RESTRICTED  
  
G/SCM/M/125  
 
7 December  2023 
(23-8326) Page: 1/50 
Committee on Subsidies and Countervailing Measures    
 
 
MINUTES OF THE REGULAR MEETING  
HELD ON 27 OCTOBER 2023  
CHAIR: MR JAMES LESTER (NEW ZEALAND)  
1. The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 27 October 2023, convened in WTO/AIR/SCM/52/Rev.1  dated 16 October 2023. The 
meeting was held in person and virtually via Interprefy . 
2. The Chair reiterated the request to delegations to provide their up -to-date contact details by 
email to the Secretariat, so that it could update its contact details list, currently contained in 
document  RD/SCM/4/Rev.21 . The Chair added that this system would be replaced in the near future 
by a centralized system  which had been introduced by the Secretariat to all Mission Coordinators  
the day before.  
3. The Committee adopted the following agenda:  
1   NATIONAL LEGISLATION – NEW NOTIFICATIONS  ................................ .......................  2 
1.1   Review of notifications of new or amended legislation or regulations not previously 
reviewed by the Committee (including Supplemental Notifications of existing provisions 
not previous ly reviewed)  ................................ ................................ ................................ . 2 
1.1.1    Brazil (G/ADP/N/1/BRA/3/Suppl.20 - G/SCM/N/1/BRA/2/Suppl.23)  ................  3 
1.1.2    Japan ( G/ADP/N/1/JPN/2/Suppl.11  - G/SCM/N/1/JPN/2/Suppl.10 ) ; 
(G/ADP/N/1/JPN/2/Suppl.12  - G/SCM/N/1/JPN/2/Suppl.11  - 
G/SG/N/1/JPN/2/Suppl.4 ) and ( G/ADP/N/1/JPN/2/Suppl.13  - 
G/SCM/N/ 1/JPN/2/Suppl.12  - G/SG/N/1/JPN/2/Suppl.5 ) ................................ ...........  3 
1.1.3    Mauritania (G/ADP/N/1/MRT/1/Rev.1 - G/SCM/N /1/MRT/1/Rev.1 - 
G/SG/N/1/MRT/1/Rev.1)  ................................ ................................ ...............................  3 
1.1.4    Mauritius (G/ADP/N/1/MUS/4  - G/SCM/N/1/MUS/4  - G/SG/N/1/MUS/2)  ........  3 
1.1.5    Kingdom of Saudi Arabia (G/ADP/N/1/SAU/2/Suppl.2 - 
G/SCM/N/1/SAU/2/Suppl.2 - G/SG/N/1/SAU/2/Suppl.2) and 
(G/ADP/N/1/SAU/2/Suppl.3 - G/SCM/N/1/SAU/2/Suppl.3 - 
G/SG/N/1/SAU/2/Suppl.3)  ................................ ................................ ............................  3 
1.2   Review of notifications of new or amended legislation or regulations with 
outstanding written questions  ................................ ................................ .........................  4 
1.2.1    Saint Kitts and Nevis ( G/ADP/N/1/KNA/1 - G/SCM/N/1/KNA/1 ) .......................  4 
2   NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE  ................................ ................................ .. 4 
2.1   Cameroon (G/ADP/N/1/CMR/2 - G/SCM/N/1/CMR/2 - G/SG/N/1/CMR/2)  ..........  4 
2.2   European Union (G/ADP/N/1/EU/3/Suppl.2 - G/SCM/N/1/EU/2/Suppl.2 and 
G/ADP/N/1/EU/3/Suppl.3 - G/SCM/N/1/EU/2/Suppl.3) ................................ ...............  4 
2.3   Ghana (G/AD P/N/1/GHA/2 - G/SCM/N/1/GHA/2 - G/SG/N/1/GHA/2)  ................  5 
3   SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ARTICLE  25.11)  ....... 5 G/SCM/M/125  
 
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  4   PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: NOTIFICATIONS: AD 
HOC NOTIFICATIONS  ................................ ................................ ................................ ..... 10 
5   ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR THE ELIMINATION OF 
EXPORT SUBSIDIES – 31 DECEMBER 2015 END OF FINAL PH ASE OUT PERIOD AND FINAL 
NOTIFICATION DUE 30 JUNE 2016  ................................ ................................ ................  11 
6   IMPROVING THE TIMELINESS AND COMPLE TENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT ..................  12 
7   PERMANENT GROUP OF EXPERTS  ................................ ................................ ..............  18 
8   JOINT PROPOSAL FROM CANADA, THE REPUBLIC OF KOREA, JAPAN,  NEW ZEALAND, 
NORWAY, THE UNITED KINGDOM, AND THE UNITED STATES  ................................ .........  19 
9   DRAFT REPORT BY THE COMMI TTEE TO THE COUNCIL FOR TRADE IN GOODS ("CTG") 
ON THE BETTER FUNCTIONING OF THE COMMITTEE  ................................ ......................  22 
10   A CASE FOR REBALANCING THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING 
MEASURES (ASCM) – POLICY SPACE TO PROMOTE INDUSTRIALISATION IN DEVELOPING 
COUNTRIES – ITEM REQUESTED BY THE AFRICAN GROUP  ................................ .............  23 
11   DELIBERATIONS ON STATE INTERVENTION IN SUPPORT OF INDUSTRIAL SECTORS – 
ADAPTING THE WTO RULEBOOK TO RESPOND TO CONTEMPORARY CHALLENGES – ITEM 
REQUESTED BY THE EUROPEAN UNION  ................................ ................................ ..........  31 
12   SUBSIDIES AND OVERCAPACITY – ITEM REQUESTED BY AUSTRALIA , CANADA, THE 
EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  ..............  37 
13   SUBSIDY TR ANSPARENCY AND CHINA'S PUBLICATION AND INQUIRY POINT 
OBLIGATIONS UNDER CHINA'S PROTOCOL OF ACCESSION – ITEM REQUESTED BY 
AUSTRALIA, CANADA, THE EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND THE 
UNITED STATES  ................................ ................................ ................................ .............  41 
14   PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF NEW AND FULL SUBSIDY 
NOTIFICATIONS – ITEM REQUESTED BY AUSTRALIA, CANADA, THE EUROPEAN UN ION, 
JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  ................................ .............  43 
15   DISCRIMINATORY SUBSIDIES POLICIES AND MEASURES OF THE UNITED STATES – 
ITEM REQUESTED BY CHINA  ................................ ................................ ..........................  45 
16   OTHER BUSINESS  ................................ ................................ ................................ .... 49 
17   DATE OF NEXT REGULAR MEETINGS IN 2024  ................................ ..........................  50 
18   ANNUAL REPORT OF THE COMMITTEE ON SUBSIDIES AND COUNTERVAILING 
MEASURES TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7)  .............................  50 
 
1  NATIONAL LEGISLATION – NEW NOTIFICATIONS  
1.1  Review of notifications of new or amended legislation or regulations not previously 
reviewed by the Committee (including Supplemental Notifications of existing provisions 
not previously reviewed)1 
1. The Chair indicated that items 1.1.1  through 1.1.5  of the agenda concern the review of new 
legislative notifications not previously  reviewed by the Committee. He stated that the reviews would 
be conducted in accordance with the relevant procedures adopted by the Committee and described 
in document G/SCM/W/293/Rev.1 . In addition, and pursuant to paragraph 8  of the same 
procedures, item 1.2 pertained to the legislative notification of Saint Kitts and Nevis with 
outstanding written questions.  
2. The Chair referred to the past and future deadlines concerning the review of the new legislative 
notifications as follows: any written questions were to be submitted to the Member concerned, and 
to the Secretariat by 2 October  2023 . Oral questions might ha ve been asked at this meeting, and 
 
1 Relevant deadlines for written questions and written answers regarding the notifications of legislation 
reviewed in the October  2023 meeting can be found in section 1 of document G/ADP/W/511  - G/SCM/W/588  - 
G/SG/W/257 . G/SCM/M/125  
 
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  any Member wishing to receive a written answer should submit the questions asked orally also in 
writing, not later than 17 November  2023 . Written answers to all written questions should be 
submitted to the Member posing t he questions and to the Secretariat by 8 December  2023 . 
3. The Chair also recalled that the primary review of those legislative notifications had been held 
in the Committee on Anti -Dumping Practices requesting delegations to limit their questions to issues 
which were specifically related to countervailing measures.  
 
1.1.1   Brazil ( G/ADP/N/1/BRA/3/Suppl.20  - G/SCM/N/1/BRA/2/Suppl.23 )  
4. No written or oral questions were posed with respect to this notification.  
5. No statem ents were made by any Member.  
1.1.2   Japan  (G/ADP/N/1/JP N/2/Suppl.11  - G/SCM/N/1/JPN/2/Suppl.10 ) ; 
(G/ADP/N/1/JPN/2/Suppl.12  - G/SCM/N/1/JPN/2/Suppl.11  - 
G/SG/N/1/JPN/2/Suppl.4 ) and  (G/ADP/N/ 1/JPN/2/Suppl.13  - 
G/SCM/N/1/JPN/2/Suppl.12  - G/SG/N/1/JPN/2/Suppl.5 ) 
6. The United States posed the following questions regarding the notifications in 
G/SCM/N/1/JP N/2/Suppl.11  and G/SCM/N/1/JPN/2/Suppl.12 :  
• G/ADP/Q1/JPN/20  - G/SCM/Q1/JPN/20  - G/SG/Q1/JPN/9  – Questions from the United States  
7. Written answers were subsequently received,  prior to the deadline, and c an be found in 
document:  
• G/ADP/Q1/JPN/21  - G/SCM/Q1/JPN/21  - G/SG/Q 1/JPN/10  – Replies to the United States   
1.1.3   Mauritania ( G/ADP/N/1/MRT/1/Re v.1 - G/SCM/N/1/MRT/1/Rev.1  - 
G/SG/N/1/MRT/1/Rev.1 ) 
8. No written or oral questions were posed with respect to this notification.  
9. No statements were made by any Member.  
1.1.4   Mauritius ( G/ADP/N/1/MUS/4  - G/SC M/N/1/MUS/4  - G/SG/N/1/MUS/2 ) 
10. Written questions and replies can be found in documents:  
• G/ADP/Q1/MUS/6  - G/SCM/Q1/MUS/6  - G/SG/Q1/MUS/1  – Questions from the United  States  
• G/ADP/Q1/MUS/7  - G/SCM/Q1/MUS/7  - G/SG/Q1/MUS/2  – Replies to the United States  
1.1.5   Kingdom of Saudi Arabia ( G/ADP/N/1/SAU/2/Suppl.2  - 
G/SCM/N/1/SAU/2/Suppl.2  - G/SG/N/1/SAU/2/Suppl.2 ) and 
(G/ADP/N/1/SAU/2/Suppl.3  - G/SCM/N/1/SAU/2/Suppl.3  - 
G/SG/N/1/SAU/2/Suppl.3 ) 
11. Written questions and replies can be found in documents:  
• G/ADP/Q1/SAU/7  - G/SCM/Q1/SAU/7  - G/SG/Q1/SAU/ 9 – Questions from the United  States  
• G/ADP/Q1/SAU/8  - G/SCM/Q1/SAU/8  - G/SG/Q1/SAU/10  – Replies to the United States  
12. The Committee took note  of the notifications, questions, and replies.  G/SCM/M/125  
 
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  1.2  Review of notif ications of new or amended legislation or regulations with outstanding 
written questions  
1.2.1   Saint Kitts and Nevis ( G/ADP/N/1/KNA/1  - G/SCM/N/1/KNA/1 ) 
13. Written questions regarding this notification were posed and can be found in document:  
• G/ADP/Q1/KNA/1  - G/SCM/Q1/KNA/1 – questions from the United States  
14. Saint Kitts and Nevis was not present at the time. Oral answers were not provided at the 
meeting, nor were written answers received to date.  
15. The Committee took note  of the notification and questions.  
2  NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE2 
16. The Chair first recalled the relevant procedures contained in document G/SCM/W/293/Rev.1  
and the deadlines. Members wishing to ask questions about notifications of legislation or regulations 
previously reviewed by the Committee were to have submitted th ose questions in writing to the 
notifying Member and to the Secretariat no later than 11 September  2023 . Noting that no such 
questions had been received by this deadline the Chair indicated that the Committee would turn to 
the written questions posed under  this agenda item at previous Committee meetings, which 
remained unanswered to date.  
2.1  Cameroon ( G/ADP/N/1/CMR/2  - G/SCM/N/1/CMR/2  - G/SG/N/1/CMR/2 ) 
17. Written follow -up questions had been posed regarding this notification and c an be found in 
document:  
• G/ADP/ Q1/CMR/5  - G/SCM/Q1/CMR/5  - G/SG/Q1/CMR/5  – Questions by the United States  
18.  The Chair noted that these questions had been pending since the Committee meeting of 
October 2022.  
19. Cameroon  was not present at the meet ing. Oral answers were not  provided at the meeting, 
nor were written answers received to date.  
20. No statements were made by any Member.  
2.2  European Union ( G/ADP/N/1/EU/3/Suppl.2  - G/SCM/N/1/EU/2/S uppl.2  and 
G/ADP/N/1/EU/3/Suppl.3  - G/SCM/N/1/EU/2/Suppl.3 ) 
21. The written follow -up questions posed by the Russian Federation can be found in document:  
• G/ADP/Q1/EU/15  - G/SCM/Q1/EU/ 15 – follow -up questions from the Russian Federation  
22. The Russian Federation  stated that the follow -up questions referred to the European Union's 
legislation on anti -dumping, so there was no need to review them in the Com mittee . 
23. The European Union  did not take the floor on this agenda item.  
 
2 Relevant deadlines for written questions and written answers regarding the notifications of legislation 
reviewed in the October  2023 meeting can be found in section 1 of document G/ADP/W/511  - G/SCM/W/588  - 
G/SG/W/257 . G/SCM/M/125  
 
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  2.3  Ghana ( G/ADP/N/1/GHA/2  - G/SC M/N/1/GHA/2  - G/SG/N/1/GHA/2 ) 
24. Written follow -up questions were posed regarding this notification and can be found in 
document:  
• G/ADP/Q1/GHA/3  - G/SCM/Q1/GHA/3  - G/SG/Q1/GHA/3 – Questions from the United States  
25. Ghana was not present in the meeting . Oral answers were not provided at the meeting, nor 
were written answers received to date.  
26. The Chair, recalling the Committee's agreed procedures, informed Members that for new 
legislat ive notifications to be placed on the agenda of the spring 2024  meeting, they should be 
circulated in all three languages by 11 March 2024 . Shortly after that date, on 15 March 2024  
the Secretariat would circulate a document informing Members of all legisl ative notifications to be 
reviewed at the next meeting. Pursuant to paragraph 8 of document G/SCM/W/293/Rev.1 , all 
unanswered written questions pertaining to new legislative notifications reviewed at the meeting, as 
well as the subject notifica tions, shall automatically be retained on the agenda of the next Committee 
meeting and on the agendas of subsequent Committee meetings until written answers are 
submitted.  
27. The Chair also recalled that new legislative notifications from the United Kingdom a nd the 
United States  would be considered under the first agenda item of the next meeting of the 
Committee. Written questions concerning those notifications as well as any other new legislative 
notifications for the spring 2024  meeting of the Committee shou ld be submitted to the Member 
concerned and to the Secretariat by 2 April 2024 . 
28. In order to place previously -reviewed legislation on the agenda of the next meeting for further 
review, written questions must be submitted to the Member concerned and the Secr etariat, not later 
than 11 March 2024 ; and written answers to such questions must be submitted to the Member 
concerned and the Secretariat, not later than 8 April 2024 . The Secretariat would circulate the 
usual triple -symbolled document containing all the relevant deadlines shortly after the meeting.3 
29. The Chair expressed concern that some Members had yet to submit any notification concerning 
legislations. He underlined the importance of these notifications in terms of transparency and 
recalled that for man y Members all that would be required was a single nil notification. For any 
Members that conducted CVD investigations but had not yet notified their legislation, it was all the 
more important for the Committee to have the opportunity to review and ask ques tions about that 
legislation. Therefore, the Chair encouraged all Members that had not yet made a legislative 
notification to do so as promptly as possible.  
30. The Chair referred to the document G/SCM/N/18/Add.59  which contained the latest revision 
of the list of authorities competent to initiate and conduct investigations within the meaning of 
Article  25.12 of the SCM Agreement and invited all Members with such an authority to submit the 
required notification pur suant to Article 25.12 of the SCM Agreement, or to review and update as 
necessary their previously -submitted notifications.  
31. The Committee took note  of the notifications, questions, and statements.  
3  SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ARTICLE  25.11)  
32. The Chair recalled that document G/SCM/N/407  and G/SCM/N/407/Suppl.1  had invited all 
Members to submit their semi -annual reports under Article 25.11 of the SCM  Agreement of 
CVD actions taken during the period January - June 2 023. Document  G/SCM/N/40 7/Add.1  
provided the current status of Members' reporting for that period. Paragraph 1 of the document 
listed those Members reporting CVD actions during the period. Paragraph 2 listed Members that had 
notified having tak en no CVD action during the period. Paragraph 5 of the document listed the 
49 Members that had submitted a one -time notification that they had no investigating authority, had 
taken no countervailing actions to date, and did not anticipate taking any such a ctions in the 
 
3 Relevant deadlines can be found in Section 1 of document G/ADP/W/512  - G/SCM/W/590  - 
G/SG/W/258 . G/SCM/M/125  
 
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  foreseeable future. The Chair drew the Committee's attention to the recent submissions of one -time 
notifications by Mauritania and Tanzania, which were circulated in documents G/SCM/N/202/MRT  
and G/SCM/N/202/TZA , respectively.  The Chair  also noted that Mauritius, which had provided a one -
time notification covering the period until 30 June 2023, had submitted a revised notification in 
July 2023. This revision indicated the establishment of a competent authority and could be found in 
document G/SCM/N/202/MUS/Rev.1 . 
33. One-time notifications served a useful transparency function, as they assisted non -active 
Members to meet the ir notification requirements in a streamlined way. Any eligible Member that had 
not already done so thus was urged to submit a one -time notification. The Secretariat was ready to 
assist any Member in this regard.  
34. Unfortunately, as listed in paragraphs 3 a nd 4 of the document, a number of Members had 
not submitted their semi -annual reports. The Chair urged those Members to submit their reports as 
soon as possible.  
35. No comments or questions were raised concerning the semi -annual reports of Australia, Brazil, 
Canada, China, Colombia, India, Mexico, the United Kingdom, and Viet Nam.  
36. On the semi -annual report of the European Union , China  expressed concerns regarding the 
countervailing duty investigation initiated by the European Commission against electric vehicl es from 
China on 4 October 2023. The concern stemmed from the fact that the investigation was launched 
ex officio  without an application from the EU industry, based on the grounds of a threat of injury , 
which was rare in trade remedy practices. China highl ighted the European Commission's 
announcement of the decision without prior notification or consultation with Chinese authorities. 
Following the announcement, the European Commission gave only four working days for China to 
engage in consultations, providi ng merely a simple summary of the initiation documents. These 
documents contained ambiguous references to subsidy programme s and the alleged threat of injury, 
lacking sufficient evidence. The European Commission also had refused to provide China with more 
substantial details and even had failed to inform China of the specific description and the tariff code 
of the product under investigation, which, according to China, were practices not in line with the 
WTO rules.  
37. Additionally, the initiation documents did  not provide sufficient evidence regarding 
subsidization, the threat of injury, and any causal link or special circumstances to justify the 
ex officio  initiation. China pointed out that the threat of injury data relied mainly on a third -party 
report, which  had inconsistencies with the actual product under investigation, undermining the 
authenticity, accuracy, and adequacy of the evidence needed to initiate the investigation. According 
to China, this was a clear violation of the WTO rules.  
38. China also express ed its concern regarding the European Commission's approach to sampling, 
indicating that the European Commission had intentionally selected three Chinese brands that did 
not represent the majority of Chinese exports while excluding foreign -branded companie s with larger 
share in exports. China was of the view that such practice would seriously violate Article 27.1 of the 
European Union's Basic Regulation on countervailing measures as well as its practice.  
39. China noted that the progress in China's electric ve hicle industry was due to unremitting efforts 
in scientific and technological innovation and the construction of complete industrial and supply 
chains. China's efforts in producing electric vehicles and other clean energy products aligned with 
its internat ional commitments to address climate change and contribute remarkably to global climate 
action while pursuing green, low -carbon development. China urged the European Union to abide by 
the WTO rules and use trade remedy measures cautiously, advocating for a  fair and non -
discriminatory market to foster the growth of the global electric vehicle industry in light of the overall 
global response to climate change and the promotion of green, low -carbon development.  
40. In response, the European Union  recalled that the  agenda item under discussion was the semi -
annual report covering January to June 2023, and noted that China had raised an issue pertaining 
to a case initiated on 4 October. Despite this, the European Union would respond to China within the 
scope of the cu rrent agenda item.  G/SCM/M/125  
 
