RESTRICTED
WORLD TRADE G/SCM/W/4
2May1995
ORGANIZATION(95-1122)
Committee onSubsidies andCountervailing Measures
NOTE FROM THE SECRETARIAT
Atthe24April meeting oftheWorking Party onSubsidy Notifications, theSecretariat was
asked toprepare adocument comparing thenotification requirements under Article 25oftheAgreement
onSubsidies andCountervailing Measures withthose contained inthesubsidies questionnaire for
notifications under GATT Article XVI.
Theattached document contains therequested comparison, showing each provision of
Article 25.3, andnexttoeach, themostsimilar provision (orprovisions) ofthesubsidies questionnaire.
Thus, thecomparison follows thesequence oftheprovisions ofArticle 25.3, andthequestionnaire 's
provisions arepresented endnotes atvarious places inthereproduced textofthequestionnaire.
Toprovideadditionalguidanceregardingtherequirementsofthesubsidiesquestionnaire,relevant
excerpts from therecommendations ofthepanel onsubsidies (BISD 9S/188-194) havebeenadded
intheform ofendnotes atvarious places inthereproduced textofthequestionnaire.COMPARISON OFNOTIFICATION REQUIREMENTS UNDER
SCM AGREEMENT AND UNDER GATT ARTICLE XVIG/SCM/W/4
Page2
SCM Agreement -Article 25 GATT Article XVI
Subject ofNotification:
Allsubsidies, asdefined inparagraph 1of
Article 1,which arespecific within the
meaning ofArticle 2,granted ormaintained
within theirterritories. (Art. 25.2)Anysubsidy, including anyform ofincome or
price support, which operates directly or
indirectly toincrease exports ofanyproduct
from, ortoreduce imports ofanyproduct into,
itsterritory. (Art. XVI.1)1
Content ofNotification:
Thecontent ofnotifications should be
sufficiently specific toenable other Members to
evaluate thetrade effects andtounderstand the
operation ofnotified subsidy programmes.
(Art. 25.3)
I.Nature andextent ofthesubsidy (BISD
9S/193-194)
(i)Form ofsubsidy (i.e., grant, loan, tax
concession, etc.)(b)Incidence (whether paidtoproducers, to
exporters, orinsome other way; whether a
fixed amount orperunit,orfluctuating; ifthe
latter, howdetermined)SCM Agreement -Article 25 GATT Article XVIG/SCM/W/4
Page3(ii)subsidy perunitor,incases where thisis
notpossible, thetotalamount ortheannual
amount budgeted forthesubsidy (indicating, if
possible, theaverage subsidy perunitinthe
previous year)(c)Amount ofsubsidy (total costestimated or
budgeted or,when thisisnotfeasible, costin
preceding year)
(d)Estimated amount perunit2
(iii)policy objective and/or purpose ofsubsidy (a)Background andauthority (reason forthe
subsidy andlegislation under which itis
granted)
(iv)duration ofsubsidy and/or anyother time-
limits attached toitNoprovision insubsidies questionnaireSCM Agreement -Article 25 GATT Article XVIG/SCM/W/4
Page4
(v)statistical datapermitting anassessment of
thetrade effects ofsubsidyII.Effect ofsubsidy (BISD 9S/193-194)3
(a)Estimated quantitative trade effects ofthe
subsidy; andthereason whyitisconsidered
thatthesubsidy willhavethese effects.
(b)Statistics ofproduction, consumption,
imports andexports:
(i)forthethree most recent years for
which statistics areavailable
(ii)foraprevious representative year,
which, where possible andmeaningful, should
bethelatest period preceding theintroduction
ofthesubsidy orpreceding thelastmajor
change inthesubsidy.
Format/Organization ofNotification:
Ifsubsidies aregranted tospecific products or
sectors, thenotifications should beorganized by
product orsector. (Art. 25.5)Information onthefoursections [I.(a)-(d)]
should begiven separately under eachspecific
commodity heading.4
Deadline forNotification:
30Juneofeachyear. (Art. 25.1) EndofJanuary ofevery thirdyearforfull
notifications; endofJanuary ofintervening
years forupdating notifications.5G/SCM/W/4
Page5
Endnotes
1. Recommendations ofpanel onsubsidies (BISD 9S/188-194):
Intheopinion ofthePanel, itisnotsufficient toconsider increased exports orreduced
imports onlyinanhistorical sense. Inthisconnection thePanel hadinmind thefollowing
interpretationoftheCONTRACTINGPARTIES(BISD,VolumeII,page44,paragraph29(a)):
"Thephrase, 'increased exports 'inline3ofArticle XVIoftheGeneral
Agreement wasintended toinclude theconcept ofmaintaining exports
atalevel higher thanwould otherwise exist intheabsence ofthe
subsidy, asmade clearinline3ofArticle 25oftheHavana Charter;"
Mutatis mutandis thisinterpretation must apply totheeffect onimports. Thecriterion is
therefore what would happen intheabsence ofasubsidy.... ThePanel considers itfairto
assume thatasubsidy which provides anincentive toincreased production will,intheabsence
ofoffsetting measures, e.g.,aconsumption subsidy, either increase exports orreduce imports.
2. Recommendations ofpanel onsubsidies (BISD 9S/188-194):
Incases where countries arenotinaposition toindicate thesubsidy perunitbecause
themeasure ofthesubsidy isrelated tofluctuating prices orisbased notontheproduct but
onsome other criterion (e.g.acreage) theyshould (1)notify thesum,ifany,which isbudgeted
forthepurpose, and(2)givedetailed figures fortheoperation ofthemeasure intheprevious
year, indicating thetotalamount, thequantity oftheproduct, andtheaverage subsidy perunit.
3. Recommendations ofpanel onsubsidies (BISD 9S/188-194):
ThePanel considered thattheCONTRACTING PARTIES, indrawing upthisSection
hadhaditinmindthatcountriesshouldgivesomeindicationofthequantitativeeffectsofsubsidy
arrangements, i.e.,theeffects onactual volume ofimports andexports ....ThePanel therefore
recommends thatallcontracting parties should include inanysubsequent notification statistical
datacovering arepresentative period ofdomestic production, consumption, imports andexports
oftheproduct concerned. These figures should cover thelastthreeyears, and,when possible
andmeaningful, aprevious representative period (tobenotified onlyonceforthatproduct)
preceding theentry intoeffect ofthemeasure orpreceding thelatest major change inthat
measure. Itisrealized thatstatistical datawould notanswer allquestions but,asindicated
earlier inthisparagraph, theywould provide themostuseful practical guidance tocontracting
parties intheirattempts toestimate theeffects ofasubsidy. ThePanel alsorecommends that
contracting parties should saywhattheyconsider tobethetrade effects ofanysubsidies and
toexplain whytheythink thesubsidies willhavethese effects.
4. From recommendations ofpanel onsubsidies (BISD 9S/188-194).
5. Procedures fornotifications andreviews (BISD 11S/58-59).