RESTRICTED  
  
G/SCM/M/119  
 
16 September 2022  
(22-7293) Page: 1/29 
Committee on Subsidies and Countervailing Measures  Original: English  
 
MINUTES OF THE REGULAR MEETING  
HELD ON 26 APRIL 2022  
CHAIR: MS NORIKO TERANISHI (JAPAN)  
1. The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 26 April 2022, convened in WTO/AIR/SCM/43 dated 14 April 2022. The meeting was 
held in person and virtually via Interprefy.  
2. New Zealand  and Chinese Taipei  requested  to be included as the co -sponsor of the agenda 
item 11. 
3. The Committee adopted the following agenda:  
1   NATIONAL LEGISLATION  ................................ ................................ ...........................  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 previously 
reviewed)  ................................ ................................ ................................ .......................  2 
1.1.1   Brazil (G/ADP/N/1/BRA/3/Suppl.14 – G/SCM/N/1/BRA/2/Suppl.17 – 
G/SG/N/1/BRA/3/Suppl.8); (G/ADP/N/1/BRA/3/Suppl.15 – G/SCM/N/1/BRA/2/Suppl.18 – 
G/SG/N/1/BRA/3/Suppl.9); (G/ADP/N/1/BRA/3/Suppl.16 – G/SCM/N/1/BRA/2/Suppl.19 – 
G/SG/N/1/BRA/3 /Suppl.10) and (G/ADP/N/1/BRA/3/Suppl.17 – G/SCM/N/1/BRA/2/Suppl.20 – 
G/SG/N/1/BRA/3/Suppl.11)  ................................ ................................ ...............................  2 
1.1.2   Cameroon (G/ADP/N/1/CMR/ 2 – G/SCM/N/1/CMR/2 – G/SG/N/1/CMR/2); 
(G/ADP/N/1/CMR/2/Suppl.1 – G/SCM/N/1/CMR/2/Suppl.1 – G/SG/N/1/CMR/2/Suppl.1) and 
(G/ADP/N/1/CMR/2/Suppl.2 – G/SCM/N/1/CMR/2/Suppl.2 – G/SG/N/1/CMR/2/Suppl.2)  ............  2 
1.1.3   India (G/SCM/N/1/IND/2/Suppl.13)  ................................ ................................ ..........  3 
1.1.4   United States (G/ADP/N/1/USA/Suppl.31 - G/SCM/N/1/USA/Suppl.32)  ..........................  3 
1.2   Review of notifications of new or amended legislation or regulations with outstanding 
written  questions  ................................ ................................ ................................ .............  5 
1.2.1   Cameroon (G/ADP/N/1/CMR/1/Suppl.1 – G/SCM/N/1/CMR/1/Suppl.1 – 
G/SG/N/1/CMR/1/Suppl.1)  ................................ ................................ ................................  5 
1.2.2   India (G/SCM/N/1/IND/2/Suppl.12)  ................................ ................................ ..........  5 
1.2.3   Saint Kitts and Nevis (G/ADP/N/1/KNA/1 – G/SCM/N/1/KNA/1)  ................................ .... 5 
2   NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWE D BY THE COMMITTEE  ................................ ................................ . 5 
• A. WRITTEN FOLLOW -UP QUESTIONS CONCERNING PREVIOUSLY REVIEWED LEGISLATIVE 
NOTIFICATIONS:  ................................ ................................ ................................ .............  5 
2.1   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)  ................................ ..........................  5 
• B. OUTSTANDING WRITTEN FOLLOW -UP QUESTIONS CONCERNING PREVIOUSLY 
REVIEWED LEGISLATIVE NOTIFICATIONS POSED UNDER THIS AGENDA ITEM AT PREVIOUS 
COMMITTEE MEETINGS:  ................................ ................................ ................................ ... 6 G/SCM/M/119  
 
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  2.2   Ghana (G/ADP/N/1/GHA/2 - G/SCM/N/1/GHA/2 - G/SG/N/1/GHA/2)  ................................  6 
3   SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ARTICLE  25.11) – 
G/SCM/N/386 AND G/SCM/N/386/SUPPL.1  ................................ ................................ .. 7 
4   PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: NOTIFICATIONS 
(ARTICLE 25.11)  ................................ ................................ ................................ ...........  13 
5   ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR THE ELIMINATION OF 
EXPORT SUBSIDIES  ................................ ................................ ................................ ...... 15 
6   IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT  .................  16 
7   CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM ANNEX VII(B)  ..........  19 
8   PERMANENT GROUP OF EXPERTS  ................................ ................................ .............  19 
9   SUBSIDIES AND OVERCAPACITY – ITEM REQUESTED BY AUSTRALIA , CANADA, THE 
EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  .............  19 
10   SUBSIDY TRANSPARENCY AND CHINA'S PUBLICATIO N 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  ................................ ................................ ................................ ............  24 
11   PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF NEW AND FULL 
SUBSIDY NOTIFICATIONS – ITEM REQUESTED BY AUSTRALIA, CANADA, THE EUROPEAN 
UNION, JAPAN, NEW ZEALAND, CHINESE TAIPEI, THE UNITED KINGDOM, AND THE 
UNITED STATES  ................................ ................................ ................................ ............  26 
12   OTHER BUSINESS  ................................ ................................ ................................ ... 28 
12.1   Questions from China to the United States Pursuant to Article 25.8 of the SCM  Agreement-
 ................................ ................................ ................................ ................................ ... 28 
13   DATE OF NEXT REGULAR MEETING  ................................ ................................ .........  29 
14   ELECTION OF OFFICERS  ................................ ................................ .........................  29 
 
1  NATIONAL LEGISLATION  
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 
1.1.1   Brazil (G/ADP/N/1/BRA/3/Suppl.14 – G/SCM/N/1/BRA/2/Suppl.17 – 
G/SG/N/1/BRA/3/Suppl.8); (G/ADP/N/1/BRA/3/Suppl.15 – 
G/SCM/N/1/BRA/2/Suppl.18 – G/SG/N/1/BRA/3/Suppl.9); 
(G/ADP/N/1/BRA/3/Suppl.16 – G/SCM/N/1/BRA/ 2/Suppl.19 – 
G/SG/N/1/BRA/3/Suppl.10) and (G/ADP/N/1/BRA/3/Suppl.17 – 
G/SCM/N/1/BRA/2/Suppl.20 – G/SG/N/1/BRA/3/Suppl.11)  
4. No written or oral questions were posed with respect to these notifications.  
1.1.2   Cameroon (G/ADP/N/1/CMR/2 – G/SCM/N/1/CMR/2 – G/SG/N/1/CMR/2); 
(G/ADP/N/1/CMR/2/Suppl.1 – G/SCM/N/1/CMR/2/Suppl.1 – 
G/SG/N/1/CMR/2/Suppl.1) and (G/ADP/N/1/CMR/2/Suppl.2 – 
G/SCM/N/1/CMR/2/Suppl.2 – G/SG/N/1/CMR/2/Suppl.2)  
5. No written or oral questions were posed with respect to these n otifications.  
 
1 Relevant deadlines for written questions and written answers regarding the notifications of legislation 
reviewed in the April 2022 meeting can be found in section 1 of document G/ADP/W/508 - G/SCM/W/584 - 
G/SG/W/254.  G/SCM/M/119  
 
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  1.1.3   India (G/SCM/N/1/IND/2/Suppl.13)  
6. No written or oral questions were posed with respect to this notification.  
7. India explained that the notification seeks to further amend Customs Tariff (Identification, 
Assessment and Collection of Countervaili ng Duty on Subsidized Articles and for Determination of 
Injury) Rules 1995 to introduce anti -absorption provisions and make certain other miscellaneous 
changes. The new rules provided for (i) anti -absorption review, (ii) initiation of investigation to 
determine absorption, and (iii) determination of absorption.  
8. With the insertion of rule 29 for anti -absorption review, in order to counter anti -absorption of 
countervailing duties ("CVD"), the designated authority may, after conducting review, recommend 
chang es in the form, quantum or rate of CVD after reassessing the  subsidy margin and injury margin. 
A CVD imposed under section 9 of the Act may be  considered to be absorbed where export prices of 
articles from the exporting country or countries decrease post  imposition of the CVD without any 
significant change in resale price of the articles in India  imported from  the exporting  country  or 
countries.  
9. With the insertion of rule 30 for initiation of review of anti -absorption investigations, the 
designated  authorit y may initiate an investigation under section 9 of the Act, upon receipt of a 
written application. The designated authority can also initiate suo motu  investigations. The 
amendment allows the central government to make provisional assessment of imports of the article 
alleged to be absorbing the CVD in force. It may also ask a  guarantee from the importer, till the 
time a decision is taken. India also not ed that the review shall be limited only to re -computation of 
subsidy and  injury margin.  
10. With the insertion of rule 31 for determination of absorption, the designated authority is 
required to make the final determinations and recommend modification that wo uld be applied 
retrospectively from  the date  of initiation  of the anti -absorption investigation.  
1.1.4   United States (G/ADP/N/1/USA/Suppl.31 - G/SCM/N/1/USA/Suppl.32)  
11. A written question was posed regarding this notification and can be found in document:  
• G/ADP/Q1 /USA/33 - G/SCM/Q1/USA/33 – questions from China  
12. The United States  noted that replies to those questions would be provided in the meeting of 
the Committee on Anti -Dumping Practices ("ADP Committee).  
13. China  recalled that the new regulation made bona fide  sales a prerequisite for applying for 
new shipper review under section 351.214(b)(1) listing specific requirements under section 
351.24(k). It requested the United States to explain (i) how the new shippers,  who did not participate 
in previous proceedings  but have been suffering  very high punitive rates, could  meet the bona fide  
requirement; (ii) whether the bona fide  sales requirement had only paper value rather than real 
commercial value and how the United States would evaluate bona fide  sales in real business scenario 
when there was a very high rate; and (iii) how the United State reconciled its regulation with the 
WTO obligations so as not to impose extra burden to the exporters that should be entitled the new 
shipper status under the WTO rules.  
14. China raised those questions because Chinese exporters had been facing very high adverse 
facts available ("AFA") rates whi ch could be as high as 170 0%. It further asked how the new Chinese 
exporters could be given a fair chance to enter the market if they were obliged to prove bona fide  
sales while facing very high punitive measures.  
15. China also recalled that under section 351 .225(c), when applying for a scope inquiry, an 
interested party must have a product which is or has been in actual production by the time of the 
filing of the application. It requested the United States to clarify whether a company, having finished 
the des ign of a new product and with the sample of such product at hand, would qualify for applying 
for a scope inquiry  and h ow the United States would define the term "is or has been in actual 
production ". G/SCM/M/119  
 
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  16. The United States  reiterated that its answers would be p rovided at the ADP Committee.  
17. China  noted that the new regulation laid out the time point for the suspension of liquidation 
and commencement for the collection of cash deposit of estimated AD and/or CVD duties in scope 
rulings and anti -circumvention inves tigations, respectively under section 351.225(l)(2) and 
351.226(l)(2). Accordingly, the new regulation authorized the investigating authority to collect cash 
deposit retroactively. China requested the United States to explain  (i) whether the retroactive 
collection of cash deposit prior to the initiation of the scope inquiry or the anti -circumvention 
investigation would be inconsistent with the domestic court ruling  of the United States in the case 
TRANS TEXAS TIRE, LLC and ZHEJIANG JINGU COMPANY v. United S tates, which stated that the 
United States' Department of Commerce ("USDOC") was required to provide adequate notice to 
importers if their product was subject to duties before any retroactive assessment. If during the 
investigation, the importers could not be sure of the inclusion of their products in the investigation, 
then the court must find that the adequate notice was not given at that stage; and (ii) how the 
exporters who reasonably believed that their products would be outside of the scope of the order 
could avoid ultimately paying for the punitive country -wide rate, to which the y were subject only 
because they had no chance to apply for a separate rate proceeding, as they did not participate in 
the original investigation.  
 
