RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/M/46
23 July 2003
(03-3953)
Committee on Subsidies
and Countervailing Measures
MINUTES OF THE REGULAR MEETING
HELD ON 8 MAY 2003
Chairman: H.E. Mr. Milan Hovorka (Czech Republic)
1. The Committee on Subsidies and Countervailing Measures (the "Committee") held a regular
meeting on 8 May 2003.
2. The airgram convening the meeting was circulated in WTO/AIR/2080.
3. Before asking whether any Member wished to raise any item under "other business", the
Chairman stated that he had to provide a very br ief and factual explanation about one aspect of the
proposed agenda for this meeting.  Items A-O on the Committee's agenda for this meeting deal with
the review of new notifications of countervailing duty legislation and/or regulations.  Members would
recall that the Committee's last regular meeting in autumn 2002 had been suspended with respect to
item A, relating to the review of the national countervailing duty legislation of certain Members.
Members would note that the legislative notifications listed in the airgram convening this meetingincluded certain of the legislations that had been listed in that suspended agenda item.  To be more
specific, these were the legislative notifications listed in items A, B, C, H, I and N of the airgram –
that is, those of Antigua and Barbuda, Argentina, Brazil, Grenada, Japan and Turkey.  The Chairman
stated that he wanted to clarify the circumstances that had led to this situation.  During the weeks prior
to this meeting, he had been approached by certain of the delegations concerned, who requested theplacement of their legislative notifications on the agenda of this meeting for review.  On this basis,
and taking into account both the situation that led to suspension of the agenda item last autumn, and
the fact that consultations to find a solution to this problem were still on-going in other fora, the
Chairman held consultations with other concerned delegations.  In placing these particular
notifications on the agenda of this meeting, the Ch airman had been guided by the interest of the
proper functioning of the Committee.  In particular, in moving some of these other notifications
forward, the clear understanding was that the regular autumn 2002 meeting of the SCM Committeeremained suspended with respect to the sub-ite m dealing with the review of one legislative
notification – that of Chinese Taipei – and that th is way of proceeding did not prejudice any Member's
views as expressed at the Committee's autumn 2002 meeting, which would resume once there was a
resolution of the issue.
4. The Committee adopted the following agenda:
A. ANTIGUA & BARBUDA - REVIEW OF NEW LEGISLATIVE
NOTIFICATION (G/ADP/N/1/ATG/2 -G/SCM/N/1/ATG/2)…………………………………4
B. ARGENTINA - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/ADP/N/1/A RG/1/SUPPL.6-G/SC M/N/1/ARG/ 1/SUPPL.6)………………………………4G/SCM/M/46
Page 2
C. BRAZIL - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/ADP/N/1/BRA/2/SU PPL.1-G/SCM/N/1/BRA/2/S UPPL.1)………………………………4
D. CHINA - REVIEW OF NEW LEGISLATIVE NOTIFICATIONS
(G/SCM/N/1/CHN/1 AND G/SCM/N/1/CHN/1/SUPPL.1)…………………………………..4
E. COSTA RICA - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/ADP/N/1/CRI/2-G/SCM/N/1/CRI/2)………………………………………………………4
F. DOMINICAN REPUBLIC - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/ADP/N/1/DOM/3-G/S CM/N/1/DOM/2-G/SG/N/1/DOM/2)………………………………4
G. EUROPEAN COMMUNITIES - REVIEW OF NEW LEGISLATIVE
NOTIFICATION (G/SCM/N/1/EEC/2/SUPPL.3)………………………………………… …4
H. GRENADA - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/ADP/N/1/G RD/2-G/SCM/N/1/GRD /2)…………………………………………………….4
I. JAPAN - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/ADP/N/1/JPN/2/SUPPL.3-G/SC M/N/1/JPN/2/SUPPL.3)…………………………………4
J. LITHUANIA - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/SCM/N/1/LTU/1)…………………………………………………………………………  4
K. NEW ZEALAND – REVIEW OF NEW LEGISLATIVE
NOTIFICATION(G/ADP/N/1/NZL/2/SUPPL .1/SCM/N/1/NZL/2 /SUPPL.1)……… ..……..4