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  41. The European Union thanked China for its remarks concerning the initiation of the investigation 
into battery electric vehicles from China, which began on 4 October 2023. The European Union 
clarified that this investigation was in the pre liminary stages and aimed to determine whether illegal 
subsidisation benefiting battery electric vehicle production in China existed, and if it was causing or 
threatening to cause injury to the competing electric vehicle producers in the European Union. Th e 
European Union would also examine whether it was in the EU's interest to remedy the effects of any 
such unfair trade practices by imposing anti -subsidy duties on the imports.  
42. The European Union assured that the investigation would be conducted in accordance with 
strict legal procedures in compliance with both the EU and WTO rules and encouraged the 
participation of Chinese authorities and exporters. The initiation of the investigation did not indicate 
any presumption of its outcome.  
43. The European Un ion underlined the possibility of ex officio  initiation of trade defence cases 
under special circumstances as per its legislation. While taking note of China's concerns, the 
European Union noted that it would not discuss the specifics of the ongoing invest igation. All 
procedural steps in the legislation would be adhered to and the law fully complied with . 
44. Lastly, the European Union highlighted that pre -initiation consultations had been  offered in 
line with the legislation, with ample time for them to take p lace, and stated that China's statement 
contained certain inaccuracies, which would be addressed during the investigation.  
45. On the semi -annual report of the  United States , the Russian Federation  expressed its 
systemic concerns regarding practices in United States' countervailing duty investigations. Firstly, it 
underlined the United States practice of designating certain entities, such as input producers, as 
"public bodies," based on allegations of "meaningful control" by the government. It pointed out that 
these allegations were made when the record did not prove that the entity in question possessed, 
exercised, and was vested with governmental authority. According to the Russian Federation, this 
practice constituted a violation of Article 1 of the SCM Agree ment.  
46. Secondly, the Russian Federation expressed concerns regarding the determinations of de facto  
specificity. It described how the US Department of Commerce ("DOC") compared the number of 
recipients of an alleged subsidy to the entire number of enterpris es within the jurisdiction of the 
granting authority, leading to a finding that the recipients were limited in number. This approach, 
according to the Russian Federation, disregard ed the commercial realities of the economy in question 
and the absence of an y plan or scheme to limit the number of recipients. The Russian Federation 
contended that this methodology could label any subsidy as de facto  specific, a practice not permitted 
by Article 2 of the SCM Agreement.  
47. The Russian Federation expressed concern ov er the provisional decision in the administrative 
review of the countervailing measure on Russian phosphate fertilizers. It noted the DOC's preliminary 
action to countervail the provision of mining licenses to Russian producers, calling this determination 
flawed. The Russian management system for subsoil resources, including license issuance, was 
intended for effective resource management and was unrelated to a government financial 
contribution conferring a benefit. Furthermore, the Russian Federation under lined the DOC's 
dismissal of actual auction prices for licenses in Russia, stating this rejection led to a failure in 
determining the adequacy of remuneration relative to the market conditions in the country of origin 
of the product concerned.  
48. The Russian Federation urged the United States to reconsider the aforementioned practices, 
to comply with WTO rules, and to withdraw its countervailing measures.  
49. Morocco  expressed its concerns regarding the countervailing duty of 19.97% on Moroccan 
exports of phosphat e fertilizers, stating that the United States' determinations leading to this duty 
were not in line with the United States' obligations under the SCM Agreement. Specifically, Morocco 
stated that  the determination that the Government of Morocco provided min eral rights for less than 
adequate remuneration was contrary to several SCM Agreement provisions , noting that no such 
grants were awarded. Morocco was of the view that the United States did not appropriately consider 
the actual conditions in Morocco, resul ting in an incorrect comparison and an exaggerated subsidy 
determination.   G/SCM/M/125  
 
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  50. Morocco also pointed out that the United States had made several determinations related to 
subsidy calculations and injury that conflicted with WTO rules. Regarding the disputes before the 
United States Court of International Trade ( "USCIT "), Morocco pointed to  the USCIT's recognition of 
inconsistencies in the DOC's subsidy calculations and the United States International Trade 
Commission's ( "USITC ") injury findings, whic h did not align with the US laws or with its WTO 
obligations.  
51. Morocco drew attention to the USCIT's finding  that the DOC had employed an unreasonable 
methodology in calculating the subsidy for the alleged provision of mineral rights for less than 
adequate remuneration. The USCIT also had noted that the USITC had not properly consider ed the 
impact of certain non -importation factors in its injury determination. Morocco noted that both 
authorities were reassessing these decisions following the USCIT's findings  and expected that they 
would use this as an opportunity to address the inconsistent determinations and align the original 
measures with WTO rules.  
52. Regarding the administrative review, Morocco noted that the United States ha d almost 
completed the first adm inistrative review of the measures on Moroccan phosphate fertilizers. The 
Moroccan Government ha d provided full cooperation during this review, submitting several thousand 
pages of documentation in response to multiple questionnaires from the DOC. Addition ally, Morocco 
had welcomed the officials from the United States for a verification visit. However, Morocco was 
concern ed that the preliminary decision of the review repeated many of the original measures' 
determinations, which had been inconsistent with th e United States' WTO obligations. Morocco 
remained hopeful that the United States would amend these discrepancies in its forthcoming final 
decision and would establish a duty rate that would be equitable and in accordance with WTO rules.  
53. China  recalled tha t it had raised its objection to the determination of the alleged provision of 
inputs for less than adequate remuneration ("LTAR") programme  on multiple occasions. China 
reiterated that there was no such programme  in China. The United States had incorrectly applied 
adverse facts available ( "AFA") in its findings on the so -called LTAR programme . In previous cases, 
both the Government of China ("GOC") and Chinese respondent companies had made reasonable 
efforts to provide the necessary information. However, the United States had ignored the information 
provided and had not consider ed or analyse d the materials at hand.  
54. China also recalled that it had raised concerns about the investigation practices of the 
United  States. According to China, the United  States should not ignore the actual situation of the 
respondent, ask for a large amount of evidence, and apply AFA to make the determination of so -
called public body without further analysing the documents presented.  
55. In the recent administrative review re lating to multi -layered wood flooring from China, the 
United States once again had ignored what the GOC had provided. China was of the view that the 
documents proving the commercial nature of input suppliers had been provided to the investigating 
authority  of the United States.  China recalled that according to Article 12.7 of the SCM Agreement, 
determinations might be made on the basis of the facts available, only if necessary information was 
not provided within a reasonable period or the investigation was significantly impeded.  It hoped 
the United States could change its practice of abusing  AFA and under take serious consideration of 
the documents provided by  the GOC and the Chinese respondents.  
56. China also raised concerns regarding the United States' practic e of using external benchmark s 
to calculate the amount of subsidy in the so -called LTAR programme s, expressing firm opposition to 
introducing external benchmark s in CVD investigations without reviewing and analysing China's 
prevailing market conditions for  the goods or services in question. In many of the  CVD investigations, 
the GOC had provided its response based on available industry information. The  DOC had ignored 
China's position and responses and determined that the input market in China was distorted  based 
on adverse facts available. In many of its determinations, the  DOC had simply said that the  GOC 
had failed to provide all answers to the questions in questionnaire. Instead of justifying how the raw 
material industry was distorted to make domestic p rices unacceptable, the United States had simply 
applied the AFA on the grounds that "the question was not fully answered".  
57. China hoped that the United  States would comply with its international obligations and take 
into consideration the prevailing benchm ark conditions of China , without prejudice to China's position 
against the resort to external benchmark .  G/SCM/M/125  
 
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  58. India expressed concerns regarding case number C -533-909 conducted by the United States, 
as reported in the semi -annual report. The concern was that the DOC employed differing 
methodologies in the anti -dumping and countervailing duty investigations concerning t he same 
subject goods and the issue of raw material supply. In the anti -dumping investigation, the supply of 
raw material had not been deemed market -distorting, leading to no particular market situation being 
applied and no anti -dumping duties imposed. Con versely, in the CVD investigation, the same raw 
material supply had been  considered market -distorting, a particular market situation had been  
applied, and this had led to the imposition of higher countervailing duties on barium chloride.  
59. With respect to Mo rocco's comments, the United States  noted that on 8 February 2021, the 
DOC had published the final affirmative countervailing duty determination on phosphate fertilizers 
from Morocco, resulting in final ad valorem  CVD rates of 19.97% for relevant producers . It also 
indicated that its finding of the phosphate mining rights programme  as a countervailable subsidy 
was in line with the facts on record, US law, and WTO obligations under the SCM Agreement.  
60. The United States detailed that the Moroccan government had granted OCP, the Moroccan 
respondent, exclusive rights to mine and extract ore from Morocco's government -owned phosphate 
reserves, which the DOC had identified as a financial contribution in the form of the provision of a 
good. The DOC also had found the  mining rights to be de jure  specific to OCP, as they were legally 
granted solely to OCP, effectively giving it a monopoly over the reserves.  
61. The United States explained that because there were no privately determined market prices 
for the good in question , nor appropriate world market prices, the DOC had examined the benefit 
under tier three of its benchmark hierarchy. This examination was to determine if the price paid by 
the respondent was in line with market principles. In this process, the DOC had used benchmarks 
not based on mining rights per se , but on the value of the underlying good conveyed via the mining 
rights, i.e., phosphate rock. To determine the benefit, the DOC had compared the per unit cost build -
up of the respondent's beneficiated phosphat e rock to a world price of comparable phosphate rock, 
using it as a market -determined price. The DOC, as detailed in the final determination notice, stated 
that this methodology aligned with previous cases involving mining rights programme s and was in 
full compliance with the recorded facts, US law, and the SCM Agreement.  Concerning other cost and 
benefit -related issues, the United States suggested Morocco review the final determination notice 
for additional details noting that those findings and the prelim inary results of the first administrative 
review had been published on 1 May 2023. It also stated that the final results would be announced 
on 2 November 2023. The United States reiterated its commitment to conducting proceedings openly 
and transparently, in alignment with US law and international obligations, while taking into account 
the views of interested parties.  
62. Regarding the ongoing litigation referred by Morocco, the United States considered it would 
not be appropriate to comment since the litigatio n had not been concluded. Nevertheless, it was 
acknowledged that the DOC was examining the court's decision and would publish a remand 
redetermination in the near future. Interested parties would be given the opportunity to provide 
feedback on the draft re mand, and the DOC would address all comments in its final redetermination.  
63. In response to China's comments on the issue of public body, the United States noted that 
many of its determinations concerning those findings involved the application of AFA due to  the 
GOC's repeated failure to respond fully to its questions to the best of its ability. The United States 
disagreed with China's claims that it had provided complete information necessary for the DOC's 
findings.  Where  the GOC reported that certain suppli ers of inputs to respondent companies were 
less than majority -owned by the government, the United States requested additional information to 
determine whether those entities were authorities.  Those questions sought to determine the level of 
involvement in these input suppliers by the Chinese Communist Party ("CCP") including whether any 
owners, members of the board of directors or management officials were  CCP officials. China had 
never responded fully to those questions beyond a cursory summary on the role  of the  CCP in China, 
despite myriad evidence that  CCP exerted significant control over economic activities in China. Thus, 
the information on the level of  CCP involvement in the management of input suppliers was relevant 
to determine whether these entitie s that were less than majority -owned by the government could 
be deemed authorities or public bodies for the purposes of determining whether a financial 
contribution had been bestowed. Without such information, the DOC would be unable to complete 
its analys is, and therefore it would be appropriate to rely on the use of facts available.  G/SCM/M/125  
 
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  64. With respect to the use of external benchmark s, the United States noted that many of its 
determinations concerning findings of market distortion and the use of external benchm arks 
in CVD proceedings on Chinese products involved the application of AFA due to the GOC's repeated 
failure to respond fully to the questions to the best of its ability. These questions addressed the 
nature of the domestic market for certain goods or ser vices, the role of the government and 
government -owned enterprises in the relevant markets, and other conditions concerning the 
purchase and sale of goods or services.  
65. In most cases, China neither responded fully to those questions nor provided the necessary 
information, for example, regarding the composition of the industry and government ownership of 
companies in the sector. Without this necessary information, the DOC was unable to complete its 
analysis of the relevant market, in particular with re spect to the role of the government. Therefore, 
in those cases, it was appropriate to rely on the use of facts available to determine that the domestic 
markets for these goods were distorted as a result of government involvement and that the use of 
externa l benchmarks was warranted. The United States urged China to provide complete information 
to the questions raised by the DOC in the investigations.  
66. In response to India, the United States recalled that it had engaged with India bilaterally on 
that issue in  the past and underlined the different standards and analyses conducted in anti -dumping 
and countervailing duty proceedings. The United States conveyed its willingness to engage bilaterally 
with India should it wish to seek further clarification or to disc uss the matter further.  
67. The Committee took note  of the semi -annual reports and the statements made.  
4  PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: NOTIFICATIONS: AD HOC 
NOTIFICATIONS  
68. The Chair reported that since the Committee's last regular meeting, notifications under 
Article  25.11 of the SCM Agreement with respect to preliminary and final CVD actions had been 
received from Australia, Brazil, Canada, the European Union, India, the United  Kingdom, and the 
United States. Those notifications were listed  in documents G/SCM/N/406 ; G/SCM/N/4 08; 
G/SCM/N/409 ; G/SCM/N/410 ; G/SCM/N/411 ; and G/SCM/N/412 .  
69. The Chair drew the attention of Members to the continued lack of full compliance with this 
important notification requirement. These notifications represent a key element of the required 
transparency concerning Members' countervailing actions, and the Committee could not effectively 
carry out its monitoring and discussion functions if Members did not fulfil their obligations in this 
regard.  
70. The Chair strongly urged all Members taking countervailing actions to provide these 
notifications of preli minary and final actions, regularly, consistently and in a timely fashion. In this 
regard, the Chair noted that the minimum information format for these notifications adopted by the 
Committee in November  2009 (document G/SCM/3/Rev.1 ), contained importan t guidance as to the 
kinds of actions that should be notified and the information that should be provided.  
71. The European Union  noted although China  had not made a notification under Article 25.11 of 
the SCM Agreement with respect to its preliminary or final  CVD actions , the European Union had 
concerns regarding the recently concluded expiry review on potato starch. In September 2022, China 
had initiated a second expiry review of the anti -subsidy measures in place on imports of potato 
starch from the EU which  had been concluded on 14 September 2023 with measures extended for 
an additional five years.  
72. The European Union was very concerned that despite the intense cooperation in pre-initiation 
consultations, questionnaire replies, supplemental questionnaire repl ies, and all the information 
provided during that proceeding, China had decided to prolong the measures for another five years.  
73. The European recalled that following the reform of the EU's Common Agricultural Policy 
("CAP"), the subsidies subject to the mea sure were not specific, not actionable, and fully compliant 
with the Agreement on Agriculture and the SCM Agreement. According to the European Union, China 
had failed to carry out a pass -through analysis to demonstrate whether benefits received by the 
farmers had been passed through to the potato starch producers, and to what extent.  G/SCM/M/125  
 
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  74. Both these aspects, non -specificity of the CAP support and the requirement for a pass -through 
analysis, had been recently confirmed by the WTO Dispute Settlement Panel Ruling o f 2021, DS577, 
US Anti -Dumping and Countervailing Duties on Ripe Olives from Spain, and the Canadian Authority's 
re-investigation conclusions on sugar in March 2022. The European Union noted that the European 
Commission was now considering the options on h ow to pursue the matter further.  
75. In response, China  noted that the Ministry of Commerce of China had initiated an expiry review 
against the potato starch originating in the European Union on 15 September 2022. Based on the 
conclusions of the investigation that the termination of the CVD measure would be li kely to lead to 
continuation or recurrence of subsidization and injury, the Chinese Investigating Authority had 
decided to continue the measure for an additional five years on 14 September 2023. This review 
had been  initiated at the request of the Chinese domestic industry and had been  conducted strictly 
in accordance with Chinese laws and regulations, and consistent with WTO rules.  
76. China also noted that during the investigation, the Chinese Investigating Authority guaranteed 
the rights of all interested pa rties, providing them with ample opportunity to participate in the 
investigation, including companies and governments from the European Union. China stated that in 
the final determination, the information and evidence presented by all interested parties had been 
duly taken into account. Regarding the issues mentioned by the European Union concerning 
specificity and pass-through analysis , the details of the investigation could be found in the final 
determination. China noted that if there were further specif ic concerns from the European Union, it 
would welcome a written submission to facilitate a better response.  
77. Before moving on to the next agenda item, the Chair repeated a request also made by his 
predecessors, which had actually come up in the presentation s made by the Secretariat at the 
2015 workshop on notifications. Materials from the workshop were available on the Subsidies and 
Countervailing Measures page on the WTO website, if Members wished to consult them. This request 
to all Members was that a give n ad-hoc notification, as was the case with all other notifications, 
should be sent, electronically and only once, directly to the Central Registry of Notifications 
("CRN"), with a copy to the Secretary of the Committee, and that any previously submitted 
notifications should not be resubmitted. Members were also requested, instead of providing 
electronic links to a general website, to attach directly the relevant document containing the action 
they wished to notify in WORD or PDF formats. The Chair asked to  avoid any confusion, repetition 
or duplication, as these notifications were circulated in monthly documents developed by the 
Secretariat and were the source of the necessary information contained in the Committee's annual 
report. Members' co -operation in this respect would be much appreciated.  
78. The Committee took note  of the notifications and the statements made.  
5  ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR THE ELIMINATION OF 
EXPORT SUBSIDIES – 31 DECEMBER 2015 END OF FINAL PHASE OUT PERIOD AND FIN AL 
NOTIFICATION DUE 30 JUNE 2016  
79. The Chair  recalled that Members that had been granted extensions under Article 27.4 pursuant 
to the procedures in WT/L/691  were required, under paragraph 2(c) of the procedures, to submit 
transparency notifications in respect of each year of the final two -year phase -out period, i.e., 
calendar years 2014 and 2015. The deadline for the notification pertaining to 2014 was 
30 June 2015. A reminder to this effect had been circulated in document G/SCM/N/290/INF . 
80. Antigua and Barbuda, Belize, Costa Rica, Dominica, Dominican Republic, El Salvador, 
Guatemala, Jamaica, Jordan, Mauritius, Papua New Guinea, Saint Kitts and Nevis, Sai nt Lucia, and 
Saint Vincent and the Grenadines had submitted these notifications, which had been circulated in 
the G/SCM/N/290  series.  
81. Furthermore, given that 2015 was the final year of the two -year phase -out period pursuant 
to the previously mentioned proc edures, the Members with extensions needed to have completed 
the elimination of their export subsidies by 31 December 2015. They also had had to provide a final 
transparency notification in respect of calendar year 2015 not later than 30 June 2016. A remin der 
concerning that final round of Article 27.4 –related notifications had been circulated in G/SCM/M/125  
 
- 12 - 
 
  document  G/SCM/N/299 . The  Secretariat had circulated a room document indicating the current 
status of notifications and of actions reported by Members with extensi ons under Article  27.4.4 
82. To date, 15 of the beneficiary Members out of a total of 19 had submitted their final 
transparency notifications which had been circulated in the G/SCM/N/299  series. The Chair reminded 
other four Members with extensions, namely, Barbados, Fiji, Panama, and  Uruguay to submit their 
final transparency notifications as soon as possible. The deadline for the elimination of the export 
subsidies had been more than six years earlier while that for submitting the final notification had 
been almost six years earlier.  He emphasized the importance for the system that the Members 
benefit ting from extensions complete their compliance with the corresponding substantive and 
transparency obligations.  
83. The United States  thanked the Members that had submitted their notification s and encouraged 
the remaining four Members to promptly submit theirs. It recalled that seven and eight years had 
respectively passed since those notifications were due.  
84. New Zealand  referred to its previous statements on this longstanding agenda item and 
emphasized the importance of compliance with notification obligations to enhance transparency at 
the WTO. It urged the remaining four Members to complete their outstanding notifications without 
further delay and encouraged them to seek assistance from the S ecretariat if needed in completing 
these notifications. New Zealand requested that this topic remain on the agenda for the next 
Committee meeting until the outstanding notifications are completed . 
85. The Chair  noted that the Committee would revert to that iss ue at the next meeting.  
86. The Committee took note  of the statements made.  
6  IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT  
87. The Chair  recalled that since the request of the Chairman of the Trade Policy Review Body in 
spring 2009, the Committee had been discussing, at formal and informal meetings, "ways to improve 
the timeliness and completeness of notifications and other information flo ws on trade measures". 
The substance of those discussions was reflected in the minutes of the previous meetings.  
88. The Chair recalled that at the Committee's May 2023 meeting a number of Members had 
indicated their willingness to continue discussions on ways  to improve timeliness and completeness 
of notification obligations under the SCM Agreement, with the notification of subsidies being the 
most fundamental. In this regard, there were two topics to cover under this agenda item, (i) the 
status of Members' no tifications of subsidies and (ii) the US proposal regarding a written process for 
questions and answers under Articles 25.8 and 25.9 of the SCM Agreement.  
89. Regarding the status of subsidy notifications, the Chair noted that the Secretariat had 
prepared and updated a background note at the request of Members, providing a snapshot of the 
level of compliance with the various notification obligations under the SCM Agreement since 1995, 
the most recent of which had been circulated in document G/SCM/W/546/Rev.15 . The Chair also 
noted that the Secretariat would update this document twice a year before each regular meeting of 
the Committee. Accordingly, the next update of that document would be made available before the 
spring 202 4 meeting of the Committee. The Chair also recalled the presentation delivered by the 
Secretariat on 2 October 2023 regarding the notification obligations under the SCM Agreement, and 
the new and full subsidy notifications, in particular.  
90. Despite all the e fforts and calls, compliance with the obligation to notify subsidies 
unfortunately remained significantly low and the chronic low compliance with this fundamental 
transparency obligation constituted a serious problem in the proper functioning of the Agreem ent. 
The Chair also recalled that at the previous meetings of the Committee, in the context of the ongoing 
discussion of ways to improve transparency and information flows, Members had stressed the 
 