18. The new regulation delegated to the USDOC the authority to initiate anti -circumvention 
investigations at re quest or at its own discretion under section 351.226, while not requiring for the 
standing of the request, domestic support or the size of this applicant. China noted that this was 
dramatically different from the domestic support requirement necessary for the initiation of trade 
remedy investigations and requested the United States to explain why the initiation of 
anti-circumvention investigations would not require domestic support.  
19. China also recalled that the new regulation might apply the determination o n a country -wide 
basis to all products from the same country regardless of producers, exporters or importers. 
However, there would be different scenarios in any anti -circumvention case depending on the 
different practices of the exporting companies. Moreov er, the circumvention practice was totally 
company specific. In this regard, China requested the United States to explain (i) the rationale of 
sampling in anti -circumvention cases clarifying  the legal consequences for those companies that did 
not circumven t the AD or CVD order  but were not selected as mandatory respondents; (ii) how the 
USDOC would determine whether the rest  of the companies in the investigated country had actually 
circumvented or not  in the scenario that one of the two selected respondent s found to be 
circumventing and the other one not; and (iii) the legal consequences  for the  companies found to 
be circumventing, if they would pay the cash deposit determined in the original investigation and 
what would be the rates applicable for them . 
20. China indicated that the new regulation laid out the procedure for covered merchandise 
referrals, authorizing the United States Customs to refer any unresolved covered merchandise issue 
to the USDOC to make a determination under section 351.227. It requested  the United States to 
clarify (i) whether it would be at the discretion of the United States Customs to initiate a scope 
inquiry and determine the scope order; (ii) whether an interest ed party would be given a chance to 
request the United States Customs to  refer to USDOC in case it did not agree with the determination 
made by the United States Customs; and (iii) where the United States would publish all the case 
tables regarding EAPA cases; whether the case information would be  publish ed online, for example , 
in ACCESS system or EDIS  system, so as to offer the interested parties and their legal 
representatives the ability to be informed of the latest progress and information.  
21. Written answers to China's written questions were subsequently provided prior to the  
deadline2 of 6 June 2022 and can now be found in document:  
• G/ADP/Q1/USA/34 – G/SCM/Q1/USA/34 – replies to China  
22. The Committee took note  of the notifications, questions and statements.  
 
2 Section 1 of document G/ADP/W/509 - G/SCM/W/586 - G/SG/W/255.  G/SCM/M/119  
 
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  1.2  Review of notifications of new or amended legislation or regulations with outstanding 
written questions  
1.2.1   Cameroon (G/ADP/N/1/CMR/1/Suppl.1 – G/SCM/N/1/CMR/1/Suppl.1 – 
G/SG/N/1/CMR/1/Suppl.1)  
23. Written questions and replies with respect to this notification can be found in:  
• G/ADP/Q1/CMR/3 – G/SCM/Q1/CMR/3 – G/SG/Q1/CMR/3 – questions from the 
United  States  
24. The Chair noted  that these questions have been pending since the Committee meeting of 
October 2014.  
25. Written answers to the United States' questions were provided and can be found in document : 
• G/ADP/Q1/CMR/4 - G/SCM/Q1/CMR/4 - G/SG/Q1/CMR/4 – Reply to the United States  
26. Cameroon  was not present at the meeting.  
1.2.2   India (G/SCM/N/1/IND/2/Suppl.12)  
27. The written follow -up question posed by Canada and India's written reply can be found in:  
• G/ADP/Q1/IND/ 32 - G/SCM/Q1/IND/32 and Corr.1 – question posed by Canada  
• G/ADP/Q1/IND/33 - G/SCM/Q1/IND/33 – reply to Canada  
1.2.3   Saint Kitts and Nevis (G/ADP/N/1/KNA/1 – G/SCM/N/1/KNA/1)  
28. 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  
29. Saint Kitts and Nevis was not present at the time. Oral answers were not provided at the 
meeting, nor had written answers been received to date.  
30. The Committee took note  of the not ifications, questions, answers and the statements made.  
2  NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE3 
• A. WRITTEN FOLLOW -UP QUESTIONS CONCERNING PREVIOUSLY REVIEWED 
LEGISLATIVE NOTIFICATIONS:  
2.1  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)  
31. 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 quest ions from the Russian Federation  
32. Oral answers were not provided at the meeting, nor had written answers been received to 
date. 
 
3 Relevant deadlines for written follow -up questions and written answers regarding the notifications of 
legislation reviewed in the October 2021 meeting can be found in section 1 of document G/ ADP/W/508 - 
G/SCM/W/584 - G/SG/W/254.  G/SCM/M/119  
 
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  • B. OUTSTANDING WRITTEN FOLLOW -UP QUESTIONS CONCERNING PREVIOUSLY 
REVIEWED LEGISLATIVE NOTIFICATIONS POSED UNDER THIS AGENDA ITEM AT 
PREVIOUS COMMITTEE MEETINGS:  
2.2  Ghana (G/ADP/N/1/GHA/2 - G/SCM/N/1/GHA/2 - G/SG/N/1/GHA/2)  
33. 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 – Subm itted by the United States  
34. The Chair noted that the notification and the questions would be taken up in the Committee 
on Anti -Dumping Practices.  
35. Ghana was not present at the time. Oral answers were not provided at the meeting, nor had 
written answers been received to date.  
36. The Chair, recalling the Committee's agreed procedures, informed Members that for new 
legislative notifications to be placed on the agenda of the fall 2022 meeting, they should be circulated 
in all three languages by 12 September 2022. Sh ortly after that date, the Secretariat would circulate 
a document informing Members of all legislative 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 n ew legislative notifications reviewed at the meeting, as well as the subject 
notifications, 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.  
37. The Chair also recalled that two new legislative notifications from the United Kingdom  would 
be considered under the first agenda item of the next meeting of the Committee. Written questions 
concerning that notification as well as any other new legislativ e notifications for the fall 2022 meeting 
of the Committee should be submitted to the Member concerned and to the Secretariat by 
3 October  2022.  
38. In order to place previously -reviewed  legislation on the agenda of the autumn meeting for 
further review, written questions must be submitted to the Member concerned and the Secretariat, 
not later than 12 September 2022; and written answers to such questions must be submitted to the 
Member co ncerned and the Secretariat, not later than 10 October 2022. The Secretariat would 
circulate the usual triple -symbolled document containing all the relevant deadlines shortly after the 
meeting.4 
39. The Chair expressed concern that some Members had yet to sub mit any notification concerning 
legislations. She underlined the importance of these notifications in terms of transparency and 
recalled that for many Members all that would be required was a single nil notification. For any 
Members that conducted CVD inve stigations but had not yet notified their legislation, it was all the 
more important for the Committee to have the opportunity to review and ask questions about that 
legislation. Therefore, the Chair encouraged all Members that had not yet made a legislati ve 
notification to do so as promptly as possible.  
40. The Chair referred to the document G/SCM/N/18/Add.56 which contained the latest revision 
of the list of authorities competent to initiate and conduct investigations within the meaning of 
Article  25.12 of th e SCM Agreement and invited all Members with such an authority to submit the 
required notification pursuant to Article 25.12 of the SCM Agreement, or to review and update as 
necessary their previously -submitted notifications.  
41. The Committee took note  of the  notifications, questions, and statements.  
 
4 Relevant deadlines can be found in Section 1 of document G/ADP/W/509 - G/SCM/W/586 - 
G/SG/W/255.  G/SCM/M/119  
 
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  3  SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ARTICLE  25.11) – 
G/SCM/N/386 AND G/SCM/N/386/SUPPL.1  
42. Before taking up the semi -annual reports submitted by Members, the Chair recalled the launch 
of the Anti -Dumping Notification Portal in January 2021 and noted that Members had been using it 
extensively to present their semi -annual reports. She announced th at the Secretariat was ready to 
launch the new online portal for submission of semi -annual reports of CVD actions. The Secretariat 
would provide a presentation of the portal, indicate how it would be accessible to Members, and 
would provide information per taining to any training that Members might request from the 
Secretariat.   
43. The Secretariat has been cleaning up and verifying the countervailing data manually for all 
Members since 1995 and would send out specific queries/requests for information to Member s 
expecting to receive responses from Members as soon as possible. The whole CVD Portal Team would 
remain at the disposal of Members if they had any issues with providing the information or answering 
any questions.  
44. The Chair noted that even though the data  cleaning process has been ongoing, the CVD 
Notification Portal would be launched with the "explore data" function which would allow Members 
to check all the data submitted to date in their own circulated semi -annual reports and in the 
circulated semi -annual reports of other Members. As the dataset for CVD actions was less extensive, 
all the actions (pertaining to measures in force and terminated ones) would be available for query.  
45. The Chair recalled that this function of the portal would require updated i nformation to work 
properly. The information contained in all the previous semi -annual reports until the end of June 
2021 were already in the portal and accessible through the "explore data" function. With respect to 
the semi -annual reports covering the se cond half of 2021 contained in the N/386 series as well as 
all future semi -annual reports, the Chair suggested that Members could start entering the 
information contained in their circulated reports into the portal until the end of June 2022. In case 
Membe rs would be unable to do so, the Secretariat would be do so on behalf of Members to make 
sure that all up to date data was available for the explore data function avoiding any backlogs.  
46. The Chair also suggested that with respect to all future semi -annual r eports, starting with the 
one covering the first half of 2022, which would be due by 14 August 2022, all Members submitting 
their semi -annual reports on paper, not through the portal, would have one month, i.e. by 
14 September 2022, to enter the data into the portal if the report has already been circulated. 
Following this date, the Secretariat would enter the data on behalf of Members, just to make sure 
that all up to date data was available for the "explore data" function avoiding any backlogs.  
47. The Chair recalled that document G/SCM/N/386 and G/SCM/N/386/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 1 July through 31 December  2021. Document G/SCM/N/386/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 taken no CVD action during the period. Parag raph 5 of the document listed the 
45 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 actions in the 
foreseeable future.  
48. One-time notifications served a useful transparency function, as they assisted non -active 
Members to meet their 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.  
49. Unfortunately, as listed in paragraphs 3 and 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 pos sible.  
50. No comments or questions were raised concerning the semi -annual reports of Australia, Brazil, 
Canada, India, Peru, Türkiye, the United Kingdom, and Viet Nam.  G/SCM/M/119  
 
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  51. On the semi -annual report of the  European Union , Indonesia  expressed concerns over the 
imposition of CVDs on the importation of cold -rolled steel from Indonesia and India. The imposition 
of the measure had to be notified without delay by the European Union according to Article 25.11 of 
the SCM Agreement on an ad hoc  basis. However, Indonesia was  not able to find such a notification 
to date. Indonesia made its best efforts during the investigation and submitted its comments most 
of which were either ignored or disregarded. The European Union considered Indonesia's nickel 
export regulation as a for m of subsidization for downstream industries, contrary to the prevailing 
dispute settlement practice  such as in the panel in United States – Export Restraints  which had 
concluded that an export restraint could not constitute government entrustment or direction for the 
provision of goods in accordance with Article 1.1(a)(1)(iv) of the SCM Agreement. Accordingly, it 
would not constitute a financial contribution w ithin the meaning of Article 1.1 of the SCM Agreement. 
A financial contribution would exist when something of economic value was transferred by a 
government. In addition, the provision of goods less than adequate remuneration would require the 
existence of  a government entrusted body which was mandated to provide production material at 
less than adequate remuneration. In that case, however, none of those conditions was met.  
52. Moreover, the European Union departed itself from the principles of the SCM Agreeme nt by 
invoking transnational subsidies, a concept which was not derived from the Agreement but rather 
created by the European Union. Article 1.1(a)(1) of the Agreement stated that there was a financial 
contribution by a government or any public body within  the territory of a Member. Indonesia noted 
that the term "by a government" was clear and did not allow another interpretation that there would 
be a dual government. This term should be read in conjunction with the term "within the territory of 
a Member". In order to identify the existence of a financial contribution, the investigating authorities 
had to determine whether such financial contribution had been provided by a government or another 
entity within its territory.  
53. The term "transnational subsidy", as used by the European Commission's 2020 White Paper 
and the proposed legislation dated 2021, was a separate and novel concept which has neither been 
constructed nor regulated under the SCM Agreement. The fact that the European Commission had 
to formulate  that concept in its 2021 proposal suggested that the European Commission was aware 
that that concept was novel with no precedent nor reference to any existing international trade and 
investment laws and regulations. Applying such a novel concept in any CV D investigation would not 
only harm the disciplines under the SCM Agreement but also the investment and competition among 
WTO Members.  
54. In addition, the use of the provisions of non -binding bilateral cooperation between Indonesia 
and China by the European Commission as evidence during the investigation was another point of 
concern for Indonesia. With such an interpretation, all international cooperation among Members 
might be considered as subsidies. The European Union's implementation of CVDs was based on 
unjustified reasons and on a biased and misleading interpretation of the WTO Agreements. Indonesia 
has been observing the issue very seriously and urged the European Union to reconsider this matter. 
It also noted that it reserved any of its rights to under take all necessary measures to protect and 
safeguard its legitimate interests as provided by the WTO rules.  
55. China  expressed its concern that in the CVD investigation of stainless steel cold -rolled flat 
products originating in Indonesia, the European Union treated the normal services provided by 
Chinese financial enterprises to private firms in Indonesia in the course of cross -border investment 
as a subsidy granted by Indonesian government in the name of the so -called cross -border 
subsidization or the transn ational subsidization. Article 1.1(a)(1) of the SCM Agreement clearly 
referred to a financial contribution by a government or any public body within the territory of a 
Member. By distorting the clear text of the SCM Agreement, the European Union has create d subsidy 
programs that did not exist. Such actions would not only affect the legitimate interests of 
corporations and Members involved, but also would disrupt normal bilateral economic cooperation 
and overseas investments. China expected that the European  Union would correct its problematic 
practices, terminate all trade remedy measures concerning cross -border subsidization and stop 
conducting similar investigations.  
56. The Russian Federation  echoed the statements delivered by Indonesia and China and raised 
systemic concerns about the growing number of abuses in establishment of subsidization in 
CVD investigations. Both Article 1 of the SCM Agreement and the relevant dispute settlement 
practice  included precise requirements as to what could be deemed as a subs idy. In recent years, 
however, certain WTO Members' investigating authorities had demonstrated selective and G/SCM/M/119  
 
