WORLD TRADE G/L/126
28October 1996
ORGANIZATION(96-4486)
Committee onSubsidies andCountervailing Measures
REPORT (1996) OFTHE COMMITTEE ON
SUBSIDIES AND COUNTERVAILING MEASURES
I. Organization ofthework oftheCommittee
1. TheAgreementonSubsidiesandCountervailingMeasures(hereinafter"theAgreement")entered
intoforce on1January 1995. AllMembers oftheWTO areipsofacto members oftheCommittee
onSubsidies andCountervailing Measures established under theAgreement.
2. Observer governments intheGeneral Council oftheWTO have Observer status inthe
Committee. Inaddition, theCommittee invited, onanadhocbasis, representatives oftheWorld Bank,
OECD, IMFandUNCTAD toattend meetings oftheCommittee inanobserver capacity. Atitsregular
meeting on23October 1996, theCommittee tooknoteofthedecision oftheGeneral Council regarding
thestatus ofinternational organizations asObservers totheWTO andauthorized theChairman toconsult
informally regarding onwhich international intergovernmental organizations would begranted observer
status intheCommittee. Pending theoutcome ofsuchconsultations, theCommittee agreed tocontinue
toinvite those organizations which hadbeenfollowing theCommittee 'smeetings onanadhocbasis.
3. ThisReport focuses ontheperiod sincetheCommittee 'slastannual report (G/L/31 andCorr.1),
thatis,November 1995 -October 1996. However, where relevant, information from theprevious
period isreported. During theperiod under review (1November 1995-24October 1996) theCommittee
heldsixmeetings. Regular meetings oftheCommittee were heldon1-2May 1996 and23-
24October 1996 (G/SCM/M/9 andG/SCM/M/12). Special meetings oftheCommittee were held
on6March 1996and22-26 July1996(G/SCM/M/8 andG/SCM/M/11). Additional special meetings
were heldjointly withtheCommittee onAnti-Dumping Practices on4-7December 1995 and24-
26April 1996 (G/SCM/M/7 andG/SCM/M/10).
4. TheCommittee atitsspecial meeting of22February 1995elected Mr.OleLundby (Norway)
asitsChairman. TheCommittee atitsregular meeting of13June1995 elected Mr.Victor doPrado
(Brazil) asitsVice-Chairman. TheCommittee atitsregular meeting of1-2May 1996 elected
Mr.Victor doPrado (Brazil) asitsChairman andMs.Michelle Slade (New Zealand) asitsVice-
Chairwoman. Pursuant totheCommittee 'sRules ofProcedure, theytookoffice attheendofthat
meeting.
5. TheCommittee atitsregular meeting of1-2May1996adopted Rules ofProcedure forMeetings
oftheCommittee onSubsidies andCountervailing Measures (G/SCM/10). TheCouncil forTrade
inGoods subsequently approved theCommittee 'sRules ofProcedure atitsmeeting of22May1996.
II. Permanent Group ofExperts
6. TheCommittee isrequired byArticle 24.3oftheAgreement toestablish aPermanent Group
ofExperts ("PGE"). Thetasks assigned tothePGEbytheAgreement aretoprovide assistance to
aPanel, onrequest, withregard towhether ameasure isaprohibited subsidy; toprovide Members
withconfidential advisory opinions onthenature ofanysubsidy proposed tobeintroduced orcurrentlyG/L/126
Page2
maintained bythatMember; andtoprovide theCommittee withadvisory opinions ontheexistence
andnature ofanysubsidy. Atitsspecial meeting of6March 1996, theCommittee elected asmembers
ofthePermanent Group ofExperts thefollowing persons: Mr.Seung-Wha Chang, Mr.GaryHorlick,
Mr.Friedrich Klein, Mr.Akira Kotera andMr.Robert Martin.
7. Pursuant toaDecision adopted bytheCommittee (G/SCM/4), thePGEshalldevelop rules
ofprocedure, taking intoaccount anyguidance provided bytheCommittee, which rulesshallbesubject
toapproval bytheCommittee. Draft Rules ofProcedure were prepared bythePGEandcirculated
totheCommittee on18April 1996(G/SCM/W/365). These draftRules ofProcedure werediscussed
attheCommittee 'sregular meeting of1-2May1996, andrevised draft Rules ofProcedure were
circulated totheCommittee on24June1996(G/SCM/W/365/Rev.1). However, theCommittee did
notapprove these draftRules ofProcedure atitsspecial meeting of22-26 July1996. Inlightoflikely
requests tothePGEforadvisory opinions fromMembers andofpending disputes regarding prohibited
subsidies, theCommittee atthatmeeting tooknotethatthePGEwould work under thedraftRules
ofProcedure untiltheregular meeting oftheCommittee on23October 1996. Atitsregular meeting
on23October 1996, theCommittee failed toapprove thePGE'sdraftRules ofProcedure ortoauthorize
theirprovisional application.
III. Informal Group ofExperts
8. Annex IVoftheAgreement provides guidance regarding thecalculation ofthetotaladvalorem
subsidization forthepurposes ofdetermining whether there exists apresumption ofserious prejudice
under Article 6.1(a) oftheAgreement. Note 62toAnnex IVoftheAgreement provides that"[a]n
understanding among Members should bedeveloped, asnecessary, onmatters which arenotspecified
inthisAnnex orwhich needfurther clarification forthepurposes ofparagraph 1(a)ofArticle 6."
TheCommittee atitsmeeting of13June1995created anInformal Group ofExperts toexamine such
matters andtoreport totheCommittee suchrecommendations astheGroup considers could assist the
Committee inthedevelopment ofanunderstanding among Members, asnecessary, regarding such
matters. TheInformal Group iscomposed ofexperts whoserve intheirpersonal capacities rather
thanasrepresentatives ofgovernments. TheGroup began itswork on1November 1995andhasmet
onsixoccasions todate. TheGroup on14October 1996 circulated totheCommittee anoutline of
issues thatithaddiscussed todate(G/SCM/W/413).
