./.RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/W/270
26 July 1999
(99-3141)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
The Agreement on Subsidies and Countervailing Measures
Communication from Brazil
The following communication, dated 20 July 1999, has been received from the Permanent
Mission of Brazil.
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Background
1. The WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement)
established equal disciplines, rights and obligations for all Members.  Except for a few transitional
provisions, there are no actual clauses for specia l and differential treatment, which would allow the
use of incentives by developing countries to address their specific needs regarding economic,
financial or social policies.
2. The subsidies disciplines disregard obvious inequalities among Members in areas such as
investment attraction, availability of external financing, acute regional contrasts, financing of research
and development projects.  The disproportion among Members stem from structural deficiencies thatcould not possibly be overcome within the short transition periods allowed for in the
SCM Agreement.  Solutions for these problems require, for the most part, long-lasting and coherent
industrial and trade policies.  The SCM Agreement s hould be reviewed so as to introduce specific
provisions to afford developing countries the flexibility they need to devise and execute development
policies capable of reducing the aforementioned disparities.
3. Therefore, Brazil submits the following proposals to the General Council and reserves its
right to complement them with other proposals or to further specify their particulars.
Proposals
4. The review of Article 8, as mandated by Article 31 of the SCM Agreement, shall classify, as
non-actionable subsidies, measures implemented by developing countries with a view to achieve
legitimate development goals, such as regional growth, technology research and development
funding, production diversification, development and implementation of environmentally sound
methods of production, manufacture of high technology and value-added goods.
5. The provisions of Article 27 shall be re-evaluated so as to address, under a permanent and
more adequate framework, the needs and specificities of developing countries concerning incentives
and subsidies.WT/GC/W/270
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6. The language of the Agreement regarding invest igation procedures shall be further clarified,
possibly by incorporating provisions that may improve its disciplines regarding, inter alia , review
procedures, facts available, sampling, significant volumes, calculation of the amount of a subsidy, and
imposition and collection of a countervailing duty.
7. The language of Annex I of the SCM Agreement, particularly item (k), shall be reviewed to
permit developing countries to provide competitive export financing vis-à-vis  the conditions found in
the international market or those offered by the credit agencies of developed countries (controlled by
and/or acting under the authority of the governments).
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