- 9 - 
 
  unscrupulous approach for those requirements. Eagerness to countervail alleged subsidization often 
led to findings of subsidies while there was act ually none. The Russian Federation urged the 
investigating authorities to exercise special precaution in their proceedings and double check their 
determinations that would be against the relevant dispute settlement practice . The goal of capturing 
subsidiza tion especially in the unprecedented forms such as so -called transnational subsidies should 
not lead the authorities to overlook the requirements of the SCM Agreement.  
57. The European Union  stated that it did not intend to engage with the statements made by t he 
Russian Federation.  
58. In response to Indonesia, the European Union noted that it respected Indonesia's right to 
develop its industry and exploit its reserves. This legitimate industrial policy aim, however, should 
be carried out in line with the WTO rules . The European Union recalled that it had lodged an ongoing 
WTO complaint against Indonesia's export ban on nickel ore among other Indonesian measures 
inconsistent with Articles X:1 and XI:1 of the GATT 1994 as well as Article 3.1(b) of the 
SCM Agreement. The investigation targeted two key subsidies which undermined many competitive 
European Union industries. Subsidized raw materials were critical for industrial value chains and 
there were cross -border subsidies deriving from China which Indonesia had accep ted as its own 
based on numerous documents found. Furthermore, Indonesian authorities only partially cooperated 
in many key aspects of the investigation so that the European Union had to rely on facts available. 
The European Union acted in full compliance with the WTO rules and it did not countervail subsidies 
granted outside the jurisdiction of the exporting country. In fact, China's financial contribution were 
clearly attributable to Indonesian Government given the letters of explicit acceptance and 
ackno wledgement as evidenced by the dense web of agreements and bilateral documents that were 
agreed with the Chinese Government within the framework of their close cooperation. 
The investigation revealed that those subsidies were instrumental to the creation o f the substantial 
additional steel capacity which were opening new channels in order to export subsidized steel 
products to the European Union causing injury to European producers. The European Union indicated 
that as long as the distortive countervailable  subsidies continued damaging the European steel 
industry and jeopardizing tens of thousands of jobs, it would have no choice but to exercise its 
legitimate WTO rights to their full extent.  
59. The European Union also noted that there was no such legislative proposal concerning 
"transnational subsidies" as referred by Indonesia and requested Indonesia to clarify what legislative 
proposal they were referring to.  
60. Indonesia  stated that it would provide its response in writing.  
61. On the semi -annual report of the  United States , Brazil  expressed its concerns regarding three 
countervailing measures on certain cold and hot rolled steel flat products and iron construction 
castings. One general concern was that the sunset reviews were carried out in an expeditious way 
by the USDOC, with the justification that only the Brazilian Government as respondent interested 
party would not allow for the opening of a "full review". The measures, however, had the effect of 
virtually excluding Brazilian exporters from the United States'  market. According to Brazil, 
government responses should be sufficient to initiate the full processes which would help ensure due 
process in line with the SCM Agreement. The expedited reviews allowed the USDOC to base the final 
results on the facts availa ble which has raised great concern because this would prevent 
governments from defending their programmes. In the case on iron castings, for example, the 
measure was extended on the basis of one programme, which, as demonstrated by Brazil, had been 
termina ted in 1990.  
62. With respect to the measures on cold and hot rolled steel, Brazil reiterated its concerns about 
their technical flaws which motived Brazil to initiate the ongoing dispute DS514. The programmes in 
question were not actionable subsidies and the USDOC itself found those programmes as 
non-actionable in another investigation on aluminium alloy. Brazil was still expecting a positive 
outcome of the sunset review of the measure on hot rolled steel before the International Trade 
Commission. The export v olume from Brazil to the United States has been very low, while the 
domestic demand in Brazil was increasing and the production capacity was decreasing. For those 
reasons, it would be highly unlikely that Brazilian exports could increase in such a way to c ause 
injury in the next few years.  G/SCM/M/119  
 
- 10 - 
 
  63. In addition, Brazil expressed its disappointment with the extension of the CVD on iron 
construction castings which has been applied since 1986. According to the USDOC, this was justified 
because there was still one programme in force while Brazil has proven that it had extinguished in 
1990.  
64. Morocco  expressed its concerns on the measures regarding phosphate fertilizers, which, 
according to Morocco, were incompatible with the United States' obligations under the 
SCM Agreement. The Moroccan Government did not provide a good or service for less than adequate 
remuneration. Moreover, in the context of the benefit determination, according to the rules and the 
relevant dispute settlement practice , the benchmark price had to b e determined in relation to the 
factual situation in the exporting country concerning the goods and services provided by the 
Government. The United States, however, used a wrong reference which did not enable the US to 
calculate an appropriate amount. This  led to a CVD which was above the amount of any subsidy that 
could be subject to a CVD. The United States determined that the exports from Morocco injured its 
domestic industry despite the evidence showing that the export prices were not undercutting the 
prices of US producers. The United States neither correctly assessed this matter nor properly 
identified the injurious effects that were attributable to other factors than the investigated exports. 
Morocco urged the United States to eliminate that measure.  
65. China  noted that in CVD cases against Chinese products, the USDOC had misused Article 12.7 
of the SCM Agreement in applying AFA to the questionnaire responses by the Government of China 
("GOC") and respondent companies. The Chinese companies provided affid avits or even detailed 
account information to prove the non -use of the export buyer 's credits program making their utmost 
efforts in the whole process. Nevertheless, the USDOC applied AFA in finding the program to be 
unverifiable inconsistently with the WT O rules.  
66. The efforts by the GOC and Chinese respondent companies were recognized by the United 
States' Court of International Trade ("CIT"). The CIT required the USDOC to correct its wrong opinion 
and redetermine the issue showing a consistent view on thi s point in many cases. Despite this fact, 
the USDOC kept its AFA practice in the export buyer 's credits program determination. The CIT 
indicated that it was familiar with other actions concerning that program, including the various 
explanations the USDOC h ad provided in its remand redeterminations. However, the USDOC has 
failed to provide a reasonable explanation for its refusal to rely on the customer certifications of non -
use. With the persistent wrong practice, the ensuing result was that Chinese compani es had to sue 
the USDOC at the CIT in order to change its determination on export buyer 's program and to reduce 
the 10.54% CVD rate. China expected the United States to make its practice in compliance with the 
SCM Agreement respecting the rulings of the CI T. 
67. In addition, China expressed its concern regarding the determination of the so -called provision 
of inputs for less than adequate remuneration ("LTAR") programme which, according to China, did 
not really exist. The USDOC incorrectly applied AFA and made its determinations of this co -called 
LTAR programme. In previous cases, both the GOC and Chinese respondent companies had made 
reasonable efforts to provide the necessary information regarding their commercial nature. The 
commercial information of the inpu t suppliers could be found in the Enterprise Credit Information 
Publicity System ("ECIPS"). The GOC had provided registration documents as well as ownership 
structure documentation for all of the input suppliers in that system to prove their commercial 
nature. The USDOC chose to ignore the ECIPS information checking the list of items including articles 
of incorporation, capital verification reports, articles of groupings, company bylaws, articles of 
association and found out which of them were missing from those numerous materials and then 
applied AFA. According to China, these registration documents of all of the input suppliers of the 
respondents could serve no other purpose but to further confirm that they were commercial 
companies rather than authorities . In the recent administrative review relating to multi -layered wood 
flooring from China, the USDOC once again chose to ignore what the GOC had provided. In that 
case, the GOC tried even harder than before by obtaining from a number of suppliers their busi ness 
licences, articles of association, capital verification reports and management appointment 
documents which the GOC collected from the input suppliers through the mandatory respondents. 
The GOC submitted over 1000 pages of additional documents from 18 independent suppliers. 
However, the USDOC applied AFA on the ground that the record was still missing critical information 
regarding whether the owners, the members of the board of directors or the managers of the input 
suppliers were members of the CCP. C hina noted that proving the nonexistence was extremely hard. 
Therefore, it was expecting the United States to change its practice of abusing AFA in its public body 
determinations.  G/SCM/M/119  
 
- 11 - 
 
  68. The Russian Federation  recalled the concerns raised previously regarding th e abuse of CVD 
instruments by the United States noting that the situation has been getting worse with new 
investigations. It further noted that the United States used certain flawed practices that would enable 
to boost CVDs. Having paralyzed the WTO judici al system by bringing the Appellate Body to 
deadlock, the United States has enjoyed total lawlessness in its investigations finding subsidies 
where there was actually none.  
69. Regarding the CVD actions concerning oil country tubular goods, granular 
polytetra fluoroethylene resin, urea ammonium nitrate solutions and seamless carbon and alloy steel 
standard line, and pressure pipe from the Russian Federation, the USDOC failed to analyse the 
evidence on the record correctly and applied certain practices inconsist ent with the SCM Agreement 
as well as the relevant dispute settlement practice . 
70. With respect to the USDOC's analytical approach to "public body", the Russian Federation 
noted that that the USDOC had countervailed the purchases by Russian exporters of a cer tain 
product from several companies which acted exclusively based on commercial considerations. 
Contrary to the relevant dispute settlement practice , the USDOC had designated them as public 
bodies based solely on the Russian Government's level of ownership , and the rights held through 
that ownership. The same designation had been made in respect of certain Russian banks based on 
some degree of government ownership and the USDOC's understanding that those banks "assisted 
in attaining various government polic y objectives". However, nothing on the record suggested that 
the banks had any authority or instruction from the government to subsidize Russian producers.  
71. With respect to the USDOC's determination of de facto  specificity, the Russian Federation 
indicated that the USDOC has focused exclusively on the number of recipients of the alleged 
assistance as compared to the entire universe of enterprises in the jurisdiction of the granting 
authority. Commercial realities in the economy, as well as the absence of any  plan or scheme limiting 
the number of recipients were disregarded. In addition, no criteria were established as to what 
number of enterprises would be limited which would lead to an inevitably arbitrary decision in every 
case.  
72. Another point of concern wa s the USDOC's use of AFA. As part of its AFA methodology, the 
USDOC was directed "to use the highest, above de minimis , calculated rate for an identical 
programme from another CVD proceeding involving the same country, or from a comparable 
programme as the  AFA plug rate". As a result of that approach, in the seamless pipes determination, 
the USDOC had replaced the calculated subsidy rate with "the highest calculated rate for any 
programme, in any Russian CVD proceeding" which had resulted in an increase of the applicable 
duty rate from less than 1% to 45% for a particular programme. In that proceeding, the USDOC had 
requested information with respect to an alleged programme that had never existed in the Russian 
Federation under any formal or informal rule or  regulation.  
73. The Russian Federation also noted the evidentiary standard applied by the United States' 
authorities when initiating investigations. All of the mentioned proceedings had been initiated based 
on applications containing allegations, assumptions , or speculations rather than sufficient evidence 
with regard to the existence, amount, and the nature of the subsidy in question. This was also 
relevant with respect to the inclusion of new subsidy allegations in the scope of ongoing 
investigations. These  issues had been raised in consultations with the United States but the level of 
the USDOC's engagement in those consultations was far from readiness to seek solutions.  
74. The Russian Federation urged the United States to recall that the WTO was a rules -based 
organization noting that the rules were to be adhered to by all Members equally. It also called on 
the United States to ensure that all CVD investigations would be initiated and conducted in full 
conformity with the relevant provisions of the SCM Agreeme nt.  
75. In response to Brazil, the United States  explained that the expedited sunset reviews on cold 
and hot rolled steel from Brazil were completed on 27 and 29 December 2021, respectively. With 
respect to both CVD orders, the USDOC determined that revocation of the orders would likely lead 
to continua tion and/or recurrence of the subsidies. In both sunset reviews, the Brazilian Government 
pointed to more recent CVD cases conducted by the USDOC where it argued that the USDOC had 
changed its methodology with respect to certain of the programmes under con sideration and given 
those changes the USDOC should have made a negative likelihood finding in those sunset reviews. G/SCM/M/119  
 