L. NICARAGUA - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/ADP/N/1/NIC/1/SU PPL.1- G/SCM/N/ 1/NIC/1/SUPPL.1)………………………………..4
M. PAKISTAN - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/SCM/N/1/PAK/2/SUPPL.1)………………………………………………………………..4
N. TURKEY - REVIEW OF NEW LEGISLATIVE NOTIFICATION
(G/ADP/N/1/TUR/3/SU PPL.1-G/SCM/N/1/TUR/ 3/SUPPL.1)……………………………….4
O. ZIMBABWE - REVIEW OF NEW LEGISLATIVE
NOTIFICATION(G/ADP/N/1/ZWE/2/SU PPL.1-/SCM/N/1/ZWE /2/SUPPL.1)……..………4
P. SEMI-ANNUAL REPORTS OF COUNTERVAILING ACTIONS (ARTICLE 25.11)……..6
Q. PRELIMINARY AND FINAL COUNTERVAILING ACTIONS:
NOTIFICATIONS (G/SCM/N/91, 94 AND 96)………………………………………………6
R. SUBSIDY NOTIFICATIONS…………………………………………………………………6
1. Review of 2001 new and full subsidy notifications and related
documentation under the procedures adopted by the Committee at its
May 2001 meeting (G/SCM/W/441)…………………………………………………6
(a) Bolivia (G/SCM/N/71/BOL & Corr.1)
(b) Estonia (G/SCM/N/71/EST)G/SCM/M/46
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(c) Grenada (G/SCM/N/71/GRD/Suppl.2)
(d) Malawi (G/SCM/N/71/MWI)
(e) Norway (G/SCM/N/71/NOR/Suppl.1)
(f) Thailand (G/SCM/N/71/THA/Suppl.1)
2. Review of 2001 new and full subsidy notifications received too late to be
reviewed at the spring 2003 meeting under the Committee's previously-
agreed procedures………………………..………………………………………….7
(a) New Zealand (G/SCM/N/71/NZL)
(b) United States (G/SCM/N/71/USA/SUPPL.1)
3. Working Party on Subsidy Notifications – Chairman's report on
8 May meeting………………………………………………………………………8
4. Timing and emphasis for submission of subsidy notifications…………………. 8
5. Procedures for review of 2003 new and full subsidy
notifications (G/SCM/W/524)……………………..………………………………. 9
S. ARTICLE 27.4 EXTENSIONS OF THE EXPORT SUBSIDY TRANSITION PERIOD
OF CERTAIN MEMBERS' ELIGIBLE PROGRAMMES…………………………………..10
1. Deadlines for submission of notifications and questions and answers
for the Committee's review of transparency and standstill obligations
in the Decisions in G/SCM/50-102 re lating to the Article 27.4 process
(extension of export subsidy tran sition period of certain Members'
eligible programmes)……………………………………………….………………10
2. Information of Thailand referred to in the Committee's Decisions in
G/SCM/101 and G/SCM/102……………..………………………………………..10
T. CONSTANT DOLLAR METHODOLOGY FOR GRADUATION
FROM SCM ANNEX VII(B) ……………………………………………………………….16
U. PERMANENT GROUP OF EXPERTS – ELECTION OF AN EXPERT…………………...17V. OTHER BUSINESS:…………………………………………………………………………17
1. Statement of the United States concerning the US request for a Secretariat export
competitiveness  calculation with respect to India's textiles and clothing  sector .............17
2. Statement of India concerning the US request for a Secretariat export
competitiveness calculation with respect to India's textiles and clothing sector ..............18
W. DATE OF NEXT REGULAR MEETING………………………………………………… ..18
X. ELECTION OF OFFICERS………………………………………………………………….18G/SCM/M/46
Page 4
A-O. REVIEW OF NEW LEGISLATIVE NOTIFICATIONS
5. The Chairman stated that items A-O on the Committee's agenda dealt with the review of
notifications of countervailing duty legislation and/or regulations, in accordance with the procedures
adopted by the Committee at its special meeting in April 1996.1  As indicated in the airgram, due to
the volume of material involved, delegations had been asked to bring their own copies of the
notifications.
6. In order to facilitate the Committee's discussions, the notifications which had been already
reviewed at the autumn 2002 Anti-Dumping Committee and which were on the agenda of the autumn2002 regular meeting of this Committee were examined first:  Antigua & Barbuda;  Argentina
;
Brazil;  Grenada ;  Japan ;  and Turkey .  With respect to each of these notifications, the Chairman
asked whether any Member wished to make any comments.  There were no comments or questions
regarding any of these notifications.
