RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q3/URY/5
25 April 2002
(02-2383)
Committee on Subsidies and
Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement on Subsidies and
 Countervailing Measures
Replies by URUGUAY to questions posed by the UNITED STATES1,
SWITZERLAND2, AUSTRALIA3 and JAPAN4
The following communication, dated 24 April 2002, has been received from the Permanent
Mission of Uruguay.
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Attached hereto are the replies of Uruguay to the questions posed by the United States,
Switzerland, Australia and Japan regarding the request for an extension of the transition period for
granting export subsidies submitted by Uruguay (G/SCM/N/74/URY).
REPLY TO THE QUESTION POSED BY THE UNITED STATES
Could Uruguay please provide sufficient details regarding these programmes to
determine whether the programmes qualify for the special procedures of G/SCM/39 and
Article 27.4?
Reply
Enterprises which export vehicles completed or part-completed in the country, or auto-parts
of national origin, may benefit from a customs concession, applicable to the importation of motor
vehicles assembled in the place of origin destined for the domestic market, in accordance with
conditions laid down in the corresponding regulations, or earmark such concession for the payment of
taxes due to the Directorate-General of Taxation as set forth in Article 3 of Decree 60/99, whichprovides for a tax benefit not limited strictly to the importation of vehicles, but which can also be used
for meeting tax obligations.  For every US dollar of exports (based on the f.o.b. values declared in the
relevant customs declarations) imports of motor vehicles may be made (for a value of one US dollar
based on the c.i.f. value declared in the relevant customs declaration) with a  concession of 13 per cent
of the TGA (global tariff) applicable to the surcharge element, for new vehicles assembled in theplace of origin, or payments may be allocated to the Directorate-General of Taxation  The details of
this programme and the corresponding legislation appear in Uruguay's notifications to the WTO
                                                     
1 G/SCM/Q3/URY/4.
2 G/SCM/Q3/URY/1.
3 G/SCM/Q3/URY/2.
4 G/SCM/Q3/URY/3.G/SCM/Q3/URY/5
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Committee on Subsidies and Countervailing Measures (documents G/SCM/N/3/URY,
G/SCM/N/60/URY and G/SCM/N/71/URY).
The programme for which the extension was requested was originally introduced to promote
the reconversion to export production of the domestic automotive industry, which had hitherto beengeared to supply the domestic market   The reconversion aims at achieving integration into the
regional market, which, in the case of the automobile sector, is currently undergoing transition
towards the full operation of a regional customs union with the free circulation of goods in the sector.
During that transition period, the access conditions negotiated for the regional markets will make it
possible for the Uruguayan export sector to subsist and achieve integration, provided the balances
negotiated between the parties, of which the programme in question is one of the essential
components, are maintained.
REPLY TO THE QUESTION POSED BY SWITZERLAND
Uruguay is urged to clarify under which procedures (i.e. Article 27.4 SCM or the special
procedures decided in §10.6 of the Ministerial De cision on Implementation-Related Issues and
Concerns WT/MIN(01)/17) it wants to seek an ex tension of the transition period for granting
export subsidies to the automotive industry.  Further, Switzerland requests Uruguay to provide
data, if available, of the main export market s for the entities profiting from the Automotive
Industry Export Promotion Regime.
Reply
Regarding the first part of the question, the extension of the transition period is being
requested under the procedure set forth in document G/SCM/39, without prejudice to the rights
established in Article 27.4 of the SCM Agreement.  Regarding details on the main export markets, thetable below provides export statistics for the years 2000 and 2001.
Main Export Markets
(in millions of dollars)
Country 2000 2001
Argentina 115.9 79.2
Brazil 44.9 34.3
United States 5.3 4.2
Germany 6.4 18.3
Mexico 3.1 2.1
Paraguay 0.4 2.7
South Africa -- 30.3
Other 1.5 5.8
Total 177.5 176.9G/SCM/Q3/URY/5
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REPLIES TO THE QUESTIONS POSED BY AUSTRALIA
1. Could Uruguay provide further details on the Automotive Industry Export Promotion
Regime for which it is seeking an extension ?
Reply
See the reply to the question posed by the United States.
2. What are the criteria for qualifying for a tax exemption under this programme?
Reply
The legal criteria for qualifying for a tax exemption are those set forth in Decree 316/92, in
the wording of Decree 60/99.  See also the reply to the question posed by the United States.
3. Does the programme require the use of dome stic goods in order to receive the subsidy?
Reply
As provided in Article 2 of Decree 316/92, the use of domestic goods is not required in order
to receive a subsidy.  The goods whose export could derive a benefit from the subsidy are motorvehicles for the transport of passengers and goods, and their parts.
4. What were the levels of exports subsidized  by this programme for the past three years
for which data is available?
Reply
The requested data appears in document G/ SCM/N/71/URY.  Exports (f.o.b.) were as
follows:
2000 177,482,452 dollars
2001 176,912,906 dollars
5. For what period is Uruguay seeking an exemption?  What is Uruguay's phase-out plan
for this programme?
Reply
MERCOSUR duly established a transition period for the achievement of free trade in goods
in the automotive sector at the regional level.  That transition period is to last until 1 February 2006.
The timetable for the process has been delayed owing to the unfavourable regional economic
climate.
Uruguay plans to phase out the programme associated with the above-mentioned transition
period, by the end of which the subsidy will have been eliminated.G/SCM/Q3/URY/5
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REPLY TO THE QUESTION POSED BY JAPAN
What is the relationship between the Automotive Industry Export Promotion Regime
referred to in G/SCM/N/74/URY and the Regulations for Enterprises Exporting Vehicles
Assembled in the Country referred to in G/SCM/N/60/URY?
Reply
The request for an extension referred to in document G/SCM/N/74/URY concerns the
programme notified in document G/SCM/N/60/UR Y (and in document G/SCM/N/71/URY), i.e. the
regulations for enterprises exporting vehicles or auto-parts.
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