4 RD/SCM/36/Rev.6 . G/SCM/M/125  
 
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  importance of the information provided through subsidy not ifications, and the value of complying 
with the relevant provisions of the SCM Agreement.  
91. The Chair observed that as of 27 October 2023, 101 Members had not submitted their new 
and full subsidy notifications for 2023, despite the deadline being 30 June 202 3. Furthermore, 
85 Members had failed to submit their 2021 notifications, even though the deadline was over two 
years ago. Additionally, 73 Members ha d yet to submit their 2017 notifications, which had been due 
more than four years before . Many of these Me mbers either ha d never notified or ha d only done so 
in the distant past.  
92. The Chair strongly urged all Members that had not yet submitted their notifications to do so 
as soon as possible. He stressed that, while all Members were required to notify, they al so had a 
vested interest in the notification information of others, which was only accessible through the 
collective effort of all Members. Therefore, it was in every Member's interest to provide complete 
and timely notifications. Reminding Members that th e Secretariat was always available to answer 
any questions regarding the notification of subsidies and had assisted many Members in the past, 
he encouraged those experiencing difficulties in fulfilling their obligations to discuss these with the 
Secretaria t. 
93. The Chair then highlighted the new technical assistance project on subsidy notifications 
recently developed by the Secretariat. The primary goal of this project was to bring together officials 
from developing and least -developed -country Members responsi ble for subsidy notifications, to 
engage in comprehensive discussions about the notification obligation and to share experiences and 
ideas. This initiative was expected to improve understanding of the notification obligation and 
identify ways to optimize a nd speed up the notification process. The project was structured in three 
phases, spanning approximately 16 weeks.  
94. The Chair reported that the first phase, held from 7 -9 June 2023, was successful. During this 
phase, the Secretariat had provided technical a ssistance on the fundamental aspects of notification 
obligations and the core concepts under the SCM Agreement. Officials from various Members, both 
developed and developing, had also been invited to share their challenges in preparing subsidy 
notification s. Of the 43 Members invited, 26 participated.  
95. Following the first phase, the Secretariat had continued to support participants in preparing 
their draft notifications during the second phase. The Secretariat had organized multiple virtual 
meetings to give detailed feedback on these drafts. The engagement from almost all participants 
was strong, and many had produced excellent draft notifications with the Secretariat's assistance.  
96. On a positive note, the Chair mentioned that five of the 26 Members involved h ad already 
submitted their 2023 subsidy notifications. Several others were in the process of finalizing their 
drafts for official submission. He strongly urged these Members to submit their new and full 
notifications as soon as they could.  
97. The Chair commen ded the success of the project and the enthusiasm of the participants, 
noting it as evidence that well -designed, tailored projects providing direct assistance could yield 
significant results. The Chair also conveyed that the Secretariat was preparing to in itiate the second 
round of the project in 2024. He encouraged all Members that would receive invitations to future 
projects to participate fully, expressing hope that such initiatives would improve compliance with 
transparency obligations despite capacity constraints.  
98. The United States  shared concerns about the worrying lack of notifications regarding subsidies 
and related measures. It underlined that transparency was essential to ensure fairness and 
accountability within the WTO system and all WTO Members had a duty to inform other Members 
and the public about their trade -related laws and regulations, including those on subsidies, which 
was crucial for maintaining fair competition and an even playing field for workers worldwide. The 
United States also ackno wledged that enhancing transparency would strengthen the ability to 
oversee compliance and resolve disputes.  
99. Furthermore, the United States expressed gratitude for the Secretariat's ongoing technical 
support to Members in the preparation and submission of their subsidy notifications. It particularly 
appreciated the Secretariat's assistance with Vanuatu's recent comprehensive submission, which G/SCM/M/125  
 
- 14 - 
 
  had been well -received by the Committee. The United States anticipated continuing collaboration 
with the Secretariat  and other Members to expand and refine the notifications made to the 
Committee in future years.  
100.  New Zealand  reiterated its previous statements on this matter, emphasizing the significance 
of timely and complete notifications in improving transparency, eff ective monitoring, and ensuring 
the proper functioning of the WTO. It expressed concern over the increasing trend of non -compliance 
with this vital obligation under the SCM Agreement. Having just completed its own notification, New 
Zealand acknowledged the  effort and resources necessary to compile and submit these notifications. 
While recognizing the real capacity challenges faced by Members, especially those that were 
developing, New Zealand encouraged Members facing such difficulties to ask for help from the 
Secretariat.  
101.  Australia  thanked the Secretariat for updating the document G/SCM/W/546  which it 
considered extremely valuable for Members. However, it noted that the document revealed a 
disappointing level of compliance with notification obligations among  Members.  
102.  Australia concurred with the United States and New Zealand regarding the importance of 
notifying subsidies as a fundamental obligation under the SCM Agreement. It pointed out that 
without timely and thorough notification of subsidies, it would be  challenging for Members to assert 
their rights under the Agreement. This issue was particularly acute for developing countries that lack 
the resources to independently investigate the subsidy programme s of their trade partners.  
103.  Acknowledging real capacity  challenges, Australia recognized that fulfilling subsidy 
notifications biennially has been a demanding task. It was, however, heartened by the Chair's update 
on the Secretariat's technical assistance project and praised this initiative, welcoming the posi tive 
outcomes and the news of its continuation.  
104.  Australia urged Members facing challenges in preparing their notifications to participate in the 
Secretariat's training or to voice their difficulties so that the Committee might explore additional 
support fr om other Members or the Secretariat. According to Australia, the failure of Members to 
notify would increase uncertainty for all exporters in competing fairly in international markets, which 
was the fundamental purpose of the SCM Agreement.  
105.  Canada  expressed a deep concern about the low level of compliance with the notification 
requirements of the SCM Agreement. It noted that the 2021 cycle marked the first occasion when 
more than half of the WTO Membership had failed to meet the subsidy notificatio n obligations under 
the SCM Agreement, with only 48 percent of Members providing a notification. Canada found it 
extremely troubling that this trend of non -compliance had deteriorated since the last meeting in 
May, indicating that, as of the most recent st atus report, over 60 percent of Members had not 
completed their subsidy notification for the 2023 cycle.  
106.  Highlighting the importance of the notification process as a fundamental aspect of the SCM 
Agreement, Canada stressed the urgency of reversing this tr end to ensure the effective operation of 
the Agreement and the WTO. Canada acknowledged the challenges involved in compiling 
notifications, given the resources, time, and coordination required among various levels of 
government, and encouraged Members to h ave open discussions about these challenges.  
107.  Canada welcomed the report provided by the Chair regarding the technical assistance projects 
currently in progress and was pleased with the positive outcomes achieved so far.  It emphasized the 
need to maintain f ocus on this issue, underscoring its significance to the Agreement and the work 
of the WTO moving forward.  
108.  Japan  appreciated the Secretariat's work and assistance in improving transparency. It 
emphasized that a timely and complete notification containing a ll necessary information was an 
obligation that all Members had agreed upon. It stressed that WTO Members should ensure proper 
and timely notification in accordance with the SCM Agreement. Japan pointed out that incomplete 
notifications would prevent subsi dies which should be reported from being reviewed by the 
Committee, and this would seriously undermine the fundamental obligation under the SCM 
Agreement to notify all specific subsidies.  G/SCM/M/125  
 
- 15 - 
 
  109.  Japan also noted that it was in the interest of all Members to enhan ce transparency and ensure 
that subsidies subject to notification were reported. Japan noted that the Secretariat's handbooks 
and webpages provided extensive guidance on notification and advised that all Members could utilize 
these tools and consult with t he Secretariat when needed.  
110.  The European Union  acknowledged the challenges involved in meeting the notification deadline 
for 2023, which was just four months ago. It understood that the process could be burdensome and 
complicated, potentially leading to de lays. The European Union also admitted to facing difficulties 
itself, with some late submissions for certain addenda to its notification. Nevertheless, it remained 
optimistic that the coming months would see increased activity and that those Members that had 
not yet notified would do so.  
111.  The European Union emphasized that submitting notifications was not optional but an 
obligation that all Members had committed to. This was vital for the Committee 's work to understand 
the types and levels of subsidies gran ted by trading partners and their impact on international trade. 
It extended special thanks to the Secretariat for the technical assistance provided to Members and 
shared that having participated in a session earlier that year, it would encourage all Membe rs in 
need to take full advantage of the expertise and guidance offered by the Secretariat, which was 
found to be immensely helpful.  
112.  Lastly, the European Union remained hopeful that those Members with overdue notifications 
would catch up and that those who  had never submitted a notification would attempt to do so.  
113.  The United Kingdom  acknowledged the difficulties in creating notifications, recognizing them 
as resource -intensive and requiring coordination across various ministries and government levels. 
Despi te the challenges, it stressed the fundamental importance of these notifications in enhancing 
the understanding of the subsidies landscape and the interventions made by Members in pursuit of 
their goals. It noted the technical capacity work and notificatio n projects conducted by the 
Secretariat, expressing gratitude for these efforts. The United Kingdom expressed support for the 
continuation of these activities and similar initiatives in the future.  
114.  It also highlighted the recent focus on transparency at the WTO reform retreat and its 
relevance to the imminent implementation of the Fisheries Subsidies Agreement. The 
United  Kingdom viewed these as opportunities for Members to collectively address notification issues 
and requirements.  
115.  The Un ited Kingdom suggested that, in addition to the Secretariat 's capacity -building 
initiatives, there might be a need for discussions on mutual support to facilitate notifications more 
effectively. It advocated for sharing experiences, best practices, and per haps language to encourage 
peer-to-peer learning and finding practical solutions for those facing difficulties. It indicated 
awareness of later agenda items where methods to aid this process could be discussed.  
116.  Korea  commended the Secretariat for its effor ts on this significant issue, including the 
provision of thoughtful technical assistance. Echoing the sentiments of previous speakers, Korea 
affirmed that transparency was one of the core principles of the WTO, contributing to enhanced 
predictability and s tability in the current uncertain global trade climate. Korea maintained that 
notifications within the WTO should be regarded as a public good beneficial for all Members.  
117.  Korea also expressed its belief that seeking ways to improve compliance with the exi sting 
notification requirements under the SCM Agreement would enable traders to proceed in a more 
informed and confident manner. In addressing the challenges some Members might face in preparing 
notifications, Korea expressed a desire to continue discussio ns with other Members on these issues.  
118.  China  emphasized its strong commitment to the obligation of transparency and noted that it 
had exerted every effort to submit its notifications on time. Concerning the currently low rate of 
notifications, China  expres sed concern and hoped that those Members that had not yet submitted 
their notifications would do so at the earliest opportunity.  
119.  On the other hand, China, identifying as a developing Member, pointed to  the difficulties that 
some Members faced, which it al so experienced. These included challenges in coordinating among G/SCM/M/125  
 
- 16 - 
 
  domestic authorities to collect and collate information, as well as apprehensions regarding the 
potential international repercussions following notifications.  
120.  With respect to the second topic under this agenda item, the Chair recalled that at the 
Committee's October 2022 regular meeting, a number of Members had indicated their willingness to 
continue discussions on the proposal from the United States regarding procedures for questions and 
answe rs under Articles 25.8 and 25.9 of the SCM  Agreement.5 
121.  The United States  recalled that it had formally proposed that written responses to initial 
questions under Article 25.8 be provided within a period of 60 days and that follow -up questions be 
answered in writing within 30 days.  
122.  The United States reiterated its belief that mandatory deadlines were preferable. However, it 
proposed an alternative approach where Members would agree to make their best efforts to submit 
written responses within a period of 60  days, and responses to follow -up questions within 30 days. 
It also acknowledged that deadlines of 90 and 60 days might also be possible. Taking into account 
comments received, the United States recognized that additional time might be required to consult 
with sub -central governments. If these proposed flexibilities were still not adequate, the 
United States invited those members that felt this way to share what they considered would be a 
reasonable timeline for responding to questions  
123.  Its recent experienc e of answering the Article 25.8 questions in writing from two previous 
meetings reinforced its belief in the appropriateness of the proposed changes. The United States 
expressed its willingness to make the necessary adjustments.  
124.  The United States reiterate d that the proposal was not extraordinary, as it reflected the 
existing accepted practice among Members for providing answers to questions during the regular 
review of subsidy notifications. It highlighted that this practice was followed by most Members wh en 
responding to Article 25.8 questions.  
125.  According to the United States, this was reform by doing at its most original. Members had 
taken it upon themselves to do things the right way, in the spirit of the organization, to promote 
transparency, fairness, a nd collegiality. This  was something that all Members should support.  
126.  The United States believed that providing responses in writing was a best practice, especially 
beneficial to those members that had colleagues in their capitals unable to attend the SCM m eetings 
in Geneva and hear incomplete oral responses to questions with no possibility of asking follow -up 
questions.  
127.  Given the increasing recognition of the need for greater transparency, as demonstrated in the 
recent report conducted by the World Bank, IM F, WTO, and OECD, as well as the establishment of 
various subsidy databases, the United States expressed hope that this simple proposal could be 
moved forward in the name of reform.  
128.  The European Union  referred to its previous statements made in the Committ ee, expressing 
its support for the proposal which it believed would improve and strengthen the provisions of 
Articles  25.8 and 25.9 of the SCM Agreement. It stated that the proposal introduced practical ways 
to make their commitments on transparency more m eaningful without creating unreasonable 
burdens on Members.  
129.  According to the European Union, the timelines proposed by the United States were generous 
and that although oral responses already required preparation, to transform those into written 
replies m ust require little additional effort. It had suggested that this would enormously improve the 
transparency under the SCM Agreement and help to fill gaps where notifications were incomplete. 
The European Union also reiterated the call by the United States f or Members who had problems 
with the proposal to clarify what exactly their objections were.  
130.  New Zealand  expressed support for the suggestions that had been made and acknowledged 
the revisions that had also been undertaken to address the concerns expressed  by Members. It 
 
5 G/SCM/W/557/Rev.4 . G/SCM/M/125  
 
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  encouraged Members to continue to engage constructively on this proposal, with the aim of reaching 
a consensus.  
131.  Japan  affirmed its continued support for the proposal and reiterated the significance of the 
obligation of notification and tran sparency, which were the most fundamental to the WTO system. 
Japan also stated that the sharing of subsidy information in written format in a timely manner would 
be advantageous for all Members.  
132.  Chinese Taipei  reiterated its support for the proposal noting that it was to improve the 
transparency and the timeliness of the information requested by Members. Noting the revisions to 
address the concerns raised by some Members, it urged all Members to reconsider and support the 
proposal.  
133.  Canada  reiterated its support for the efforts of the United States to advance this proposal, 
which aimed to enhance the transparency and completeness of notifications. It recalled that the 
subsidy notification process, along with the information request process outlined in Articles 25.8 and 
25.9 of the SCM Agreement, were essential for achieving the transparency goals outlined in the 
Agreement. The proposal offered valuable guidelines that would introduce greater predictability and 
transparency to the question -and-answer process without imposing an excessive burden on 
Members. Canada emphasized that this matter had been under discussion at the Committee for 
several years, and it encouraged Members to engage constructively in an effort t o reach an 
agreement.  
134.  Brazil  expressed its support for the proposal.  
135.  Australia  reiterated its support for the proposal, believing it effectively reflected the current 
and long -standing practice within the Committee. The proposal would enhance clarity in th e 
Committee's procedures and practice, facilitating improved transparency and comprehension of 
Members' subsidy programme s. It provided best -efforts guidance on timeliness and responses. The 
successive revisions made to the proposal addressed the concerns expressed by some Members and 
noted the acknowledgment of time constraints related to consultations with sub -central 
governments.  Therefore, Australia continued to support keeping this item on the agenda for further 
discussion and expressed hope that conse nsus could be reached.  
136.  The United Kingdom  expressed its support for the proposal noting that transparency was an 
essential component of the SCM Agreement including the question -and-answer process. It echoed 
the European Union's point that written responses  were common at both the Committee and the 
wider WTO, implying a minimal burden on Members. It also commended the United States for 
addressing the concerns that had been raised by Members, including timeframe flexibility and 
acknowledging potential resourc e constraints and difficulties coordinating across different levels of 
government. Noting that this item had been on the agenda for some time, the United Kingdom urged 
all Members with outstanding concerns to specify the additional and specific text change s required 
to address them. It also encouraged the United States to consider circulating an updated draft of 
the proposal that incorporated some of the revisions, such as the 90 -day and 60 -day timeframes for 
follow -up, as this could be beneficial for Membe rs to see how these changes could be reflected in 
the text.  
137.  India reiterated its concerns which had been expressed in previous meetings, that imposing 
binding deadlines would create an additional burden beyond what was already required in the 
Agreement. It  emphasized that the transparency obligation has already been onerous for developing 
countries, including Least Developed Countries (LDCs).  
138.  The Russian Federation  expressed its continued support for efforts aimed at improving the 
timeliness and completenes s of notifications and other trade -related information under the 
SCM Agreement. Regarding the extension of the proposed deadlines to 90 and 60 days and indication 
that the deadlines would not be mandatory and should be met on a best -effort basis, it would be 
helpful for Members if the text of the proposal was amended accordingly. The Russian Federation 
remained open to further discussion.  
139.  China  emphasized its position of fulfilling its transparency obligations in accordance with the 
relevant provisions of t he WTO Agreement. It stated that the proposal lacked sufficient support or G/SCM/M/125  
 
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  groundings in the existing rules. According to China, further tightening the rules, even if not 
mandatory, would not be practical when existing obligations had not been adequately i mplemented. 
It highlighted the United States' failure to provide a written response strictly within the 60 -day 
deadline it proposed. China had submitted written questions to the United States regarding the 
Inflation Reduction Act and the Chips Act on 20 Oc tober 2022. The Secretariat had circulated the 
questions, and China had received responses on 12 January 2023, which was over 80 days after the 
United States had received the request.  
140.  China hoped that Members, including the United States, would consider its concerns and that 
the United States would lead by example in adhering to its own proposed rules. China remained 
open to further discussions.  
141.  The United States  took note of the sugges tions to circulate an updated version of the proposal 
and stated it would do so following the meeting. Addressing China's remarks, the United States 
acknowledged the delay in responding to China's questions but emphasized that the measures were 
being imple mented in real -time and they had provided the most up -to-date information possible on 
relatively new measures. Recalling previous discussions, the United States also highlighted the 
significant delays, spanning years and almost decades, in China's response  times when answering 
its questions, contrasting with the proposal's 60 to 90-day timeframe.  
142.  Reaffirming its commitment to making its best efforts to meet the proposed timelines, the 
United States expressed willingness to consider an extension to 90 and 12 0 days if proposed. It 
believed that setting an aspirational goal for timely and transparent information exchange would be 
beneficial for all WTO Members.  
143.  In response to India's concerns about additional binding deadlines, the United States 
acknowledged I ndia's apprehension and stated that it would strive to make it even clearer that the 
proposed timeframes were intended as best practices or aspirational goals rather than legally binding 
obligations.  
144.  The Chair  stated that it appeared that Members wished to  continue discussions on those issues 
at the next regular meeting of the Committee.  
145.  The Committee took note  of the statements made.  
7  PERMANENT GROUP OF EXPERTS  
146.  The Chair  recalled that the term of Mr Rabih Nasser had expired in the spring and was still 
vacant. Although there had been multiple nominations to fill two vacancies at the spring 2023 
meeting of the Committee, during the consultations of the previous Chair some Members had 
indicated that they would not be able to join a consensus on the election of  three of the candidates. 
As a result, the Committee had only been able to fill one of the vacancies.  
147.  The Chair informed the Committee that there had been no development or change in the 
positions of those Members that had previously expressed concerns ab out the relevant candidates. 
For this reason, the Chair was not in a position to make a proposal to fill the existing vacancy.  
148.  The Chair also noted that one additional vacancy would arise following the expiry of the term 
of Ms Marina Foltea in spring  2024. In view of this, the Chair would initiate a new election process 
from the beginning, aiming to fill both vacancies at the next meeting of the Committee. To facilitate 
this, the Chair would inform the Committee about the nomination process for the two vaca ncies and 
the consultation schedule to be followed in due course.  
149.  The Committee took note  of the statement made.  G/SCM/M/125  
 
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  8  JOINT PROPOSAL FROM CANADA, THE REPUBLIC OF KOREA, JAPAN, NEW ZEALAND, 
NORWAY, THE UNITED KINGDOM, AND THE UNITED STATES  
150.  The Chair recalled tha t this proposal6 had been previously discussed at informal meetings of 
the SCM Committee, held in conjunction with joint informal meetings of the Committees on Anti -
Dumping Practices, Safeguards, and Subsidies and Countervailing Measures, on 20 June 2023,  and 
2 October 2023. As agreed at the informal meeting on 2 October 2023, the proposal had been placed 
on the agenda of this meeting for further discussion.  
151.  The United Kingdom  welcomed the discussion of this proposal at the formal Committee 
meeting, noting the previous conversations that had taken place at the informal Committee meeting. 
The United Kingdom saw the process to be like that in the Working Group on Implementation o f the 
Anti-Dumping Committee. It saw close parallels between the two where Members suggested topics 
and could then decide from a compiled list what to discuss.  
152.  Although Members could discuss any topics at the regular meeting, informal groups could help 
them move away from pre -cleared statements and encourage more constructive deliberations 
between Members.  
153.  The United Kingdom noted that the proposal did not prescribe specific topics for discussions 
but aimed to provide space for Members to discuss shared int erests among experts, including on the 
implementation of the SCM Agreement. The proposal would achieve some of the desires expressed 
by Members at recent discussions for space to look at the SCM Agreement's frameworks and 
procedures, potentially leading to  immediate enhancements, including those related to notifications.  
154.  The United Kingdom recognized that questions regarding the scope, logistics, and sensitive 
matters had been brought up at the informal Committee  meeting  and through dialogues with 
Members. Providing insights from the UK's perspective, it was considered crucial for the working 
group to be effective that Members be able to propose relevant topics on countervailing measures 
and subsidies. Acknowledging the full schedules during Rules Week, the suggestion was made for 
the informal meeting to be scheduled during a lunchtime slot, allowing Members to determine the 
frequency and timing.  
155.  The United Kingdom recognized that some topics might be sensitive and, therefore, would not 
be chosen for discussi on, aligning with the procedures of the Anti -Dumping Working Group. The 
initial focus should be on non -sensitive subjects. It proposed sharing experiences as a way to assist 
in facilitating subsidy notifications and discussed the possibility of deliberatin g on the information 
requirements of the notification questionnaire. This included interpretation of each section and what 
is provided, such as the meaning behind 'background and authority,' and the consideration of 
additional guidance and illustrative exa mples to aid Members in communicating with their public 
authorities. The sharing of experiences in completing notifications was also suggested.  
156.  Building on the Secretariat's recent efforts on technical capacity issues, the United Kingdom 
viewed this forum as an opportunity for all Members to learn from each other about the 
considerations involved in completing notifications, the challenges encountered, and the solutions 
developed, emphasizing that sharing these experiences could benefit all Members.  
157.  The Uni ted Kingdom urged Members to participate constructively in the proposal and to 
support it. It requested that Members with further questions, concerns, or suggestions communicate 
with the co -sponsors for consideration.  
158.  New Zealand  echoed the statement made by the United Kingdom and stated that its 
investigating authority greatly valued the informal technical exchanges currently taking place in the 
Safeguard and Anti -Dumping contexts. It recognized the benefit in establishing similar technical 
exchanges in th e SCM Agreement context. In the interest of involving a broad number of Members 
and seeking wide input on topics of interest for discussion, New Zealand endorsed the proposal to 
initiate such discussions within the Committee itself. Regarding questions rai sed in previous 
meetings about the choice of topics for discussion, New Zealand acknowledged the different interests 
 