7. The Committee turned to the remaining new legislative notifications.  Questions concerning
the remaining new notifications of legislation were to have been submitted to the Member concerned
and the Secretariat no later than three weeks before this meeting; that is, no later than 10 April 2003.
As provided for in the agreed procedures, Members receiving written questions were to respond orally
to timely-submitted questions during the meeting.  They were also subsequently to submit writtenversions of their answers to all written questions received.  The Chairman reminded Members that
follow-up questions could be asked in this meeting.  If a Member posed a follow-up question and
wanted to receive a written answer, the follow-up question had to be submitted in writing no later than
15 May 2003.  Written answers to all written questions were to be submitted no later than 3 July 2003.
The Chairman noted that most of the questions had been submitted either on time, or only a few days
late.  The Chairman stated that he hoped Members would be attentive to deadlines in the future.
8. The Committee turned to the review of the first such legislative notification, that of  China.
The European Communities and the United States had posed written questions.  These questions and
China's replies could be found in G/SCM/Q1/CHN/20 and 21.
9. The delegate of the European Communities thanked the delegation of China for the written
replies.  The European Communities submitted written follow-up questions, in document
G/SCM/Q1/CHN/22.  China's replies were circulated in document G/SCM/Q1/CHN/23.
10. The delegate of the United States stated that his delegation appreciated the efforts made by
China to respond to the questions posed by his delegation.  The United States found it particularly
helpful that the answers were provided in writin g in advance of the meeting and thanked China for
doing that.  He asked when the delegation of China foresaw notifying laws and regulations which had
been referred to but had not yet been notified because they were still in translation or for some other
similar reason.  In addition, the US delegate wished to raise an issue with respect to China's subsidy
notification obligation.  The US delegate stated that China had not yet made its first annual subsidynotification required by Article 25.1 of the Agreem ent, which was due to the Committee in June 2002.
The US delegate stated that his delegation would like China to confirm that it would meet this year's
deadline of 30 June for its subsidy notification.  The US delegate stated that China's failure to
participate in the notification process undermined the transparency that Members had worked to
develop and hampered the ability of Members to confirm that China was complying with itsobligations under the Agreement.
                                                     
1 Document G/SCM/W/293G/SCM/M/46
Page 5
11. The delegate of China stated that, with regard to the comments of the US delegation, due to
internal re-organization, legislation rules and laws on anti-dumping, countervailing and the safeguard
measures investigations would be amended this year.  After the amendment of these laws and
regulations, China would notify them to the relevant Committee(s).  At the same time, China would
notify to the Committees as soon as possible other laws, regulations and rules related to anti-dumping,countervailing duty and safeguard investigations.  As for the subsidy notification, the Chinese
authorities were collecting information on subsidies.  He stated that subsidy notifications were a
heavy burden for developing Members.  He also stated that China was a new Member of the WTO.
China would try its best to get as much information as possible and notify the Committee as early as
possible.
12. The Committee moved on to review the notification of Costa Rica.  The delegation of
Costa Rica had responded to questions on its legislation on subsidies and countervailing measures at
the Anti-Dumping Committee meeting of 1-2 May 2003, and these responses had been circulated in
G/SCM/Q1/CRI/6.  There were no further comments or questions regarding this notification.
13. The next legislative notification for review was that of the Dominican Republic.  The
Chairman noted that the delegation of the Dominican Republic responded to the questions from the
United States on its subsidies and countervailing measures legislation at the Anti-Dumping
Committee meeting of 1-2 May 2003.2  Those responses are contained in G/SCM/Q1/DOM/3.  There
were no comments or questions regarding this notification.
14. There were no comments or questions regarding the notifications of the European
Communities, Lithuania , New Zealand  and Nicaragua .
15. Turning to the notification of Pakistan, the Chairman noted that the delegation of Pakistan had
responded to the European Communities' questions (in G/SCM/Q1/PAK/7) on its countervailing
measures legislation at the Anti-Dumping Committee meeting of 1-2 May 2003.  These replies were
circulated in document G/SCM/Q1 /PAK/8.  There were no further comments or questions regarding
this notification.
16. The final legislative notification on this Committee's agenda was that of Zimbabwe.  The
United States had posed questions to  Zimbabwe in G/SCM/Q1/ZWE/7.  No written answers have
yet been received.    There were no additional comments or questions regarding this notification.
