WORLD TRADE  
ORGANIZATION  G/SCM/Q3/BLZ/12 
G/SCM/Q4/BLZ/7 23 January 2007 
 
(07-0311) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
  
REQUESTS PURSUANT TO ARTICLE 27.4 OF THE AGREEMENT 
ON SUBSIDIES AND COUNTERVAILING MEASURES 
 
PROCEDURES FOR EXTENSIONS UNDER  
ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES  
AND COUNTERVAILING MEASURES 
  
Replies to Questions Posed by the UNITED STATES
1 
 
 
 The following communication, dated 19 January 2 007, is being circulated at the request of the 
Delegation of Belize.  
_______________ 
  G/SCM/N/146/BLZ  
 
Q.1 Please describe what efforts Belize has made to phase out the programmes within the 
extension period that has already been gr anted, as provided under the "Procedures for 
Extension Under Article 27.4 for Cert ain Developing Country Members."
2  
 
Reply  
 
Belize in 2003 requested the Commonwealth Secretar iat to undertake a review of its investment 
programmes with a view to making them WTO-co mpatible.  In June of 2005, the report was 
concluded and the relevant Ministries are reviewi ng the recommendations.  Needless to say, because 
of the short duration of this extension, it has been a formidable challenge to "phase-out" these 
programmes within the prescribed period in a manner supportive of Belize's sustainable development.   
 
Q.2 Please describe changes to the progra mmes since 2001.  Also, please provide any 
updated or revised implementing legislation,  and any relevant amendments, under these 
programmes and any accompanying regulations and decrees.  
 Reply
 
 The Export Processing Zone Act was amended in 2004 resulting in reduced benefits to beneficiaries 
under this programme.
3  Regarding the Fiscal Incentives Programme, the Government continues to 
maintain a de facto moratorium on the granting of tax holidays.   
                                                      
1 G/SCM/Q3/BLZ/11 and G/SCM/Q4/BLZ/6. 
2 G/SCM/39.   
3 G/SCM/N/114/BLZ.   G/SCM/Q3/BLZ/12 
G/SCM/Q4/BLZ/7 Page 2 
 
 
  Q.3 How many beneficiaries of these pr ogrammes were there in 2001?  How many 
beneficiaries are there currently under each of these programmes?  What types of industries 
currently benefit under the programmes?  
 Reply
 
 In 2001, there were 107 beneficiaries and currently  there are twenty-two companies benefiting from 
these programmes.  The industries benefiting are:  paper, fisheries, forestry and garment.   
 Q.4 Did Belize undertake any commitments to provide export subsidies to new beneficiaries beyond the year 2009?  If so, please indicate the number of such beneficiaries by the year in 
which those commitments extend. 
 
Reply 
 
 
Most of the benefits under the programmes extend be yond the year 2009.  However, it must be noted 
that as part of the recent review, all benefits provided under the EPZ Programme are now subject to 
the following clause:  "the company will comply wi th any rules or regulations made by Belize for its 
EPZ legislation pursuant to the World Trade Organization (WTO) Agreements".    Q.5 If available, please provide the amount of the subsidy provided under these programmes 
for each year from 2001 through 2005.   
 
Reply
 
 
This information is not available.   
 
Q.6 Please explain whether benefits under any of the programmes are contingent upon the 
use of domestic over imported goods.  
 
Reply  
 
This condition is absent from all three investment programmes.     
G/SCM/Q4/BLZ/5 
 
Q.1 Are there more specific economic, financial and development statistics to which Belize 
can point that demonstrate that the programmes in questions have had a positive impact and 
will continue to do so into the future?  
 
Reply 
 
 
In assessing the role of these programmes with respect to the Government's diversification schemes, it 
is evident that these programmes are significant dir ect contributors to employment, investment and 
foreign exchange earnings and this is not to mention the indirect benefits for the economy at large.  
Below is a table detailing the level of employment , investment and foreign exchange generated by 
companies benefiting form the Export Processing Zone Programme.   
    G/SCM/Q3/BLZ/12 
 G/SCM/Q4/BLZ/7 
 Page 3 
 
 
  Period Employment 
EPZ Total Labour 
Force Investment 
(BZ$) Foreign 
Exchange  (US$) Total Exports
(Value $) 
2000 2,486 N/A 191,451,151 88,796,442 210,390,000 
2001 2,169 94,430 307,055,179 25,019,005 162,730,000 
2002 2,684 94,173 451,433,015 36,685,053 158,340,000 
2003 3,472 102,437 112,152,312 58,519,568 190,710,000 
2004 3,735 108,491 19,199,129 104,098,190 204,910,000 
2005 3,775 110,786 84,954,196 144,850,619 257,950,000 
 
Q.2 Has there been a formal government review of the continued need for the programmes 
in question?  If so, what were the findings? 
 
Reply  
 A formal review of the programmes carried out by the Commonwealth Secretariat indicated that the incentive programmes operated in Belize are largely co nsistent with interna tional practice and with 
WTO rules.  The principal difficulty appeared to  be the exemption from the payment of corporate 
income tax under both the Export Processing Zone and the Commercial Free Zone.   
 
Q.3 What is the relationship between the three programmes for which an extension is being 
granted and how do their respective roles in Beli ze’s development strategy specifically differ?   
 Reply
 
 Each programme seeks to address the different developmental needs of investors.  So, for example, the fiscal incentive programme provides for the granti ng of fiscal incentives to investors, foreign or 
local, in the form of full or partial exemptions from import duties and internal taxes and is mostly 
used by companies producing for the domestic mark et.  The Commercial Free Zone was originally 
conceived to stimulate economic growth to the north of the country which is adjacent to Mexico.  To 
date businesses in the Corozal Zone are mainly  duty free shops, fuel vendors and casinos.   
 
Q.4 Belize’s notification states the incentiv es granted under these programmes have terms of 
either 15, 20 years or an indefinite period of ti me.  If an extension was granted, what steps will 
Belize take to ensure that the benefits und er these programmes will not exceed the suggested 
2018 extension request? 
 
Reply
 
 As it currently stands, under the Fiscal Incentiv e Programme, there is a moratorium on the tax 
holidays which effectively addresses the principal issue of non-compatibility with the WTO.  
Regarding the Export Processing Zone, the inclusion of the clause mentioned above on the condition 
for the continuation of the benefits underscores the commitment of the Government of Belize to conform to the terms of the extens ion should this be granted.   
 Q.5 If any additional extension is granted, woul d Belize accept new applicants for each of the 
programmes or would the extension period be us ed to phase out the subsidies for the existing 
beneficiaries?   
 
 
 G/SCM/Q3/BLZ/12 
G/SCM/Q4/BLZ/7 Page 4 
 
 
  Reply
 
 Please see response to question four.    
__________