RESTRICTED
WORLD TRADE G/SCM/M/8
18April 1996
ORGANIZATION(96-1415)
Committee onSubsidies andCountervailing Measures
MINUTES OFTHE MEETING
HELD ON6MARCH 1996
Chairman: Mr.O.Lundby (Norway)
1. TheCommittee onSubsidies andCountervailing Measures ("the Committee") heldaspecial
meeting on6March 1996.
2. TheCommittee adopted thefollowing agenda:
Page
A. Election ofthePermanent Group ofExperts 1
B. Rules ofprocedure forthePermanent Group ofExperts 1
C. Status ofsubsidies notifications 2
A. Election ofthePermanent Group ofExperts
3. TheChairmanindicatedthatheandtheVice-ChairmanproposedtotheCommitteethefollowing
slateforelection tothePermanent Group ofExperts ("PGE"): Mr.Chang ofKorea, Mr.Horlick
oftheUnited States, Mr.Klein oftheEC,Mr.Kotera ofJapan, andMr.Martin ofCanada.
4. Therepresentative ofIndiaexpressed hisdelegation 'sregret thatdeveloping country Members
wereunder-represented inthePGE. Efforts could havebeenmade toobtain more nominations from
developing countries. India accepted theChairman 'sdecision nottoaccept alatenomination from
India, butexpected thatdeadlines should beobserved byallMembers inallsituations. India expected
thattheimbalance between developed anddeveloping country members ofthePGEwould beremedied
when rotation leftavacancy nextyear, andrequested thatitsnominee beconsidered fornextyear's
vacancy.
5. TheCommittee tooknoteofthestatement ofIndiaandelected thePermanent Group ofExperts.
B. Rules ofProcedure forthePermanent Group ofExperts
6. TheChairman recalled theCommittee 'sdecision of13June1995that"[t]he Permanent Group
ofExpertsshalldeveloprulesofprocedure,takingintoaccountanyguidanceprovidedbytheCommittee.
These rulesofprocedure ...shallbesubject toapproval bytheCommittee." Hehadincluded this
matter ontheagenda inorder togivetheCommittee anopportunity toprovide anyguidance itmight
consider appropriate tothePGEasitproceeded tothework ofdrafting these rules ofprocedure.G/SCM/M/8
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7. Therepresentative oftheUnited States made thefollowing preliminary remarks. First, itmight
beefficient forthePGEinperforming certain tasks toactthrough lessthanitsfullmembership of
five. Theworking procedures oftheAppellate Body might provide guidance regarding howthePGE
couldworkwithlessthanfullmembershipwhileensuringconsistencyandcoherenceofdecision-making.
TheUnited States alsorecalled thedecision oftheAppellate Body toaccept thedraftrulesofconduct
onaprovisional basis.
8. Therepresentative ofAustralia identified thefollowing non-exhaustive listofissues. First,
different procedures should apply todifferent functions ofthePGE. Second, nationals should notbe
involved inacaseinwhich theircountry wasparticipating; however, thiscould cause problems in
aparticular case. Third, allfivemembers should participate inagiven caseunless excluded onthe
grounds ofnationality. Fourth, unanimity wasdesirable butrequired further discussion inlightof
thepractical issues involved. Fifth, time-frames should bedeveloped forprocedures when thePGE
wasperforming itsArticle 4.5function. Sixth, theprocedure inArticle 4.5cases should basically
follow those ofthepanel process. Finally, there wasanissue astowhether thePGEshould make
recommendations orsuggestions astohowtobring ameasure intoconformity rather thantolimititself
toajudgement regarding whether ameasure isorisnotconsistent withArticle 3oftheAgreement.
9. Therepresentative ofSwitzerland stated thatthemodel oftheAppellate Body could inspire
thePGEindrafting itsrulesofprocedure, i.e.,decision-making bylessthanfivemembers; consensus
decision-making; theprinciple ofsolidarity andcoherence; confidentiality ofPGEdeliberations; and
following oftherules ofconduct, onceadopted.