IV. Notification ofsubsidies
9. Newandfullnotifications. Transparency iscentral totheeffective operation oftheAgreement.
Pursuant toArticle 25.1oftheAgreement andArticle XVI:1 ofGATT 1994, allMembers ofthe
Committee were required tosubmit anewandfullnotification ofsubsidies totheCommittee by
30June1995. Aformat forsuchnotifications wasapproved bytheCommittee on21July1995
(G/SCM/6). While asubstantial number ofMembers havesubmitted notifications ofsubsidies pursuant
tothese provisions, discussions intheCommittee indicate awidely heldviewthatcompliance isnot
fullyadequate, bothinterms ofthenumber ofnotifications andthecontent ofthenotifications received
(G/SCM/M/8, paras. 21-23, G/SCM/M/11, paras. 29-31).
10. Asof24October 1996, 46of125WTO Members1hadnotified subsidies pursuant toArticle 25
oftheAgreement andArticle XVIofGATT 1994. Inaddition, 18Members hadnotified thatthey
maintain nosubsidies notifiable pursuant tothese provisions. These notifications maybefound in
document series G/SCM/N/3/... However, 61Members hadsubmitted nonotification asoftheclose
oftheperiod covered bythisReport. Thus, sixteen months aftertheduedatesetforthintheAgreement,
1TheECiscounted assixteen Members.G/L/126
Page3
nearly halfofWTO Members havenotyetsubmitted anotification ofsubsidies. Ofthese Members,
22areleast-developed countries, while theremainder aredeveloping countries, countries intransition
toamarket economy, and(inafewcases) developed countries. Atableindicating thestatus ofsubsidy
notifications isreproduced inAnnex AtothisReport. TheChairman onseveral occasions expressed
hisserious concerns regarding thenumber ofMembers thathadnotasyetsubmitted anotification.
11. Special session. Article 26.1oftheAgreement requires thatnewandfullnotifications be
examined bytheCommittee atspecial sessions heldevery thirdyear. Because veryfewnewandfull
notifications were received inatimely manner, thefirstspecial session toreview suchnotifications
wasnothelduntiltheweek of22July1996, while asecond session willbeheldintheweek of
28October 1996. Asofthecloseofthesecond session, fifty-four ofthe1995newandfullnotifications
received todatewillhavebeenreviewed. Pursuant toadecision oftheCommittee, thereview sessions
areconducted onthebasisofwritten questions, withwritten answers provided afterthespecial session.
Written questions havebeenposed byapproximately adozen Members (G/SCM/Q2/...), andwith
respect toalmost allofthenotifications reviewed.
12. Attheendofthefirstspecial session inJuly1996, theChairman noted theprogress thathad
beenmade inthereview process. Thereview hadbeenconducted inaspirit ofcooperation andgood
will,andaconsiderable amount ofinformation hadbeenexchanged. However, written questions and
discussions revealed concerns bysomeMembers regarding thecompleteness ofmany ofthenotifications
reviewed. Inmany cases, questions wereraised regarding certain programmes ormeasures notnotified
totheCommittee. Questions were alsoposed regarding thefailure ofsome Members tonotify
agricultural subsidies, andofthevastmajority ofMembers tonotify subsidies atasubnational level
(G/SCM/Q2/...).
13. Updating notifications. Article 25.1oftheAgreement requires thatanupdating notification
besubmitted by30June1996. Asof24October 1996, ninesuchnotifications hadbeenreceived.
Australia, Brazil, Iceland, Japan, Norway, Romania andThailand hadnotified subsidies, while Hong
Kong andNewZealand hadnotified thattheymaintained nonotifiable subsidies. These notifications
maybefound indocument series G/SCM/N/16/.... Theremaining 116Members hadnotyetsubmitted
anupdating notification.
V. Notification ofexisting inconsistent subsidies
14. Article 28.1oftheAgreement provides thatsubsidy programmes established before thedate
aMembersignedtheWTOAgreementandwhichareinconsistentwiththeAgreementweretobenotified
notlaterthan90daysafterthedateofentry intoforce oftheWTO Agreement. Asof24October 1996,
Chile, Malaysia andSouth Africa hadnotified programmes pursuant tothisprovision (thenotification
byChile alsomade reference toArticle 27oftheAgreement). Canada, Cuba andHonduras hadnotified
theyhadnosuchprogrammes (G/SCM/N/2 andCorr.1 andaddenda). TheCommittee alsohadreceived
anotification from Singapore pursuant toArticle 27(G/SCM/N/6).
VI. Notification byMembers intransformation intoamarket economy
15. Article29.3providesthatMembersintransformationintoamarketeconomyshallnotifysubsidy
programmes falling within thescope ofArticle 3bytheearliest practicable dateafterthedateofentry
intoforce oftheWTO Agreement. TheCommittee decided atitsregular meeting of13June1995
onanindicative dateof30June1995forthesenotifications. Asof24October 1996, Hungary, Poland
andRomaniahadnotifiedprogrammespursuanttothisprovision(G/SCM/N/9/HUN,G/SCM/N/9/POL
&Corr.1, andG/SCM/N/9/ROM). TheCzech Republic hadnotified thatithadnosuchsubsidy
programmes (G/SCM/N/9/CZE). Noother Member hadsubmitted anotification.G/L/126
Page4
VII. Non-actionable subsidies
16. Notifications. Article 8.3oftheAgreement provides thatasubsidy programme forwhich non-
actionability isinvoked pursuant toArticle 8.2shallbenotified totheCommittee inadvance ofits
implementation. Arecommendation bytheInformal Contact Group ofaformat forinitial notifications
(PC/IPL/11, Annex 1)wasapproved bytheCommittee atitsmeeting of22February 1995. Asof
24October 1996, nosuchnotifications hadbeenmade. Inaddition, theWorking Party onSubsidies
Notifications wasestablished on22February 1995andhasheldfiveformal meetings todatetodiscuss,
inter alia,aformat forupdates ofnon-actionable subsidies. Adraft format wascirculated tothe
Committee on26April 1996 (G/SCM/W/390). Asoftheendofthereview period, noformat had
yetbeenadopted. However, theChairman attheregular meeting oftheCommittee on23October 1996
indicated thathewould consult regarding thedateforanother meeting oftheWorking Party toconsider
thedraftformat.