6 The latest version of the proposal can be found in RD/SCM/63/Rev.2  
 G/SCM/M/125  
 
- 20 - 
 
  and sensitivities noting that the selection of topics would be based on shared interest and consensus 
among Members.  
159.  Canada  saw value in ho lding discussions among Members on technical issues related to trade 
remedies, such as those conducted in the Anti -Dumping Working Group on Implementation. It 
highlighted that these informal discussions provided Members with an important opportunity to sha re 
their experiences and to learn from the practices of other Members. Canada also noted the inclusive 
nature of the discussion group, pointing out that all Members were involved in the process, from 
coordinating dates and topics to taking on the role of d iscussant and participating in the meetings, 
which were made more accessible with the support of the Secretariat.  
160.  Canada also saw value in creating a similar discussion forum for SCM -related issues. It 
acknowledged the questions raised by other Members dur ing the informal discussions regarding the 
intended scope and coordination with other Committees, agreeing that these were significant 
considerations. Canada considered the process for the Working Group on Implementation as a model 
for selecting topics and  concurred on the necessity to avoid duplicating efforts and overloading 
delegations with preparatory work.  
161.  Canada also thanked the United Kingdom for its earlier comments on the selection of topics, 
finding them very valuable as they provided a practical example of various issues that could be 
addressed.   
162.  The United States  echoed the comments made by the United Kingdom. The model being used 
in the anti -dumping and safeguards area could be a useful and important forum for Members and 
their experts  to establish informal technical exchanges on the topics covered by the SCM Agreement. 
Such a group could facilitate technical and practical discussions among administrators, particularly 
allowing for more experienced Members to share their experiences and  lessons learned with other 
interested Members.  
163.  Similar to the approach taken in the anti -dumping and safeguards area, the United States 
believed it was important for those more experienced in the areas covered by the SCM Agreement 
to share their expertise  with other Members. In addition,  it would be  more constructive to conduct 
these discussions outside of the normal Committee business and in an informal setting, enabling 
Members to openly discuss the various topics selected and ask questions where applica ble. The 
discussions held over the past 10 years in the anti -dumping and safeguards fora had been both 
constructive and a learning experience for all Members. The United States  looked forward to hearing 
the views of other Members on this proposal.  
164.  Japan  called on other Members who had not joined the proposal to clarify their questions and 
concerns and to discuss them in order to constructively solve the problems together.  
165.  Korea  welcomed the United Kingdom and Japan for co -sponsoring the proposal since the l ast 
informal meeting and echoed the statements made by previous speakers. According to Korea, given 
the technical and practical aspects of SCM -related  issues, there could be several topics available for 
Members to discuss, which would enhance common unders tandings.  
166.  In an effort to foster informal and flexible discussions among Members,  and based on 
Members' meaningful experience in the Working Group on Implementation in the Anti -Dumping 
Committee, establishing an informal venue under the SCM Committee would  be beneficial. This 
would facilitate an inclusive and transparent process, such as the selection of discussants and topics 
by all Members.  
167.  China  thanked the co -sponsors for their efforts to improve the Committee's operations. China 
maintained a positive a nd open attitude towards the idea of having informal technical discussions 
within the Committee. However, it pointed out that the current proposal lacked clarity on specifics, 
such as how to manage the tim ing and what topics to discuss and suggested that M embers should 
continue their discussion on these issues.  
168.  China then provided two suggestions. First, given the Committee's current practice of holding 
its regular and special sessions on the same day with a full agenda, it would be difficult to add an 
informal meeting for technical discussions. Therefore, China proposed that the timing of the formal G/SCM/M/125  
 
- 21 - 
 
  and informal meetings, as well as the schedules of the Committee on Anti -Dumping Practices, 
Safeguards Committee and the SCM Committee could be coordinated more  effectively. Second, 
regarding the selection of topics for discussion, a consensus would be  necessary to avoid 
disagreements, given the sensitive nature of the subsidy issues.  
169.  India sought clarification on the proposal's assertion of the existence of sepa rate informal 
technical discussion groups for both anti -dumping and safeguard topics. Specifically, it requested 
information on the informal technical discussion group mentioned with reference to safeguard topics. 
India recalled a similar proposal in the S afeguard Committee regarding the migration of informal 
technical discussions, currently organized by the Friends of Safeguard outside the Committee, to the 
Committee itself.  
170.  India reiterated its concerns expressed during the informal session of the Commit tee on the 
issue. Considering the Committee's workload and the sensitive nature of certain aspects of the 
subject, it believed the matter warranted further discussion. India also thanked the United Kingdom 
for outlining potential discussion topics such as non-controversial issues related to the scope of the 
agreement, notification requirements, experience sharing, and challenges faced. It, however, noted 
that adequate opportunities for such discussions existed in forums like technical sessions organized 
by the Secretariat recalling the work done by the Secretariat recently with delegations. India 
affirmed its willingness to constructively participate in discussions on the matter.  
171.  The Russian Federation  reiterated its support for efforts to enhance the effici ency of the SCM 
Committee. Reflecting its stance during the informal meeting, the Russian Federation generally 
favoured the establishment of an informal group for technical discussions. The Russian Federation 
acknowledged the proposal's broad scope, encomp assing not only CVD investigations but also 
subsidies. According to the Russian Federation, the informal group should provide a platform for 
exchanging experiences on CVD investigation laws and practices, contributing to the effective 
functioning of the SC M Agreement without introducing additional obligations or deviating from 
existing ones.  
172.  Addressing the proposal's focus on subsidies, the Russian Federation expressed scepticism 
about the added value it would bring. While understanding the proponents' int ention to encourage 
informal exchanges where speakers could share knowledge and learn from each other, it would be 
challenging to identify specific technical issues in the subsidies domain that could drive such active 
engagement.  
173.  The Russian Federation cit ed the Working Group on Implementation of the Anti -Dumping 
Committee as a positive example of informal technical discussions proving mutually beneficial. It 
envisioned a similar exchange in the CVD realm, enhancing understanding and fostering better 
implem entation. However, it remained uncertain about specific technical issues in the subsidies 
domain that could stimulate meaningful participation in such discussions.  
174.  The Russian Federation also sought clarification regarding the procedural aspects, particula rly 
the selection of topics and discussants. It understood that Members would reach consensus through 
the Chair and Secretariat to determine these aspects prior to group meetings. It also acknowledged 
that the group would operate in an informal mode, witho ut formal sessions, resulting in informal 
submissions and statements from Members. The Russian Federation requested confirmation that its 
understanding of the proposed group's working methods was accurate. It also sought clarification 
on whether summaries of group meetings would be circulated and whether the Chair would provide 
reports at SCM Committee meetings. Lastly, the Russian Federation reaffirmed its openness to 
further discussions on ways to strengthen discussions on issues under the SCM Agreement.  
175.  Brazil  expressed its support and thanked the co -sponsors for the comprehensive explanations 
and clarifications provided. Noting that technical exchanges conducted in a constructive spirit always 
yield positive outcomes, it expressed eagerness to participat e and contribute to the proposed 
discussions and emphasized the importance of such exchanges in enhancing transparency and 
understanding within the SCM Committee.  
176.  Australia  acknowledged the proposal's potential to enhance the functioning and operations of 
the Committee. It also expressed support for Members to have informal discussions within the 
Committees to exchange insights on their trade remedy regimes, particularly investigation practices. G/SCM/M/125  
 
- 22 - 
 
  It reiterated its support for the proposal and expressed enthu siasm for engaging in these discussions 
in the future.  
177.  The European Union  thanked the proponents of the proposal for their comprehensive 
explanations and information regarding their proposal's rationale. It stated that it would need to 
reflect further on t he proposal's details, particularly the scope of the proposed group and the 
feasibility of scheduling it within the Rules Week, given other meetings and the Working Group on 
Implementation of the Anti -Dumping Committee. However, it expressed openness to fu rther 
discussions indicating that it would carefully consider the proposal.  
178.  Singapore  highlighted its appreciation for the Anti -Dumping Committee's Working Group on 
Implementation and expressed support for focused and constructive discussions within the SC M 
Committee on the implementation of the SCM Agreement. It acknowledged the proponents' 
clarifications regarding the proposal's modalities, including consensus -based facilitator and topic 
selection.  
179.  Singapore expressed ongoing consideration regarding the necessity of establishing an 
additional group specifically for technical discussions, suggesting that alternative modalities 
employed by other Committees could be considered. It cited the Trade Facilitation Committee's 
thematic sessions during formal meeti ngs and the TBT and SPS Committees' thematic sessions on 
the sidelines of their meetings as examples of flexible and consensus -driven approaches. Singapore 
concluded by affirming its willingness to engage in further discussions with the proponents of the 
proposal to explore potential options.  
180.  The United States  thanked delegations for their thoughtful comments and insights on the 
proposal. It pointed out  that the Friends of Safeguards proceedings was not yet an official 
Committee -adopted group but noted that  it served as an example of collaboration among Members 
on important issues.  
181.  The United States agreed with the call for careful coordination on scheduling and topics, 
emphasizing that the goal would be to avoid duplication of discussions in other working g roups. It 
proposed that the Secretariat would coordinate the timing of these meetings and suggested that not 
all three technical working groups need ed to meet every Rules Week.  
182.  The United States also underscored the importance of creating a space for Membe rs to discuss 
any relevant topic related to the SCM Agreement, without initially limiting the scope of discussions. 
It agreed with the call for consensus -based selection of topics and suggested a similar approach to 
the Working Group on Implementation, whe re minutes were not recorded and only the names of 
discussants and topics discussed were identified. This approach, according to the United States, 
would foster a free and open exchange of information and practices among Members.  
183.  The United States emphasiz ed that the goal of the proposed informal technical discussion 
group was to facilitate technical exchanges among experts, promote practice sharing, and enhance 
understanding of complex issues related to the SCM Agreement. It reiterated that the group shoul d 
not be a forum for making formal recommendations or recording Members' comments, preserving a 
space for candid discussions.  
184.  The Chair observed that several Members were willing to examine the proposal and that some 
others, despite their ongoing questions  or concerns, were also open to further discussions. In light 
of these reactions, the Chair stated that Members would need additional time for further discussions. 
Accordingly, the Chair recommended that the co -sponsors continue to discuss their proposal w ith 
other Members and consider including it on the agenda for the next meeting, if deemed appropriate.  
185.  The Committee took note  of the statements made.  
9  DRAFT REPORT BY THE COMMITTEE TO THE COUNCIL FOR TRADE IN GOODS ("CTG") 
ON THE BETTER FUNCTIONING OF THE COMMITTEE  
186.  The Chair explained th at on 3 May 2023, the outgoing Chair of the Committee had issued 
document RD/SCM/62  attaching the list of four items that Members instructed the Secretariat to 
explore , as well as the three issues that were still under Members' consideration. On 8 June 2023, G/SCM/M/125  
 
- 23 - 
 
  immediately following his election, the Chair, together with the chairs of the Anti -Dumping and 
Safeguards Committees, had invited Members to a joint informal meetin g which was held on 20 June 
2023. Based on the informal discussions that took place at that meeting, two documents had been  
issued on 21 June 2023. The first document was a written process listing the four issues that 
garnered consensus at the joint inform al meeting and providing the deadline of 3 July 2023 for any 
views, objections or comments. The second document was a room document RD/ADP/37 - 
RD/SCM/64 -RD/SG/67  listing the one issue which remained under Members' consideration for future 
discussion. On 4 July 2023,  document G/ADP/32 -G/SCM/165 -G/SG/284  had been  issued reflecting 
the four issues agreed upon by the three Committees in the context of the reform of the functioning 
of these Committees. On 21 July 2023 the three Chairs had sent an invitation to a joint informal 
meeting to continue consideration of the remaining issue which was the use of e -agenda. This 
informal meeting had been held on 2 October 2023. At that meeting, on the issue of e -agenda, it 
had been  agreed to use, as of the spring 2024 meeting and on a tria l basis to be reviewed by the 
Spring 2025 meeting, the feature of uploading Members' statements and facilitating access to 
relevant documents for meetings. This outcome had been issued in document RD/ADP/39  – 
RD/SCM/67  - RD/SG/69 , and also had been subject to a written pr ocedure which had ended in the 
approval by the Committee of the use of these features of the e -agenda tool. This was later circulated 
as an issue agreed upon by the three Committees in document G/ADP/33 -G/SCM/166 -G/SG/285 . 
187.  The Chair also noted that on 2 October 2023, the Secretariat had delivered a presentation on 
the functioning of the Committee, which had been agreed upon in document G/SCM/165 . An 
audio/video recording of this presentation and the presentation itself were avai lable on the 
Committee's webpage.  
188.  The Committee then proceeded to discuss the report to the CTG on the improvements in the 
functioning of the Committee, using as a basis the draft sent on 11 October 2023 in document 
RD/SCM/68  and taking into consideration the discussion that took place under the previous item. 
The Committee discussed the wording of the report in informal mode, and then adopted the report .7 
189.  The Committee also took note  of the Chair's statement.  
10  A CASE FOR REBALANCING THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING 
MEASURES (ASCM) – POLICY SPACE TO PROMOTE INDUSTRIALISATION IN DEVELOPING 
COUNTRIES – ITEM REQUESTED BY THE AFRICAN GROUP  
190.  On behalf of the African Group, South Africa  referred to the submission in document 
G/SCM/W/589  and said that Africa  was still locked into production patterns dominated by extractive 
sectors, with exports concentrated in a few resource -based and light manufacturing sectors, and 
with limited representation in advanced manufacturing and services. These trade patterns pose d 
balance -of-payment risks, and the over -concentration of production and supply among a few 
countries posed systemic risks to the economic resilience of many developing economies and 
hindered shared prosperity. It further noted that Africa had substantial potential to develop various 
industries by leveraging its natural and comparative advantages, but that this potential was hindered 
by unfair and imbalanced trade rules that allowed developed countries to offer excessive subsidies 
that sustained their compa rative advantages.  
191.  According to South Africa, the current forms of constraints on policy space were unworkable 
for developing countries, as they limited their ability to be resilient or adaptable to change. 
Industrialization options were limited, and the c urrent policy space was not fit for its original purpose. 
Developing countries struggled to pursue the same development pathways that the currently 
developed countries had taken, and there was little empirical evidence of successfully developing 
economical ly in other ways.  
192.  South Africa indicated that there was a need for a multilateral framework that would enable 
developing countries to have the policy space to industrialize in a manner that maintained the 
requisite balance to enable Members to respond to t he current challenges of global commons and to 
industrialize to address high levels of concentration on key essential products that posed a risk to 
resilience building for future crises. This framework should also promote international trade. The 
WTO neede d to discuss and evaluate policy space differently and assess how it fit into the current 
circumstances. This included assessing whether the policy space was sufficient in today's world for 
 
7 Subsequently circu lated in document G/L/1505  – G/SCM/167 . G/SCM/M/125  
 
- 24 - 
 
  developing countries that were still in the catch -up process, and whether these countries had 
sufficient policy space to decide how to advance onto increasingly complex, value -adding 
manufacturing and industrialization pathways.  
193.  In the context of the SCM Agreement, the African Group was proposing a non -exhaustive list 
of issues that could be considered by Members to rebalance trade rules to enable industrialization. 
This was important in light of the relevance of subsidy disciplines to emerging policy orientations 
increasingly adopted by many governments. The role of subs idies in spurring investment remained 
an important policy lever for developing countries, including LDCs.  
194.  South Africa explained that the African Group was proposing that Members revisit policy space 
articles that had since expired during implementation of  the SCM Agreement post -Uruguay Round. 
This would include revisiting certain thresholds, such as definitions of actionable subsidies, in the 
context of addressing contemporary challenges like climate change and the need for sustainable 
industrialization.  
195.  The African Group also proposed that Articles 8 and 27 of the SCM Agreement be reinstated 
noting that the thresholds in the expired carve -outs were too conservative for current challenges, 
and that both Article s required updating to be fit for purpose.  
196.  South Africa indicated that the African Group looked forward to an active and focused 
engagement on its paper to address the constraints identified that limited the policy space to drive 
industrialization, economic diversification, and structural transformatio n. It expected that the SCM 
Committee and other relevant bodies would earnestly consider the issues and concentrate on the 
concrete proposals that it had tabled for recalibration of the SCM Agreement with a view to 
registering clear outcomes at MC13.  
197.  Egypt  endorsed the submission in document G/SCM/W/589  and associated itself with the 
statement made by South Africa on behalf of the African Group. It highlighted the imperative of 
industrialization for sustainable economic growth and prosperity in the African c ontinent. It noted 
that current trade patterns were marked by over -reliance on limited upstream industries with 
concentration in certain sectors, which was vulnerable and limited economic diversification and 
development potential.  
198.  Egypt recognized the subs tantial potential of African countries to develop various industries 
leveraging natural and comparative advantages, but emphasized that imbalanced trade rules 
allowing developed countries to offer excessive subsidies perpetuated disparities in comparative 
advantages. It observed that developing countries faced unworkable constraints on policy space, 
limiting their ability to adapt and promote industrialization in an equitable and sustainable manner. 
It also supported the call for a level playing field where  developing countries have the same policy 
tools available to them as developed countries. It endorsed the need for a multilateral framework 
that would provide policy space to industrialize, address concentration risks, and promote 
international trade.  
199.  Egypt acknowledged the global climate change challenge and proposed that policy tools and 
flexibilities within the SCM Agreement framework be unlocked to enable developing countries to 
participate in green industries and promote green industrialization. It su pported the proposal for:  
• Revisiting policy space articles, including revising thresholds, considering contemporary 
challenges like climate change;  
• Re-establishing special and differential treatment ("S&DT")  flexibilities with transitional 
periods to level  the playing field for addressing global challenges;  
• Reinstating Article 8 of the SCM Agreement to permit green -light subsidies for research and 
development, regional development, and environmental protection;  
• Updating the thresholds in the expired carve -outs in Article 27 and Article 8; and  
• Revisiting the criteria contained in Annex VII of the SCM Agreement.  
 
200.  India stated that the African Group's proposal to create necessary flexibilities and policy space 
in the SCM Agreement was evidence -based and necessary for developing countries to support 
domestic industries in their early period of growth. India also noted that developed countries ha d 
used subsidies and other policy options to support their own industries, while international  trade G/SCM/M/125  
 
- 25 - 
 
  rules have effectively curtailed policy space for developing countries. Therefore  there was a need to 
review the provisions identified by the African Group in the submission, including Article 3 and 
Article  8, as well as the S&DT provisions in Artic le 27. India hoped that the Committee would engage 
earnestly in constructive discussions on these proposals for a concrete outcome.  
201.  Costa Rica  shared the African Group's desire for greater industrialization and structural 
transformation in their countries.  However, it questioned whether these objectives could be achieved 
without introducing flexibility into the current multilateral rules, including the SCM Agreement. 
According to Costa Rica, promoting and achieving industrialization and structural transform ation in 
a manner harmonious with WTO rules is possible. Costa Rica cited its own transformation from a 
primarily agricultural economy to a diversified exporter of finished goods, including electronic 
products, pharmaceuticals, biotechnology, and IT produc ts. 
202.  Costa Rica noted that industrialization did not require picking winners and losers, but rather 
effective public policy. The current WTO disciplines had benefited Costa Rica, providing equal footing 
for developing countries and developed countries in terms of granting subsidies. Costa Rica had 
successfully industrialized in a manner consistent with its international obligatio ns and hoped to 
engage in further discussions on this matter . 
203.  The European Union  agreed that the topic of development and industrial policies was important 
and deserved in -depth deliberation. While it was not ready to have a definitive position at this sta ge, 
the European Union wanted to deepen the shared understanding of the issues raised in the paper 
and raised the following questions:  
• With respect to section 1.3, to what extent did the African Group consider that subsidization 
by developing countries was  currently limited by budgetary constraints and to what extent 
was it limited by the disciplines in the SCM Agreement?  
• With respect to section 1.4, the proposal argued that subsidies for certain goals "should not 
have to face countervailing measures or oth er actions." Did the African Group consider that 
the assessment of such subsidies should no longer take into account adverse effects to the 
interests of other Members? The European Union also requested  more information about the 
statement that "developing countries had been the main target of countervailing measures 
by developed economies". The European Union's countervailing measures mainly concerned 
a small number of developing countries while most developing countries were not affected 
at all. Was this a lso the case overall?  
• With respect to section 2.1, the European Union shared the view that the current subsidy 
rules were no longer fit for purpose and should be updated. Did the African Group consider 
that changes should include also strengthening of rule s and addressing gaps, or did they 
only see a need for additional flexibilities?  
• With respect to sections 2.2 and 2.3, the paper correctly highlighted the vulnerabilities and 
dependencies of Africa. Should any changes to the subsidy rules be specific to Af rica or to 
specific types of developing countries, or should all developing countries be treated 
identically?  
• With respect to section 2.4, the paper highlighted diversification of economies and 
integration into global value chains as key aims. However, hig h levels of subsidization in 
global markets constituted an obstacle to the industrialization of developing countries. Any 
new entrant from a developing country would have to compete against heavily subsidized 
existing producers. In this sense, the European  Union saw a risk that loosening WTO subsidy 
rules might make industrialization harder, not easier. What was the view of the African Group 
on this?  
• With respect to sections 2.6 and 2.7, what changes other than an increase in thresholds the 
African Group wo uld consider necessary in Article 8 of the SCM Agreement?  G/SCM/M/125  
 