- 12 - 
 
  The USDOC made it clear in its final determinations that it would consider the net countervailable 
subsidy determined in the investigation and subsequent reviews as well as whether there has been 
any change in any programme that would likely to affect the net countervailable subsidy. In addition, 
the USDOC made it clear that consistent with past practice and prior determinations, two conditio ns 
had to be met in order for a subsidy programme not to be included in the likelihood determination: 
(i) a programme had to be terminated and (ii) any benefit stream had to be fully allocated. 
Notwithstanding the arguments by Brazil, the government had pr ovided no evidence that the 
programmes under consideration had expired or been terminated. Moreover, the USDOC noted in a 
footnote in the decision memoranda that given that the Government of Brazil's arguments were 
largely concerned on methodological decis ions rather than the termination of the programme, a 
more appropriate venue for the USDOC to analyse the nature of those programmes and any benefit 
provided by them would be within the context of an administrative review of the orders in question.  
76. With re spect to the comments raised by Morocco, the United States noted that the USDOC's 
finding that the government's bestowment of phosphate mining rights was a countervailable subsidy 
was fully consistent with the facts, its law and WTO obligations under the S CM Agreement. The 
USDOC properly concluded that the Government of Morocco had provided a financial contribution in 
the form of provision of a good under Article 1 of the SCM Agreement by granting the Moroccan 
respondent company the exclusive right to extra ct ore from government -owned phosphate reserves. 
In addition, the USDOC properly found that the provision of those mining rights was de jure  specific 
under Article 2 of the SCM Agreement. Given the unique nature of the mining rights specifically, and 
the m onopoly over such rights held by the government, the USDOC conducted a benefit analysis by 
comparing the respondent company's per unit costs to world market price of the phosphate rock 
concluding that the respondent company received a benefit. Such an appr oach was consistent with 
the prior CVD investigations conducted by the USDOC under similar facts. The United States 
requested Morocco to refer to the final determinations for more specific issues in the investigation.  
77. In response to China, the United Stat es noted that the USDOC used AFA only when there was 
a failure on the part of the respondent companies or the governments to fully respond to the 
questionnaires to the best of their ability. With respect to the export buyer's credit programme, the 
USDOC ha s repeatedly explained that the GOC has never fully provided the requested information 
needed to analyse the programme. Specifically, the GOC failed to provide the laws, regulations and 
governing documents for the programme as well as the list of third -party banks which was 
information necessary to fully understand the nature and operation of the programme. The GOC's 
decision to withhold this information impeded and prevented a complete verification of that 
programme.  
78. With respect to China's comments on the  application of AFA regarding the LTAR programme, 
the United States noted that that was due to the GOC's repeated failure to respond fully to the 
questions to the best of its ability. Those questions addressed the nature of the domestic market for 
certain goods and services, the role of the government and government -owned enterprises in the 
relevant markets, as well as other conditions concerning the purchase and sale of goods and 
services. In the most recent cases, China neither fully responded to those ty pes of questions nor 
provided the necessary information such as the composition of the industry and government 
ownership in the relevant sectors. Without such information, the USDOC would be unable to 
complete its analysis of the relevant market in particu lar with respect to the role of the government. 
Therefore, in those cases it was appropriate to rely on the facts available.  
79. The United States stated that it would not engage in business as usual with the delegation of 
the Russian Federation.  
80. China  stated that in all of the investigations involving the export buyer's credits programme 
the GOC confirmed that none of the respondents had applied for, used or benefited from that 
programme during the periods of investigations. In addition, the Chinese companie s provided 
affidavits or even detailed account information to prove the non -use of that programme. 
Nevertheless, the USDOC applied the AFA in determining the existence of that programme. As the 
CIT has repeatedly recognized, the USDOC has neither articulat ed a reasonable explanation 
justifying its conclusions nor explained why the information regarding the third -party banks was 
critical to USDOC's verification process. The USDOC also determined that it could not rely on 
information from the respondents and their customers to establish the non -use, including the 
self-certifications because the information was not verifiable. China hoped that the USDOC would 
change its unfair practice on this. With regards to the public body claim, China urged the United G/SCM/M/119  
 
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  State s to refrain from AFA noting that it has provided the relevant information regarding the 
upstream suppliers.  
81. With respect to the export buyer's credits programme, the United States  noted that in 
response to the CIT's decisions, the USDOC developed supplem ental questionnaires to request 
additional financing information from Chinese companies. In certain cases, this information has been 
deemed sufficient to find that the programme was not used by the respondent companies. However, 
the USDOC has reiterated in  recent decisions that only the GOC could provide the necessary 
documentation regarding the internal operation of that programme. Without such information, the 
GOC's non -cooperation would continue to significantly impede the USDOC's investigation of this 
programme.  
82. Regarding the public body issue, the United States noted that the USDOC had asked about 
the involvement of the CCP in the suppliers that were less than majority owned by the GOC. 
However, the GOC never responded to those questions beyond a cursor y summary about the role 
of the CCP in China. Since the necessary information was missing, the USDOC had to rely on the 
facts available.  
83. The Committee took note  of the semi -annual reports, the statements made, the questions 
posed, and the answers provided.  
4  PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: NOTIFICATIONS 
(ARTICLE 25.11)  
84. The Chair reported that since the Committee's October 2021 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, China, the European Union, India, the United Kingdom, 
and the United States. Those notifications were listed in documents G/SCM/N/384; G/SCM/N/385; 
G/SCM/N/387; G/SCM/N/388; G/SCM/N/389; and G/SCM/N/390.  
85. Türkiye  expressed its concerns  over the CVD investigation by the United Kingdom  on ironing 
boards which was initiated on 7 April 2022. Türkiye recalled that according to Article 13.1 of 
SCM Agreement, the investigating authorities shall invite the exporting Member to consultations to 
arrive at a mutually agreed solution after receiving an application but before initiating an 
investigation. The United Kingdom, however, initiated the investigation only three days after sending 
the notification under Article 13.1. Therefore, Türkiye was not able to respond to the invitation for 
consultations b efore the initiation of the investigation. Since the three days of notice did not provide 
enough time to gather sufficient information to respond and hold consultations, the United Kingdom 
did not provide sufficient opportunity to Türkiye to defend its int erests in that proceeding. Türkiye 
requested the United Kingdom to prioritize the consultation process before initiation of an 
investigation to fulfil its obligations under Article 13.1 of SCM Agreement. Türkiye also reserved its 
rights stemming from the S CM Agreement and from relevant dispute settlement practice.  
86. In response, the United Kingdom  indicated that the investigation on ironing boards from 
Türkiye was initiated on 7 April 2022 following an application lodged on behalf of the domestic 
industry. A non-confidential copy of the application was available on the Trade Remedies Service 
and the United Kingdom notified that action to the Secretariat on 7 April 2022 and ahead of the 
initiation, it also notified the Government of Türkiye and made an offer fo r consultations under 
Article  13 of the SCM Agreement. The United Kingdom stood ready to consult with Türkiye and 
continue the consultations throughout the investigation. The United Kingdom invited Türkiye to 
engage with the investigating authority and to participate as an interested party. The progress of 
the investigation could be tracked through the fully digital trade remedy service, and the 
United  Kingdom encouraged all interested parties to engage in the investigation.  
87. Malaysia  observed that there was  an increased number of countervailing investigations 
initiated against Malaysia by India , the most recent of which were on imports of aluminium primary 
foundry alloy ingot in different forms, copper tubes and pipes, and saturated fatty alcohols. Those 
investigations were initiated with inadequate petitions filed by the Indian domestic industry without 
sufficient evidence regarding the existence of programmes that benefited the producers of the 
products under consideration. The petitions were filed to the I ndian Authority without merit by 
ignoring the principles provided under Article 11 of the SCM Agreement and most allegations were G/SCM/M/119  
 
- 14 - 
 
  done without proper due diligence. Nevertheless, Malaysia has thoroughly cooperated and provided 
detailed responses on the all eged programmes. However, Malaysia had concerns because the 
investigating authority conducted the investigations by ignoring evidence furnished by the Malaysian 
Government and the Malaysian producers showing that the alleged programmes were not subsidy 
within the meaning of the SCM Agreement.  
88. Malaysia viewed those improper practices very seriously and urged India to avoid 
WTO-inconsistent trade restrictive measures to protect its domestic industry as such measures would 
harm the healthy trade relations betw een India and Malaysia.  
89. India requested Malaysia to provide its comments in writing.  
90. China  expressed its concerns over the application of countervailing measures noting that there 
were some problems which might hinder economic recovery and disrupt the global trade order. 
According to China, the legitimate rights and interests of developing Memb ers have been threatened 
by countervailing measures. Between 1995 and 2021, there were 644 countervailing investigations. 
The top four Members who initiated the most countervailing investigations were all developed 
Members, and the investigations of the to p four  account ed for 78% of the global total.  Seven of the 
top ten Members that were subject to investigations were developing Members accounting for 85% 
of the investigations.  
91. Some Members have been creating new methodologies for countervailing investiga tions and 
their domestic legislation and practice have deviated from multilateral rules. For instance, a certain 
Member fabricated the so -called subsidy program of currency undervaluation. The concept of public 
body has been unreasonably expanded by certai n Members by confusing the normal commercial 
behaviour of enterprises with the behaviour of performing government functions. The external 
benchmark has been applied increasingly as a normal method.  Certain Members disregarded the 
effective decisions by the  Appellate Body. Following the paralysis of the Appellate Body, a certain 
Member failed to treat the relevant panel reports in good faith and repeated its violations identified 
by the panel by initiating new investigations.  
92. Some Members have been expanding  the investigated subsidy from exporting country to a 
third country, which would break the basic principle of countervailing investigation causing great 
interference to international investment and normal bilateral economic and trade cooperation. It 
would be extremely unfavourable to upgrade the infrastructure construction of developing Members. 
China called on all Members to pay attention to those problems, to oppose trade protectionism and 
to uphold the authority and effectiveness of the rules -based multi lateral trading system.  
93. China also expressed its concerns regarding the continued application by the 
United  Kingdom  of some of the European Union's countervailing measures after Brexit. China 
noted that the European Union and the United Kingdom were indep endent WTO Members and that 
the European Union's countervailing measures were imposed by the European Union in its capacity 
as a WTO Member. Following Brexit, the United Kingdom as an independent WTO Member no longer 
had any relationship with the European Union's countervailing measures. According to the European 
Union, "all anti -dumping and anti -subsidy measures in force apply from 1 January 2021 only to 
imports into the 27 Member States of the European Union". In China's view, the WTO rules did not 
author ize a Member to apply countervailing measures of other Members. Absent a WTO -compliant 
investigation, the United Kingdom's continued application of certain countervailing measures of the 
European Union would be inconsistent with WTO rules. The European Uni on's measures were based 
on the European Union's trade remedy legislation and on information and data from its 28 member 
States. Transition reviews could not legally transmit another Member's measures to the United 
Kingdom. China expected the United Kingdo m to respect other Members' interests, abide by WTO 
rules and terminate the application of the European Union's countervailing measures and the 
transition reviews.  
94. In addition, China referred to the CVD investigation on optical fibre cables initiated by th e 
United Kingdom on 26 April 2022. The United Kingdom sent the pre -initiation notification containing 
the invitation for consultations on 22 April 2022 without providing necessary information and 
material, including the application. Although China accepted  the consultation invitation, the 
United  Kingdom had initiated the investigation without holding the pre -initiation consultation which 
would deprive China 's right under the SCM Agreement.  G/SCM/M/119  
 