17. Arbitration. Article 8.5oftheAgreement provides forbinding arbitration incertain cases
relating tonotifications ofnon-actionable subsidies. Theinformal group onprocedures forarbitration
underArticle8.5oftheAgreementhasmetrepeatedlytodiscussproceduresfortheconductofarbitration
under Article 8.5,andapaper containing proposed procedures (G/SCM/W/5) wascirculated tothe
Committee on11May1995. However, noprocedures haveyetbeenadopted.
18. Review oftheoperation ofArticle 8.2(a). Footnote 25toArticle 8.2(a) oftheAgreement
provides that,"[n]ot laterthan18months afterthedateofentry intoforce oftheWTO Agreement,
theCommittee shallreview theoperation oftheprovisions ofparagraph 2(a)withaviewtomaking
allnecessary modifications toimprove theoperation oftheseprovisions. Initsconsideration ofpossible
modifications theCommittee shallcarefully review thedefinitions ofthecategories setforth inthis
subparagraph inthelightoftheexperience ofMembers intheoperation ofresearch programmes and
thework ofother relevant international organizations." Accordingly, theCommittee reviewed the
operation ofthisprovision atitsregular meeting of1-2May1996(G/SCM/M/9, paras. 50-57). Certain
Members observed thatthere hadbeenlimited activity withrespect tosubparagraph 8.2(a) ofthe
Agreement, andinparticular thatnonotifications ofnon-actionable research subsidies hadbeenmade
pursuant toArticle 8.3. Itwasnoted thatabroader review oftheoperation ofArticles 6.1,8and
9oftheAgreement would berequired notlaterthan5July1999 under Article 31oftheAgreement.
TheCommittee tooknoteofthestatements made andconsidered thatforthepresent ithadconcluded
thereview oftheoperation ofsubparagraph 8.2(a) envisioned byfootnote 25oftheAgreement; if
Members sodesired, theCommittee could revert totheissue atafuture date.
VIII. Notifications ofsubsidies linked toprivatization programmes
19. Article 27.13 oftheAgreement provides thatcertain subsidies thataregranted within andare
directlylinkedtoaprivatizationprogrammeofadevelopingcountryMemberandwhicharedulynotified
totheCommittee arenotsubject totheprovisions ofPartIIIoftheAgreement. Aformat forsuch
notificationswasrecommendedbythePreparatoryCommittee(PC/IPL/11)andadoptedbytheCommittee
(G/SCM/M/1, paras 19-20). Brazil made anotification pursuant tothisprovision (G/SCM/N/13/BRA)
andnoted that,while notalloftheinformation required intheformat wasnecessarily included inthe
notification, thiswasbeing presented withaview toproviding basic information ontheBrazilian
privatization programme. Thenotification wasdiscussed attheregular meeting oftheCommittee on
1-2May1996 (G/SCM/M/9, paras. 40-42).
IX. Notification andexamination ofcountervailing dutylawsand/or regulations
20. Intheareaofcountervailing duties, WTO rulesareimplemented through Members 'national
legislation. Pursuant toArticle 32.6oftheAgreement, asamplified byadecision oftheCommittee,G/L/126
Page5
Members withavailable legislation and/or regulations regarding countervailing dutyinvestigations or
reviews covered bytheAgreement should notify thefullandintegrated textoftherelevant legislation
and/or regulations totheCommittee. Ifsuchlegislation and/or regulations donotexistorarenot
available, theMember should inform theCommittee ofthisfactand,inthecaseofnon-availability,
explain thereasons therefor. Inaddition, theCommittee decided, atitsspecial meeting of
22February 1995, thatObserver governments should provide theCommittee withanyinformation
theObserver government considers relevant tomatters within thepurview oftheAgreement, including
thetextofitslawsandregulations regarding countervailing duties, andinformation regarding any
countervailing measures taken bytheObserver government.
21. Asof24October 1996, 80Members2hadnotified theCommittee regarding theirdomestic
countervailing dutylegislation. These notifications canbefound indocument series G/SCM/N/1/....
Forty-five Members hadnot,asyet,made anynotification under Article 32.6oftheAgreement.
Annex Bsetsoutthestatus ofnotifications oflegislation under Article 32.6oftheAgreement. Of
the80Members submitting notifications, 18notified thattheyhadnospecific legislation relating to
countervailing duties, 29notified newlegislation, and35notified pre-WTO legislation stillinforce.
Ofthe53Members notifying nocountervailing legislation orpre-WTO legislation stillinforce, 36
indicated thatnewlegislation isbeing considered ordrafted. Inaddition, 26Members indicated that
theWTO Agreement hasforce oflawintheterritory oftheMember.
22. During theperiod under review, theCommittee continued thework ofreviewing notifications
ofcountervailing dutylawsand/or regulations begun in1995. Inaddition tothelegislations and
notifications without legislative textreviewed during theprevious period, theCommittee reviewed
thenotifications ofcountervailing dutylegislation ofthefollowing Members intwospecial meetings
heldjointly withtheCommittee onAnti-Dumping Practices: Barbados, Bolivia, Colombia, Costa Rica,
Cuba, Ecuador, Iceland, Israel, Jamaica, Japan, Malawi, Malaysia, Norway, Philippines, Romania,
Saint Lucia, Slovenia, South Africa, Thailand, Trinidad &Tobago, Tunisia, Turkey, andZambia.
