# **_5. Achieving WTO Compliance_**

There are four principal elements in a program to achieve WTO compliance regarding government measures employed in connection with SEZ programs. These are (1) a thorough review of all applicable measures and identification of possible inconsistent measures; (2) prompt reporting of possible WTO inconsistent measures; (3) development of a plan to phase-out WTO inconsistent measures; and (4) implementation of the phaseout plan. These are summarized below.

**_Review and Identification._** All Members, and in particular middle income countries, should review their SEZ programs in detail to assure compliance with the SCM Agreement and other WTO disciplines. This is best accomplished using independent advisors and not government officials or local experts that may have a vested interest in defending the existing measures. It may be appropriate to request technical assistance from experts at the WTO, international financial institutions and other donors in connection with such a review. Upon request, the WTO Secretariat staff routinely provide confidential advice and in-depth technical assistance to individual Members about their programs, including bringing these into conformity with WTO disciplines.

SEZ programs in middle income countries are examined by the WTO as part of regularly scheduled trade policy reviews (TPRs). MICs are normally reviewed every 6 years. Preparation by MICs for scheduled TPRs should include a thorough review of all measures relating to SEZs.

Members that maintain export subsidies pursuant to SCM Agreement Article 27.2 (b) and Annex VII(b) (the per capita GNP under $1,000 in 1990 dollars provision) should annually determine (a) whether per capita GNP has exceeded the limit for 3 consecutive years<sup>81</sup> , and (b) whether specific products have reached “export competitiveness” pursuant to SCMA Articles 27.5 and 27.6.<sup>82</sup> Members that maintain export subsidies pursuant to Article 27.4 and relevant extensions should also monitor whether specific products have reached “export competitiveness” and comply with all reporting and notification requirements.

**_Notification._** Changes with regards to export subsidy exemptions and other measures that are specific subsidies should be notified to the WTO Committee on Subsidies and Countervailing Measures by 30 June of each year.<sup>83</sup> The notifications must contain sufficient detail to enable an understanding of the operation of the subsidy programs and

> 81   See the calculations produced and circulated by the WTO Secretariat in the G/SCM/110/... series, 82   As discussed before, there is uncertainty over the breadth of the definition of a "product"  If the correct interpretation is that this is a 4-digit HS tariff heading, it is clearly far more likely that a given product will reach export competitiveness than if the correct interpretation is that this is an entire section of the HS. Members should monitor this assessment on both bases.  In addition, the WTO Secretariat can be requested, pursuant to Article 27.6, to calculate whether a given developing Member has reached export competitiveness in a product.  To date, such calculations have been requested and performed for Colombia, Thailand and India  See G/SCM/46, G/SCM/48, and G/SCM/103.

> 83   SCMA Article 25.1.

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