- 15 - 
 
  95. The United Kingdom  stated that it had retained certain definitive t rade remedy measures 
applied before the end of the United Kingdom -European Union transition period and in respect of 
which the United Kingdom held an interest. These measures had been established based on an 
investigation covering the entire territory of t he European Union, including the United  Kingdom. 
Therefore, they had been maintained in respect of the United Kingdom territory as of the end of the 
United Kingdom -European Union transition period. The United Kingdom explained that it had 
determined which countervailing measures should be retained based on evidence presented by the 
United Kingdom's industries and all interested parties, including international industries. 
The relevant assessment had been based on objective evidence relating to specific crit eria, including 
a market share threshold for the United Kingdom -based producers of the product in question of 
more than  1%. The United Kingdom was committed to maintain a fair and transparent approach. Its 
investigating body would conduct objective evidenc e-based transition reviews of the retained 
measures. These reviews would determine whether the measures remained necessary to offset 
subsidization and whether injury of the United Kingdom's domestic industries would recur in case 
the measures were lifted. This could result in the measures being amended, terminated, or 
maintained. Until the conclusion of the reviews, the measures would be maintained.  
96. The United Kingdom also noted that all reviews could be tracked through the fully digital trade 
remedy servic e, and it encouraged exporters and foreign governments to engage in the reviews, as 
appropriate.  
97. Regarding the new investigation referred by China, the United Kingdom indicated that it had 
notified China and invited for consultations under Article 13 of th e SCM Agreement. It stood ready 
to consult with China and to continue consultations throughout the investigation.  
98. The Committee took note  of the notifications and statements made.  
5  ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR THE ELIMINATION OF 
EXPORT SUBSIDIES  
99. 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 respec t 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.  
100.  Antigua and Barbuda, Belize, Costa Rica, Dominica, Dominican Republic, El Salvador, 
Guatemala, Jamaica, Jordan, Mauritius, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, and 
Saint Vincent and the Grenadines had submitted these notifications, which had been circ ulated in 
the G/SCM/N/290 series.  
101.  Furthermore, given that 2015 was the final year of the two -year phase -out period pursuant 
to the previously mentioned procedures, the Members with extensions needed to have completed 
the elimination of their export subsidi es by 31 December 2015. They also had to provide a final 
transparency notification in respect of calendar year 2015 not later than 30 June 2016. A reminder 
concerning that final round of Article 27.4 –related notifications had been circulated in document 
G/SCM/N/299. The  Secretariat circulated a room document indicating the current status of 
notifications and of actions reported by Members with extensions under Article  27.4.5 
102.  To date, 15 of the beneficiary Members out of a total of 19 had submitted their fi nal 
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 five years earlier while for submitting the final notification had been 
almost five years earlier. She emphasized the importance for the system that both the Members 
benefit from exte nsions complete their compliance with the corresponding substantive and 
transparency obligations.  
 
5 RD/SCM/36/Rev.5.  G/SCM/M/119  
 
- 16 - 
 
  103.  The United States  urged the remaining four Members to provide their final transparency 
notifications as soon as possible.  
104.  New Zealand  noted that this agenda i tem had been before the Committee for a number of 
years. It also strongly encouraged those Members to submit their outstanding notifications prior to 
the next meeting of the Committee. New Zealand requested to keep this item on the agenda for the 
fall meet ing. 
105.  The Chair noted that the Committee would revert to that issue at the next meeting.  
106.  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  
107.  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 an d other information flows on trade measures". 
The substance of those discussions was reflected in the minutes of the previous meetings.  
108.  The Chair recalled that at Committee's October 2021 meeting a number of Members had 
indicated their willingness to conti nue 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) th e 
status of Members' notifications 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.  
109.  Regarding the status of subsidy notifications, the Chair noted that the Secret ariat 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 docume nt G/SCM/W/546/Rev.13.  
110.  Despite all the efforts 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 proble m in the proper functioning of the Agreement. 
Ninety -four Members have not yet made their 2021 new and full subsidy notification. Seventy -eight 
Members have not made their 2019 new and full subsidy notification, although the deadline was 
almost three years  earlier. Further, sixty -seven Members still have not made their 2017 notifications, 
which were due almost five years earlier. Many of those Members either have never notified or have 
done so only in the distant past.  
111.  The Chair invited the Members that ha d not yet submitted their 2021 notifications to provide 
an update to the Committee on their progress in preparing those notifications. No such delegation 
took the floor.  
112.  The Chair urged Members that had not yet submitted their notifications to do so and re called 
that the Secretariat continued to be available for enquiries about compliance with notification 
obligations. The Secretariat had assisted many Members in the past and Members finding themselves 
unable to comply with their obligations were encouraged  to consult the Secretariat.  
113.  The European Union  thanked the Secretariat for updating the report on the status of 
notification obligations which had given a very useful but negative picture of the situation. Following 
10 months from the 30 June 2021 deadli ne for 2021 new and full subsidy notifications, 95 Members 
had not yet made their notifications. The European Union acknowledged the difficulties caused by 
the pandemic noting that this was not a voluntary exercise but rather an obligation which was crucia l 
for the work of the Committee. It remained hopeful that while Members have been going back to 
normal functioning, they would be able to catch up with their outstanding notifications.  
114.  The United Kingdom  noted that the notification of subsidies was an inte gral part of the work 
of the Committee and essential for the proper functioning of the SCM Agreement. It remained 
concerned with the low levels of compliance with the notification obligations and recognized that G/SCM/M/119  
 
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  completing notifications was a resource -intensive exercise. It was also an important obligation that 
all Members needed to fulfil to enable a complete understanding of Members' subsidy practices. The 
United Kingdom called on all Members to take the necessary steps to complete their notifications in 
a timely manner and encouraged those Members experiencing difficulties to let the Committee know 
about the nature of those difficulties and seek assistance if needed.  
115.  New Zealand  welcomed the notifications received to date . Timely and complete notifications 
were fundamental for transparency and effective monitoring. For Members who had no subsidy 
programmes, "nil" notifications were useful to enhance transparency. New Zealand ackn owledged 
that compiling notifications could be a resource -intensive process with additional Covid -related 
challenges and encouraged Members facing difficulties to seek assistance from the Secretariat.  
116.  Canada  reiterated the importance of complying with the  notification requirements of the 
SCM Agreement and continued to be concerned that the number of Members completing subsidy 
notifications remained well below full compliance and had been decreasing over recent years. The 
number of notifying Members had fal len from a high of 6 7% in 2013, to a low of 4 2% in 2021 which 
was a very concerning trend. Canada acknowledged that it was a resource -intensive undertaking 
that required coordination between multiple levels of government, but also being a fundamentally 
important transparency exercise for the effective functioning of the SCM Agreement and the WTO. 
It encouraged Members to make their best efforts to fulfil their notification obligations, including by 
making nil notifications, and to leverage existing resource s to seek assistance in those efforts.  
117.  The United States  echoed the statements made by previous speakers and noted that the level 
of non -compliance would undermine the proper functioning of the SCM Agreement. It urged those 
Members who had not yet provided  their notifications to do so as soon as possible.  
118.  Australia  was disappointed that the number of Members who had not made any notification 
regarding their subsidy programs had increased significantly and the number of Members notifying 
subsidies had decli ned. It continued to attach considerable importance to the transparency of subsidy 
programs. The notification of subsidies was a key obligation under the SCM Agreement and the low 
compliance with this obligation was of continuing concern. It acknowledged t he existence of genuine 
capacity constraints, but many non -notifying Members had the capacity to provide subsidies. 
Australia invited those Members, who had not notified, to identify their capacity constraints so that 
the Committee could consider how indiv idual Members, or the Secretariat could provide assistance.  
119.  Japan  stated that transparency and notification obligations were fundamental to the WTO 
system and Members were required to make their subsidy notifications in a timely and proper 
manner.  
120.  With respect to the second topic under this agenda item, the Chair recalled that at the 
Committee's October 2021 regular meeting, a number of Members had indicated their willingness to 
continue discussions on the proposal from the United States regarding p rocedures for questions and 
answers under Articles 25.8 and 25.9 of the SCM  Agreement.6 
121.  The United States  recalled its proposal to improve the process regarding the questions and 
answers provided under Articles 25.8 and 25.9. The United States believed th at the answers should 
be provided in writing and within a certain time -frame. Following some concerns raised regarding 
strict deadlines, it had proposed that Members agree to make their best efforts to submit written 
replies to initial questions and to fol low-up questions within 60 and 30 days, respectively. The United 
States had also indicated that it might be willing to go to even 60 and 90 days. It was open to 
continue to discuss the proposal, but it also noted that it had been responsive to Members' con cerns 
and was reaching the limits of its flexibility. There was nothing extraordinary about the proposal 
because it mirrored the existing practice of providing answers to questions on regular notifications 
and reflected the practice most Members were follo wing when answering Article  25.8 questions.  
122.  The United Kingdom  welcomed the continued discussion on the proposal and reiterated its 
support. Timely sharing of information was in the interest of all Members and essential for the 
 
6 G/SCM/W/557/Rev.4.  G/SCM/M/119  
 
- 18 - 
 
  effective functioning of the  SCM Agreement. It thanked Members that had contributed to the 
discussions so far and encouraged all Members to engage constructively on the proposal.  
123.  The European Union  referred to its previous statements in support for the proposal which 
presented pract ical ways to make transparency commitment more meaningful without creating 
unreasonable burdens. Transforming oral replies, which already required preparation, to written 
responses would significantly improve the transparency with very little additional ef fort. The 
European Union reiterated its support for the proposal encouraging other Members to do the same.  
124.  Australia  supported the proposal noting that it mirrored current practice within the Committee. 
At the heart of the proposal was the requirement to h ave a written reply so that the information 
provided could be properly understood by other Members. Article 25.9 did not prevent Members 
from developing and improving a practice to deal with these requests for information. With this 
proposal, all Members w ould have improved clarity in the Committee's procedures as well as 
improved transparency and understanding of Members' subsidy programmes. The proposal also gave 
best endeavours guidance on timely replies. The revisions made to the proposal addressed the 
concerns expressed by some Members acknowledging time pressures relating to consultation with 
sub-central governments. Australia requested that this item remained on the agenda for further 
discussion at the next meeting.  
125.  Canada  reiterated its support for the proposal. Members should make every effort to provide 
their notifications and respond to questions from Members in a timely and complete manner. The 
subsidy notification process along with the information requests contemplated under Articles 25.8 
and 2 5.9 of the SCM Agreement were fundamental to ensuring transparency objectives. Canada 
encouraged constructive discussions between Members.  
126.  Chinese Taipei  reiterated its support for the proposal.  
127.  New Zealand  remained supportive of the proposal which recogni zed the capacity constraints 
without creating unreasonable burdens. The best efforts framing as well as the language referencing 
to consultation with sub -central governments were particularly helpful. It encouraged all Members 
to engage constructively.  
128.  Brazil reiterated its support noting that the proposal would be helpful to improve transparency.  
129.  The Russian Federation  remained concerned with the proposal which had not changed since 
the previous meeting. The time needed to prepare replies might differ depe nding on the situation 
such as the complexity of the questions posed, the number of authorities involved, and any other 
factors. Therefore, deadlines to submit replies could not be mandatory. The proposed deadlines of 
60 and 30  days periods would be too s hort even if they were indicative. The proposal needed 
significant improvement.  
130.  China  recalled that it had persistently advocated the implementation of transparency 
obligations in accordance with the relevant provisions of the WTO Agreements. Many questio ns 
raised by Members pursuant to Article 25.8 had been incorporated into the normal questions on 
subsidy notifications. Therefore, the proposal would not only cause difficulties to the LDC Members 
but would also pose challenges to many developing Members f acing capacity constraints, increasing 
their workload and distracting their focus on preparing the notifications. China reiterated the 
importance of transparency, expecting that the relevant discussions could be conducted in a 
pragmatic manner and Members would do their best to fulfil their respective transparency obligations 
in accordance with the relevant provisions of the SCM  Agreement.  
131.  India noted that it had already discussed the proposal bilaterally with the United States not to 
fix proposed timelines  as firm deadlines but rather as best endeavour objectives. Keeping in view 
the difficulties for developing and least -developed Members facing capacity constraints, India 
reiterated its suggestion to revise the timelines on the best endeavour basis for a p eriod of 90 days 
for initial questions and 60 days for follow -up questions.  
132.  The Chair stated that it appeared that Members wished to continue discussions on those issues 
at the next regular meeting of the Committee.  G/SCM/M/119  
 