TheCommittee alsoreviewed thenotifications without legislative textofthefollowing Members:
Botswana, Cyprus, Dominican Republic, ElSalvador, Guatemala, Republic ofGuinea, Honduras,
Indonesia, Maldives, Malta, Morocco, Nicaragua, Pakistan, Paraguay, Poland, SriLanka, Suriname,
Turkey, Uganda, andZimbabwe. Thesubstance ofthereview isreflected inthewritten questions
puttoMembers, andtheirwritten answers. References tothese questions andanswers canbefound
intheminutes ofthejointspecial meetings toreview legislation, G/SCM/M/6 andG/SCM/M/10.
23. AsoftheendofApril 1996, theCommittee hadconducted aninitial review ofalmost all
notifications received todate,infourspecial meetings heldjointly withtheCommittee onAnti-Dumping
Practices. TheCommittee therefore decided thatfortheimmediate future, jointspecial meetings to
review legislation were nolonger needed, andthecontinued review oflegislation would takeplace
inthecontext ofregular Committee meetings. TheCommittee adopted procedures forthecontinued
review oflegislation (G/SCM/W/293), based onaprocess ofwritten questions andanswers, tofacilitate
productive discussions during thecontinued review oflegislations. Review ofnewandamended
legislationswouldfollowthesameproceduresusedduringthejointspecialmeetingstoreviewlegislation.
References tothequestions andanswers submitted regarding continued review ofnotifications of
legislation canbefound intheminutes oftheregular meeting oftheCommittee (G/SCM/M/12).
24. Asoftheendoftheperiod under review, asignificant number ofthewritten questions put
toMembers during thecourse ofthelegislative review meetings remained unanswered. Nonetheless,
theChairman observed theprogress thathadbeenmade inthereview process (G/SCM/M/7, para.
30).Questions puttoMembers ranged fromthose regarding general, policy matters toveryspecific
2TheECiscounted assixteen Members.G/L/126
Page6
andhighlytechnicalquestionsofnationaladministrationofcountervailingmeasures.Amongtheconcerns
raised byMembers were perceived inconsistencies between theAgreement andbothnewly-enacted
legislation andlegislation enacted priortotheentry intoforceoftheAgreement. Inaddition, Members
expressed concern regarding thepotential foractions inconsistent withtheAgreement ifsuchactions
arebased onlegislation enacted prior totheentry intoforce oftheAgreement. Another concern was
thecomplexity oftheprocedural andsubstantive requirements oftheAgreement, andtheneedfor
significant training andeducation, particularly fornewusersofcountervailing measures anddeveloping
countries, toensure thatactions were taken consistently withtheAgreement.
X. Semi-annual reports oncountervailing actions
25. Article 25.11 oftheAgreement provides thatMembers shallsubmit, onasemi-annual basis,
reports oncountervailing dutyactions taken within thepreceding sixmonths. Pursuant tothe
recommendation oftheInformal Contact Group (PC/IPL/11, Annex 7),which wasadopted bythe
Committee atits22February 1995meeting (G/SCM/M/1, paras. 19-20), thefirstsemi-annual report
submitted byeachWTO Member would cover theperiod July-December orJanuary-June, whichever
wasmore recent, preceding thedateofentry intoforce oftheWTO Agreement forthatMember.
Inaddition, Members taking noaction during agiven period arerequested tosonotify theCommittee.
26. Guidelines forinformation tobeprovided insemi-annual reports submitted pursuant to
Article 25.11 arecontained indocument G/SCM/2. Submission ofsemi-annual reports byMembers
known tobeusers ofcountervailing measures hasimproved since early 1995. Asignificant number
ofMembers havenever filedasemi-annual report, however. While many ifnotmostoftheseMembers
arebelieved nottobeactive users ofcountervailing measures, intheabsence ofsemi-annual reports,
thesituation remains uncertain. TheCommittee reviewed thenotifications ofaction fortheperiods
1July-31December 1995 and1January -30June 1996 atitsregular meetings inMay and
October1996.InadditiontospecificquestionsraisedconcerningtheactionstakenbyMembers,concern
wasexpressed overthelackofnotifications, andthefactthatnotifications often didnotfollow the
format setforthintheguidelines. Thecomments ofMembers arereflected intheminutes oftheregular
meeting of1-2May1996 (G/SCM/M/9, para. 33).
27. Notificationsfor1July-31December1995.Asof24October1996,eightMembershadnotified
actions taken during theperiod 1July-31 December 1995. Forty-six Members hadnotified the
Committee thattheyhadnottaken anycountervailing dutyaction during thisperiod. Approximately
halfofWTO Members hadnotsubmitted anotification. Thesemi-annual reports werecirculated in
document series G/SCM/N/12. Thestatus ofsemi-annual reports issetoutinAnnex C.
28. Notifications for1January -30June1996. Asof24October 1996, nineMembers hadnotified
actions taken during theperiod 1January-30 June1996. Thirty-nine Members hadnotified the
Committee thattheyhadnottaken anycountervailing dutyaction during thisperiod (G/SCM/N/19
andaddenda). Approximately two-thirds ofWTO Members hadnotsubmitted anotification. The
semi-annual reports werecirculated indocument series G/SCM/N/19. Thestatus ofsemi-annual reports
issetoutinAnnex C.
29. Atablesummarising notifications ofcountervailing actions taken byMembers during theperiod
1July1995-30 June1996 isreproduced inAnnex DtothisReport.