17. The Chairman stated that, pursuant to the Committee's procedures for review of notifications
of legislation, in order for a previously reviewed notification of legislation to appear on the agenda of
the Committee's regular meeting in October 2003, questions regarding such notification had to be
submitted to the Secretariat, and to the Member whose notification was in question, no later than11 September 2003.  As was its practice, the Secretariat would issue a reminder note of relevant
deadlines for this Committee, its subsidiary bodies, and the Committees on Anti-Dumping Practices
and Safeguards, in the course of the next few weeks.
3  He expressed his continuing concern over the
failure of some Members to submit any notification at all concerning legislation or regulations
relevant to countervailing measures.  For many, if not most, of these Members, it was likely that asingle "nil" notification, indicating that there was no such legislation or regulation currently in effect,
would be all that was required.  This seemed to be a relatively simple matter.  For those Members who
conducted countervailing duty investigations but had not yet notified their legislation, it was
obviously important, from the point of view of all Members, that such legislation be notified, in the
interest of transparency and better understanding.  He encouraged Members who had not yet done soto make their notification of legislation promptly.
                                                     
2 Document G/SCM/Q1/DOM/2.
3 Circulated as document G/ADP/W/432-G/SCM/W/525-G/SG/W/194.G/SCM/M/46
Page 6
18. The Committee took note of all of the statements made.
P. SEMI-ANNUAL REPORTS OF COUNTERVAILING ACTIONS (ARTICLE 25.11)
19. The Chairman stated that a request for the semi-annual report for the period 1 July–
31 December 2002, to be submitted not later than 5 March 2003, had been circulated to the Members
in G/SCM/N/93, dated 13 January 2003.  As was unfo rtunately almost always the case, a number of
the semi-annual reports had been received late.  He reminded Members that semi-annual reports were
always due at the end of August for the period January through June of the current year, and at the end
of February for the period July through December of the previous year.  He again urged all Members
to take the necessary steps to submit these notifications on time.  Particularly for those Members whohad taken no actions, these notifications should be purely a matter of routine, as all that was required
was a one-sentence letter stating that no actions had been taken.  Members who had submitted semi-
annual reports of countervailing actions were identified in paragraph 1 of document
G/SCM/N/93/Add.1, dated 1 May 2003.  These Members were: Australia, Brazil, Canada, the
European Communities, South Africa and the United States.  To the extent possible, the semi-annualreports had been translated and circulated to th e Committee, and were included in the documents
made available for this meeting.  In addition to the Members who had submitted semi-annual reports
of countervailing actions, 42 Members, listed in paragraph 2 of document G/SCM/N/93/Add.1, had
notified the Committee that they had not taken any countervailing actions during the period in
question.  While Members who took actions appeared generally to comply with this requirement,there remained a significant number of Members who had not responded to the request for semi-
annual reports, and had therefore failed to comply with this important requirement set forth in
Article 25.11 of the Agreement.  These Members were identified in document G/SCM/N/93/Add.1.,
paragraph 3.
20. There were no comments or questions regarding the semi-annual reports of Australia, Brazil
,
Canada, the European Communities  and the United States .
21. The Committee took note of the statement made.
Q. NOTIFICATIONS OF PRELIMINARY  AND FINAL COUNTERVAILING ACTIONS
22. The Chairman stated that lists of the notifications of preliminary and final countervailing duty
actions received by the Committee were circulat ed to the Committee in documents G/SCM/N/91, 94
and 96.  Since the last meeting of the Committee, preliminary and final countervailing actions had
been notified by the European Communities, South Africa , and the United States .  There were no
comments or questions with respect to any of these notifications.