10. Therepresentative oftheECmade thefollowing suggestions: (1)therewasaneedfordifferent
rules forthePGEdepending onthefunction itwasperforming; (2)decision-making inagiven case
bylessthanfivemembers wasamatter tobefurther considered; (3)thedraftrulesofconduct could
betaken intoaccount bythePGE; and(4)decision-making andcollegiality wereimportant. Heinquired
whether itwastheproposal oftheChairman thattheCommittee takeadecision onguidance tothe
PGE, orwhether delegations should simply statetheirviews intheCommittee, inview ofthefact
thattheCommittee would inanyevent havetoapprove therules ofprocedure.
11. TheChairman stated thatthelogical andleasttime-consuming approach would betopassthe
comments ofdelegations ontothePGEandallow thePGEthentodevelop andsubmit draftprocedures
totheCommittee forconsideration.
12. Therepresentative ofArgentina noted thatsome Members would notaccept theideathatthe
draftrulesofconduct beadopted onaprovisional basisbythePGE. Therulesofconduct werestill
being negotiated andhadnotbeenagreed bytheMembers oftheWTO.
13. Therepresentative ofPeruconsidered thatdifferent procedures should apply tothePGEin
theperformance ofdifferent functions. Nationals should notbeinvolved inacaseconcerning their
government, andthatallfivemembers neednotnecessarily beinvolved inallcases. Itwasimportant
thattime-frames beestablished forArticle 4.5procedures.
14. TheCommittee authorized theChairman toholdinformal consultations tofurther discuss the
issue ofguidance tothePGEwithrespect toitsrules ofprocedure.
C. Status ofSubsidies Notifications
15. TheChairman drew theattention oftheCommittee toG/SCM/N/3/Add.1, which indicated
thestatus ofnotifications pursuant toArticle XVI:1 oftheGATT 1994andArticle 25oftheSubsidies
Agreement. Since thatdocument hadbeencirculated, anadditional notification ofsubsidies hasbeenG/SCM/M/8
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received from Argentina anda"nil" notification from Swaziland. Thestatus ofnotifications inthis
areawasprobably theworst ofanyintheWTO system. Thirty-two Members hadnotified subsidies
andthirteen Members hadnotified thattheyhadnonotifiable subsidies. Seventy-four Members had
madenonotificationwhatsoever.TheChairmanrequestedeachMemberpresenttoinformtheCommittee
ofthestatus ofitsnotification andwhen itexpected toprovide ittotheCommittee.
16. Chile stated thatitwould notify shortly. TheDominican Republic indicated thatitwould notify
assoonaspossible. Ecuador indicated thatithadonlyrecently become aMember buthadmade a
"nil"notification toitsaccession working party. Egypt stated thatitwould inform theCommittee of
thestatus ofitsnotification assoonaspossible. Ghana stated thatitwould notify assoonaspossible.
Hungary indicated thatitwould notify bytheendoftheweek (i.e.8March). Israel hadnoinformation
onthestatus ofitsnotification. Japan stated thatithadnotified onlypursuant toArticle 25,which
differed inscope from thatofArticle XVI:1. Itrecognized itsobligation alsotonotify pursuant to
Article XVI:1 butwasstillexamining thequestion. Korea stated thattherehadbeendiscussion regarding
what programmes needed tobenotified, andinparticular whether agricultural programmes were
notifiable. However, theseissues werealmost resolved andanotification would becoming verysoon.
Pakistan stated thatithoped tohavegood news verysoon. Mexico stated thatitwould notify when
itcould. Perustated thatitwould trytonotify assoonaspossible. ThePhilippines stated thatit
wasprepared lastyeartosubmit a"nil"notification, buthadsubsequently considered thattheremight
benotifiable programmes andwasworking onanotification. Poland stated thatitwasworking to
prepare thisdifficult notification, which required coordination among various ministries. Poland was
working onanotification ofagricultural export subsidies, andintended toinclude thatinformation
alsoinitsArticle 25notification. Romania wasworking tofinalize thenotification. Slovenia stated
thatanotification would besubmitted bytheendofthemonth. South Africa indicated thatanotification
wasinpreparation. SriLanka believed thatithadnotified lastyear. TheUnited States indicated that
itwould notify bytheendoftheweek (i.e.8March). Itrequested thatitsnotification becirculated
asanunrestricted document.