XI. Reports onallpreliminary orfinalcountervailing dutyactions
30. Pursuant toArticle 25.11 oftheAgreement, Members aretoreport without delay tothe
Committee allpreliminary andfinalcountervailing actions taken. Guidelines fortheinformation to
becontained inthese reports aresetforthinG/SCM/3. Asof24October 1996, reports ofpreliminaryG/L/126
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andfinalcountervailing actions during theperiod under consideration werereceived fromArgentina,
Australia, Brazil, Canada, CôteD'Ivoire, theEC,Mexico, NewZealand, Peru, andtheUnited States.
(G/SCM/N/14, 15,17,and20).While such reports areregularly submitted bysome users of
countervailing measures, anumber ofMembers known tohavetaken preliminary andfinalactions
have notreported those actions without delay totheCommittee. TheCommittee reviewed the
notifications ofpreliminary andfinalactions atitsregular meetings inMayandOctober 1996. During
these reviews, theChairman expressed theviewthatcompliance withthisnotification hadnotbeen
fullyadequate (G/SCM/M/5, para.7).
XII. Other matters discussed bytheCommittee
31. Notification ofCompetent Authorities. Atitsregular meeting on1-2May1996, theCommittee
decided torequest members tonotify thename, address, telephone andfaxnumber, andelectronic
mailaddress where available, oftheirauthorities competent toinitiate andconduct countervailing duty
investigations. Thisnotification would bemade once, subject toupdating orcorrecting notifications
should therelevant information ofanyMember change. Thelistcontaining theinformation notified
byMembers ismaintained bytheSecretariat andcirculated inaddenda todocument G/SCM/N/18.
Asof24October 1996, thefollowing Members hadnotified relevant information totheSecretariat:
Argentina, Australia, Bolivia, Brazil, Canada, Chile, EC,Guatemala, Hong Kong, Hungary, Iceland,
Israel, Jamaica, Kenya, Korea, Malaysia, Mauritius, Mexico, NewZealand, Norway, Peru, Romania,
Singapore, Slovenia, Switzerland, Thailand, Turkey, Uganda, United States, Venezuela andZambia.
AttheCommittee 'sregular meeting inOctober, itwasproposed thattheCommittee askMembers
tonotify, separately fromtheirnotifications oflegislation and/or regulations, theirdomestic procedures
fortheconduct ofcountervailing dutyinvestigations.
32. Procedures forpreparation andadoption ofAnnual Report. Atitsregular meeting on1-
2May1996, theCommittee considered theprocedures forthepreparation andadoption ofitsAnnual
Report adopted atitsfirstmeeting inFebruary 1995, inlightofsuggestions from theChairman of
theGeneral Council. TheCommittee decided thattheSecretariat should prepare adraftReport in
thesame format ashadbeenusedintheprevious year'sReport, incorporating fromthatReport those
aspects ofimplementation thatwould helpexplain theprogress thattheCommittee hadmade. The
draftReport would becirculated toMembers attheendofSeptember orinearly October, atwhich
timetheCommittee would havetodecide whether itshould meetinformally inadvance oftheregular
October meeting todiscuss anyadditional matters forinclusion intheReport.
33. Status ofMembers inAnnex VII.TheChairman informed theCommittee that,according to
datainthe1996 World Bank Atlas, theGNP percapita perannum ofthree Members identified in
Annex VII(b) oftheAgreement (theDominican Republic, Guatemala, andMorocco) nowexceeded
$1000. Inaddition, theCommittee discussed thestatus ofHonduras, which isnotidentified in
Annex VII.TheChairman noted thatHonduras wasanoriginal Member oftheWTO, having signed
theWTO Agreement atMarrakesh inApril 1994, andhadaGNP percapita perannum ofwellunder
$1000.Nevertheless,HondurashadnotbeenincludedinAnnexVII.AfterdiscussionintheCommittee,
theChairman stated thathewould consult informally regarding thissituation.
XIII. Concluding observations
34. TheCommittee considered that,ingeneral, goodprogress hadbeenmade inthefirsttwoyears
inimplementing theAgreement. However, theCommittee considered thatmuch remained tobedone,
andthatadditional efforts from Members were required inorder toachieve fullimplementation of
theAgreement.G/L/126
Page8
35. TheCommittee observed thatoneareawhere implementation wasinadequate wasnotifications.
Fulltransparency wasessential toensure substantive implementation oftheAgreement. Every effort
wasrequired inorder thatallMembers submitted fullandcomplete notifications onatimely basis.
While theachievement ofthisgoaldepended primarily ontheefforts ofindividual Members, the
Committee could examine steps thatmight betaken toimprove compliance by,interalia,informing
concerned governments ofcompliance problems, examining waystostreamline thenotification process,
andassisting developing country Members tomeettheirnotification obligations.
36. TheCommittee noted thatthere wereanumber ofoutstanding tasks confronting it.Among
thesewerethedevelopment ofaformat forupdate notifications pursuant toArticle 8.3,thefinalization
ofprocedures forarbitration regarding non-actionable subsidies under Article 8.5,theapproval of
rulesofprocedure forthePermanent Group ofExperts, andthecompletion ofthework oftheInformal
Group ofExperts established toexamine thematters referred toinfootnote 62toAnnex IVofthe
Agreement. TheCommittee considered thatcompletion ofthesetaskswasimportant andthatMembers
should make every effort toward thatend. TheCommittee recalled that,while ithadforthepresent
concluded thereview oftheoperation ofArticle 8.2(a) required byfootnote 25oftheAgreement, a
broader review oftheoperation ofArticles 6.1,8and9would berequired notlaterthan5July1999
under Article 31oftheAgreement. TheCommittee alsoobserved thattheprovisions ofArticle 8.3
hadnotbeenusedbyMembers, andthatitmight usefully consider thissituation, taking intoaccount
theobligations oftheAgreement.
37. TheCommittee observed thatamong itsmajor tasksduring thefirsttwoyears oftheAgreement
hadbeen toreview thedomestic countervailing legislations andsubsidy programmes notified by
Members. Thereview exercises indicated thatimplementation inthisregard waslessthancomplete.
