prior to adoption of G/SCM/39.  At that time, th e proponents of this document had already explained 
their concerns and the reasons for phasing out th eir programmes over a sufficiently long period of 
time, approximately 20 years.
8  Bearing in mind these discussions and taking into account the 
important and legitimate financial,  economic and development needs of the Dominican Republic, the 
extension proposed in document G/SCM/W/535 should not be seen as or related to a longer extension. 
 
                                                      
8 See document G/SCM/38.  G/SCM/Q4/DOM/6 
 Page 9 
 
 
   The Dominican Republic's programme under examination generally shares the same 
objectives, structure and outline as that of the othe r proponents of the extension in document W/535.  
The special features of the group of countries with  small and vulnerable economies, as well as their 
limited potential to take advantage of the globali zation of markets under the current rules in trade 
agreements are well known.  Indeed, all the proponents are facing the same structural deficiencies that 
justify the request for an extension.  In addition, recent events in the trading system could hinder the 
integration of the Dominican Republic and that of the other proponents into the global economy. 
  The uncertainty concerning the future of the Doha Round negotiations and the significant 
changes on the global trade scene pose new challenges that will require  major efforts on the part of 
domestic producers in small and vulnerable economi es and exert further pressure on our countries in 
economic and trade terms.   The Dominican Republic has applied and notifie d only one programme.  This programme has 
been the main component of the strategy to deve lop our exports.  The latter help to promote and 
diversify the Dominican Republic's small export base and have shown themselves to be an effective 
tool in alleviating poverty.  For these reasons, it is essential to have a uniform extension of the export 
subsidies programme we are applying so as to give the vulnerable economy of the Dominican 
Republic and the other proponents gr eater predictability and certainty. 
 
2. 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 Dominican Republic only applies one  export incentives programme, covered by 
Law No. 8-90, which promotes new free zones and th e expansion of those already existing by means 
of fiscal incentives.  The information regarding the programme notified by the Dominican Republic, 
including the way in which the programme is integr ated into our country's development strategy, can 
be found in the corresponding notification of the Dominican Republic for 2006, contained in 
document G/SCM/146/DOM, of 5 July 2006, and in  the documents submitted in 2001 in order to 
obtain this extension.  (Compilation by the Secretariat).   The proposed date of 2018 should be viewed in  the light of the discussions that took place 
prior to adoption of G/SCM/39.  At that time, th e proponents of this document had already explained 
their concerns and the reasons for phasing out th eir programmes over a sufficiently long period of 
time, approximately 20 years.
9  Bearing in mind these discussions and taking into account the 
important and legitimate financial,  economic and development needs of the Dominican Republic, the 
extension proposed in document G/SCM/W/535 should not be seen as or related to a longer extension 
because we can in fact prove that the conditions wh ich existed and justified the extension in 2001 still 
exist. 
  The Dominican Republic, after undertaking an ev aluation at the national level, considered it 
necessary to request a new extension based on our financial, economic and development needs and 
because of the potential value of the programme in helping the Dominican Republic to achieve better 
integration into the global economy. 
 
                                                     
 
9 See document G/SCM/38. G/SCM/Q4/DOM/6 
Page 10  
 
   Furthermore, one of the main objectives in proposing the date of 2018 for renewal of the 
extension period is to guarantee pr edictability and certainty to busi ness persons and investors, who 
look towards the benefits of the authorized pr ogrammes.  We therefore consider that only a 
sufficiently long period of time would meet this important objective.  
 The export incentives have had an extremely positive effect in attracting foreign direct 
investment, on export diversification and on job creation.  Currently, over 75 per cent of the 
Dominican Republic's total exports come from companies which benefit from the programme 
provided in Law No. 8-90, and over 65 per cent of these are foreign companies which have invested 
in the Dominican Republic because of th e incentives provided under the programme. 
 
 The programme notified by the Dominican Repub lic has had an extremely positive effect on 
our country, which has a very limited export base and only participates to a minor extent in world trade.  It has proved an excellent instrument fo r diversifying and promoting exports through the 
adoption of various competition models in our i ndustrial and manufacturing sector, some of them 
based on sectoral incentives, and these have helped to  develop sectors such as free zones, which in 
turn have boosted job creation, transfer of technology, experience and know-how, improved export 
capacity, foreign currency, production chains, inter alia .  We thus consider that another of the 
objectives to be met through the new extension w ill be to continue boostin g development and the 
economy and helping to alleviate poverty in the Dominican Republic.  
 It is obvious that this programme has helped to attract foreign direct investment with the 
result that the beneficiary industries within  the free zones sector directly employ around 
190,000 Dominican citizens and it is estimated that  there are 300,000 indirect jobs, representing 
approximately 14 per cent of the Dominican Republic's labour force.  
 The existence of the incentives programme implemented by the Dominican Republic has 
proved to be an effective tool in reaching many  of the country's development objectives and has 
revitalized our economy over the past decade.  Na turally, it is not the only policy instrument, but is 
one of the key components of our development st rategy, fulfilling its goal by helping to promote 
diversification and industrialization since its im plementation and up to the last few years. 
 
 Another of the reasons why we are proposi ng the date of 2018 for extension of these 
programmes is that they do not only contribut e to achieving the aforementioned development 
objectives but also boost imports of raw materi als from developed and developing countries by 
applying a zero tariff rate and lower tariff levels, thus making a positive contribution to the 
multilateral trading system. 
 