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  • With respect to sections 3.2 and 3.3, the African Group made several references to 
introducing new objective criteria and modifying existing numerical thresholds. However, the 
paper also stated that  it did not want to prejudge or predetermine thresholds. How would 
the African Group propose to determine such numerical values in an evidence -based 
manner?  
204.  The European Union noted  that the paper contained valuable ideas that deserved closer 
consideration  and more deliberation. Development should be a key aspect of the deliberations on 
trade and industrial policies. In particular, the deliberations should take into account the 
industrialization needs of developing countries and help them to better integrat e into global value 
chains.  
205.  Canada  welcomed the discussions on developing countries' industrialization and development. 
It was open to considering additional flexibilities in the rules for certain Members for a specified 
period of time to support industria lization. However, Canada did not believe that more policy space 
would necessarily support development, and there was a risk that it could exacerbate existing 
inequalities.  
206.  Canada believed that to advance this work, it needed more specific reasons, such a s examples, 
as to what Members in question planned to do with the types of flexibilities that were proposed, and 
which Members were seeking them. As noted at the recent Senior Officials Meeting by Canada, this 
could really be seen to be a member -by-member discussion. Even in the context of a broader 
discussion, it was hard to see how it would be appropriate to provide all developing Members the 
new flexibilities that were being requested given significant differences in capacity and role in world 
trade betw een Members.  
207.  According to Canada, the consideration of any potential flexibility should also be conditional 
on a broader rules modernization, including meeting established or enhanced transparency 
requirements. Canada believed that a Member -driven dialogue  would be a promising path forward 
to improve the collective understanding of the issues and to lay the groundwork for potential 
solutions, alongside other proposals to enhance and modernize rules relating to industrial subsidies 
and state-owned enterprise s ("SOEs"). 
208.  Korea  noted  the need for policy space for LDCs, and had been actively participating in WTO 
reform discussions to build a more inclusive and resilient multilateral trading system. However, 
noting Costa Rica's insightful experiences, Korea argued  that strengthening existing WTO rules and 
formulating new ones to reflect current trade realities could be more powerful tools for industrial 
development, given multifaceted and rapidly evolving global challenges. In this regard, Korea 
proposed factual an d evidence -based case studies as well as consideration of specific circumstances 
in each Member to identify what was needed and how to move forward.  
209.  Japan  recognized that subsidies could be a necessary tool for development, but expressed 
concern about the African Group's proposal to relax prohibited subsidies, such as export subsidies 
and subsidies contingent upon the use of domestic over imported goods. These subsidies had a 
highly distorting effect on the market and were therefore prohibited under the SCM  Agreement.  
210.  The OECD reports had shown that overcapacity fuelled by government support for SOEs was 
a major cause of trade distortions in heavy industries. SOEs that were not economically viable could 
persist in the market due to government support, creati ng "zombie" firms that hindered new 
entrants, prevented the growth of existing firms, and adversely impacted both trade and 
competition. Government support to SOEs could also negatively affect competition both domestically 
and internationally, deprive cons umers of benefits such as lower prices and a wider range of 
products, and hinder innovation efforts.  These issues c ould also occur in developing Members and 
overcapacity c ould impede their domestic industrialization and overall development . 
211.  Japan consider ed that there was a need for an evidence -based discussion on the causal 
relationship between individual issues. Japan also stated that discussions for reviewing rules to 
strengthen discipline on subsidies as necessary were equally important and sho uld have been 
considered in balance with the abovementioned issues.  G/SCM/M/125  
 
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  212.  China  recognized that developing Members and LDCs faced grave challenges in their 
development and industrialization process. It supported the African Group's pursuit of policy space 
and ha d taken an active part in the related discussions at the various Committees, contributing to 
addressing the concerns of developing, especially African Members. In addition, in order to help 
developing Members accelerate their industrialization process and better fit into the global value 
chain, China proposed further discussions on the possibility of resuming the non -actionable subsidies 
and promoted the WTO to make greater contributions to the global sustainable and green 
development.  
213.  Singapore  stressed th e importance of ensuring that proposed subsidy reforms strike the right 
balance to achieve their intended outcomes of supporting the legitimate developmental and 
industrialization needs of Members, without further encouraging or triggering the proliferatio n of 
harmful and trade -destructive subsidies, or a race to the bottom. It thanked Costa Rica for sharing 
its domestic experience on how the current SCM Agreement allowed adequate policy space for 
industrialization. Singapore expected to hear from other Mem bers on their experiences and 
expressed its willingness to share its own experiences in future discussions. It also encouraged 
Members to engage in constructive and evidence -based discussions to pave the way forward in the 
lead-up to MC13 and beyond.  
214.  The United States  believed  that all WTO members share the objective of developing their 
economies to provide meaningful, safe, and well -paying jobs for their workers, while also 
safeguarding the environment for future generations. It acknowledged that many coun tries, 
including itself, were enacting policies to aid in industrial development, but also noted that some 
were using the guise of industrial policy and the moniker of a developing country to subsidize, 
intervene, and distort the market in the goal of reac hing not just domestic market share targets, 
but the goal of dominating global markets as well . These practices, according to the United States, 
would hinder the ability of all countries, particularly developing and least developed countries, to 
compete fa irly. 
215.  The United States observed that such policies would not only impede fair competition but also 
deter developing countries from attracting the necessary investment for industrialization due to the 
extensive market distortions. It was pointed out that w hile developed countries may have defences 
against such practices, these were often not available to developing countries, affecting their 
industrialization capacity.  
216.  The United States highlighted the question of the rules on subsidies for industrial devel opment 
could not  just be a question of providing narrowly tailored and targeted exceptions for development, 
but also the need to rein in policies that would make it fundamentally harder for fair competition to 
win the day . It emphasized that discussions sh ould be grounded in shared facts and understandings, 
noting the African Group's argument that developing countries have been the main targets of 
countervailing measures by developed economies as misleading. It clarified that none of the United 
States' 175 CVD orders were on exports from LDCs, and the majority of them involved self -
proclaimed developing countries with significant manufacturing and industrial operations that could 
not reasonably claim that the risk of facing CVD orders ha d limited their polic y option s. 
217.  The United States stated that, beyond CVDs, the Africa Group was also proposing to weaken 
the prohibition on subsidies contingent on the use of domestic over imported goods as a tool for 
industrialization for developing countries based on an agr eed threshold.  
218.  The United States also noted that while subsidies contingent on using local goods instead of 
imported goods were prohibited, there were no prohibitions in the SCM Agreement on subsidies 
generally focused on local manufacturing, local labour , local capital, local financing, local intellectual 
property, or the use of local service suppliers. In fact, it was not clear that subsidies strictly to service 
suppliers were subject to discipline under the SCM Agreement. Yet, the United States was not seeing 
developing countries in need taking advantage of these types of subsidies.  
219.  The United States questioned the rationale behind the belief that the current rules on 
prohibited subsidies and countervailing duties serve as an obstacle to industrializatio n. The 
conversation at the WTO was deemed important  to understand why developing countries felt 
hindered by these rules and why the proponents believed   additional, narrowly tailored flexibilities 
might facilitate industrialization. The United States sought to understand  how more specific and G/SCM/M/125  
 
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  targeted flexibilities might be a better response to Member concerns compared to broad flexibilities 
that apply to all sectors for all developing countries.  
220.  It had to  be recognized that there was no scenario under whi ch the United States, or probably 
any other developed country, would consider additional flexibilities for all developing countries to 
industrialize, not when relatively advanced, wealthy, or influential Members claimed they were 
automatically eligible for  blanket special and differential treatment intended for less advantaged 
Members. Any discussions on flexibilities would necessitate proponents to present a feasible method 
for differentiating between developing countries that need additional targeted flex ibilities and those 
that do not.  
221.  Finally, the United States highlighted that the lack of transparency in many countries' 
subsidization practices impeded understanding and undermined the fairness and confidence in the 
multilateral trading system. As part of  any discussion, the United States said that the WTO should 
explore how to condition any potential flexibilities on the provision of meaningful transparency.  
222.  The Russian Federation  reaffirmed its understanding of the desire of the develop ing Members, 
including LDCs, to ensure policy space to promote industrialization.  It referred to its statements 
previously expressed at the Retreat on WTO Reform in September and the Senior Official's Meeting 
that week . According to the Russian Federation, the Membersh ip should look comprehensively at all 
the contemporary challenges facing developing and especially least developed countries. It called 
for a comprehensive approach to address major distortions and their trade consequences, including 
spillover effects of l arge-scale anti -crisis measures, green policies, and unilateral restrictive 
measures. Otherwise, the expected relief described in the African group's proposals could be 
significantly diminished.  
223.  The United Kingdom  noted that the WTO rules were crucial for a stable global trading system 
that benefited all Members, but acknowledged that experiences among developing countries have 
been varied. It recognized the information from the Africa Group, yet noted the presence of differing 
views among Members, includin g developing countries. The United Kingdom underscored the 
necessity to address these concerns, echoing the representative from Costa Rica's viewpoint that a 
universal solution was not feasible and caution would be needed to avoid unintended consequences.  
224.  The United Kingdom agreed on the need to openly consider how the WTO could better promote 
industrialization and support sustainable development, emphasizing the importance of examining 
the adequacy of current flexibilities under the SCM Agreement. It stres sed the need to understand 
the connection between the rules and the challenges highlighted by the African Group, and how the 
specific proposals would achieve the intended objectives.  
225.  Upon reviewing the proposals, the United Kingdom made two main observatio ns. First, the 
United Kingdom noted that the proposals went beyond reinstating previous flexibilities and 
introduced new concepts. It said that some proposals, including some of those on countervailing 
duties, lacked detail and would require technical disc ussions to understand. It questioned the 
introduction of a percentage threshold on domestic content and sought clarification from the African 
Group on what percentage domestic content would be deemed necessary and how it would be 
calculated, and what mecha nisms would be implemented to monitor compliance.  
226.  Secondly, the United Kingdom pointed out the need to consider these proposals in the context 
of wider African Group and G90 proposals. It observed that the proposals under discussion seemed 
to intersect wit h others in different Committees, emphasizing the importance of understanding how 
these various proposals interrelate, including those on TRIMS and the Annex II of the LDC proposals. 
For example, proposals to revise the coverage of paragraph 2(a) of Articl e 27 would cut across the 
G90 Annex II proposals. The United Kingdom asked the African Group to clarify how these different 
sets of proposals would interact.8 
227.  Lastly, the United Kingdom reaffirmed the importance of establishing comprehensive 
dialogues on these significant issues, suggesting the use of existing and new structures to first 
 
8 The United Kingdom submitted its questions in document G/SCM/W/591  dated 7 December 2023.  G/SCM/M/125  
 
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  analyse and understand the existing rules and flexibilities, and then consider how to enhance their 
effectiveness for Members to achieve their development objectives.  
228.  Australia acknowledged the challenges faced by some developing countries and LDCs in their 
industrialization and economic development, and recognized the important contribution international 
trade could make to a country's economic development, as illustrated by Costa Rica. Australia had 
long supported targeted S&DT  that responded to individual country needs. It recognized the role 
that subsidies could play in meeting legitimate public policy objectives and their importance as a 
policy tool to support developin g countries' economic growth. However, it also noted that subsidies 
and other state interventions could have significant trade -distorting and anti -competitive impacts if 
left unchecked.  
229.  Australia understood the need for subsidies to meet some legitimate ob jectives, such as to 
address an energy or health crisis or to support transition to a green economy, and was open to 
research on the use of these types of subsidies. However, the SCM Agreement provided a critical 
safeguard to limit the negative externaliti es that could arise from policies such as subsidies.  
230.  Australia noted that the SCM Agreement only prohibited export subsidies and subsidies that 
were contingent on import substitution. Further, in order to take action against any other type of 
subsidy, a M ember must demonstrate that it was a specific subsidy and was causing injury, 
nullification or impairment of benefits or a serious prejudice to its interests. The burden of proof was 
on the complaining Member. Australia was therefore interested in explorin g further what was actually 
driving the proponent's concerns. It welcomed any evidence or examples of specific policies that 
developing countries had been prevented from implementing due to the expiry of Article 8. For 
example, subsidies targeting research  and development, regional development and environmental 
protection could still be provided in a manner that was consistent with the SCM Agreement, in 
particular where the subsidies were non -specific. Australia asked whether the proponents had 
actually att empted to design subsidies for research and development, regional development or 
environmental protection in a way that was consistent with the SCM Agreement and, if so, what 
specific difficulties had they encountered.  
231.  Australia believed there was scope fo r further evidence -based investigations into perceived 
underutilisation of current flexibilities in the WTO rules. It recommended that this be done as part 
of the broader deliberations on trade and industrial policy which had been proposed by the European 
Union and which Australia supported. It also supported investigating how best to enable developing 
country Members to strengthen their ability to comply with the SCM Agreement requirements, 
including designing their subsidies for research and development, regional development and 
environmental protection in a way that was consistent with the SCM Agreement.  
232.  Chinese Taipei  echoed the views of previous speakers and said that there were some questions 
to be answered and uncertainties to be clarified before furt her discussion could take place. It called 
for more evidence, data, or statistics to show how the SCM Agreement had negatively impacted the 
proponents' pursuit of industrialization according to their needs. Chinese Taipei also agreed with 
Costa Rica and Si ngapore that there was no one -size-fits-all solution for Members' pursuit of 
industrialization. Successful industrialization usually required other policies or conditions, such as a 
friendly investment environment to attract foreign companies that could br ing capital and 
technology. Therefore, according to Chinese Taipei, it would not be appropriate to focus the 
discussion on or pursue flexibilities for just a certain group of Members, whose conditions might 
differ from each other, let alone the fact that M embers outside of the group could also differ from 
the Members of the group.  
233.  Chinese Taipei also noted that while it was open to further discussion of the proposal, the 
rules and disciplines of the SCM Agreement should not be rolled back as a result. It wo uld be more 
appropriate to focus on the specific needs of specific Members instead of focusing on a proposal to 
be applied to all other Members, which might not deserve this kind of flexibilities.  
234.  Thailand  underlined the importance of having further dialog ues on policy space and state 
intervention on industrial support in order to refine the scope and gather additional data and 
evidence from external organizations or the WTO Secretariat. Thailand also agreed with Chinese 
Taipei on the importance of preventi ng any regression in the WTO agreements.  G/SCM/M/125  
 
- 30 - 
 
  235.  Brazil  stressed the importance of industrial policy to promote development, and welcomed the 
African Group proposal as an opportunity for constructive discussion. Brazil supported the proposal 
to consider industrial subsidies in the broader context of the Africa n Group initiative to discuss 
industrial policy in the WTO. It noted that industrial policy encompasses several agendas well beyond 
subsidies, such as technology transfer, investments, and intellectual property. Brazil commended 
the African Group for refle cting this in its papers on industrialization, development, and policy space.  
236.  Brazil emphasized the importance of having the proper tools for achieving sustainable 
development, while preserving and strengthening the rules -based multilateral trading system.  Brazil 
was keen to have meaningful discussions on the TRIPS Agreement and its relationship with 
technology transfer, industrial policy, and development. It also called for horizontal discussions on 
subsidies, covering both industrial and agricultural subs idies stressing the need to establish a parallel 
means of subsidies reform in agriculture that would go hand in hand with any deliberations on 
industrial subsidies at MC13.  
237.  Lastly, Brazil reiterated that special and differential treatment must be an integr al part of any 
discussion on industrial policy, and must apply to all developing countries, including Brazil.  
238.  South Africa  welcomed the comments and questions that it had received noting that it would 
provide detailed responses if the  questions were put in writing. In the meantime, South Africa would 
respond to some of the comments received.  
239.  Regarding whether constraints were fiscal or related to policy space, South Africa suggested 
it could be both, likening it to a "chicken and egg" situation. It sought certainty in rules to induce 
necessary reallocations and incentivize investments. It also mentioned the possibility of needing 
additional disciplines, suggesting this could be a topic for further discussion within the Group to 
ensure a balance in discussio n and policy space, while limiting negative spillovers.  
240.  Regarding proposals to make articles fit for purpose, the African Group suggested updating 
outdated thresholds and incorporating additional objectives or criteria, like the degree of export 
diversific ation. They observed that developing countries were major targets of anti -dumping and 
countervailing actions, with significant percentages of investigations directed against them.  
241.  The interaction between TRIMS and the SCM Agreement was addressed in the SCM  paper of 
the African Group. Prohibitions on local content requirements were a constraint on developing 
countries' ability to diversify their productive sectors. The lapse of certain flexibilities in the SCM 
Agreement created uncertainties, leading to ambi guity in practical applicability and a relationship 
between TRIMS and the SCM Agreement.  
242.  According to South Africa, the paper provided sufficient evidence for their case and the African 
Group was open to further engagement, especially for genuine considera tions of available evidence. 
It urged for discussions not to be stalled and advocated for multilateral discussions to manage the 
surge in unilateral subsidy use, which it noted was happening even among developed countries. It 
underscored the African Group' s desire to have the same policy tools used by others for 
industrialization and called for a level playing field and policy space for developing countries. It 
stressed the need for a multilateral framework to provide necessary policy space for industrializ ation, 
maintaining balance and responding to global challenges.  
243.  South Africa concluded by appreciating the comments and insights shared, emphasizing their 
commitment to engaging on these issues and ensuring that agreements were fit for purpose. It also 
clarified that the African Group's intent was not to undermine existing articles or increase obligations, 
but to ensure a level playing field, remaining open to further engagement on their submissions 
related to industrial policy space for development.  
244.  Egypt recalled that some delegates had referred to the discussion as a type that might occur 
under the WTO's deliberative function, but expressed suspicion about the validity of this idea. Egypt 
emphasized that subsidies were a crucial tool for countries to deve lop their industrial base and 
pursue development goals. It also noted that while subsidies were included in discussions, the 
limitations imposed by existing agreements might render the deliberative function less helpful. Egypt 
pointed out that the flexibil ities in current agreements, which were considered hard law, were too 
restrictive for developing countries to achieve legitimate objectives.  G/SCM/M/125  
 
- 31 - 
 
  245.  Egypt stressed the legitimacy of developing countries, particularly those in Africa, seeking to 
use certain provisi ons or flexibilities to support their industrial and development aspirations. Egypt 
cited historical examples of developed countries using similar instruments dating back to 1958 and 
1960 to support their industries. Egypt proposed that the Committee shoul d consider organizing 
thematic sessions to address and further discuss flexibilities in the SCM Agreement, particularly 
those supporting industrialization. These sessions would allow Members to share their experiences, 
as demonstrated by Costa Rica, which Egypt identified as a beneficial example for developing 
countries.  
246.  Egypt also suggested that the Secretariat compile a catalogue of flexibilities relevant to 
industrialization within the context of the SCM Agreement. This would aid in providing data and 
evidence to support their cause based on specific documents and assessments of available 
flexibilities. Egypt envisaged that the design of the thematic sessions would facilitate learning from 
those who had utilized these flexibilities, aiding in the developm ent of their industries. Egypt 
concluded by presenting this as an idea and queried whether the Committee would endorse this 
proposal.  
247.  The Chair  said that several delegations had underlined the importance of evidence -based 
discussions on this matter, with s ome noting that some groundwork would need to be undertaken 
to reach a common understanding of the elements of such a conversation. He also noted that some 
delegations had shared an interest and that Egypt had directly requested that the Secretariat provid e 
some background information with a focus on the existing flexibilities within the SCM Agreement. In 
this respect, the Chair suggested that it could be useful for the Secretariat to provide a factual 
presentation on the SCM Agreement for interested Member s, specifically oriented to the existing 
flexibilities under the Agreement. Finally, the Chair said that there had been a second conversation 
around Members' own experiences, which could be the subject of a second thematic discussion.  
248.  The United States  requested clarification, both from Egypt and the Chair, regarding their 
proposal. It inquired whether the intention was for the factual background or report to focus solely 
on the flexibilities within the current applicable rules of the SCM Agreement as it st ands, or if the 
proposal aimed to examine a broader set of flexibilities.  
249.  In response to the United States, the Chair stated that his understanding was that the 
presentation would be based on the existing flexibilities under the SCM Agreement, and would be  a 
purely factual thematic presentation along those lines.  
250.  India thanked Egypt for making those proposals and agreed with both ideas presented. It 
suggested moving forward in this manner to ensure the proposals and issues raised by the African 
Group were d iscussed with positive intent and to achieve quick, constructive outcomes.  
251.  The Chair noted that his suggestion seemed agreeable and stated that the Secretariat would 
be in contact in the near future regarding the provision of such a presentation.  
252.  The Commi ttee took note  of the statements made.  
11  DELIBERATIONS ON STATE INTERVENTION IN SUPPORT OF INDUSTRIAL SECTORS – 
ADAPTING THE WTO RULEBOOK TO RESPOND TO CONTEMPORARY CHALLENGES – ITEM 
REQUESTED BY THE EUROPEAN UNION  
253.  The European Union  recalled that in its sub mission of 20 February 2023  in WT/GC /W/864 , 
titled "Reinforcing the Deliberative Function of the WTO to Respond to Global Trade Policy 
Challenges", it had proposed to enhance deliberations among WTO Members on a number of key 
issues affecting global trade. One of the identified topics was state intervention in support of 
industrial sectors, which included subsidies as one of the key types of measures that should be part 
of the deliberations by the Membership.  
254.  The European Union suggested that deliberations, to be productive, should aim for substantive 
policy deliberations, not legal debates on whether or not a particular measure falls under the 
definition of subsidy under the SCM Agreement. Instead, the focus should be on how to improve 
transparency and reach  a consensus on what would be the acceptable parameters for countries' 
intervention in support of industrial sectors. The deliberations should identify gaps in the current G/SCM/M/125  
 