NotallMembers thatarecurrent orpotential users ofcountervailing measures hadcompleted the
domestic legislative processes toincorporate therelevant requirements oftheAgreement. Thus, further
efforts were required inorder toensure substantive implementation oftheAgreement. Inaddition,
during thespecial meetings toreview notifications avariety ofissues wereraised regarding theWTO-
consistency ofnotified legislations, programmes andmeasures. Themeetings provided Members with
anopportunity toseekclarification ofissues arising outofother Members 'legislation. Generally,
Members wereabletoclarify theissues raised. BothMembers notifying legislation andthosesubmitting
questions generally found theprocess helpful andwished tocontinue thiswork intheCommittee.
TheCommittee viewed itasextremely important thatMembers carefully consider allquestions posed,
comments made andreplies provided inthecontext ofthese review sessions.
38. TheCommittee noted thattheprocedural andsubstantive provisions ofthenewAgreement
weredetailedandthatitsimplementationrequiredsubstantialexpertiseandthecommitmentofsubstantial
resources byMembers. TheCommittee considered thatmaximum efforts should bemade toassist
Members, andinparticular developing country Members, toachieve fullimplementation ofthe
Agreement.G/L/126
Page9
ANNEX A
SUBSIDY NOTIFICATIONS
(G/SCM/N/3/...)
Member Member Member Member
Antigua &Barbuda Germany X Kuwait Sierra Leone
Argentina X Greece X Lesotho Singapore X
Australia X Ireland X Liechtenstein nil Slovak Republic X
Bahrain Italy X Macau Slovenia X
Bangladesh Luxembourg X Madagascar Solomon Islands
Barbados Netherlands X Malawi South Africa
Belize Portugal X Malaysia X SriLanka X
Benin Spain X Maldives Suriname nil
Bolivia nil Sweden X Mali Swaziland nil
Botswana nil United Kingdom X Malta Switzerland X
Brazil X Ecuador Mauritania Tanzania
Brunei Darussalam Egypt Mauritius nil Thailand X
Burkina Faso ElSalvador Mexico X Togo
Burundi Fiji Morocco nil Trinidad &Tobago nil
Cameroon Gabon Mozambique Tunisia
Canada X Gambia n.a Myanmar Turkey X
Central African R. Ghana nil Namibia Uganda nil
Chad n.a. Grenada NewZealand nil United Arab
Emirates
Chile X Guatemala Nicaragua nil United States X
Colombia X Guinea Bissau Nigeria X Uruguay
Costa Rica X Guinea, Rep. of Norway X Venezuela X
Côted'Ivoire nil Guyana Pakistan X Zambia nil
Cuba Haiti Papua NewGuinea Zimbabwe
Cyprus Honduras nil Paraguay
Czech Republic X Hong Kong nil Peru nil
Djibouti Hungary X Philippines X
Dominica Iceland X Poland
Dominican Rep. nil India X Qatar
EC X Indonesia X Romania X
Austria X Israel Rwanda
Belgium X Jamaica St.Kitts&Nevis
Denmark X Japan X St.Lucia
Finland X Kenya St.Vincent &
Grenadines
France X Korea X Senegal
"Nil" means thattheMember hasindicated thatitmaintains nonotifiable subsidiesG/L/126
Page10
ANNEX B
COUNTERVAILING DUTY LEGISLATION NOTIFICATIONS
MEMBER/OBSERVER NOTIFICATION PROVIDED
Antigua andBarbuda
Argentina G/SCM/N/1/ARG/1 +Suppl.1
Australia G/SCM/N/1/AUS/1 +Suppl.1
Bahrain
Bangladesh
Barbados G/SCM/N/1/BRB/1
Belize
Benin
Bolivia G/SCM/N/1/BOL/1 +Suppl.1
Botswana
Brazil G/SCM/N/1/BRA/1 +Suppl.1
Brunei Darussalam
Burkina Faso
Burundi
Cameroon
Canada G/SCM/N/1/CAN/2
Central African Republic
Chad
Chile G/SCM/N/1/CHL/1
Colombia G/SCM/N/1/COL/1
Costa Rica G/SCM/N/1/CRI/1
Côted'Ivoire
Cuba G/SCM/N/1/CUB/1 +Suppl.1
Cyprus G/SCM/N/1/CYP/2
Czech Republic G/SCM/N/1/CZE/1
Djibouti
Dominica
Dominican Republic G/SCM/N/1/DOM/1
European Communities G/SCM/N/1/EEC/1G/L/126
Page11
MEMBER/OBSERVER NOTIFICATION PROVIDED
Ecuador G/SCM/N/1/ECU/1
Egypt G/SCM/N/1/EGY/1
ElSalvador G/SCM/N/1/SLV/1
Fiji
Gabon
Gambia
Ghana
Grenada
Guatemala G/SCM/N/1/GTM/2
Guinea Bissau
Guinea, Rep.of G/SCM/N/1/GIN/1
Guyana
Haiti
Honduras G/SCM/N/1/HND/2
Hong Kong G/SCM/N/1/HKG/1
Hungary G/SCM/N/1/HUN/1
Iceland G/SCM/N/1/ISL/1
India G/SCM/N/1/IND/2 +Corr.1 +Suppl.1
