RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/501
8 March 2002
(02-1165)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
MEMBERS' DIFFICULTIES IN MAKING SUBSIDY NOTIFICATIONS,
AND THE PLANNED SUBSIDY NOTIFICATION SEMINAR
Reply to Questions in document G/SCM/W/473
of 18 December 2001
Paper Submitted by Australia
The following communication, dated 5 March 2002, has been received from the Permanent
Mission of Australia.
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B.Q UESTIONS CONCERNING DIFFICULTIES IN NOTIFYING
1. Does your government face resource constraints in trying to make subsidy notifications?
If so, what are the major bottlenecks in the notification system of your government?  Is the
problem primarily an insufficient number  of staff to handle the notifications, or is it more a
question of insufficiently trained  staff?
Reply
Australia does have resource constraints in the preparation of subsidy notifications
particularly in terms of the requirement to coordinate and seek input from sub-national agencies (six
States and two Territory governments, which in turn  consult across all portfolios of government) that
are less familiar with WTO issues.
2. Depending on your answer to question 1, above, if the notification questionnaire format
could be simplified, would this make a difference to your government’s ability to make therequired subsidy notifications?
Reply
Australia considers that there are some elements of the required information which are
necessarily more onerous and difficult to provide largely due to the nature of the programmes
themselves.  For example, the provision of statistica l data permitting an assessment of the trade effects
of a subsidy is particularly difficult where a program is horizontal in nature or covers a number of
products.  A simplification of the questionnaire may be possible to facilitate the timely provision of
data in such cases.G/SCM/W/501
Page 2
3. Balancing your government’s needs for as simple  a format as possible against its needs
to be able to understand other Members’ notifications when it reviews them, how much
simplification could be introduced without sacrificing transparency?
Reply
Australia considers that as there is a process established within the Committee for the review
of notifications, there is nothing to prevent other Members from seeking clarification or further
details.  A simplified notification would need to balance a minimum level of information for
transparency purposes yet not be so onerous that it may delay notification of a programme due to lack
of certain information such as statistical data which may not be readily available.
4. Considering the notification format itself, and the concepts underlying it as found in
SCM Articles 1-3, in your government’s experi ence, do individuals responsible for making
notifications have difficulties understanding the requirements due to the language used in theAgreement to define “subsidy”, “specificity”, etc. ?  For example, do these individuals believe
that subsidies are in the nature of cash grants  only, and do not encompass revenue foregone via
tax and duty incentives?  Could some sort of explanation be introduced into the questionnaire
format to make more clear the scope of measures that are subject to notification?  How might
such an explanation be worded?
Reply
Those responsible for preparing Australia’s notifications do not have such difficulties.  A
number of training seminars to other agencies and sub-national agencies have been conducted to
explain the basic concepts underlying the SCM Agreement and to increase familiarity with WTO
subsidy rules.  We would therefore consider it helpful if the questionnaire format made clearer thescope of measures captured.
5. Does your government experience general problems due to the formatting requirements
of the notification questionnaire?  In particular, does your government maintain any pre-
existing information that addresses the substance of the notification questionnaire, but does not
correspond to the questionnaire’s format?  If so, what are the specific problems that yourgovernment encounters when it tries to fo rmat the information as required by the
questionnaire?  If the information were to be notified in its pre-existing format, could it
nevertheless be keyed to the data elements of the subsidy questionnaire?
Reply
Assistance programs are generally funded on a financial year basis (1 July – 30 June financial
year).  Australia therefore has a fundamental problem with supplying calendar year data.  As a result,
Australia’s notification contains 6 months’ data which would normally be contained in the following(calendar) year’s notification; in other words, approximately 6 months ahead of the due deadline
(30 June).  Australia attempts to notify its subsidies as soon as possible at the end of each financial
year.
6. In reviewing other Members’ notifications, would your government find it problematic
to review information that was formatted in a way other than the way foreseen in the subsidy
questionnaire, but that comprehensively ad dressed the substantive elements of the
questionnaire?  How important would it be for this information to be keyed or coded to the
questionnaire format?G/SCM/W/501
Page 3
Reply
Australia is flexible on how information is to be formatted.  The current subsidy questionnaire
format makes clear the purpose, background or aut hority of a subsidy which may not be otherwise
evident.  On the basis that there is basic core information provided by a notifying Member, nothing
prevents a WTO Member from seeking further clarification on a particular programme.  Australiaconsiders that the provision of an official website as an optional addition to the basic information
would also be helpful to increase the transparency of measures.
7. Does your government maintain any info rmation about its subsidy or incentive
programmes on official web sites?  How much wo uld your notification of subsidies be simplified
if such information could be submitted in its pre-existing format?  As a reviewer of
notifications, what sorts of limits should there be to the substitution of information from web
sites for completed notification questionnaires?  Would references to web sites be a usefulsupplement to substantive information provided in a notification?