17. Thefollowing delegations which hadnotyetsubmitted notifications werenotpresent: Antigua
andBarbuda,Bahrain,Bangladesh,Barbados,Belize,Benin,BruneiDarussalam,BurkinaFaso,Burundi,
Cameroon, Central African Republic, Côted'Ivoire, Cuba, Cyprus, Djibouti, Dominica, ElSalvador,
Fiji,Gabon, Ghana, Grenada, Guatemala, Guinea Bissau, Guinea, Rep.of,Guyana, Haiti, Iceland,
Jamaica, Kenya, Kuwait, Lesotho, Macau, Madagascar, Malawi, Maldives, Mali, Malta, Mauritania,
Morocco,Mozambique,Myanmar,Namibia,Nigeria,Paraguay,Qatar,SaintKitts&Nevis,SaintLucia,
SaintVincent&Grenadines,Senegal,SierraLeone,Tanzania,Togo,Tunisia,Uganda,Uruguay,Zambia
andZimbabwe.
18. During thecourse oftheroll-call, therepresentative ofHungary indicated hisdisagreement
withtheprocedure followed bytheChairman, which hehadnever before encountered. Delegations
werenotmade aware inadvance ofthisprocedure. Israel, Korea, Peru, Romania andSriLanka also
questioned theprocedure. South Africa queried whether theprocedure might beineffectual.
19. TheChairman stated thathehadplaced thestatus ofnotifications ontheagenda inlightof
theextraordinarily gloomy status ofnotifications. Thepurpose oftheroll-call wastoobtain information
regarding where theCommittee stood onthisissue. Thisinformation wasimportant inlightofthe
factthatthedateforaspecial meeting toreview notifications wasnowbeing considered. Theprocedure
hadbeenfollowed before intheTokyo Round Committee.
20. Hong Kong recalled theconcerns about thestatus ofnotifications expressed attheGeneral
Council meeting inDecember. Theroll-call procedure served togather information which would
facilitate preparations forareview ofthenotifications. TheUnited States recalled thatthisprocedure
forassessing status hadbeenfollowed intheCommittee inthepast.While itmight make delegations,G/SCM/M/8
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including hisown,uncomfortable onoccasion, itallowed delegations tobring home totheirauthorities
theimportance ofnotifications. NewZealand stressed theimportance itattached tofullandtimely
observance ofthenotification obligations under Articles 25andXVIandconsidered thattheCommittee
should continue tomonitor thestatus ofnotifications toencourage compliance.
21. TheChairman considered thesituation regarding notifications tobecompletely unacceptable,
andsought theguidance ofdelegations onhowtheCommittee should proceed. Hestated hisintention
thattheCommittee fixatitsnextregular meeting adateforaspecial meeting toreview notifications
andaprocedure forconducting thatspecial meeting. Unless thestatus ofnotifications improved
substantially before thattime, suchadiscussion could prove difficult.
22. Argentina, Australia, Brazil, Canada, andtheECindicated thatthenotification obligation was
important andthatthestatus ofnotifications wasaserious matter. Intheir view, noreview of
notifications could occur untilacritical mass ofnotifications hadbeenreceived. TheUnited States
agreed thatcritical mass wasimportant butbelieved thatpractical judgements might havetobemade
about when thiscriterion wassatisfied; 100percentreporting wasnotnecessary.
23. Several delegations alsoexpressed concerns about thecontent ofnotifications. TheECstated
thatthemeresubmission ofapiece ofpaper wasnotsufficient; notifications should contain substantive
information. NewZealand stated thatnotifications should befull,comprehensive andtimely.
24. TheUnited States raised thematter oftheprocedures tobefollowed inthereview session,
andstated thatadvance written questions would facilitate thereview process.
25. TheChairman stated thatitwaslikely, inviewofthestatus ofnotifications, thatnoreview
would bepossible untilthesecond halfoftheyear. Heproposed toholdinformal consultations on
thetiming andprocedures foraspecial review session.
26. TheCommittee sodecided.