Indonesia G/SCM/N/1/IDN/2
Israel G/SCM/N/1/ISR/2
Jamaica G/SCM/N/1/JAM/1
Japan G/SCM/N/1/JPN/2 +Corr.1 &2+Suppl.1
Kenya G/SCM/N/1/KEN/1
Korea G/SCM/N/1/KOR/1 +Corr.1 &2
Kuwait
Lesotho
Liechtenstein
Macau
Madagascar
Malawi G/SCM/N/1/MWI/1
Malaysia G/SCM/N/1/MYS/1G/L/126
Page12
MEMBER/OBSERVER NOTIFICATION PROVIDED
Maldives G/SCM/N/1/MDV/1
Mali
Malta G/SCM/N/1/MLT/1
Mauritania
Mauritius G/SCM/N/1MUS/2
Mexico G/SCM/N/1/MEX/1 +Corr.1
Morocco G/SCM/N/1/MAR/1
Mozambique
Myanmar
Namibia
NewZealand G/SCM/N/1/NZL/2
Nicaragua G/SCM/N/1/NIC/1
Nigeria
Norway G/SCM/N/1/NOR/3
Pakistan G/SCM/N/1/PAK/1
Papua NewGuinea
Paraguay G/SCM/N/1/PRY/1
Peru G/SCM/N/1/PER/1 +Corr.1 +Suppl.1
Philippines G/SCM/N/1/PHL/1
Poland G/SCM/N/1/POL/1
Qatar
Romania G/SCM/N/1/ROM/1
Rwanda
Saint Kitts&Nevis
Saint Lucia G/SCM/N/1/LCA/1
Saint Vincent &Grenadines
Senegal G/SCM/N/1/SEN/1
Sierra Leone
Singapore G/SCM/N/1/SGP/1
Slovak Republic G/SCM/N/1/SVK/1
Slovenia G/SCM/N/1/SVN/1G/L/126
Page13
MEMBER/OBSERVER NOTIFICATION PROVIDED
Solomon Islands
South Africa G/SCM/N/1/ZAF/1
SriLanka G/SCM/N/1/LKA/1
Suriname G/SCM/N/1/SUR/1
Swaziland
Switzerland G/SCM/N/1/CHE/1
Tanzania
Thailand G/SCM/N/1/THA/2 +Corr.1
Togo
Trinidad andTobago G/SCM/N/1/TTO/1
Tunisia G/SCM/N/1/TUN/1
Turkey G/SCM/N/1/TUR/2
Uganda G/SCM/N/1/UGA/2
United Arab Emirates
United States G/SCM/N/1/USA/1 +Corr.1 +Suppl.1
Uruguay G/SCM/N/1/URY/1
Venezuela G/SCM/N/1/VEN/1 +Suppl.1 &2
Zambia G/SCM/N/1/ZMB/1
Zimbabwe G/SCM/N/1/ZWE/2G/L/126
Page14
ANNEX C
SEMI-ANNUAL REPORTS
Key: X=Semi-annual report ofactions taken submitted
N=Report ofnoactions taken submitted
notapplicable =obligation didnotapply toMember forthatperiod
blank =Noreport submitted
MEMBER 1July-31 December 1995 1January-30 June 1996
Antigua andBarbuda
Argentina X X
Australia X X
Bahrain
Bangladesh
Barbados N
Belize
Benin
Bolivia N
Botswana N N
Brazil X X
Brunei Darussalam
Burkina Faso
Burundi
Cameroon
Canada X X
Central African Republic
Chad notapplicable
Chile N N
Colombia N N
Costa Rica N
Côted'Ivoire
Cuba N N
Cyprus NG/L/126
Page15
MEMBER 1July-31 December 1995 1January-30 June 1996
Czech Republic N N
Djibouti
Dominica
Dominican Republic N N
European Communities3X X
Ecuador
Egypt N N
ElSalvador
Fiji
Gabon
Gambia notapplicable
Ghana
Grenada
Guatemala
Guinea Bissau
Guinea, Republic of
Guyana
Haiti
Honduras N
Hong Kong N N
Hungary N N
Iceland N N
India N N
Indonesia N N
Israel X N
Jamaica
Japan N N
Kenya
Korea N N
3TheECiscounted as1Member.G/L/126
Page16
MEMBER 1July-31 December 1995 1January-30 June 1996
Kuwait N
Lesotho
Liechtenstein
Macau
Madagascar
Malawi
Malaysia N N
Maldives
Mali
Malta N N
Mauritania
Mauritius N
Mexico X X
Morocco N N
Mozambique
Myanmar
Namibia
NewZealand X X
Nicaragua
Nigeria
Norway N N
Pakistan N N
Papua NewGuinea
Paraguay N N
Peru X N
Philippines N N
Poland N
Qatar
Romania N N
Rwanda
Saint Kitts&NevisG/L/126
Page17
MEMBER 1July-31 December 1995 1January-30 June 1996
Saint Lucia N
Saint Vincent &
Grenadines
Senegal N N
Sierra Leone
Singapore N N
Slovak Republic N N
Slovenia N N
Solomon Islands notapplicable
South Africa N
SriLanka N N
Suriname
Swaziland N
Switzerland N N
Tanzania
Thailand N N
Togo
Trinidad andTobago N
Tunisia N N
Turkey N N
Uganda N
United Arab Emirates N
United States X X
Uruguay N N
Venezuela N N
Zambia N N
Zimbabwe NG/L/126
Page18ANNEX D*
Summary ofCountervailing Duty Actions
(1July1995-30 June1996)
Initiation Provisional
Measures
(negative preliminary determination not
included)Definitive
DutiesPrice
UndertakingsMeasures
inforce on
30June1996
(definitive
duties and
price
undertakings)
No. Countries1involved No. Countries involved No. Countries involved No. Countries involved
ARGENTINA
0 0 1 EEC(1) 0 1
AUSTRALIA
1 GBR (1) 0 0 0 13
BRAZIL
0 6 CIV(1) IDN(1) LKA(2) 0 7
MYS(1) PHL(1)
*Includes actions covered bytheTokyo Round Agreement, theWTO Agreement andArticle VIofGATT 1947.
