RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/USA/13
5 May 1998
(98-1785)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions Posed by the EUROPEAN COMMUNITY1
Regarding the Updated Notification of the UNITED STATES2
The following communication was received 30 April 1998 from the Permanent Mission of the
United States.
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The European Community has noticed that the following programmes, which seem to
involve the granting of specific subsidies as defined by Articles 1 and 2 of the WTO Subsidies
Agreement, have not been notified.  The US is re quested to provide a notification in accordance
with Article 25.2, using the standard format, or to explain why notification of the programmes
is not considered appropriate.
Q.1. The Aeronautical Research and Technology Base Programme of NASA.  It is
understood that the annual funding of this programme amounted to over $350 million between
1995 and 1997.
A.1. The overall objective of the Research and Technology Base programme is to provide a strong
fundamental foundation for future aviation advances.  The major emphasis is on the fundamentalunderstanding of a broad range of physical phenom ena, development of computational methods to
analyze and predict physical phenomena, and experimental validation of key analytical capabilities.
As a result, consistent with footnote 26 of the Subsidies Agreement, the United States does not
consider that the kind of fundamental research activity supported through this programme would fall
within the scope of the notification requirement.
Q.2. The following NASA focused programmes:  High Performance Computing and
Communication, Advanced Composite Technolo gy and Numerical Aerodynamic Simulation.
A.2. (A) The High-Performance Computing and Communications Programme is a
broad-based, Congressionally chartered init iative spanning the activities of twelve
federal departments and agencies.  Given its broad and varied nature, it is difficult to
judge whether the programme as a whole, or any of its component initiatives, may
meet the notification requirements of the Subsidies Agreement.  Like other initiativesspearheaded by the US National Science and Technology Council, it in many respects
                                                     
1 G/SCM/Q2/USA/12.
2 G/SCM/N/16/USA.G/SCM/Q2/USA/13
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amounts to no more than the organization of a more efficient and effective means of
marshalling existing science and technology talents and resources to meet better
defined objectives.  In many instances, the mission of the R&D remains government-
or public-policy oriented and there is no appreciable increase in the financial
resources devoted to them.  As is the case in our notification of activities associated
with the Partnership for a New Generation of Vehicles, it is frequently difficult toascertain on a programme-wide basis whether subsidies are actually being conferred
pursuant to these kinds of programmes.  However, consistent with our notification of
the PNGV, we will consider whether it may be appropriate to include notification of
the HPCC in future US notifications.
(B) The Advanced Composite Technology Programme was not included in the 1996
updating notification of the United States since the fiscal year 1995 was the last year
of the programme’s operation.  Attached is a notification of that programme usingdata available from the last fiscal year of operation.
(C) For the reasons provided in reply to Question 1, the Numerical Aerodynamic
Simulation Programme was not included in the 1996 updating notification due to the
fundamental nature of the research activity.
Q.3. The Small Business Innovation Research Programme.
A.3. The United States explained in reply to a question posed by the EC on the US 1995 new and
full notification the reasons for not including the SBIR programme in our subsidies notifications.  As
a horizontal research and development programme providing assistance to small businesses covering
a broad range of disciplines, it is our view that the programme likely falls outside of the requirement
to notify specific subsidies within the meaning of  Articles 1 and 2 of the Agreement.  However, we
invite the Community to refer to our replies on the 1995 notification for further background on the
structure and use of the SBIR programme, which was provided in the interest of transparency.
Q.4. The Community also notes that the update contains no information on subsidies granted
by State or other sub-federal levels of Government.  The United States is requested to notify all
specific subsidies granted at sub-federal level in accordance with Article 25 of the Agreement,
using the standard format, or to explai n why a notification is not appropriate.
A.4. As we noted at the last meeting of this Committee, the United States is undergoing a process
of consultation with its state governments with a view towards providing a notification of state-level
programmes.  It is our intention to provide such a notification this year, likely in conjunction with the
next new and full notification.  The United States wishes to reiterate, however, that the question ofinclusion of “sub-central” measures is one which must be addressed by all WTO Members.  It is,
therefore, also our intention to provide information which has come to our attention about similar
measures maintained by other WTO Members at or around the time that our own notification is made.G/SCM/Q2/USA/13
Page 3
Title: Advanced Composite Technology Programme
Period covered by the Notification
The period covered is the fiscal year 1995.
Policy objective and/or purpose
The Advanced Composite Technology programme has the specific aim of generating
innovative cost-effective structural concepts and fabrication processes to more fully exploit theadvantages of composite materials in primary structures of future aircraft.  The programme goals are
to reduce airframe structural weight by 30 per cent to 50 per cent and structural cost by 25 per cent
relative to the state-of the-art in metallic structures.
Background and authority
The Advanced Composite Technology programme is administered by NASA's Office of
Aeronautics.  Legislative authority for the programme derives from the National Aeronautics and
Space Act of 1958, as amended, and the US Governments' annual budget and appropriationslegislation.
Form
Up to three-quarters of the appropriated funds is applied to grants, contracts or other
cooperative-type agreements with private-sector participants for the purpose of achieving the
programme's stated goals.
To whom and how the assistance is provided
Participants are selected through an open process and work jointly with NASA in the research
and technology (R&T) programme.  Due to the nature and focus of the R&T activity, these contracts,
grants and other cooperative-type agreements have been awarded to large civil aircraft and rotorcraft
manufacturers, advanced aerospace material producers, and higher education institutions.  In the longterm, it is expected that this programme may benefit a broader spectrum of manufacturers, operators
and users throughout the aviation system.  These benefits may take the form of improved air vehicle
safety, fuel efficiency and environmental compatibility.
Amount
The amount budgeted for fiscal year 1995 was $24.3 million for the Advanced Composite
Technology programme.
Duration
Fiscal year 1995 is the final year of funding for the programme.
Trade Effects
In light of the scope and nature of the R&T activity being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
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