 In addition, it must be emphasized that average participation in global trade by the 
proponents of document G/SCM/W/535 is very low, some 0.219 per cent .  Moreover, our main 
export markets are highly concentrated in the Un ited States and the European Union, two markets 
where there are many large competitors at the global level.  This shows that the size of the countries 
making the proposal, all small and vulnerable economi es, is highly insignificant and it is therefore 
most unlikely that the proposal will affect and be  detrimental to other producers in WTO member 
countries in third markets.   We also consider that maintaining the pr ogramme would maximize and consolidate its 
benefits.  The granting of incentives through the pr ogramme implemented in the Dominican Republic 
has created capacities that require the necessary period in which to mature and benefit from the 
investment, the labour market and the productivity they generate, thereby allowing the Dominican 
Republic's economy to move on smoothly to new models .  In fact, eliminating the programme at this 
stage would jeopardize the economic and social contribu tions that have been of benefit to many of our 
countries.  G/SCM/Q4/DOM/6 
 Page 11 
 
 
   
 Lastly, it is important to stress that the proposed extension concerns a longer transition period under the same conditions as those negotiated in th e Uruguay Round agreements  and subsequently at 
the Doha Ministerial Conference.  Members should th erefore bear in mind that this new extension is 
being requested because of the specific economic, fi nancial and development needs of the beneficiary 
Members, which remain virtually the same as those put  forward to justify the extension and fast track 
adopted in document G/SCM/39.   So as to ensure that the proponents are able to become fully integrated and obtain real benefits 
from the multilateral trading system, development st rategies should be designed for a medium and a 
long-term so as to ensure sustainabl e and sustained economic development. 
 
PERU
 
 
1. 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 
Article 2 in document G/SCM/39? 
 
Reply
 
 
 The Dominican Republic's intention is solely  to extend the programme notified to date. 
 
2. Under what laws and enabling regulations are the programmes listed in Annex A of the 
proposal implemented? 
 
Reply  
  The law relating to our programme is La w No. 8-90 on Free Zones for Export and the 
Implementing Regulations are in Decree No. 366-97 of 29 August 1997.  3. Which sectors and products benefit from the programmes? 
 
Reply
 
  The purpose of the programme is to bene fit all sectors producing goods and services 
incorporated in the goods produced.  The only expo rt subsidies programme be ing implemented in the 
Dominican Republic currently includes a total of 5 66 beneficiary enterprises, classified into some 
15 industrial sectors, of which around 50 per cent are in the clothing, textiles and electronics branches. 
 
4. What amount is disbursed by the St ate to the programmes listed in Annex A? 
 Reply
 
  Law No. 8-90 does not contain any provision on fiscal inspection of enterprises operating 
under the free zones regime with regard to their commercial operations, therefore, the fiscal sacrifice 
made by the Dominican State as a result of implementation of the programme has not been estimated. 
 G/SCM/Q4/DOM/6 
Page 12  
 
  UNITED STATES
 
 
Law No. 8-90 "Promote the Establishment of New Free Zones and Expand Existing Ones " 
 
 The Dominican Republic has requested an ex tension for the above listed programme through 
calendar year 2018, pursuant to the 2001 Doha Mini sterial Decision on the Procedures for Extension 
under Article 27.4 of the ASCM.  
1. Please describe what efforts the Domi nican Republic has made to phase out the 
programme within the extension period that ha s already been granted, as provided under the 
"Procedures for Extension Under Article 27.4 for Certain Developing Country Members".  
Please further describe how the Dominican Re public will continue to ensure that the 
programme will be phased out, if an additional extension were granted. 
 
Reply
 
 
 The Dominican Republic has made efforts by recruiting a number of consultancy services and 
has requested special assistance to  examine the various options for the amendment or elimination of 
any type of subsidy, after having considered the social impact this might have on the unemployment 
rate and other economic variables of importance for our country's economic and social development.  
All this has been done in comp liance with our WTO obligations. 
 
2. Please describe changes to the programme since 2001.  Also, please provide any updated 
or revised implementing legislation, and an y relevant amendments, unde r this programme and 
any accompanying regulations and decrees. 
 Reply
 
  Since 2001, the programme has not been the subject of any changes and/or updating.  
3. How many beneficiaries of this pr ogramme were there in 2001?  How many 
beneficiaries are there currently under the prog ramme?  What types of industries currently 
benefit under the programme?  
Reply
 
  At 31 December 2001, the programme includ ed a total of 512 enterprises.  Today 
(September 2006) there are 566 enterprises.  The programme is intended to benefit all sectors 
producing goods and services incorporated in the goods produced.  The incentives programme being 
implemented in the Dominican Republic include s beneficiary enterprises classified into some 
15 industrial sectors, of which around 50 per cent are in the clothing, textiles and electronics branches. 
 
4. Did the Dominican Republic undertake any co mmitments to provide export subsidies to 
new beneficiaries beyond the year 2009?  If so, pl ease indicate the number of such beneficiaries 
by the year in which those commitments extend. 
 
Reply
 
 
 No.  The Dominican Republic did not make any commitment to grant subsidies beyond the 
year 2009.   G/SCM/Q4/DOM/6 
 Page 13 
 
 
  5. If available, please provide the amount of the subsidy provided under the programme 
for each year from 2001 through 2005. 
 
Reply  
 
 Law No. 8-90 does not provide for the fiscal inspection of enterprises operating under the free 
zones regime with regard to their commercial ope rations, therefore, the fiscal sacrifice made by the 
Dominican State as a result of implementation of this programme has not been estimated.  
6. Please explain whether exports by qualif ying companies to CARICOM members are 
eligible for the benefits provided under this progra mme.  If not, please explain what benefits, if 
any, such exports to CARICOM countries are elig ible for, and the reason for differentiating 
among exports to CARICOM members and other exports. 
 
Reply
 
 
 Yes.  Exports to CARICOM member countries by enterprises included in the programme are 
eligible.  
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