1"Countries" refer inallcases tocountries orcustoms territories. Alistoftheabbreviations usedinthistable canbefound following thetable.G/L/126
Page19Initiation Provisional
Measures
(negative preliminary determination not
included)Definitive
DutiesPrice
UndertakingsMeasures
inforce on
30June1996
(definitive
duties and
price
undertakings)
No. Countries1involved No. Countries involved No. Countries involved No. Countries involved
CANADA
1 ITA(1) 2 EEC(1) ITA(1) 1 EEC(1) 0 6
EEC
0 0 0 3
ISRAEL
2 EEC(1) ITA(1) 0 0 0 0
MEXICO
0 7 BRA(4) VEN(3) 5 CAN(1) USA(1) VEN(3) 13
NEW ZEALAND
2 ITA(2) 0 0 0 1G/L/126
Page20Initiation Provisional
Measures
(negative preliminary determination not
included)Definitive
DutiesPrice
UndertakingsMeasures
inforce on
30June1996
(definitive
duties and
price
undertakings)
No. Countries1involved No. Countries involved No. Countries involved No. Countries involved
PERU
0 0 1 ARG(1) 0 0
UNITED STATES
1 CAN(1) 2 ITA(1) TUR(1) 2 ITA(1) TUR(1) 0 65
VENEZUELA
0 0 0 0 3G/L/126
Page21
LIST OFABBREVIATIONS USED INANNEX D
AFG AFGHANISTAN
ALB ALBANIA
DZA ALGERIA
ATG ANTIGUA AND
BARBUDA
ARG ARGENTINA
ARM ARMENIA
AUS AUSTRALIA
AUT AUSTRIA
AZE AZERBAIJAN
BHS BAHAMAS
BHR BAHRAIN
BGD BANGLADESH
BRB BARBADOS
BLR BELARUS
BEL BELGIUM
BLZ BELIZE
BEN BENIN
BMU BERMUDA
BOL BOLIVIA
BIH BOSNIA-HERZEGOVINA
BWA BOTSWANA
BRA BRAZIL
BRN BRUNEI DARUSSALAM
BGR BULGARIA
BFA BURKINA FASO
BUR BURUNDI
CMR CAMEROON
CAN CANADA
CAF CENTRAL AFRICAN
REPUBLIC
TCD CHAD
CHL CHILE
CHN CHINA
CHT CHINESE TAIPEI
COG CONGO, REPUBLIC
COL COLOMBIA
CRI COSTA RICA
CIV COTE D'IVOIRE
HRV CROATIA
CUB CUBA
CYP CYPRUS
CZE CZECH REPUBLIC
DNK DENMARK
DJI DJIBOUTI
DMA DOMINICA
DOM DOMINICAN REPUBLIC
EEC EUROPEANCOMMUNITY
ECU ECUADOR
EGY EGYPT
SLV ELSALVADOR
EST ESTONIA
FJI FIJI
FIN FINLAND
FRA FRANCE
MKD FORMER YUGOSLAV
REPUBLIC OF
MACEDONIA
GAB GABON
GMB GAMBIA
GEO GEORGIA
DEU GERMANY
GHA GHANA
GRC GREECEGRD GRENADA
GTM GUATEMALA
GNB GUINEA-BISSAU
GIN GUINEA, REP. OF
GUY GUYANA
HTI HAITI
HND HONDURAS
HKG HONG KONG
HUN HUNGARY
ISL ICELAND
IND INDIA
IDN INDONESIA
IRN IRAN
IRQ IRAQ
IRL IRELAND
ISR ISRAEL
ITA ITALY
JAM JAMAICA
JPN JAPAN
JOR JORDAN
KAZ KAZAKHSTAN
KEN KENYA
KOR KOREA
KWT KUWAIT
KGZ KYRGYZSTAN
LVA LATVIA
LBN LEBANON
LSO LESOTHO
LIE LIECHTENSTEIN
LTU LITHUANIA
LUX LUXEMBOURG
MAC MACAU
MDG MADAGASCAR
MWI MALAWI
MYS MALAYSIA
MDV MALDIVES
MLI MALI
MLT MALTA
MRT MAURITANIA
MUS MAURITIUS
MEX MEXICO
MDA MOLDOVA, REP. OF
MNG MONGOLIA
MAR MOROCCO
MOZ MOZAMBIQUE
NAM NAMIBIA
NLD NETHLANDS
NZL NEW ZEALAND
NIC NICARAGUA
NER NIGER
NGA NIGERIA
NOR NORWAY
OMN OMAN
PAK PAKISTAN
PAN PANAMA
PNG PAPUA NEW GUINEA
PRY PARAGUAY
PER PERU
PHL PHILIPPINES
POL POLAND
PRT PORTUGAL
PRI PUERTO RICO
QUT QATAR
ROM ROMANIARUS RUSSIAN FEDERATION
RWA RWANDA
KNA SAINT KITTS &NEVIS
LCA SAINT LUCIA
SAU SAUDI ARABIA
SEN SENEGAL
SYC SEYCHELLES
SLE SIERRA LEONE
SGP SINGAPORE
SVK SLOVAK REPUBLIC
SVN SLOVENIA
ZAF SOUTH AFRICA
ESP SPAIN
LKA SRILANKA
VCT SAINT VINCENT &
GRENADINES
SDN SUDAN
SUR SURINAME
SWE SWEDEN
CHE SWITZERLAND
TJK TAJIKISTAN
TZA TANZANIA
THA THAILAND
TGO TOGO
TTO TRINIDAD &TOBAGO
TUN TUNISIA
TUR TURKEY
TKM TURKMENISTAN
UGA UGANDA
UKR UKRAINE
ARE UNITEDARABEMIRATES
GBR UNITED KINGDOM
USA UNITED STATES
URY URUGUAY
UZB UZBEKISTAN
VUT VANUATU
VEN VENEZUELA
VNM VIET NAM
ZAR ZAIRE
ZMB ZAMBIA
ZWE ZIMBABWE