RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/PAN/4
25 January 1999
(99-0266)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Questions from JAPAN
Regarding the New and Full Notification of PANAMA1
The following communication, dated 18 January 1999, has been received from the Permanent
Mission of Japan.
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"Granting of Tax Credit Certificates (CAT)"
1. It is understood that Panama considers that the CAT constitutes an export subsidy within the
meaning of Article 3.1(a) of the SCM Agreement a nd therefore it would eliminate the incentive as of
2003.  The programme, however, requires the enterpri se to show a minimum share of 20 per cent in
national content and national value added and, in this regard, the CAT also seems to constitute a subsidy
contingent upon the use of domestic over imported g oods within the meaning of Article 3.1(b) of the
SCM Agreement.  Does Panama confirm that the CA T will be eliminated by the end of this year in
accordance  with Article 27.3 of the SCM Agreement?
- If that is not the case, can Panama demonstrate that the CAT does not constitute a
subsidy within the meaning of Ar ticle 3.1(b) of the SCM Agreement?
2. Is the CAT the only specific subsidy currently ma intained by Panama which is to be notified
under the SCM Agreement?
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1 G/SCM/N/38/PAN.