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  133.  The Committee took note  of the statement s made.  
7  CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM ANNEX VII(B)  
134.  The Chair recalled that, pursuant to the Doha Ministerial Decision on Implementation -Related 
Issues and Concerns (document WT/MIN (01)/17, paragraph 10.1), Annex VII (b) to the 
SCM Agreement listed Members until their GNP per capita reached US D 1 ,000 in constant 
1990 dollars for three consecutive years. As of 1 January 2003, the methodology set forth in 
G/SCM/38, Appendix  2 had applied for making those calculations. In accordance with that Decision, 
since then the Secretariat had circulated annual notes in document  series G/SCM/110 updating the 
GNP per  capita figures for the Members listed in Annex VII (b) based on that methodology. The most 
recent version, Addendum 19, was circulated on 31 March 2022.  
135.  No Member took the floor and the Committee took note  of the Chai r's statement.  
8  PERMANENT GROUP OF EXPERTS  
136.  The Chair recalled that the term of Mr Jaemin Lee was expiring and therefore the Committee 
should elect a new expert to replace him. She had explained the procedures to be followed in 
document G/SCM/160. In partic ular, she had established a deadline for nominations, which would 
be strictly enforced. Only one nomination, Mr Pu Lingchen from China, had been received by the 
deadline, whose CV had been circulated to Members via email on 31 January 2022. In the same 
communication, the Chair asked Members whether they could join a consensus such that she could 
recommend the Committee to elect Mr Pu Lingchen. Following her call to join consensus, some 
Members had indicated in writing that they would not be able to join a c onsensus at the time. The 
Chair had convened an informal transparency meeting on 3 March 2022 to inform the Committee 
about the situation. Absent any change in the positions of the relevant Members by the time of the 
meeting of the Committee, the Chair wou ld not be able to recommend the election of the nominee. 
This issue would be taken up by the next Chair of the Committee.  
137.  Japan  expressed its appreciation to the Chair for coordinating the process thus far and looked 
forward to seeing the process move forw ard so that a qualified expert could be appointed as soon 
as possible.  
138.  China  expressed its regret that the Committee had not reached a consensus on the new 
member of the PGE due to the reservation of some Members. China recalled that at the transparency 
session on 3 March 2022, it had expressed its willingness to listen to the reservations of any Members 
and try to address their concerns in an open and constructive manner. It was regrettable that no 
Member had made its reservations known to China therefore it could not find ways to solve the 
problem accordingly.  China had been very serious and responsible in nominating an independent 
expert with extensive knowledge and abundant practical experience in the fields of subsidies and 
trade relations. It remained ready to engage in any discussions with other Members concerning the 
nomination and hoped that the problem could be solved cooperatively to fill the vacancy of the PGE 
as soon as possible.  
139.  The Committee took note  of the statements made.  
9  SUBSIDIES AND OVERC APACITY – ITEM REQUESTED BY AUSTRALIA, CANADA, THE 
EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  
140.  The United States  noted that overcapacity was largely a result of the industrial policies and 
programmes of one Member to the detriment of t he workers and industries of other Members. 
One academic stated that "Chinese state capitalism generates industrial overcapacity in targeted 
sectors; provides SOEs favourable access to credit and other advantages; chases promising 
companies, industries, and investment out of the market and causes numerous other economic 
distortions around the world."  
141.  Recalling the previous discussions at the Committee over the impact of industrial overcapacity 
in certain industries including steel, aluminium, and semi -conductors as well as its disincentivizing 
effect on innovation, the Unite d States indicated that it would highlight the link between China 's 
reliance on industrial state -owned enterprises and the resulting excess capacity in certain sectors. G/SCM/M/119  
 
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  State support for SOEs in China, including subsidies to and through SOEs, has caused, m aintained, 
and increased overcapacity.  
142.  The United States was of the view that the scope of SOEs' role in the economy was unique to 
China. As the IMF noted, "in 2018, total assets of Chinese SOEs stood at 194 % of GDP—higher than 
in the early 2000s, and seve ral orders of magnitude larger than in any other country. China 's SOEs 
also operate in all sectors of the economy, while in other countries their operations are usually 
concentrated in a few sectors".  
143.  The United States referred to the report released by th e WTO, IMF, World Bank, and OECD 
and quoted that "while many SOEs operate commercially without public support, industrial firms in 
which governments are large equity investors benefit relatively more from all kinds of support. 
Industrial firms that are at least 25 % owned by governments receive relatively more government 
grants and below -market loans. SOEs can also be providers of support, as where state banks provide 
below -market lending or state utilities provide below -cost gas and electricity."  
144.  According to the United States, SOEs were unique in their receipt of subsidies. The OECD 's 
recent report on below market finance concurred with the IMF that "SOEs receive relatively more 
subsidies than privately owned enterprises who are typically smaller in size wh ich can lead to market 
distortions. " The OECD report also highlighted that "this is true in cement, of which China is the 
largest producer by a very large margin, but also in shipbuilding and several other sectors covered 
in this report ". Including steel, these were some of the sectors that were in overcapacity.  
145.  Another sector plagued by overcapacity was the aluminium sector. As the OECD noted in its 
study of below -market finance in the aluminium sector, "the vast majority of financial support was 
provided by China 's state -owned banks to Chinese aluminium SOEs." The IMF reported that "recent 
studies of the aluminium and semiconductor sectors estimated that firms, including SOEs, in these 
industries received sizable government support through budget support, subsidized inputs, 
below -market loans, and equity financing. An academic study estimated that SOEs produced 
one-third of global steel output in 2016 amid private sector complaints that SOE peers received 
unfair government support. In all three sectors, ove rcapacity is a concern."  
146.  The United States also referred to economic research from the China Journal of Accounting 
Research which showed that SOEs received a large share of financial support that contributed to 
overcapacity. For example, "according to the data for China 's A-share listed companies from 2007 
to 2019, companies in industries with excess capacity received more financial support from 
controlling shareholders compared with those in non -overcapacity industries. Analysis of the 
mechanism revealed t hat state -owned enterprises and companies with relatively poor financial 
status received more financial support from controlling shareholders. " Looking across sectors, 
research showed that "the proportion of SOEs is significantly and negatively correlated with capacity 
utilization. "  
147.  The United States recalled China's previous statements that it had taken steps to reduce 
capacity in certain sectors. However, research in the 2021 International Review of Economics and 
Finance also showed that SOEs were signif icantly less likely than private firms to reduce their 
overcapacity. In addition, a paper from the 3rd Asia-Pacific Electronics and Electrical Engineering 
Conference concluded that "for SOEs, due to the influence of management mechanisms and the 
ownership of enterprises, the problems they faced in the process of cutting overcapacity are more 
severe than those for private enterprises, and they were undertaking greater challenges and 
pressures". The support and maintenance of overcapacity via Chinese SOEs was  distorting markets, 
tilting the playing field in China 's favour, and harming workers and industries in the United States 
and around the world.  
148.  Japan  drew attention to cases where SOEs were given preferential financial support or 
regulatory advantage over private entities, putting the latter at a disadvantage in the global 
competition. It acknowledged the public interests that could not be achieved through the market 
competition where it would be reasonable to pursue such public policy objectives through SO Es. 
However, the advantage given to SOEs through financial support or preferential regulatory treatment 
and commercial activities of SOEs which were not in line with the market principles could be used to 
put SOEs in advantage over private entities of othe r Members. Such an advantage could distort the G/SCM/M/119  
 
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  market competition and impair the overall optimization of the global resource allocation, including 
those for global innovation and environment.  
149.  In the steel industry, for example, SOEs made up the majority o f crude steel producers around 
the world being the key players in the global market. According to a study by the OECD, since 2000, 
the production capacity of SOEs, especially those in China, had shown significant and stable growth. 
The preliminary analysis  suggested that SOEs had received more governmental support than private 
entities preventing non -competing entities from exiting the market while pushing up the production 
capability. It was highly likely that the excessive capacity in the steel industry w as caused by the 
market distortive support to SOEs. As it was not easy to identify such support to SOEs, transparency 
was essential. Governments should not provide financial and regulatory preferences leading to 
excess capacity. Japan would like to continu e to discuss this issue in the Committee.  
150.  Canada  remained concerned with the contribution of government interventions such as 
subsidies creating persistent global excess capacity in several sectors. The co -sponsors of this 
agenda item had highlighted sever al important findings by the OECD with respect to the prevalence 
of government support in various sectors as well as its trade impacts. Industrial SOEs could also 
contribute importantly to maintaining and increasing excess capacity in these sectors. Recogn izing 
their role in serving the public interest, Canada expressed that it was concerned about the distortive 
effect that SOEs could have. For example, they might enjoy privileges and immunities not available 
to private firms that would give them an undue c ompetitive advantage over their rivals.  In addition, 
SOEs also had the potential to distort trade by discriminating between different country markets and 
providing more favourable treatment for domestic goods and services.  
151.  Initial OECD analysis suggested that the role of SOEs in global steelmaking had increased 
substantially since 2000, and that government ownership of steelmaking capacity might be 
contributing to excess capacity, as the provision of market -distorting govern ment support might 
have led to over investment in production capacity or prevented non -viable producers from leaving 
the market. Similar harmful dynamics could be observed in other industrial sectors. All Members 
should be concerned by the SOEs' role in co ntributing to overcapacity and distorting global markets.  
152.  Canada encouraged all Members to reflect on past and forthcoming analysis by the OECD on 
those issues, and to engage constructively with other Members both at the Committee and in other 
internationa l fora including the Global Forum on Steel Excess Capacity ("GFSEC") which continued 
to provide a useful forum to discuss support to steel industry. It was important that all major steel 
producing economies continued to participate in the work of the GFSEC , to address excess capacity 
and move forward together.  
153.  The United Kingdom  welcomed the continued discussion on this issue and shared the concerns 
raised by previous speakers. Unjustifiable subsidies had the potential to distort markets and stall 
competiti on including by causing overcapacity across important economic sectors such as 
semiconductors, steel and aluminium.  
154.  According to the OECD's estimations, the global steelmaking capacity was 
2454.3  million  metric  tons while the actual production was only 19 10.2 million metric tons in 2021. 
The gap of 544.1 million tons highlighted that the overcapacity continued to be the major problem 
for the steel sector in which SOEs were playing a significant role. The United Kingdom continued to 
support the ongoing work  across the international fora including the GFSEC as well as the OECD's 
current research on the rail rolling stock sector and below -market energy inputs. The results of that 
work could be shared in the Committee to help the full understanding of the scale  of the problem. 
The OECD report dated May 2021 showed that below -market financing could undermine the 
perception of fair competition and contribute to excess capacity in a number of sectors. It was 
estimated that the total below -market borrowing was aroun d 66 billion US dollars and aluminium, 
cement, solar panels, glass and ceramics sectors were the most frequent recipients. These sectors 
were also providers of subsidies to other firms, which was not fully covered by the existing trade 
rules. The OECD repo rt highlighted the need to improve transparency of such subsidy practices as 
well as the information gaps regarding government ownership of firms.  
155.  The United Kingdom was of the view that overcapacity was a global challenge which required 
a collective respo nse. It encouraged all Members to engage constructively including by contributing 
useful data to help informed analysis. It pointed out the challenges in obtaining data from Chinese G/SCM/M/119  
 