- 32 - 
 
  rules and explore alternatives on how to address these gaps, leading to a discussion  on possible 
improvements in the current rules. There should be openness to consider targeted adjustments to 
provide flexibilities for interventions that were well designed, subject to strict transparency 
requirements, and only having a minimal impact on t rade. 
255.  The European Union also emphasized that the deliberations should include a strong 
development dimension, deliberating on subsidies while considering the development angle of 
industrialization and helping developing countries better integrate into glo bal value chains. It noted  
the usefulness of subsidies in achieving legitimate policy objectives such as industrialization and the 
need to consider the positive and negative impacts of industrial subsidies. The European Union had 
agreed with the proposal o f a thematic session on flexibilities and sharing experiences of developing 
countries, as suggested by Egypt earlier, fitting into the process the European Union wished to 
launch after MC13.  
256.  In terms of process, the European Union suggested that MC13 shoul d set up a Member -driven, 
dedicated space to conduct these discussions. Given the scope of the deliberations would extend 
beyond subsidies and beyond the current parameters of the SCM Agreement, setting up a dedicated 
space for deliberations seemed useful.  
257.  Regarding transparency, the European Union noted the central role of the SCM Committee, 
especially concerning transparency and notifications. It encouraged all Members to duly notify their 
subsidies to have the best possible factual basis for the delibera tions. However, it also pointed out 
the challenges with the existing transparency arrangements, including the insufficient information 
disclosed by governments and the decreased percentage of WTO Members providing subsidy 
notifications to the SCM Committee  from 75% in 1995 to 35% in 2021, with further decrease noted 
in the 2023 notification cycle.  
258.  The European Union pointed out that the current transparency arrangements needed 
strengthening. This would involve increasing the incentives for Members to notify and improving the 
mechanisms for counter -notification. It emphasized the need for more guidance on the information 
that should be included in subsidy notifications, especially from major subsidizers, highlighting that 
the lack of transparency in sta te interventions was a significant problem. For meaningful policy 
debates, transparency was essential, and there was a need to extend it to measures currently 
underreported.  
259.  Specifically, the European Union highlighted the role of SOEs in channelling state  support, 
such as below -market financing or energy inputs, and noted the lack of sufficient information on 
such support. It suggested that in addition to improving the existing notification regime, new 
approaches to transparency could be developed. This wo uld include creating more opportunities for 
policy discussions on subsidies and state support for industrial sectors. It recommended that such 
information should be provided regardless of whether a specific state support measure was 
considered a subsidy by  the notifying country.  
260.  The European Union proposed that WTO Members could voluntarily subject themselves to 
new, enhanced mechanisms of peer reviews of their subsidy policies. This approach would facilitate 
a more meaningful engagement in discussions rais ed by partners. Furthermore, it expressed 
openness to considering other ideas from Members on how to enhance transparency in these 
matters.  
261.  Canada  expressed its support for the European Union's proposal to establish a dedicated 
Member -driven space for disc ussions on state intervention in the economy. This approach aligned 
with Canada's long -term goal of modernizing and strengthening multilateral rules. Canada was 
particularly interested in engaging on the issue of industrial subsidies, including those provi ded by 
SOEs, and in improving the transparency of such measures. It viewed a Member -driven dialogue as 
a promising way forward to enhance collective understanding of the issues and lay the groundwork 
for potential solutions.  
262.  Canada suggested that this dial ogue could focus on several areas: firstly, the context for 
industrial policymaking, including a range of state interventions impacting trade and production, not 
limited to industrial subsidies and SOEs; secondly, relevant WTO rules and principles, includi ng gaps G/SCM/M/125  
 
- 33 - 
 
  in the existing rules; thirdly, transparency; and fourthly, challenges faced by developing countries 
in industrializing.  
263.  Canada proposed that a temporary Working Group could provide a factual report on these 
discussions at MC14 and potentially prop ose initiatives, concrete actions, or recommendations for 
further work. It recognized the complexity and multidimensionality of these discussions and the time 
they would require. However, it emphasized the need to lay the groundwork for modernizing subsidy  
rules to level the playing field and support industrialization for all Members.  
264.  The United Kingdom  stated that it valued the multilateral rules -based system but recognized 
that significant rule gaps were affecting the ability of Members to address trade h arms. These gaps 
needed to be addressed to ensure a level playing field, which included adequately capturing harmful 
practices of SOEs and improving transparency.  
265.  Reflecting on the recent discussions at the Retreat on WTO Reform and Senior Officials 
meetin g, the United Kingdom noted that the contemporary challenges impacting industrial policy 
and development were shared concerns. These challenges included the rise of protectionism and the 
risk of unchecked subsidy races that could potentially harm all Members. The United Kingdom al so 
noted  the different perspectives among Members regarding the priority areas impacting 
industrialization and sustainable development, and the various approaches to address them. It 
supported the need for a comprehensive, meaningful, and inclusive dialogu e on these issues. It also 
emphasized the importance of Members approaching discussions with an open mind to build a 
collective understanding of distortive interventions, how the multilateral rules could enable Members 
to support economic and development o bjectives, identify where gaps existed, and how to address 
them.  
266.  According to Korea , trade and industrial policy was a crucial issue that the WTO should address 
to uphold the rules -based multilateral trading system, considering the rapidly evolving global trade 
landscape. Korea emphasized the importance of adequately and inclusively defining the scope of the 
deliberations, taking into account various pressing global common challenges. This approach would 
pave the way for comprehensive and constructive discu ssions on this significant issue. With respect 
to the design of the structure of such deliberations, Korea stated that adopting a balanced manner 
was essential, ensuring that no critical issues were overlooked.  
267.  Japan  expressed its support for the European Union's proposal noting that it was necessary to 
examine whether the current WTO rules related to state interventions were functioning sufficiently 
to ensure a level playing field and a stable business environment. If the disciplines were found to be 
incom plete, Japan thought that they should be considered for review. Japan supported the idea of 
launching a framework to discuss "state intervention and trade" at MC13 and to deliberate on these 
points. It also agreed with the European Union that a lack of tra nsparency exacerbated the problem.  
268.  According to Japan, while many Members had been actively implementing industrial policies 
with diversifying approaches, opaque and trade -distorting subsidies might cause future issues, such 
as overcapacity. Enhanced disci plines would not restrict developing Members but rather expand 
opportunities for equitable growth. However, Japan cautioned that subsidies could lead to increased 
competition for subsidies, negatively impacting vulnerable developing Members.  
269.  Japan also obs erved that while subsidies could be an appropriate tool for achieving policy 
objectives like environmental protection and climate controls, weakening disciplines on subsidies 
contributing to such objectives could easily legitimize trade -distorting subsidie s. Therefore, Japan 
believed that careful discussion was needed to avoid such a situation.  
270.  New Zealand  indicated that its statement was relevant for both this and the previous agenda 
item. It drew attention to the risks arising from the substantial growth and proliferation of subsidies 
internationally in the past decade, which could create further tensions in an already stressed 
multilateral trading system. New Zealand believed these issues warranted deeper and more 
thorough consideration and further reflec tion on the best forum for doing so. It saw a need for efforts 
to ensure a clearer understanding of existing rules to improve transparency and to more fully explore 
specific needs and issues. This exploration should include how existing rules and flexibili ties could 
address these needs and issues.  G/SCM/M/125  
 
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  271.  New Zealand recalled that the multilateral trading rules under the WTO were only one part of 
a broader complex picture. It also stressed the need not to lose sight of the outstanding existing 
commitments to addres s major trade and economic distortions and environmental harms arising 
from current very high levels of agricultural domestic support and fisheries subsidies. Given this, 
New Zealand asserted the importance of redoubling efforts to address these outstandin g areas while 
taking forward deliberate consideration in an appropriate forum of the additional issues raised in the 
two papers submitted by the African Group and the European Union.  
272.  The Russian Federation  reiterated its view, previously expressed in the r etreat in September 
and the Senior Official's Meeting that week, regarding the ideas presented in the proposal. The 
discussions at these sessions had demonstrated a number of contemporary challenges faced by the 
Members. Among these challenges were the lac k of transparency in subsidization, especially in green 
subsidies, the need for more information on the nature and effects of subsidies, and the need to 
address their trade -distorting effects. The Russian Federation emphasized that these were not the 
only challenges, noting that the distortive effects of state support, including in agriculture, must be 
taken into account.  
273.  The Russian Federation believed that these challenges should be considered comprehensively. 
For this purpose, it suggested that issues su ch as the spillover effects of large -scale anti -crisis 
measures, green policies, and unilateral restrictive measures should also be addressed. Therefore, 
it advocated for a balanced approach in defining the scope of deliberations to make them truly result -
oriented.  
274.  Australia  welcomed the proposal's focus on state intervention in support of industrial sectors. 
It recognized the important role subsidies can play in meeting legitimate public policy objectives but 
emphasized that state intervention could have significant trade -distorting and anti -competitive 
impacts if left unchecked. It pointed out the urgent need to address growing state intervention in 
industrial sectors to reduce the risks of detrimental impacts on the international trade system.  
275.  Australia noted that international cooperation and coordination through the WTO would be 
crucial in managing this issue. It mentioned the clear interest of WTO Members at the recent informal 
retreat on trade and industrial policy and at the  Senior Officials' Meetin gs for future deliberations 
on these issues. At these meetings, many Members indicated that these issues were complex, cross -
cutting in nature, and required nuanced discussion.  
276.  Australia supported the European Union's proposal for dedicated Member -driven deliberations 
post-MC13 to consider these complex issues in more detail, identify areas of convergence from 
informed discussions, and recommend evidence -based policy responses for consideration at MC14. 
This approach would ensure that Members had sufficien t time to undertake the relevant groundwork, 
including a stocktake of issues, and would ensure proper consultation of relevant stakeholders, 
drawing on the expertise of different technical Committees such as the SCM Committee.  
277.  Relevant to the SCM Committee , Australia supported an initial focus on transparency and 
design of industrial subsidies, the role of SOEs, as well as the potential negative spill overs of massive 
subsidies and state intervention on global markets, and the development impacts of such 
interventions.  
278.  Singapore  expressed its support for the European Union's proposal noting that having a 
dedicated space with would be useful to consolidate discussions and decide on the next best actions 
or recommendations. Singapore also recalled the past dis cussions in the previous informal meeting 
of the Heads of Delegations and the Senior Officials Meeting where Members had called for a clearer 
scope on the discussion as well as clear topics.  
279.  Recalling that the proposal had been discusses at the retreat he ld in September as well as at 
the Senior Officials Meeting earlier that week, India noted that by the very nature of this proposal, 
it deserved discussion in this Committee and other relevant WTO regular Committees.  
280.  India believed that the proposal contai ned several ideas which should be discussed in the 
respective Committees on the issues within their remit. India also felt that the proposal should be 
split into separate submissions on the respective items as contained in the proposal. While thanking 
the European Union for bringing the proposal to the Committee, India was of the view that going G/SCM/M/125  
 
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  forward, it would prefer to engage in an evidence -based discussion on the subject after the 
proponent provided sufficient details, practical examples, and statistic s on what it sought in these 
deliberations. India specifically wanted elaborat ion on the points with evidence and practical 
illustrations, namely the overall scope of deliberation the proponent wished this Committee to 
engage in, and which issues the propo nent wished to deliberate in this Committee. It suggested that 
the proponent should bring in an Agreement -specific proposal, similar to the detailed submissions 
made by the African Group on policy space.  
281.  India sought explanation and elaborations on the sco pe of terms like well -designed subsidies 
and detrimental subsidies for climate and trade, the negative spillover of state intervention, the 
tension resulting therefrom in international trade, and the design of measures. It also requested 
clarification on t he enhanced transparency, including changes the proponent proposed or envisaged 
in the existing provisions and processes, and the insufficiency in the existing provisions, processes, 
and rules.  
282.  India also questioned whether the proponents were looking for a review of existing rules as 
elaborated in the first intervention by the European Union, and if so, what their ask was and what 
evidence and facts they would bring to the table in this regard. India also highlighted the importance 
of external engagement, anticipating that Members would present their interests in their domestic 
constituencies and in the Committees.  
283.   India expected that the WTO would discuss only those issues within its remit and not venture 
into issues belonging to other international bodie s. India viewed the WTO regular Committees as the 
right forum for discussion and sought clarity on the need expressed by the proponent for a dedicated 
space. It urged the European Union to bring in facts, evidence, and statistics to make their proposal 
clear. According to India, the proposal in its current form lacked preciseness and depth regarding 
what exactly it sought in deliberation on the topic and only contained selected observations on the 
negative spill over of industrial policy.  
284.  India also noted some similarity between this proposal and the next four Agenda items (12, 
13, 14, and 15) based on past deliberations on transparency -related matters. It wanted to 
understand the proponents' view on this.  
285.  According to India, the proposal needed a lot of groundwork before it could be taken up for 
meaningful discussion. It did not see the proposal as ripe for placing before ministers for any 
direction or guidance in MC13 and emphasized the importance of not overloading the MC agenda at 
the cost of other rip e issues.  
286.  Brazil  expressed concerns that the sought deliberative discussions or mandates might fall 
outside the scope of existing WTO mandates. It viewed the approach of the proposal as not being 
development -oriented, but rather focusing on classifying typ es of industrial subsidies as good or 
bad, based on criteria foreign to trade. According to Brazil, this could lead to loosening requirements 
for possibly non -WTO-compliant green programme s in developed countries, while simultaneously 
tightening discipline s for programme s of other Members that would not meet certain unilaterally -
defined criteria. It believed this might ultimately shift the goalposts against developing countries by 
legitimizing large -scale green transition subsidization programme s in develop ed countries, which 
could be trade -distorting and protectionist in nature. Brazil was concerned that this course of action 
ran the risk of further fragmenting r ules and disciplines, undermining the WTO as a trade 
liberalization institution. Finally, Brazil  reiterated the importance of any discussion including a critical 
assessment of unilateral measures by certain develop ed Members allegedly based on environmental 
concerns.  
287.  The United States  agreed with the European Union that the deliberative function of t he WTO 
needed reinvigoration, particularly in the area of state intervention. According to the United States, 
the WTO rulebook, including rules on industrial subsidies, was insufficient in addressing the 
pervasive, opaque, and cross -sectoral efforts by cer tain members to dominate domestic and 
international markets unfairly at the expense of fair competition  and support  and adherence to the 
international trading system's rules and norms. It also noted that the European Union's paper 
correctly pointed out the  lack of disciplines to address trade distortions caused by the non -market 
practices of SOEs. The United States emphasized that the multilateral trading system was not 
designed to handle a situation where a country, responsible for a significant portion of  global G/SCM/M/125  
 
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  manufacturing output, was not aiming for fair trade or competition, but rather using government 
power to dominate multiple global  industries for political and economic gains, particularly at the 
expense of developing countries.  
288.  The United States a sked all WTO Members, especially developing countries seeking to 
industrialize, to consider whether additional flexibilities would be sufficient without also addressing 
attempts by some members to create globally dominant market shares across key industrie s. 
Members should discuss these issues at the WTO and highlight why the WTO rules failed to address 
them. However, according to the United States, Members could not limit any potential discussions 
to subsidies or SOEs alone, as no rules on subsidies alone would be sufficient to address non -market 
policies and practices.  
289.  The United States echoed other Members noting that no rules could be meaningful or effective 
without transparency, a fundamental component of the WTO. Fair trade would not possible when 
Memb ers failed to adhere to transparency obligations, failed to live up to commitments in their 
protocols of accession, and failed to make measures public. The United States had invested 
significant resources in identifying, understanding, evaluating subsidy programme s, and counter -
notifying them, but few other WTO members had the capacity and resources to do the same. The 
United States then questioned how members could evaluate these measures and their potential 
impact if they were non -transparent, consistentl y under notified, and their scale was hidden from 
public evaluation.  
290.  According to the United States, transparency, as it currently stood, was not sufficient and 
needed to be discussed going forward. Efforts by highly transparent Members to provide extra 
transparency in hopes of setting an example had not been successful, and this information had been 
used against them in countervailing duty investigations.  
291.  The United States noted that the discussed policies were unfair and disadvantaged workers in 
both deve loping and developed countries, the very people the WTO should empower and lift up. 
Therefore, it was necessary to have real conversations about how the WTO could address these 
issues.  
292.  The European Union  stated that it would engage with all Members with th e goal of launching 
deliberations on industrial policies and trade at MC13. It expressed its confusion over the view of 
some Members who suggested that the topics proposed by the European Union did not fall within 
the mandate of the WTO or existing agreeme nts. According to the European Union, even if certain 
issues were not identified in the existing agreements, such as the role of SOEs in the economy, this 
should not prevent the WTO from tackling these issues. It emphasized that the impact of SOEs on 
international trade was significant and currently not disciplined by the WTO.  
293.  The European Union also clarified that its aim post -MC13 was not to negotiate new disciplines 
but to deliberate and discuss, using facts, evidence, and statistics, to identify gaps an d targets for 
the WTO. It noted that the WTO's current rules, crafted 30 years ago, might not address 
contemporary challenges effectively and that failing to tackle these challenges might render the WTO 
irrelevant in a few years.  
294.  Regarding the venue for th ese deliberations, the European Union explained that it did not 
intend to conduct them in the SCM Committee, as the scope of the deliberations was much broader 
than what the SCM Committee administers. It anticipated that other aspects would need to be 
addressed in these deliberations in the post -MC13 period.  
295.  The European Union also stated that its primary goal was not to loosen the rules but to tighten 
them. It highlighted the current subsidy race, which was detrimental especially to developing 
Members, lea ding to a situation where only those with deep pockets could compete and leveling the 
playing field would require further subsidies. If the current rules allowed for a subsidy race, then 
there was something wrong with these rules, and they needed to be exa mined and potentially 
revised to fill gaps and prevent such races.  
296.  Responding to the comments from India, the European Union stressed that the goal was not 
to negotiate after MC13. It also indicate d the need for further clarity on what would be negotiated 
and saw the deliberative process after MC13 as necessary to use facts, evidence, and statistics to G/SCM/M/125  
 
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  identify gaps. The European Union hoped that perhaps at MC14, these areas could be jointly 
identified, leading to negotiations afterward.  
297.  The Committee took note of the statements made.  
12  SUBSIDIES AND OVERCAPACITY – ITEM REQUESTED BY AUSTRALIA, CANADA, THE 
EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  
298.  The United States  explained that over the past several years, the co -sponsors had requested 
the agenda item on subsidies and overcapacity to highlight different aspects of the problem of global 
overcapacity, specifically caused by immense Chinese subsidies in targeted industries. They started 
this effort by showing how subsidies could lead to ove rcapacity, particularly highlighting the impact 
of subsidies in sectors like steel, aluminum, and solar, where Chinese subsidies had created capacity 
far beyond market demand, detrimentally affecting industries worldwide.  
299.  They further highlighted thematic issues resulting from Chinese subsidies, especially the 
negative impacts these subsidies created by disincentivizing innovation, as well as the role of 
subsidies and China 's SOEs. The discussion primarily had focused on the impact of Chinese 
companies on a dvanced economies competing against China in the industrial sectors targeted for 
subsidization by China.  
300.  The United States acknowledged the importance of industrialization to Members at all levels 
of development, particularly developing countries, and view ed that China 's pervasive and distortive 
subsidies undermined the industrialization strategies of developing countries and impeded their 
development. Based on studies by the OECD, it was consistently noted that Chinese subsidies and 
other state support hav e created global excess capacity in various sectors, increased Chinese 
exports, depressed worldwide prices, and created adverse production and employment effects in 
market -oriented countries, a phenomenon more pronounced today than a decade ago.  
301.  The WTO, World Bank, IMF, and OECD in a recent report noted that the drive toward industrial 
policies to promote strategic sectors might distort international competition, especially against 
smaller, fiscally constrained developing countries. The United States stat ed that no Member targeted 
as many sectors, or with the same volume of distortive support, as China, which was emblematic of 
China's state -led, non -market approach. China had identified at least 10 broad sectors it deemed to 
be strategic and sought to domi nate via its industrial plans, including next -generation information 
technology, new materials, biopharmaceuticals, high -performance medical devices, and energy -
saving and new energy vehicles. The United States also noted that China used various supporting  
measures to dominate these industries, including not only traditional subsidization practices but also 
massive new subsidies via government guidance funds. Through these support measures and other 
non-market policies and practices, China denied countries at all levels of development, including 
least developed countries, the opportunity to compete on equal footing across industries that would 
account for a substantial share of global GDP.  
302.  As academics ha d noted, in sectors suffering from global overcapacity " if China 's subsidy 
system prevents layoffs and bankruptcies and maintains production, it not only fails to bear its share 
of the burden of the negative shock, but it pushes more of its cost onto other countries that do not 
deploy such subsidies". In this way, among other things, "China exports its unemployment to other 
economies. " 
303.  In the aluminium sector, the OECD estimated that in China, non -financial government support 
over 2013 -17 amounted to almost USD8 billion. According to the United States, this would raise the 
question of how any developing country trying to establish a competitive aluminium industry could 
compete with such government support from a country accounting for 57 percent of global pri mary 
aluminium production. Researchers determined that a one -unit increase in China 's subsidies would 
decrease the total exports of downstream sectors using the base metal as input in competitor 
countries by an average of 16.6%, showing that as China 's sub sidies filtered downstream, they 
would cause lost export opportunities for competitors around the world. This problem would affect 
not just developed economies but other WTO Members, large and small alike.  
304.  The WTO, IMF, World Bank, and OECD had also noted that subsidies in one country could 
trigger subsidies in others. For example, in using tax incentives to attract foreign direct investment, G/SCM/M/125  
 