Reply
Detailed information on Australia’s subsidy programmes is available on official websites.
Official websites do not contain all the information required to be notified at any one particular
website.  Nor are they formatted in accordance with Article 25 of the SCM.  Australia is also mindfulthat some websites do not contain sufficient/adequate information.  Australia therefore does not
consider that an official website address would or should be a substitute for a notification.  Rather, we
consider that it could supplement information provided by the notifying Member.  However, as noted
above, so long as basic information was furnished by the notifying Member, Australia considers that it
would be most useful, and would add to the transparency of the notification, to have an officialwebsite wherever possible included in the notification.  Notifying Members should therefore only
include official websites which elaborate upon information contained in a notification.
8. Concerning General Rule 6, which requires that  notification of subsidies provided “to
specific products or sectors” be organized on a product- or sector-specific basis, does this rule
pose problems for your government when notifying subsidies that are provided on a horizontal,rather than a product- or sector-specific basis?   What are the specific steps and difficulties in
preparing sector- or product-specific informatio n for subsidies provided on a horizontal basis?
Reply
Problems arise in providing statistical information for horizontal programs.  Such information
is not collected by the agency administering the programme.  Australia has attempted to indicate the
industry sectors which have benefitted from the subsidy.  These programmes are often discretionary
programmes and may involve supporting projects involving services as well as goods.  It has alsoproven difficult to isolate specific subsidies to firms or goods.  Hence, Australia includes all
projects/firms assisted under the programme and total budget expenditures and therefore necessarily
overestimates the level of subsidy on a product-specific basis.
9. Does this rule present problems for notification of subsidies that are provided on a
product- or sector-specific basis (e.g., some agricultural subsidies)?
Reply
Australia notifies its sector-specific agricultural support.G/SCM/W/501
Page 4
10. Would a redrafting of General Rule 6 to ref er to subsidies "provided on the basis of
specific products or sectors" help to resolve this  problem?  (The idea would be to clarify that
programme-based information, rather than product- or sector-specific information would be
required for subsidies provided on a horizontal basis, which product- or sector-specific
subsidies would continue to need to be notified on that basis.)
Reply
As noted above, Australia provides programme-based information where a programme is
horizontal in nature.  Australia also indicates the industry sectors or products which received benefits
under such programmes.
11. Would such a redrafting pose problems for the review of subsidy notifications, and if so,
what would those problems be?
Reply
Australia considers that, for the sake of transparency, it is important that notifications are
submitted for review.  While Members can seek further clarification in reviewing a notification, it
would be helpful if notifying Members could indicate the specific products or sectors within
horizontal programmes which received assistance.
12. To what extent does the general requirement to provide statistical information on the
trade effects of notified subsidies (chapeau of item 9) impede or delay the presentation of
subsidy notifications?
Reply
Australia has difficulties with this requirement where measures are horizontal or the
programmes are sub-national.  In the case of a sub-national measures, simply providing theproduction, consumption, imports and exports of a produ ct (national-level statistics) does not provide
any accurate picture or relationship between this data and the subsidy and its corresponding trade
effects.  As noted above, in many cases, Australia is unable to identify the trade effects of particular
programmes.  In some cases, the statistical data is not readily available in the format required.  To
provide such statistical data would seriously dela y the submission of Australia’s subsidy notification.
13. To what extent does the need to compile the specific kinds of statistical information
referred to in items 9(a) and 9(b) impede or delay the presentation of subsidy notifications?
Reply
See response to question 12.
14. How important is this statistical information about other Members’  subsidies to your
government when reviewing subsidy notificati ons?  Could these reporting requirements be
made less stringent in some manner?  If so, how?
Reply
Australia views details regarding the delivery mechanism of a subsidy to be of greater
importance for transparency reasons than statistical details relating to production, consumption,
imports and exports of the subsidized product.  However, Australia is mindful of the requirements of
Article 25 and Members should wherever possible seek to provide statistical information.G/SCM/W/501
Page 5
15. Does your government find, in preparing subs idy notifications, th at there is conceptual
overlap or redundancy in some of the information elements as currently drafted?
Reply
Australia considers that the policy objective and/or purpose of the subsidy and the
background and authority of the subsidy (items 3 and 4) may constitute duplication of informationparticularly where the policy objective of a measure is contained in the relevant legislation.  Similarly,
there may be overlap between items 5 and 6 in terms of the form of a subsidy and how it is provided.
16. If your government believes there to be overlap, how might this be eliminated?  What
drafting improvements might be introduced to clarify such situations, while preserving the
substantive requirements of Article 25 from which the questionnaire is drawn?
Reply
We consider the Article 25 format to be adequate but further explanations and examples of
what is required in responses could be included.  In other words, items 3 and 4 could be simplified or
streamlined as could items 5 and 6 where there is overlap.
