. /.RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/455
20 June 2001
(01-3085)
Committee on Subsidies and
Countervailing MeasuresOriginal:  Spanish
IMPLEMENTATION-RELATED ISSUES REFERRED TO
THE COMMITTEE IN THE 15 DECEMBER 2000
DECISION OF THE GENERAL COUNCIL
Discussion Paper Submitted by Colombia
The following communication, dated 18 June 2001, has been received from the Permanent
Mission of Colombia.
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As part of the process conducted by the Committee on Subsidies, Colombia has submitted
three documents.  In the first (G/SCM/W/429), we  set out the legal and economic arguments, as well
as arguments relating to appropriateness, demonstrat ing the need to address the issue of the treatment
of fiscal incentives on capital goods used in the export process.  We also analysed the treatment
accorded to such instruments by Annex 1 of the Subsidies Agreement.  In the two subsequentdocuments (G/SCM/W/442 and G/SCM/W/449), we proceeded to reply to the questions put forward
by other Members in relation to that document.
Under the current circumstances, and as a consequence of the recent development in this
Committee, we have considered it important to explore other alternative solutions to our
implementation-related concerns about fiscal instruments for capital goods.   A draft Decision is set
out below.
The preambular considerations, namely the political reasons that would lead to the adoption
of the Decision, would remain the same in any of the three proposed scenarios.  However, the
difference between the three types of decision proposed lies in the scope of the operations covered
and in the countries which would be able to benefit from the Decision in accordance with their levelof development.
Draft Decision
Bearing in mind  that access to technology in exporting sectors is linked with the acquisition
of capital goods under competitive fiscal conditions;
Observing  that in a large number of countries, the import of capital goods gives rise to high
taxes and duties;
Recognizing  that the depreciation of capital goods is subsequently incorporated in the value of
goods which they are used to produce;G/SCM/W/455
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Aware that it is essential to allow WTO Members the possibility of developing instruments
designed to remove anti-competitive distortions resul ting from their tariff and tax policies, regardless
of their level of development and capacity to apply sophisticated domestic tax systems.
Decides
Scenario 1. Comprehensive coverage of operations
1. To take no action of any kind, including WTO dispute settlement procedures, under
Article 3.1(a) of the Agreement on Subsidies and C ountervailing Measures, or investigations for the
introduction of countervailing duties against the mechanisms aimed at granting exemption, remission
or deferral of indirect taxes and import charges on capital goods used in the production of exportedgoods.
Scenario 2. Coverage limited to certain operations
1.  To take no action of any kind, including WTO dispute settlement procedures, under
Article 3.1(a) of the Agreement on Subsidies and C ountervailing Measures, or investigations for the
introduction of countervailing duties against the mechanisms aimed at granting exemption or deferral
of indirect taxes and import charges on capital goods used in the production of exported goods.
Scenario 3. Coverage limited to certain operations and certain Members
1. To take no action of any kind, including WTO dispute settlement procedures, under
Article 3.1(a) of the Agreement on Subsidies and C ountervailing Measures, or investigations for the
introduction of countervailing duties against the mechanisms of developing countries aimed at
granting exemption or deferral of indirect taxes and import charges on capital goods used in theproduction of exported goods.
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