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  countries might engage in a race to the bottom that would hurt all subsidizing countries while 
blunting the intended  effect of the subsidy for each one. This rationale response to other countries ' 
subsidies, if not addressed, would leave countries at all stages of development worse off.  
305.  The United States cited economic research confirming the detrimental impact of subs idies on 
developing country members of the WTO. One study highlighted that such a pattern was more likely 
to disadvantage developing countries compared to developed WTO members. According to the study, 
"the additional concern here comes from the fact that the developing country and LDC firms do not 
receive the same level of support received by their developed country counterparts, which 
significantly constrain their market access both in home and foreign markets" . 
306.  Addressing China's previous claims that the  United States, the European Union and other 
developed countries also had substantial industrial subsidy programme s, the United States indicate d 
that developed members used industrial subsidies. It, however, emphasized that China 's industrial 
subsidies wer e considerably larger relative to its GDP, covering a wider range of sectors, and causing 
unprecedented distortions in international trade. The United States also pointed out a fundamental 
difference in practices, especially regarding China 's ownership and  use of SOEs to control industries 
and support China 's industrial policy ambitions.  
307.  The United States also noted that its subsidies were fully transparent while China's subsidy 
regime was opaque and simple questions about its subsidy programme s often remai ned unanswered. 
The United States recalled that it had notified the CHIPS Act noting that China had not notified the 
IC Fund, a government guidance fund investing billions of renminbi in China's semiconductor sector. 
The United States also underlined that some legal measures of the IC Fund had never been  
published or made public, resulting in more detrimental impacts on opportunities not just for 
developed countries but for developing countries as well.  
308.  Additionally, the United States referred to a study b y the Center for Strategic and International 
Studies, which showed that in 2019, China's spending on industrial policy was enormous, amounting 
to 1.73% of its GDP in fiscal outlays, significantly higher than any other country. The study suggested 
that if m ore components were included in the calculation, China 's spending might have been as high 
as 4.9% of GDP, over 12 times the amount spent by the United States. The United States highlighted 
that estimates of Chinese subsidy programme s were conservative due to the lack of transparency in 
Chinese policies and industrial data, China 's reluctance to discuss or acknowledge its industrial 
subsidization tools, including government guidance funds, and its refusal to answer basic questions 
or provide transparency for  many of its measures.  
309.  The United States has invested significant resources to highlight the lack of transparency in 
China 's subsidy notifications and programme s. It has counter -notified hundreds of measures over 
the years and requested responses and infor mation, often without success. The United States 
stressed that not every member had the resources to undertake such efforts and encouraged all 
Members who wish to compete in industrial sectors now or in the future to consider the impacts of 
these policies.  
310.  The United Kingdom  recalled previous discussions about the impact of overcapacity and excess 
production capacity in sectors such as steel and aluminium, and its broader effects, including on 
innovation and the environment. It continued to support the work in this area, incl uding efforts by 
other international organizations like the OECD or the Global Forum for Steel Excess Capacity.  
311.  The United Kingdom highlighted the need to address the impacts of overcapacity, especially 
on developing economies and LDC Members, who were mo re vulnerable to the effects of substantial 
foreign subsidies. It pointed out that overcapacity could limit the growth of domestic industries and 
economic development in sectors with global excess capacity. The United Kingdom reiterated that 
existing WTO f rameworks do not adequately capture the impacts of such subsidies, complicating 
efforts for all Members to mitigate adverse economic effects. Finally, it suggested that other 
international organizations could be invited to participate in discussions to sha re the results of their 
research.  
312.  Canada  reiterated its concern about government interventions, like subsidies, contributing to 
global overcapacity in various sectors, echoing concerns previously raised by the United States and G/SCM/M/125  
 
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  the United Kingdom. It ackno wledged that while subsidies could serve public interest and address 
market failures without distorting trade, the impact of certain subsidies remained worrying.  
313.  Over numerous meetings, Canada had highlighted how market -distorting interventions lead 
to ove rinvestment, depressed global prices, distorted competition, and reliance on carbon -intensive 
processes, affecting all manufacturing economies regardless of their development level. Canada 
referred to a recent report by the WTO, the World Bank, the IMF, an d the OECD, highlighting how 
subsidies in one country can trigger subsidies in others, potentially leading to a race to the bottom 
that harms all subsidizing countries and blunts the intended effects of the subsidy for each. The 
report also noted how disto rtions in international competition from the drive to promote strategic 
sectors via industrial policies could particularly impact smaller, fiscally constrained developing 
countries.  
314.  In light of this, all Members should be concerned about global excess capa city, the contributing 
subsidies, and the resultant trade impacts. Canada called attention to the importance of better 
information on subsidies, regular dialogue, and increased analysis to understand the impacts of 
subsidy programme s, as highlighted by the  WTO, the World Bank, the IMF, and the OECD. This, in 
Canada's view, reaffirmed the importance of the WTO's work, and particularly that of the SCM 
Committee, in supporting increased transparency and robust discussions on the role of subsidies in 
contributi ng to global overcapacity and addressing them. Canada urged Members to fully respect 
their transparency obligations, engage constructively in discussions, and utilize the WTO forum fully 
in efforts to find lasting and long -term solutions to global overcapa city. 
315.  Japan  stated that subsidies, used in all sectors by Members at different stages of development, 
were essential tools for achieving public objectives. However, it cautioned that if subsidies were not 
properly designed, they could fail to fulfil their intended pu rposes and distort the competitive 
environment. A poorly designed subsidy would not adhere to market principles, leading to market 
disruption through excess capacity relative to demand.  
316.  Japan referred to an OECD report, stating that one of the main causes of trade distortions in 
heavy industry was overcapacity fuelled by government support for SOEs. This support allowed the 
existence of 'zombie' SOEs in the market, which persisted due to government support even when 
not economically viable. The presence of these 'zombie' enterprises hindered new entrants, 
prevented the growth of existing firms, and adversely impacted both trade and competition. 
Moreover, such government support to SOEs negatively affected competition, both domestically and 
internationally, d epriving consumers of benefits such as lower prices or a wider range of products, 
and hindering innovation efforts. Japan also noted that these issues could occur in developing 
countries, as overcapacity could impede their domestic industrialization and ov erall development.  
317.  To address these challenges, Japan emphasized the importance of this Committee continuing 
discussions on "subsidies that can lead to overcapacity" and on improving the transparency of 
subsidies. It highlighted that the issue of overcapac ity was a global challenge and needed to be 
discussed in a multilateral forum. Therefore, it was important to continue these discussions at the 
Committee level, including on enhancing the transparency of subsidies. Japan also expressed 
support for more com prehensive discussions on this global issue, beyond those related to the SCM 
Agreement, by initiating the framework to discuss "State Intervention and Trade " as proposed by 
the European Union.  
318.  Australia  noted that the OECD had memorably compared government  support to industrial 
sectors to doping in sport. It said that, much like doping in sport, government support gave some 
firms an unfair advantage over their competitors, which was not granted by economic or market 
forces, but rather by the generosity of t he government supporting them. This, in turn, would 
pressure other competitors to either follow suit and use similar 'doping' methods or withdraw from 
the competition. This could lead to an arms race, leaving everyone worse off. Similarly, subsidization 
in one economy might prompt other economies to do the same, harming consumers, taxpayers, and 
governments that could not financially support their industries to the same extent. A subsidies race 
would be costly and damaging for major economies, but the poore st and most vulnerable economies 
would suffer the most.  
319.  The impact on developing countries would be exacerbated when government support led to 
global overcapacity in a sector. For example, even if a developing country established an efficient G/SCM/M/125  
 
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  steelmaking i ndustry, it would struggle to generate an economic return due to artificially low world 
prices. Reflecting on the OECD's sporting analogy, Australia noted the difficulty in understanding the 
true scale and scope of industrial subsidies, as, like doping, th ey might not be fully transparent. This 
lack of transparency would complicate matters for developing countries in effectively exercising their 
rights under the SCM Agreement and other WTO transparency mechanisms, such as trade policy 
reviews. It would ulti mately undermine the trading system's integrity when major Members set a 
poor example in fulfilling their transparency obligations. Australia underscored the need for greater 
shared understanding and transparency about the full impact of industrial subsidi es and state 
intervention. Consequently, Australia supported the European Union's proposal to establish formal 
deliberations on subsidies and other forms of state intervention supporting industrial sectors.  
320.  The European Union  addressed the impact of subsid ies and overcapacity on development and 
industrialization. The issue of development was central to the multilateral trading system and WTO 
reform. Therefore, it was important to consider how subsidies and overcapacity would affect 
developing countries and their industrialization objectives.  
321.  The European Union noted that subsidies leading to overcapacity were harmful to all trading 
partners, including both developed and developing countries. For developed countries, overcapacity 
negatively would affect exist ing industries and manufacturers. For developing countries, the harm 
from subsidies and overcapacity would be particularly significant, an aspect not addressed in 
previous meetings. Overcapacity could result from various types of government support, includ ing 
direct subsidies, tax incentives, below -market financing, and preferential loans, which distort 
competition and contribute to excess capacity in certain sectors. The EU pointed out the uneven 
nature of these subsidies, emphasizing that countries with f ewer resources could not subsidize as 
much as others, leading to a disadvantage for those with limited funds.  
322.  The European Union also highlighted the second negative impact of subsidies leading to 
overcapacity on development. Many developing countries aime d to industrialize and diversify their 
economies, which was challenging and required a consistent long -term action. These objectives 
would become even harder to reach if global markets were dominated by heavily subsidized 
competitors and experienced overca pacity due to these subsidies. In such scenarios, market prices 
would be depressed and there would be an excessive offer on the market, jeopardizing the 
profitability of new investments and preventing new competitors from entering the markets. This 
would p ose an obstacle to the development and industrialization of developing countries.  
323.  According to the European Union, current WTO rules did not sufficiently consider the distortive 
impacts of overcapacity. This topic should be included in the upcoming deliber ations on trade and 
industrial policies. As part of this broader reflection on state interventions supporting industrial 
sectors, WTO Members should deliberate on reducing subsidies leading to overcapacity and 
mitigating their effects. The European Union m aintained that while subsidies could be legitimate 
policy instruments in certain situations, harmful practices should be notified to reduce their negative 
impact on other WTO Members, particularly in terms of development and industrialization of 
developing  countries.  
324.  China  stated that the issue of overcapacity was not in the terms of reference of the Committee 
and the Committee was not an appropriate forum for that discussion. It also noted that the causes 
of overcapacity were complex, and it was untenable to simply attribute overcapacity to China's 
industrial policies. China had made effective efforts to cut production capacity in recent years 
therefore accusing China of distorting the market does not square with facts.  
325.  China emphasized that besides genera l, cyclical, and structural effects in economic 
development, the impact of trade protectionism was a significant cause of overcapacity that should 
not be ignored. It shared a fact to demonstrate the efforts made by the Chinese Government in 
addressing over capacity: the number of steel workers who were relocated to other jobs exceeded 
270,000, surpassing the total number of steel workers in the United States, Japan, and Germany. 
Blaming China for overcapacity contradicted the facts. Contrarily, China indicat ed that certain 
Members provided substantial subsidies to their domestic industries, disrupted global industrial and 
supply chains, and forced companies in other Members to make decisions against market principles 
leading to unnecessary capacity expansion.   G/SCM/M/125  
 
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  326.  With respect to SOEs, China noted that it did not provide subsidies specifically for SOEs. Some 
SOEs received compensation from the government for performing public service functions, such as 
maintaining public assets and general service obligations, whi ch was a service purchased by the 
government and aligned with international practice. Both state -owned and non -state-owned 
enterprises could obtain subsidies, without special preferential treatment for SOEs. China reiterated 
that the OECD reports were bias ed, using firm -level data from the recipient perspective, leading to 
issues like repeated calculation and inappropriate sampling. China reiterated that it does not provide 
subsidies specifically for SOEs.  
327.  Regarding the governmental guidance fund, China cla rified that it was an equity investment 
fund owned by the Fund Company, a joint stock enterprise established under the Company Law and 
not affiliated with any government departments. The fund's investment management and decision -
making were market -oriented , with no government intervention in its investment decisions. As an 
equity investment, its shareholders would expect financial returns, so there was no form of subsidy 
for the enterprises it invested in.  
328.  The Russian Federation  reiterated its view that the  discussion within this agenda item 
remained one -sided, avoiding certain measures that effectively support ed national industries in 
sectors affected by overcapacity. It specifically mentioned trade protectionism as a factor. The 
Russian Federation argued t hat deterring foreign competition through long -lasting trade remedy 
measures provided tangible support to industries operating in sectors with overcapacity. It also 
highlighted other trade barriers they have recently faced, such as prohibitive import dutie s, import 
bans, and other similar actions, which would contribute to supporting the national industries of 
certain Members. The Russian Federation indicated that a one -sided approach would not help 
address overcapacity and urged the withdrawal of protectio nist measures.  
329.  The Committee took note  of the statements.  
13  SUBSIDY TRANSPARENCY AND CHINA'S PUBLICATION AND INQUIRY POINT 
OBLIGATIONS UNDER CHINA'S PROTOCOL OF ACCESSION – ITEM REQUESTED BY 
AUSTRALIA, CANADA, THE EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, A ND THE 
UNITED STATES  
330.  The United States  reiterated that together with other Members, it had numerous concerns 
with respect to the transparency of China's industrial subsidy regime. In its Protocol of Accession, 
China had agreed to publish all trade -related measures in a single journal, which China had 
designated as the China Foreign Trade and Economic Cooperation Gazette, or MOFCOM Gazette . 
However, China has rarely been publishing its subsidy measures in the MOFCOM Gazette, especially 
the ones it called "no rmative documents" and measures from sub -central governments. In addition, 
sometimes those measures were not made public at all.  
331.  In its Protocol of Accession, China had also agreed to establish or designate an "enquiry point 
where, upon request of any ind ividual, enterprise, or WTO Member all information relating to the 
measures required to be published may be obtained".  
332.  The United States had come across references to five legal measures, two relating to fuel 
subsidies for fishermen, one relating to the de velopment of China's distant water fishing fleet, and 
two relating to the semiconductor industry. It had been three years since its original request for 
those measures pending written responses.  
333.  The United States emphasized that the issue was not just abou t these specific measures, but 
about the ability of any WTO member to understand the actions that China was taking. It stressed 
the principle that measures establishing and implementing subsidy programme s should be 
transparent. According to the United Stat es, the fairness of the international trading system depends 
on Members being transparent in their measures impacting trade and investment. The United States 
highlighted that due to China's system, WTO members had required , and China had agreed to, 
special commitments for additional recourse against opacity. It stated  that these commitments, 
which comprised establishing a dedicated inquiry point and mandating the publication of measures, 
had been ineffective.  G/SCM/M/125  
 
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  334.  The United States said that th at this lack of transparency was unfair not only to the 
United  States and co -sponsors of this agenda item, who could try to uncover these measures on 
their own, but especially to developing and least developed members who might not have the 
capabilities to  research these measures themselves. The United States indicated that it maintained 
and demonstrated transparency on its measures and would answer questions and provide 
information on its subsidy measures to any other Member, including China, in good faith . It 
emphasized this as a minimum expectation in a fair international system based on collegiality and 
compromise over conflict and competition.  
335.  The European Union  referred to its statements in previous meetings noting that China's 
obligation on transparency stem med not only  from Article 25 of the SCM  Agreement, but also from 
its Protocol of Accession to the WTO. The European Union urged China to back its commitment  to 
transparency by dealing with all the requests to the inquiry point and publishing all trade -related 
measures in the Gazette . 
336.  Japan  noted that the notification obligation and transparency were among the most essential 
foundations of the WTO system and c omplying with them would benefit all Members. Japan was 
concerned that the lack of transparency in the expenditure of subsidies could lead to exp ansion  of 
distorted subsidies and cause overcapacity issues . Japan requested China  to fulfil its obligations 
agreed upon in its Protocol of Accession regarding transparency and to keep effective the 
mechanisms that would contribute to enhanced transparency.  
337.  Australia  reiterated that it attached great importance to the WTO notification and transparency 
obligations w hich stemmed from both the Agreements and Members' Protocols of Accession. 
Transparency remained critical to the proper functioning of the WTO and underpinned the SCM 
Agreement, as it created certainty for all exporters in being able to compete fairly in i nternational 
markets. Australia urged China to fulfil the transparency commitments made as part of its Protocol 
of Accession.  
338.  The United Kingdom  welcomed the continued discussion on this issue not only at this 
Committee but also at the Council for Trade an d Goods. It reiterated the points made by other co -
sponsors about the fundamental importance of transparency for the proper functioning of the 
Committee and the wider WTO stressing that it was essential for all Members to fulfil their 
transparency obligati ons, including any Member -specific commitments.  
339.  The United Kingdom acknowledged the progress and positive steps that China had taken to 
comply with its WTO obligations since joining, such as establishing inquiry points, publishing some 
measures, and incorp orating public consultations into the legislative process. However, it continued 
to share the concerns and questions of other Members regarding the completeness of China 's 
compliance with its obligations, particularly regarding public consultations in the legislative process. 
Full compliance with obligations under the Accession Protocol was crucial for all Members, especially 
for developing Members who lacked resources to search for missing information, to understand the 
subsidies provided by China. This co mpliance was vital for assessing potential impacts of subsidies 
on their economies and identifying opportunities for their businesses operating in China to benefit 
from these subsidies as well.  
340.  In previous discussions, the United Kingdom had suggested furt her steps that China could 
consider addressing  some of the concerns raised, such as detailing how Members could utilize its 
inquiry point, publishing all measures in official journals, and implementing adequate public 
consultation at the local level. The U nited Kingdom also noted the importance and benefits of 
experience sharing for building understanding, as discussed in previous Committee items. It 
proposed that China share its experiences with Members on fulfilling its obligations under its 
Accession Pro tocol, including considerations in deciding what trade measures to publish and how to 
respond to inquiries. This sharing could occur at a future regular Committee meeting or as a 
lunchtime presentation during a future Rules Week. By sharing its experiences , China could improve 
Member awareness and understanding of its compliance and decision -making processes, addressing 
some of the concerns raised by Members. The UK looked forward to China's response to this 
suggestion.  
341.  Canada  echoed the concerns of other M embers regarding China's compliance 
with WTO transparency obligations. It reiterated that the notification process was an integral aspect G/SCM/M/125  
 
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  of not only the  SCM Agreement, but also of the multilateral trading system. According to Canada, it 
was important that  all Members provided notifications in accordance with the relevant 
WTO requirements. It encouraged China to fully comply with its transparency obligations in 
accordance with  WTO rules and its Protocol of Accession.  
342.  China  emphasized its longstanding commit ment to observing WTO rules and fulfilling its 
obligations. Firstly, the commitment to set up an inquiry point showed that China valued 
transparency. This commitment, made over 20 years ago when information access was limited, was 
stricter than the general  level of WTO Members, reflecting China's willingness to provide relevant 
information to WTO members and stakeholders with sincerity and to the greatest extent possible.  
343.  Secondly, China also noted that the transparency provisions of its Accession Protocol did not 
require China to answer the inquiries in writing. Despite the challenges posed by the COVID -19 
pandemic in 2020, China's enquiry point worked hard to overcome the pandemic's impact and 
responded to the US consultation promptly after completing inte rnal procedures.  
344.  Thirdly, China highlighted its efforts in promoting information disclosure and policy 
transparency over the years. It mentioned sharing information on its measures and developments 
in previous meetings and noted the convenience brought by  the rapid development of network 
communication technology in accessing information.  
345.  Fourthly, regarding the policy document requested by the US, China clarified that its policy on 
fishery development had been published on the official website. The rest of  the policies did not fall 
under the category of "laws, regulations or other measures affecting trade " and were not subject to 
information disclosure requirements. The Chinese enquiry point explained this to the United States 
and clarified it in regular me etings and the CTG meetings several times.  
346.  China expected that its accession commitments aimed at enhancing transparency and 
demonstrating sincerity would not become a means of repeated pestering and be taken advantage 
of by some Members.  
347.  The Committee took note  of the statements made.  
14  PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF NEW AND FULL SUBSIDY 
NOTIFICATIONS – ITEM REQUESTED BY AUSTRALIA, CANADA, THE EUROPEAN UNION, 
JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  
348.  According to the European Union , it was crucial for there to be an understanding and 
acceptance in the review of subsidy notifications that questions could be posed in writing on non -
notified subsidies, and importantly, that these questions would be responded to.  The European 
Union regarded the proposal as significant, similar to the one discussed earlier under Item 6 of the 
agenda, aiming to further enhance the transparency of subsidy notifications and significantly 
improve the work of the Committee. It strongly encouraged Members  to support this proposal so 
that it could be in place and operational for the next round of subsidy notifications.  
349.  Australia  noted that the first element of the proposal required written replies to written 
questions. This written procedure was intended to  ensure that the replies were fully understandable 
to the Member posing the questions. Indeed, it was open to a Member to pose additional written 
questions if the replies were incomplete or unclear.  
350.  The second element reflected a long -standing practice of the Committee that Members might 
seek to pose written questions on any specific subsidies, including those not included in a Member's 
notification. This practice allowed any Member at any time to seek information on any subsidy 
granted or maintained by ano ther Member, or for an explanation of the reasons why a specific 
measure had not been considered subject to the requirement of notification. Australia encouraged 
Members to support this proposal.  
351.  Japan  recalled that Members could make a written request for  an explanation on why a specific 
measure was not subject to the requirement of the notification under Articles 25.8 and 25.9 of the 
SCM Agreement. It noted that providing the requested explanation in writing would enhance 
transparency.  Japan looked forwar d to the support of Members for this proposal.  G/SCM/M/125  
 
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  352.  The United States  recalled that under Article 26 of the SCM Agreement the Committee had 
been given the task to review Members' subsidy notifications and in 2005 the Committee had agreed 
upon a procedure for th e review those notifications that continued to be followed for the review of 
Members' new and full subsidy notifications. This was a straight -forward Committee document that 
established a written question and written answer process to occur within a specif ic time -frame.  
353.  The United States saw this as a fundamental question of fairness noting that responses to 
questions should not be limited to those present in a room when the question was raised but should 
also inform those in capitals working on the issues and potentially impacted by the measures in 
question. The United States also highlighted that it was a matter of fairness that members should 
be required to respond to questions about programme s they did not notify, to avoid incentives for 
submitting no or  incomplete notifications without the Committee's ability to ask questions about the 
programme . 
354.  The United States provided an example, asking other Members to imagine if it did not notify 
significant acts like the CHIPS Act or the Inflation Reduction Act a nd then refused to answer 
questions on those measures because they were not notified. It rejected this approach, considering 
it unfair to all Members in the room. For many years, in the spirit of fairness and collegiality, Members 
of all types have asked a bout programme s not included in the notifications that should have been 
included. The United States and some other Members had received these questions and had 
answered them. Responding to such questions had become part of the routine question and answer 
process for subsidy notifications and had aided in the overall transparency of Members' subsidy 
regimes.  
355.  The United States noted that to clarify the Committee's procedures, the co -sponsors proposed 
an amendment that would require all Members to provide writ ten answers to all written questions 
posed, including questions regarding specific subsidies not included in a Member's notification. 
According to the United States, it was a simple amendment that nearly all Members have been 
following since the very begin ning. Its adoption would encourage a degree of transparency that the 
drafters of the Agreement had assumed would exist in the normal course of the Committee's review, 
even in the absence of a written obligation. The United States viewed this amendment as a  key 
example of an easy reform to make the WTO more efficient, transparent, and responsive to Member 
concerns.  
356.  The United Kingdom  echoed the comments made by other co -sponsors noting that  the 
proposal did not propose or require new time frames for response s to these questions. The proposal, 
according to the United Kingdom, was not intended to catch Members out or assume that they were 
withholding notifiable subsidies from their notification. It recognized that notifications were a 
resource -intensive exercis e requiring coordination across various government levels and parts, so 
subsidies might unintentionally be omitted. The United Kingdom shared its own experience, noting 
that when submitting its 2023 notification, it found some schemes had been missed, lead ing to a 
supplementary notification. In this regard, the proposal could aid Members in identifying measures 
that might have been overlooked and require notification, thereby facilitating notifications going 
forward.  
357.  Acknowledging concerns from some Members  in previous discussions, the United Kingdom 
invited those with outstanding concerns to inform the co -sponsors of specific text changes required 
to address those issues for further consideration.  
358.  Canada  welcomed continued discussion of the proposal noting that it was a simple amendment 
that would support increased transparency by requiring that written answers would be provided to 
all written questions posed, including those subsidies not included in a Member's notification. The 
written question and answer process has been a fundamental part of the subsidy notification process. 
By improving this process, Members could improve transparency as a whole and fill some of the 
important information gaps that had been referenced during the meeting. According to Cana da, the 
proposal would achieve this by formalizing a longstanding practice that many Members have already 
respected.  
359.  The Russian Federation  reiterated its concerns that had been expressed during the previous 
Committee meeting regarding the proposal. It rec alled that the amendment envisaged Members 
providing written answers to all written questions posed in actions "regarding specific subsidies not G/SCM/M/125  
 