17. Do the requirements to provide information on the policy objective or purpose of the
subsidy, its background and authority, and to whom and how it is provided pose significant
difficulties to your government in preparing its subsidy notifications?  How might theserequirements be simplified?
Reply
Australia considers that these are straight forward requirements and represent the less onerous
areas of the notification.
18. Does the requirement to furnish an explanation where a particular element of
information cannot be provided pose particular difficulties to your government in preparing its
notifications?  If so, is there a way to simplify this requirement while preserving its substantive
content?
Reply
This poses no difficulties.
19. Is there sufficient flexibility in item 7 of th e subsidy questionnaire (information on the
amounts of subsidies provided) for your government to be able to notify such information
without undue difficulty?  If not, is there a way to simplify this requirement while preserving its
substantive content?
Reply
As noted above, in the case of investment incentives, programmes may provide subsidies to
firms or projects which involve the provision of government advisory facilitation services as well asassistance to goods and/or services.  As Australia has indicated in its subsidy notifications, Australia
therefore has difficulties in assessing the level of assistance provided to a specific product.  Australia
provides information on total budget expenditures for these programmes.G/SCM/W/501
Page 6
C. QUESTIONS PERTAINING TO THE SUBSIDY NOTIFICATION SEMINAR
1. Concerning the number and nature of pa rticipants in the seminar, how many
individuals in your government have day-to-day responsibility for gathering information about
subsidies and for preparing and submitting subsidy notifications based on that information?  If
more than one, please describe the differen ces in these individuals ’ responsibilities.
2. Would it be sufficient for your government to have two participants in the seminar?  If
not, why not, and how many participants would be optimal from your government’s point of
view?
Reply
The Department of Foreign Affairs and Trade has prime responsibility for the preparation and
coordination of Australia’s subsidy notification.  Sub-federal agencies are also involved in compiling
input to Australia’s subsidy notifications.
3. Would two days be a sufficient/appropriate length for the seminar?  If not, what would
be more appropriate?
4. Would the following schedule be appropriate:  First session:  detailed presentation of the
basic definitions in Articles 1, 2 and 3 of the SCM Agreement, and presentation of the subsidy
notification obligations in the light of these definitions.  Second session:  Presentations by
Members concerning the specific problems they experience in preparing subsidy notifications.
Third session:  Information-sharing and brainstorming among Members as to possible practical
solutions for the identified problems (ways to coordinate and streamline gathering and
formatting of subsidy information).  Fourth session:  Follow-up steps to ensure that information
shared and lessons learned would be retained and implemented.  (It has been emphasized that
to be effective, such follow-up should be immediate and intensive.)  Ideas suggested to date have
included establishment of informal contacts am ong capital-based officials, planning of future
focused technical assistance activities, etc.
Reply
The outline and length proposed for the seminar would be appropriate to cover the issues
comprehensively.
5. Does your government normally send capital-based representatives to the Committee’s
regular meetings?  If not, why not?
Reply
Yes.
6. Does your government view this subsidy noti fication seminar as an important event in
improving its ability to understand the subsidy rules, and to make subsidy notifications in acomplete and timely manner?  (That is, does your government view the seminar as a priority
event for its participation?)  Does your government  plan to send capital-based participants to
the seminar?  If so, how many and what are their functions?  If not, why not?G/SCM/W/501
Page 7
Reply
We consider that the seminar will provide a valuable opportunity to Members having
difficulties in preparing and submitting notifications to consider practical ways to overcome specific
difficulties and concerns.
No decision has been made regarding capital-based participants attending the seminar.
7. In the view of your government, would financial sponsorship only of participants from
least-developed country Members be appropriate?  If not, why not?  What other objective
criteria for eligibility for financial sponsorship could be developed that might be more
appropriate?
Reply
We consider that financial sponsorship of participants from least-developed country Members
would be appropriate.
8. If your government would be prevented from sending participants to the seminar due to
financial constraints, what is the minimum level of financial sponsorship that would make it
possible to send participants (e.g., airfare only, airfare and subsistence for the days in Geneva,
etc.)?
Reply
Not applicable.
9. Assuming that it is not possible to finance the seminar out of existing trust funds in the
WTO (a possibility currently being explored), and assuming a total budget of approximately
CHF 225,000, would your government consider making  a donation to finance it?  If so, how
much would your government be in a position to contribute?
10. If the seminar were financed by earmarked contributions from individual Members,
and there were a surplus in the budget for the seminar (due to fewer than expected participants
from Members eligible for financial sponsorship,  however they might be identified), how should
any such surplus be disposed of?  Two possible  options have been discussed (I) returning the
surplus to the sponsors on a pro-rata basis; or (ii) making the surplus available on a first-come,
first-served basis to other developing countr y Members.  Are there other, more appropriate,
options?
Reply
Australia is currently considering its contributi on to the Global Trust Fund which will be used
for the WTO Secretariat’s technical assistance programme.
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