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  companies and called on China to be more transparent in demonstrating the actions taken to reduce 
overcapacity by providing the relevant and accurate information.  
156.  The European Union  stated that the SOEs had the potential to distort competition due to their 
size and proximity to state. To avoid competition distortions, the European Union required its own 
SOEs to follow commercial considerations and not to discriminate in their sales a nd purchases. 
Similar commitments were also included in the free trade agreements signed by the European Union. 
Subsidies could cause overcapacity if they were not designed carefully. A particularly problematic 
practice would be when a state required an SO E to invest in capacity creation that would not be 
made under commercial conditions. In addition to being the recipients of subsidies, SOEs might also 
serve as a vehicle to grant subsidies. Financial SOEs such as banks and investment funds could be 
used to  channel state funds to industrial enterprises at below market conditions.  
157.  State -run investment funds could contribute to the overcapacity in two ways. First, the 
recipients of capital injections could make new investments creating excess capacity that wo uld not 
be profitable under normal conditions. Second, rescue funds could artificially maintain unprofitable 
enterprises in a probation which would prevent the excess capacity from adjusting to the demand. 
In addition, use of financial intermediaries to ch annel subsidies would create transparency challenges 
because capital injections were not always notified and the favourable financial conditions were not 
always admitted as subsidies.  
158.  The European Union also referred to the recent joint report by the WTO,  IMF, World Bank and 
the OECD which identified specific concerns on SOEs such as below -market financing and 
overcapacity. The report highlighted some specific challenges such as transparency of SOEs, 
underlined the changing role of the state and SOEs justi fying development of strengthened rules on 
SOEs. The new rules should also address below market financing and overcapacity.  
159.  Brazil  expressed its support to reduce subsidies causing overcapacity both in the industrial 
and agricultural sectors. It commended  the work carried out by the GFSEC and its important role as 
a transparency and coordination mechanism addressing overcapacity in the steel sector. As the 
Co-Chair of the GFSEC in 2022, it would engage in the debate of G20 members as well as other 
prominen t jurisdictions in the global steel market.  
160.  Australia  was concerned that structural excess capacity remained a feature in several key 
industry sectors and noted that the linkage between overcapacity and subsidies was an appropriate 
and valuable area of dis cussion for the Committee. Australia has been looking to identify where 
improved subsidy disciplines would be required which necessitated looking at the impacts of 
subsidies on the functioning of competitive markets.  
161.  Australia also observed the ongoing wor k by the OECD on measuring government support in 
industrial sectors and its analysis of the impacts of certain types of subsidies.  The OECD 's previous 
analysis had underscored the need for transparency of government support programs in terms of 
understandi ng the policy settings in markets in the context of excess capacity; understanding how 
capacity in markets was developed and supported by governments; and in understanding how 
government support measures affected sectors where overcapacity features.  
162.  Austra lia recalled that improving and clarifying subsidy rules in the Doha negotiations included 
looking at government support to state -owned enterprises. There was acknowledgement that these 
were not adequately disciplined by existing subsidy rules, but these d iscussions were partially 
informed by existing rules and principles relating to SOEs. Namely, such enterprises should operate 
in accordance with commercial considerations and in line with customary business practice and afford 
private enterprises adequate opportunity to compete.  
163.  As the OECD 's report on below market financing has indicated, SOEs were both receivers and 
providers of government support. The potential advantages and preferences received by SOEs, 
particularly where they had a significant portion  of a market, might have significant distortive effects 
both on the structure of the market and the competitiveness of private enterprises.  
164.  Australia welcomed the OECD 's further analysis on SOEs and subsidisation as well as its 
current work on the role of support for energy inputs and rail rolling stock. Keeping apprised of the 
OECD 's analysis and sharing that analysis would be valuable for the Committee.  G/SCM/M/119  
 
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  165.  Chinese Taipei  referred to the interim report of the OECD Steel Committee dated March 2022 
which analys ed the correlation between financial support to SOEs and their economic performance. 
It noted that the issue deserved continued attention and it looked forward to keeping the discussions 
under that agenda item so that Members could think about ways to deal  with that issue collectively.  
166.  According to China , overcapacity was a universal, cyclical, and structural problem in economic 
development. The current overcapacity in steel industry was caused by the global economic 
recession resulting from the 2008 intern ational financial crisis and the consequent decrease in 
demand for steel.  A few Members had attempted to attribute the current overcapacity to China 's 
industrial subsidies and support measures, claiming that China had distorted the market. These 
claims were inconsistent with the facts. Since 2016, China had been carrying out the supply -side 
structural reform, producing remarkable progress in over -capacity reduction. For example, between 
2018 and 2020, China had reduced over 150 million tons of crude steel p roduction capacity and the 
utilization rate had returned to an appropriate range of over 80%. The capacity utilization rate in 
the aluminium industry was above 85%. The net export of China 's crude steel was 16.72 million  tons 
the previous year, accounting for only 1.6% of China 's total crude steel output, and China 's net steel 
export took up only 4.2% of the global export. For the aluminium industry , China had exported 
4.6 million tons of aluminium the previous year, down by 10%, accounting for only 8% of C hina's 
aluminium total output. China would maintain controls over new capacity and was committed to 
establishing and improving a long -term mechanism for resolving excess capacity through 
marketization and rule of law.  
167.  China also noted that the Chinese Gove rnment attached great importance to fair and equitable 
participation of SOEs in market competition. SOEs had been integrated to the market economy 
independently engaging in market competition. They have been purchasing and selling according to 
commercial c onsiderations, being subject to the same laws and rules as other enterprises such as 
bankruptcy and competition legislation.  
168.  With respect to the state -owned banks, China noted that SOEs, private enterprises, and 
foreign investment companies were all custo mer groups of commercial banks which would 
independently select their customers and issue credits and loans according to their own strategic 
planning, development orientation, risk preference and management capacities.  
169.  China disagreed with the comments ma de by other Members with respect to the 
overcapacity -creating support to the SOEs in the steel sector. Through regulations and laws, the 
Chinese Government had strictly forbidden provision of support that would create additional 
production capacity in the steel sector. China had notified subsidies also relevant for SOEs but had 
no specific subsidies on SOEs.  
170.  With respect to capital injection by the State, China noted that the Chinese Government, just 
as many other private actors, served as a shareholder of SOEs and has been receiving rich returns. 
Therefore, capital injections shall not be regarded as subsidies.  
171.  Regarding the semiconductor industry, China noted that it had collected and included the 
information related to the integrated circuit industry in i ts notification. It also clarified that the 
National Integrated Circuit Industry Investment Fund was not a subsidy that needed to be notified.  
172.  The Russian Federation  assured the Committee of its readiness for constructive engagement 
in genuine efforts to tackle overcapacity reiterating that overcapacity should be approached 
holistically from different angles and other important factors should be equally addressed. Acc ording 
to the Russian Federation, trade protectionism was the major factor hampering competition, 
artificially shielding domestic industries which disregarded pure market signals when making 
investment decisions. The proponents of that agenda item together  with some other Members 
pretended to be committed to tackling with overcapacity. However, they also aggravated the 
devastating impacts of protectionism by imposing new illegal and unjustified unilateral barriers. 
Russian exporters had recently faced prohi bitions of imports of iron and steel, additional duties on 
those products and other adversary trade actions. Such unilateral measures had already led to 
shortages of supply, spiking prices, reallocation of trade flows and logistical challenges. Moreover, 
due to new unjustified trade restrictions and the consequent disruptions in global supply chains 
subsidization might surge which could exacerbate global excess capacity. The Russian Federation G/SCM/M/119  
 
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  urged the Members concerned to address the global challenge of o vercapacity in a constructive and 
holistic way by making tangible steps in reducing the level of protectionism.  
173.  The Committee took note  of the statements.  
10  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, AND THE 
UNITED STATES  
174.  The United States  reiterated that together with other Members, it had numerous concerns 
with respect to the transparency of China's industrial subsidy regime.  
175.  The United States recalled that in China's Protocol of Accession, China had agreed to publish 
all trade -related me asures in a single journal, which China had designated as the MOFCOM Gazette. 
Often – if not normally – however, subsidy measures – especially normative measures and 
sub-central measures – were not published in the MOFCOM Gazette. It had also agreed to est ablish 
or designate an "enquiry point where, upon request of any individual, enterprise, or WTO Member 
all information relating to the measures required to be published may be obtained".  
176.  The United States had come across references to five legal measures,  two relating to fuel 
subsidies for fishermen, one relating to the development of China's distant water fishing fleet, and 
two relating to the semiconductor industry. Since it could not find these measures in the MOFCOM 
Gazette, or anywhere else, the Unite d States had submitted a request to China's WTO inquiry point 
in April 2020.  
177.  Under China's Protocol of Accession, China had agreed that "replies to requests for information 
shall generally be provided within 30 days after receipt of a request. In exception al cases, replies 
may be provided within 45 days after receipt of a request. Notice of the delay and the reasons 
therefore shall be provided in writing to the interested party." Although the United States had 
submitted its initial request in April 2020, no  written response had been provided.  
178.  Additionally, in September of 2020, a Ministry of Commerce representative contacted the 
United States Embassy in Beijing and stated that China would not be providing copies of any of the 
requested measures because they  were either soon to be replaced by new measures or not relevant 
to China 's WTO commitments. According to the United States, China 's handling of its request would 
be inadequate and contrary to China 's WTO commitments, because copies of the requested 
measur es should have been provided. Paragraph 2( c) of China's Protocol of Accession contained no 
exception for China to withhold measures that might be superseded at some point in the future. 
In addition, when new measures came out, it was nearly a year after th e United States ' initial request 
and well beyond the 45 -day response time mandated in the Protocol of Accession.  
179.  The United States disagreed with China's refusal to provide copies of the requested measures 
which were claimed by China to be irrelevant to Ch ina's WTO commitments. The requested measures 
addressed policies and guidelines relating to the development of China 's fisheries and semiconductor 
sectors and therefore, would satisfy the standard of "pertaining to or affecting trade in goods " in 
paragraph  2(c) of China 's Protocol of Accession to the WTO.  
180.  The United States also noted that the two new fishery support measures had not been 
published in China 's designated official journal, the MOFCOM Gazette, as required by paragraph 2(c) 
of China 's Protocol o f Accession. China's Protocol of Accession contained transparency obligations 
because Members had been concerned with the lack of transparency of China's industrial subsidy 
regime. Those concerns remained after 21 years.  
181.  Following the previous meeting, the United States had found two of the requested measures 
relating to China 's fuel subsidy programs for its domestic and distant water fishers which had been 
published on unofficial Chinese news sites but not in the MOFCOM Gazette. With those meas ures, 
China had reduced subsidies for its fishers in its own waters, while increasing the level of subsidies 
for its distant water fleet keeping the overall level of support for its fishing industry the same. 
In addition, the measure covering fishers in Ch ina's domestic waters cited the objective of renovating 
14,000  fishing vessels and scrapping or converting to other uses, 20,000  fishing vessels.  G/SCM/M/119  
 
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  182.  The United States requested China to clarify its reasons for not publishing those measures as 
required by its Protocol of Accession and refusing to provide the measures pursuant to a legitimate 
request of another Member or not providing a written explanation as required under its Protocol of 
Accession. It questioned whether those reasons were (i) the extensive sco pe of the fishing vessel 
renovation program that targeted 14,000  fishing vessels for renovation; (ii) the large number of 
fishing vessels that were targeted for scrapping or conversion indicating an overcapitalized domestic 
waters industry and overfished d omestic fisheries; (iii) the specifics of how exactly the fuel subsidy 
had been calculated for both domestic and distant water fishers, which was estimated around 
USD 3 billion annually to Chinese fishers between 2015 and 2020; or (iv) the reference to the  
provinces ' ability to have their own programs, which had not been notified, to supplement the central 
government 's fuel subsidy program.  
183.  The United States also requested China to clarify the content of other measures that China 
had refused to provide or m ake public. One of the remaining measures was China's plan to develop 
its distant water fishery and the other two measures related to China's semiconductor policies. 
The United States requested clarification whether the distant water fisher measure establi shed a 
subsidy programme for the purpose of constructing or buying fishing vessels. Recalling its previously 
submitted fishery subsidy counter -notification, the United States noted that the origins and 
significant growth of China's distant water fleet was not clear.  
184.  With respect to the semiconductor measures, the United States requested clarification whether 
there were (i) subsidy programmes with local content requirements; and (ii) any guarantees by 
Ministry of Finance to private investors for various equ ity investment measures.  
185.  Although China's initial response to such transparency issues was that it took its transparency 
obligations very seriously, the United States' experience with China's inquiry point demonstrated 
otherwise.   
186.  The United Kingdom  reiterated that transparency was essential for the proper functioning of 
the WTO. This included fulfilling any specific commitment agreed as part of Members' accession 
which was essential in enabling a more complete understanding of Members' subsidies practices  and 
assessment of potential trade effects. The United Kingdom encouraged all Members to take all steps 
necessary to fulfil their obligations, including any Member -specific commitment in a timely manner. 
It also urged China to engage constructively on the concerns raised and fully comply with its 
transparency commitments.  
187.  The European Union  expressed its support to the points raised and recalled that China's 
obligation on transparency would not only stem from Article 25.8 of the SCM Agreement, but also 
from its Protocol of Accession to the WTO. In this context, China had created an inquiry point 
mechanism and agreed to publish its trade -related measures in the MOFCOM Gazette. However, if 
the information was not published or China did not provide answers to t he requests for information, 
these obligations would not be met. The European Union urged China to back its commitment to 
transparency by practical actions and to provide answers.  
188.  Canada  echoed the United States' concerns and recalled that it was important  that all Members 
provided notifications in accordance with WTO requirements. When China had acceded to the WTO 
in 2001, it had agreed not only to publish its measures but also to respond the enquiries related to 
those measures within 30 days. Compliance w ith the notification requirements and responses to 
inquiries in accordance with WTO rules and China's Protocol of Accession would be critical to the 
successful functioning of the rules -based international trading system.  
189.  Australia  echoed the comments made  by previous speakers. It attached considerable 
importance to the WTO notification and transparency obligations which 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 international markets. At the previous Committee meeting, China 
had referred to its publication of an official gazette and noted the establishme nt of the Bureau of 
WTO Notification and Enquiry. Australia referred to its questions raised at the previous meeting, in 
which it requested China to clarify (i) whether the request to China had to be lodged via Members ' 
respective Embassies, (ii) whether t his required a specific request format and (iii) whether there 
was a specific website address.  G/SCM/M/119  
 