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  included in the notification". The language of the proposal appeared to be at odds with Article  25.2 
of the SCM  Agreement, which had not enabled specific subsidies to be un -notified. Additionally, it 
had provided room for considering a measure as a specific subsidy without offering any substantial 
evidence to prove its specificity. Finally, such wording could have implied an additional burden on 
the notifying Member to prove that the un -notified measure was not a specific subsidy. The Russian 
Federation recalled that it had previously suggested replacing the phrase "specific subsidy" with the 
term "alleged subsidy" which would help to address its concerns.  
360.  India reiterated its concerns noting that the issue required further discussion.  
361.  China  recalled that it had previously expressed concerns about the proposal to increase 
Members ' obligations to reply in writing under Articles 25.8 and 25.10 of the SCM Agreement. China 
emphasized that the existing rules did not prevent a Member from seeking i nformation on policies 
other than those notified by another Member. It also highlighted that the proposal could shift the 
burden of proof onto the notifying Member to prove whether a policy was specific and should be 
notified. Improving transparency should  focus on creating conditions that would encourage and 
assist Members in fulfilling their existing obligations, rather than crafting new ones. China also 
appreciated efforts made by the Secretariat through capacity -building projects for Members with 
notification difficulties. In practice, like some other Members, China had provided written replies to 
questions regarding policies not included in its notification. China expressed openness to suggestions 
from the United Kingdom and willingness to share with Me mbers its experiences and difficulties faced 
in preparing notifications. China remained ready to participate in further discussions on the proposal 
in an open and pragmatic manner.  
362.  New Zealand  remained supportive of the proposal and encouraged other Member s to do 
likewise.  
363.  Noting the divergence of views regarding the proposal, the Chair suggested that the co -
sponsors continue to discuss the proposal with other Members until the next meeting of the 
Committee and to inscribe this item on the agenda of that me eting if they so wish.  
364.  The Committee took note  of the statements made.  
15  DISCRIMINATORY SUBSIDIES POLICIES AND MEASURES OF THE UNITED STATES – 
ITEM REQUESTED BY CHINA  
365.  China  stated that the US CHIPS Act ("CHIPS Act") and the Inflation Reduction Act ("IRA") ha d 
been in place for a year , recalling that it had requested clarification from the United States whether 
certain provisions of those acts were in consistent with the WTO rules. The United States however, 
had not provided a satisfactory reply. Referring to the implementation rules of  the IRA and CHIPS 
Act issued by the US subsequently, China observed that the United States was going farther and 
farther away from the multilateral rules.  
366.  China noted that the Guidance on the new clean vehicle provisions of the Inflation Reduction 
Act, ef fective from 18 April 2023, outlined requirements for qualifying for electric vehicle (EV) tax 
credits. These requirements included the final assembly of new clean vehicles in North America, a 
certain percentage of the vehicle battery's critical minerals n eeding to be extracted or processed in 
the United States or from a Free Trade Agreement ( "FTA") partner, or recycled in North America. 
Additionally, a specific percentage of the battery's components must be manufactured or assembled 
in North America. China  stated  that these conditions essentially imposed strict local content 
requirements for granting subsidies, limiting them to American electric vehicle manufacturers and 
amounting to disguised import substitution.  
367.  Furthermore, according to the Guidance, sta rting in 2024, eligible clean vehicles could not 
have any battery components manufactured by a foreign entity of concern. From 2025, eligible 
vehicles must not contain critical minerals extracted, processed, or recycled by a foreign entity of 
concern. Chin a argued that this would discriminate against and exclude some foreign competitors. 
China considered this practice a serious violation of WTO principles, namely national treatment and 
most-favoured -nation treatment. It viewed it as a distortion to global t rade and market, imposing 
protectionism under the guise of responding to climate change, promoting green transformation, 
and strengthening the resilience of the global industrial chain.  G/SCM/M/125  
 
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  368.  China also noted that arbitrary interpretations of FTAs would seriousl y undermine global 
trading rules and disrupt the global industry and supply chains. According to China, the United States 
has been using its Free Trade Agreements as a basis for allowing EV tax credits, specifically stating 
that critical minerals must be e xtracted and processed in countries that were parties to these 
agreements. This method, according to China, effectively excluded non -FTA countries from the 
United States supply chain for battery components and critical minerals. China was of the view that 
the United States' arbitrary interpretation of Free Trade Agreements was undermining the 
fundamental consensus on global trade rules. This approach would lead to a "broken window theory" 
and cause irreversible damage to the authority of WTO rules and the p rinciple of international law. 
Moreover, China criticized the United States for using FTAs as a tool to economically coerce some 
parties into joining the United States - centered supply chain for critical minerals, thereby excluding 
most WTO members from t his supply chain. China described this strategy as a "small yard, high 
fence," which it believed would severely disrupt global industry and supply chains.  
369.  China stated that the relevant measures would slow the pace of green transition of developing 
Members  and would catalyse fragmentation of global green economic governance by enticing green 
subsidy race to the bottom. The accelerated investment in North America by global EV manufacturers 
in pursuit of subsidies, had triggered industrial shift and technolog y outflow from some other 
Members. The outcome would be a subsidy race in the global clean energy sector which would lead 
to a "siphoning effect," resulting in the concentration of the clean energy supply chain in developed 
WTO members. This would simultan eously diminish the capacity and opportunities for developing 
Members to access clean energy products, technologies, and investment. China further stated that 
this subsidy race would hinder the progress of developing Members in addressing global challenges  
and advancing sustainable development. It expressed its concern that such a subsidy race would 
fragment green economic governance, ultimately being counterproductive to achieving global carbon 
emission reduction goals.  
370.  China noted that subsidies should be  implemented in a manner consistent with the WTO rules 
and should not trigger subsidy races among Members, exacerbating the rule deficit and development 
deficit, and disrupting the global supply chain and industry chain. In this respect, China called on 
the United States to eliminate discriminatory and distorting subsidies that were not in line with the 
WTO rules. According to China, the WTO should play a more active role in effectively monitoring 
such subsidies.  
371.  China also had some concerns regarding the t rade-distorting and discriminatory subsidies set 
out in the CHIPS Act and its implementing rules. It pointed out that the United States ha d been 
employing a "double standard" regarding industrial subsidies. While it was intensifying subsidy 
regulations for  other WTO Members, including China, it was simultaneously offering large -scale 
subsidies to support its own domestic industries. China noticed the following inconsistencies between 
the Trilateral Statements and the United States' practices:  
• with respect t he excessively large subsidies, China referred to two Notices of Funding 
Opportunity CHIPS Incentive Programme  on Commercial Fabrication Facilities" ("Notice") by 
the United States Department of Commerce issued in February and June 2023. China noted 
that d irect funding for CHIPs would amount up to USD 38.22 billion, and up to USD 75 billion 
in direct loan or guaranteed principal would be granted. Small -scale projects might be 
awarded up to USD 500 million direct funding. For specific projects, up to 30 -35% of the 
project 's capital expenditure would be funded by the CHIPS Incentive Programme . In 
addition, a federal income tax credit which would be equal to 25% of a qualified investment 
could also be applied;  
• China recalled, however, in a Trilateral Statement it was proposed that for the excessively 
large subsidies, which were listed as one of the particularly harmful types of subsidies, the 
burden of proof should be reversed. In case of failure to prove that there were no serious 
negative trade or capacity eff ects, the subsidizing member must withdraw the subsidy in 
question immediately;  G/SCM/M/125  
 
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  • with respect to non -market -oriented policies and practices, China highlighted that both 
Notices indicated that an applicant must demonstrate how the CHIPS Incentives would 
incentivize the applicant to make investments in the United States which would not occur in 
the absence of those incentives. In that case, the applicant's investment decisions might not 
be based on commercial interests and logic under market conditions because  those 
investments would not occur without the CHIPS Incentives. According to China, this was a 
typical non -market -oriented practice;  
• another example was the so -called "guardrails" provisions. The CHIPS Act restricted 
recipients of the funds from construct ing new or expanding existing leading -edge and 
advanced technology facilities in foreign countries of concern for 10 years. The investment 
restriction had been set as a precondition for receiving subsidies. Those provisions were 
clearly contrary to the Tri lateral Statement that called for restraints on non -market -oriented 
policies and practices;  
372.  China also expressed its concerns regarding the local content requirements prescribed in the 
Notice which has set the prioritization and selection factors for sele cting applications for funding. 
One of those factors was to strengthen the use of domestically produced iron, steel, and construction 
materials which might result in local content subsidies that were not consistent with the 
SCM Agreement.  
373.  China stated that  the chips subsidies and export control measures would strictly control the 
export of chip -related key products and technologies.  The final rule on guardrail provisions released 
on 21  September 2023 essentially tightened the United States' and its allies'  export controls on 
chips, and limited the access of foreign countries of concerned to relevant technologies, aiming to 
exclude some Members, including China, from the global supply chain of semiconductors.  
374.  First, the final rule classified current -generati on and mature -node chips used for quantum 
computing, radiation -intensive environments, and other specialized military capabilities as "critical 
to national security" and strictly controls their production in countries of concern. Simultaneously, 
the United  States had continuously tightened its semiconductor export control measures toward 
China, including imposing export controls on AI -related chips and semiconductor manufacturing 
equipment, and had pushed to decouple the semiconductor industry chain.  
375.  Second, the final rule prohibited the expansion of semiconductor manufacturing capacity in 
leading -edge and advanced facilities in countries of concern within 10 years from the date of granting 
the subsidy. It stated that wafer production, in addition to f ront-end and back -end processes, was 
also incorporated into the scope of semiconductor manufacturing subject to this restriction, further 
limiting the opportunities for countries of concern to participate in the semiconductor manufacturing 
supply chain.  
376.  Third, the final rule clarified that recipients of subsidies were prohibited from engaging in 
significant transactions in leading -edge and advanced semiconductor facilities in countries of concern 
within 10 years of the date of award. It defined a 5% increas e in production capacity as a material 
expansion. The definition of a significant transaction was to be determined on a case -by-case basis. 
These practices had brought great uncertainty for subsidy recipients in expanding their foreign 
investment and produ ction.  
377.  According to China, these practices and measures by the United States represented a typical 
double standard, cold war mentality, zero -sum game and trade bullying. Such measures, deviating 
from the market principles, had disturbed the normal order of  international trade and investment, 
and represented an affront to the rule -based multilateral trading system. They not only broke the 
existing layout of the global semiconductor industry chain based on the advantage of resource 
endowment, but also impeded  technological progress and post -pandemic global economic recovery. 
This would be detrimental to China's interests as well as the key interests of the United States and 
other Members including allies of the United States. China reiterated its call on the W TO to 
strengthen the monitoring on the relevant measures that might violate the WTO rules and would 
like to join hands with other WTO members to safeguard the stability and resilience of the global 
semiconductor supply chain and value chain.  G/SCM/M/125  
 
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  378.  The Russian Fe deration  expressed its support to the statement by China and reiterated its 
systemic concerns over the WTO inconsistency of the IRA. The Russian Federation highlighted that 
the IRA offered higher tax credits for taxpayers who would use a new clean vehicle whose battery 
complies with specific requirements regarding the origin of critical minerals and components. The 
IRA stipulated that the critical minerals requirement could be met if the minerals were extracted or 
processed in the United States, a FTA partn er, or recycled in North America. The Russian Federation 
pointed out that this mechanism would provide a more favorable treatment to products processed 
or recycled in WTO Members other than the mentioned countries. The Russian Federation considered 
that th ere was no justification for that in the WTO rulebook. The Russian Federation reiterated that  
support measures should be consistent with WTO rules and urged the United States to adhere to 
these rules.  
379.  With respect to the CHIPS Act, the United States  indicated that the publicly available, 
published Act explained in detail the initiative, including the entities and projects eligible to receive 
support, as well as the types of support available. The CHIPS programme  also had a website 
dedicated to publicly sha ring information at www.chips.gov  where the United States Department of 
Commerce had published its initial implementation strategy and the first notice of funding 
opportunity.  
380.  The CHIPS Act consisted of three distinct initiatives: (i) large -scale investments in 
leading -edge logic and memory manufacturing clusters; (ii) expansion of manufacturing capacity for 
mature and current -generation chips, new and specialty technologies; and (iii) in itiatives to 
strengthen and advance United States' leadership in research and development.  
381.  The United States reiterated that the contemplated support was consistent with the US law 
and the WTO commitments of the United States. As also detailed in the CHIPS  Act and implementing 
regulations, a successful CHIPS programme  would respond to market signals, fill market gaps, and 
seek to attract significant private capital. To that end, the publicly available CHIPS Act and notice of 
funding opportunity set forth in  detail the eligibility criteria, which included the need for long -term 
commercial viability, along with the economic and national security objectives that the Department 
of Commerce would use to evaluate applications.  
382.  In addition, the Department of Commer ce would implement certain restrictions to ensure that  
those who would receive CHIPS funds could not compromise national security.  Those national 
security -based  restrictions were described in more detail in the Act and in a notice of proposed 
rulemaking pu blished in the Federal Register on 23 March 2023 which had also solicited comments 
on the proposed rule. The United Stat es also reiterated that the SCM Committee was not an 
appropriate forum for issues related to national security. The United States also n oted that, contrary 
to China's claims, the evaluation criteria in the CHIPS Act did not contain a requirement to use 
domestically produced inputs . 
383.  The United States recalled its previous statements indicating that China also had a very robust 
semiconductor  programme . In fact, it had numerous programme s at both the central and sub -central 
levels of government in the form of government guidance funds, none of which had been notified. 
The biggest of those funds was the National IC Fund Phase I and II and the t otal amount of 
investment from those funds was approximately USD 50 billion. Although it had started in 2014, the 
National IC Fund had never been notified. China had argued that the Fund was a private equity fund 
and therefore, did not need to be notified.  This was despite the fact that the Fund was a corporate 
entity that was 99% owned by government ministries and SOEs, and despite the fact that it was 
obligated to invest in accordance with government policy, just like the state -owned banks.  
384.  With respect to the IRA, the United States stated that all Members shared an urgent need to 
increase investments in clean energy technologies to seriously combat the climate crisis, as well as 
to address supply chain issues. The IRA, which was signed by President Biden , would be a key tool 
for the United States to meet those critical objectives.  
385.  The transportation sector was the greatest source of greenhouse gas emissions in the 
United  States which would not be able to meet its Paris commitments and other climate goals without 
bold action to promote major new investments in clean energy technology, especially incentives for 
electric vehicle production and their adoption. The Act would provide clean vehicle tax incentives to G/SCM/M/125  
 
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  encourage a rapid transition to clean transport . It would ensure the creation of more diverse and 
robust supply chains and promotion of the domestic adoption of clean vehicles.  
386.  In addition to the Clean Vehicle Tax Credit for new clean vehicles purchased, the IRA would 
also provide for a Commercial Cle an Vehicle Credit and a Previously -Owned Clean Vehicle Credit 
which would create tax credits for certain eligible light, medium and heavy -duty clean vehicles 
purchased by businesses, and, for used clean vehicles. Final assembly, battery and critical minera l 
requirements would not apply to those credits. According to the United States, those vehicles would 
account for a significant share of the total clean vehicle purchases in the future. The United States 
Congressional Budget Office estimated that those veh icles would receive roughly 40% of the overall 
clean vehicle tax credit funding.  
387.  The United States also mentioned that it was still in the early stages of developing the 
regulations for that programme  and was considering input from all stakeholders as the  Department 
of Treasury has moved forward with its public process in implementing those credits as required by 
the legislation. Several of the United States' trading partners already had taken advantage of the 
opportunity to participate in that transparent  process, and there would be future opportunities to 
engage in that process.  
388.  The United States noted that many of its trading partners, including China, had also prioritized 
investment in EV technologies, and taken a range of domestic measures to support zero emission 
vehicles. In discussions regarding electric vehicle measures, the starting point should be the 
importance of working to achieve overall climate, supply chain, and related goals in parallel – and 
to do so in a way that Members could maintain s upport from their stakeholders. This would include 
the shared goal in ensuring the achievement of the Paris commitments.  
389.  In response to China's argument that it was trying to centralize supply chains in the United 
States, the United States noted that, base d on manufacturing capacity under construction, China's 
share of global polysilicon, ingot, and wafer production would soon reach almost 95% of global 
manufacturing capacity, according to the International Energy Agency. Therefore, China was the one 
that w as trying to make sure the entire world would be dependent on Chinese -manufactured green 
energy components.  
390.  China  stated that the purpose of the subsidy would not be enough to justify a good subsidy. 
In addition, the publication or the notification of a su bsidy would not be enough to justify a subsidy. 
China underscored that what was important was how the subsidy has been designed and 
implemented.  
391.  The Committee took note  of the statements made.  
16  OTHER BUSINESS  
392.  Korea  expressed its concerns over the recent revision of France's green bonus, which was 
enacted on 10 October 2023, stating that the amendments to France's EV subsidy regime might be 
inconsistent with the rules and principles of GATT 1994 Articles 1 and 3. Kor ea indicated that these 
amendments were designed in a manner that could disadvantage imported EVs based on the carbon 
emissions generated during their production, which could unduly burden businesses and hamper fair 
and free economic activities.  
393.  In light o f these concerns, Korea put forward several requests and suggestions to the French 
Government. First, it asked France to clarify the methodology used to determine carbon emission 
factors and the criteria for these determinations, adjusting them to reflect justifiable figures. Korea 
noted the current absence of established standards for carbon emissions for each component in the 
EV manufacturing process. Secondly, Korea pointed out that considering transportation distance and 
carbon emission factors by each transport type could significantly disadvantage foreign EV 
manufacturers, especially those with assembly sites located far from France and reliant on maritime 
transport. This could substantially reduce the likelihood of foreign -produced cars qualifying for  
French subsidies. Korea suggested revisiting and adjusting this consideration.  
394.  Lastly, Korea proposed that France consider postponing the implementation of these changes 
until established international standards on carbon emission factors would become ava ilable.  G/SCM/M/125  
 
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  395.  Japan  stated that some recent subsidy programme s appeared discriminatory, especially in 
their preferential treatment of domestic products. Generally, Japan requested that subsidy measures 
be implemented and administered in a manner consistent with WTO rules.  
396.  The European Union  provided some preliminary information on the 2023 revision of the Auto 
Bonus Programme , noting that changes to this scheme were not subject to notification until June 
2025. The revision aimed to direct subsidies for purchasing  electric vehicles towards the most 
environmentally friendly vehicles, considering the growing demand for these vehicles in the coming 
years. The European Union highlighted the importance of prioritizing the acquisition of 
environmentally friendly vehicles  throughout their entire life cycle.  
397.  The previous bonus system only considered CO2 emissions during vehicle use. The European 
Union stated that conditioning the Auto Bonus on environmental criteria that would take into account 
the entire life cycle of the vehicle would reduce France's carbon footprint by an average of 800,000 
tons of greenhouse gases per year between 2024 and 2027. The calculation of this carbon footprint 
would be based on an objective and scientifically rigorous methodology, developed by e xperts from 
the French Environment and Energy Management Agency. This methodology was expected to focus 
on the simplified CO2 content of the vehicle, including emissions related to battery manufacturing 
and the use of key materials such as steel and alumin ium. 
398.  Korea  thanked the European Commission for the general information provided on the issue. 
However, it expressed difficulty in viewing the revision as purely environmentally motivated, 
considering the different carbon emission factors applied to EU -produced electric vehicles and those 
manufactured outside the EU. Korea acknowledged that even if the environmental purpose of the 
revision was accepted, the measure might still constitute a disguised restriction on international 
trade. It referred to this as potentially being in violation of the requirements of Article XX of 
GATT  1994 and, by extension, of WTO agreements.  
399.  The Committee took note  of the statements made.  
17  DATE OF NEXT REGULAR MEETINGS IN 2024  
400.  The Chair recalled that by decision of the Committee, its two regular meetings take place in 
the spring and the autumn of each year, in the last week of April and the last week of October, 
respectively. He further recalled that the Committee agreed in docu ment G/SCM/165  that the 
meeting weeks of the regular and special formal spring and autumn meetings of the Committees for 
the following year shall be proposed in the annotated draft agendas of the October meetings. In line 
with the annotated draft agenda circula ted on 15 September 2023, the Chair proposed that the next 
spring and autumn regular meetings of the Committee in 2024 be held in the weeks of 22 April and 
28 October 2024, respectively. The exact scheduling of these meetings w ould be communicated to 
Membe rs in due course. As usual, these meetings would be immediately preceded by the special 
meetings of the Committee.  
401.  It was so decided .  
18  ANNUAL REPORT OF THE COMMITTEE ON SUBSIDIES AND COUNTERVAILING 
MEASURES TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7)  
402.  The Committee adopted its Annual Report for 2023 to the CTG.9 
__________  
 
9 G/L/1506  – G/SCM/168 .