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  190.  Japan  noted that the notification obligation and transparency were one of the most important 
foundations of the WTO system and complying with them would benefit all Members. Various 
Members had expressed concerns about transparency and the lack of complete notifications. Japan 
was concerned that if transparency in the expenditure of subsidies was not ensured, provision of 
distortive subsidies would be encouraged, which might lead to challenges such as overcapacity. 
Japan requested China to ensure transparency and compliance with the notification obligation, 
especially about the expenditure of subsidies and to ensure the effectiveness of mechanisms that 
contributed to increase transparency, by fulfilling its transparency obligations agreed upon in its 
Protocol of Accession.  
191.  Regarding the comments on the publication of relevant policies in a single platform, China  
referred to it replies provided at the special meeting  of the Committee. On the issue of the inquiry 
point, China noted that it had contacted the United States Embassy in Beijing and requested updated 
information regarding the new measures mentioned by the United States. No follow -up questions 
had been receiv ed so far. With respect to the comments on the transparency of China's fisheries 
policies, China underlined that it had submitted all the specific subsidies on fisheries sector, including 
the measures mentioned by the United States, in its notification. Th e new measures mentioned by 
the United States were not included in the notification as they were out of the notification period.  
192.  The United States  indicated that it had responded to China with a written letter therefore there 
was a follow -up. 
193.  Australia  reiterated that it had posed specific questions regarding the operation of the 
mechanism. It requested clarification on how Members could seek information through the inquiry 
point and how it would operate. Australia also noted that it could meet China bilate rally.  
194.  The delegate of China  explained that the Embassy of the United States had been informed 
that the measures in question had been replaced. However, no follow -up questions had been 
received.  
195.  The Committee took note  of the statements made.  
11  PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF NEW AND FULL SUBSIDY 
NOTIFICATIONS – ITEM REQUESTED BY AUSTRALIA, CANADA, THE EUROPEAN UNION, 
JAPAN, NEW ZEALAND, CHINESE TAIPEI, THE UNITED KINGDOM, AND THE UNITED 
STATES  
196.  The United States  noted that to clarify the Committee 's procedures, the co -sponsors proposed 
an amendment that would require all Members to provide written answers to all written questions 
posed, including questions regarding specific subsidies not included in a Member 's notification. The 
only substantive change was the one bolded sentence in the third paragraph – all other changes 
would only be to change the dates such that the amended process would begin with the review of 
the 2023 new and full subsidy notifications.  
197.  According to the United States, it was a simple amendment that nearly all Members have been 
following since the very beginning. Its adoption would encourage a degree of transparency that the 
drafters of the Agreement had assumed would exist in the normal cour se of the Committee 's review, 
even in the absence of a written obligation.  
198.  Japan  noted that timely submission of complete notifications with all necessary information 
was an agreed -upon obligation of all Members. If specific subsidies were not subject to t he review 
by the Committee due to lack of submission of the required notifications, that would seriously 
undermine the fundamental obligation under the SCM Agreement. Japan believed that if the 
information on specific subsidies was shared more smoothly in writing that would enhance 
transparency.  
199.  The European Union  recalled that it had expressed concerns at previous meetings about the 
approach by some Members that questions regarding the subsidy notification should focus only on 
the particular subsidies alr eady mentioned in the notification. This approach would undermine the 
effectiveness of the review process and hinder Members from achieving fully understanding of all 
the subsidies. The process of posing questions in writing was not to highlight shortcomin gs of G/SCM/M/119  
 
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  Members in subsidy notifications but rather to complete the picture. Over the years, the 
European  Union had made a number of supplementary notifications in response to questions from 
other Members regarding subsidy programmes that were overlooked in the notification process. This 
had helped the European Union to achieve greater and improved transparency. Like the one 
discussed under agenda item 6, that was an important proposal which would enhance the 
transparency of subsidy notifications. The Europea n Union encouraged Members to support the 
proposal.  
200.  The United Kingdom  welcomed the continued discussion on that proposal and reiterated its 
support. Having written replies to written questions was an essential component of transparency 
enabling a more co mplete understanding of Members' subsidies practices. The United Kingdom 
encouraged all Members to support the proposal and to engage constructively.  
201.  New Zealand  expressed its support for the proposal. It would continue to engage in discussions 
and respon d to all questions including the ones on programmes that were not included in its 
notification.  
202.  According to Chinese Taipei , the proposal was timely and useful, and the proposed amendment 
would not alter its understanding on the written question and answe r process. Members should 
provide replies to the questions on subsidy programmes that were not included in the notifications. 
If any Member had a counter approach to that common understanding, then there would be a need 
for further clarification of the pro ceeding so that the review process would not be undermined. 
Chinese Taipei urged Members to support the proposal and it stood ready to work with Members to 
improve that important transparency exercise.  
203.  Canada  reiterated that the subsidies notification proc ess was a fundamentally important 
transparency exercise which included the written question and answer process. The absence of 
complete information on subsidy measures in Members ' notifications would significantly undermine 
the effectiveness of the SCM Agr eement as Members would be unable to not only assess the possible 
impact of such subsidies on trade, but also to exercise their rights in respect of the implementation 
and enforcement of such measures. That would undermine the predictability of the rules -based 
trading system. Canada continued to support the proposal, which would formalize a long -standing 
practice of many Members, by clarifying that Members would be expected to provide written answers 
to all written questions including questions regarding sp ecific subsidy measures not included in their 
notifications.  
204.  Australia  was of the view that it was timely and useful to consider the procedures for 
submission and review of the 2023 new and full subsidy notifications. Article 25.8 provided that any 
Member may at any time seek information on any subsidy granted or maintained by another Member 
or for an explanation of the reasons why a specific measure has not been considered subject to the 
requirement of notification. Article 25.9 established that any Member  may bring the matter of a 
measure to the attention of the Committee. The notification process was to enable the other Member 
to be able to assess compliance of the measure with the SCM Agreement. In line with those core 
obligations, since 1995, as part of  the review of Members ' subsidy notifications, it had been the 
practice of the Committee to raise questions on specific subsidy programs that were not included in 
the subsidizing Member 's notification. Australia encouraged Members to support the proposal.  
205.  China  appreciated the efforts made by the proponents of the proposal to enhance 
transparency. It reiterated that the written questions should focus on Members' subsidy notifications 
to which Members had an obligation to provide written replies. With respe ct to the subsidy policies 
that were not covered by the notifications, written questions could be submitted in accordance with 
Articles 25.8 and 25.10 of the SCM Agreement. Members were not obligated to provide written 
replies to such questions or counter -notifications. The proposal intended to increase Members' 
obligations under Articles 25.8 and 25.10 of the Agreement. According to China, the proposal had 
no legal basis and would break the negotiated balance of rights and obligations under the relevant 
provisions.  
206.  The Russian Federation  recalled that at the previous meeting it had expressed concerns 
regarding the proposed wording of "including questions regarding specific subsidies not included in 
the notification". However, Article 25.2 of the SCM Agreem ent stated that any subsidy which was 
specific within the meaning of Article 2 shall be notified. The Russian Federation saw two problems G/SCM/M/119  
 
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  with this text. First, the proposed wording would imply that the Member posing questions might 
label an alleged subsid y of another Member as "specific" while the notifying Member did not agree. 
Second, such labelling would require posing a mere question instead of clear substantiation of the 
determination of specificity on the basis of positive evidence as required by Art icle 2.4 of the 
SCM Agreement.  
207.  The text of the proposal did not correspond to the SCM Agreement according to which the 
notifying Member was responsible to notify all specific subsidies, while the contesting Members would 
bear the burden of proof if it bel ieved that the obligation was not met. Shifting the burden of proof 
to the subsidizing Member would go beyond the Agreement and needed to be negotiated. For that 
reason, the Committee would not be an appropriate forum to discuss and implement such ideas.  
208.  Noting that transparency was essential, the Russian Federation stated that Members could 
pose written questions about alleged unnotified subsidies and expect appropriate replies. 
Articles  25.8 and 25.9 provided sufficient legal basis to that end. Questions  on alleged subsidies 
would be useful to double -check whether the notifying Member had overlooked them and needed to 
submit a supplementary notification. Replies to those written questions would add clarity for the 
benefit of the Membership. The WTO rules already provided ample opportunities for a useful and 
efficient exchange about specific subsidies and the adoption of the proposed language would be 
inappropriate as it contradicted the SCM Agreement.   
209.  The Chair noted that there was a considerable diverge nce of views regarding the proposal. 
She 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 meeting if they so 
wish. 
210.  The Committee took note of the statements made.  
12  OTHER BUSINESS  
12.1  Questions from China to the United States Pursuant to Article 25.8 of the 
SCM Agreement7-8 
211.  China  recalled that it had submitted written questions to the United States in accordance with 
Article 25.8 of the SCM Agreement. The United States had not notified some subsidy programmes 
involved in WTO disputes as well as several subsidy policies that were s ubject to CVD investigations 
initiated by other Members against the United States. In addition, China had identified some subsidy 
policies of New York State from public websites which had not been notified. China expected the 
United States to provide clari fication on those policies in due course.  
212.  The United States  indicated that it could have provided answers to China's questions in the 
context of the normal review of its subsidy notification without invoking the special procedures under 
Articles 25.8 and 25.9. The United States recalled that it had notified over 7 00 programmes noting 
that it would not be frightened to answer a few more questions on programmes that might have 
been overlooked.   
213.  China  stated that as a large, developed Member and one of the co -sponsors of a proposal on 
enhancing transparency and impro ving compliance with the notification requirements under the 
SCM Agreement, the United States had been calling on Members to improve transparency for many 
years. According to China, the completeness of subsidy notifications was a complicated issue faced 
by both developing and developed Members and hoped that the United States could play a leading 
role on that matter.    
214.  The Committee took note  of the statements made.  
 
7 G/SCM/Q2/USA/85  
8 The United States' written replies can be found in document  G/SCM/Q2/USA/86, dated 22 July 2022.  G/SCM/M/119  
 
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  13  DATE OF NEXT REGULAR MEETING  
215.  The next regular meeting of the Committee would be held in the  week of 24 October 2022.  
14  ELECTION OF OFFICERS  
216.  The Chair recalled Rule 12 of the Committee's Rules of Procedure which provides that the 
election of the new Chair shall take place at the first regular meeting of the year and that the election 
shall take eff ect at the end of that meeting.  
217.  The Chair stated that consultation at the CTG level regarding the selection of the new chair of 
this Committee as well as of other subsidiary bodies under the CTG was still under way, therefore a 
new Chair cannot be elected  at this meeting. In these circumstances, the Chair suggested that the 
Secretariat send a communication once the CTG had completed its work, indicating the Chair 
identified by the CTG. The new Chair would be deemed to be elected by the Committee absent any  
objection. This approach, which had been taken in previous years, would obviate the need for an 
additional meeting of the Committee.  
218.  On the Vice -Chair, the Chair proposed to postpone the election of the new Vice -Chair until the 
new Chair is appointed, unt il he or she holds the usual consultations and sends the usual 
communication nominating a new Vice -Chair who, absent any objection, would be deemed to be 
elected by the Committee.  
219.  The Committee so decided.  
 
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