23. The Committee took note of the statement made.
R. SUBSIDY NOTIFICATIONS
1. Review of 2001 new and full subsidy notifications and related documentation under the
procedures adopted by the Committee at its May 2001 meeting (G/SCM/W/441)
24. With respect to the review of 2001 new and full subsidy notifications under the Committee's
agreed procedures, the Chairman stated that the notifications and related documentation of Bolivia,
Estonia, Grenada, Malawi, Norway and Thailand were on the agenda for review under this item.  He
reminded Members that, as decided by the Committee at its October 2002 meeting, and as recalled by
his fax to Members of 15 January 2003, those 2001 new and full subsidy notifications received too
late to be reviewed at the Autumn 2002 meeting, w ould, if possible, be reviewed during this SpringG/SCM/M/46
Page 7
2003 meeting according to the Committee's agreed procedures.  Pursuant to the Committee's decision,
2001 new and full notifications distributed in all three working languages not less than 19 weeks
before this meeting could be reviewed at this meeting.  The review of subsidy notifications was to be
conducted on the basis of written questions and answers provided before the meeting.  Written
questions regarding these notifications were due to the notifying Member and to the WTO Secretariatno later than 15 weeks before the meeting, i.e., by 22 January 2002.  Written answers to written
questions were due no later than 6 weeks before the meeting, i.e., by 26 March 2002.  All written
questions and answers which were available in time were included in the document package available
from the documentation centre.  Not all of the questions and answers were available in all languages,
partly due to late submission of documentation and partly due to translation delays.
25. The first notification on this Committee's agenda was that of Bolivia, which could be found in
document G/SCM/N/71/BOL & Corr.1.  The Chairman stated that the United States had submitted
questions, contained in G/SCM/Q2/BOL/1.  No written answers have yet been received .
26. The notification of Estonia can be found in document G/SCM/N/71/EST.  Australia had
submitted written questions, contained in G/SCM/Q2/EST/1.  Estonia's written replies were circulated
as document G/SCM/Q2/EST/2.
27. The next notification on the agenda was a supplementary notification of Grenada, which can
be found in document G/SCM/N/71/GRD/Suppl.2.  Th e original subsidy notification of Grenada had
also been subject to review, and questions and an swers had been exchanged, in the context of the
Committee's Article 27.4 exercise last year.  There were no comments or questions with regard to this
supplementary notification.
28. The next notification on the agenda was the "nil" notification of Malawi.  There were no
comments or questions with respect to this notification.
29. The next notification on the agenda was a supplementary notification of Norway, which can
be found in document G/SCM/N/71/NOR/Suppl.1.  There were no comments or questions with respect
to this notification.
30. The last notification under this item on the agenda was the supplementary notification of
Thailand.  The Chairman recalled that the original G/SCM/N/71 subsidy notification of Thailand had
also been subject to review, and questions and an swers had been exchanged, in the context of the
Committee's Article 27.4 exercise in 2002.  Australia had submitted written questions on Thailand's
supplementary notification, in G/SCM/Q2/THA/14.  Thailand's written replies to Australia's questions
were circulated as document G/SCM/Q2/THA/15.
31. The Chairman reminded Members that any written follow-up questions should be submitted
to the Member concerned and to the Secretariat no later than 16 May 2003.  Written responses to any
such follow-up questions should be submitted by 13 June 2003.
32. The Committee took note of the statements made.
2. Review of 2001 new and full subsidy notifications received too late to be reviewed at the
spring 2003 meeting under the Committee's previously-agreed procedures
33. The Chairman recalled that, through his faxes of 15 January and 17 February, and from the
draft annotated agenda sent to Members in late March 2003, he had informed Members that the 2001
new and full subsidy notification of New Zeala nd (G/SCM/N/71/NZL), as well as documentation
received from the United States (G/SCM/N/71/USA/Suppl.1), were received too late to be reviewed
under the Committee's previously-agreed procedures.  However, as no Member objected to theG/SCM/M/46
Page 8
Chairman's proposal to review this notification a nd documentation at this Spring 2003 meeting by the
deadline he had indicated – 14 March 2003 – he intended to conduct the review of these notifications
at this meeting.  As Members were informed, written questions were to have been submitted by
24 March, and written responses by 28 April 2003.
34. The Chairman stated that, unless any Memb er had any comments, he would draw the
Committee's attention to the 2001 new and full subsidy notification from  New Zealand, to be found
in document G/SCM/N/71/NZL.  Australia and the United States had posed questions, in documents
G/SCM/Q2/NZL/9 and 10.  New Zealand's replies to the questions posed by Australia and the
United States were circulated as document G/SCM/Q2/NZL/11.
35. The delegate of the United States expressed his appreciation for the replies received from
New Zealand.  He stated that it was really a model set of answers with respect to notification
questions.  In particular, he noted the answers received with respect to the distribution of benefits
under the programmes.  This was often the most difficult information to put together and it was very
clear a lot of hard work and effort had gone into putting together the answers.
36. There were no comments or oral questions with respect to the supplementary notification of
the United States in G/SCM/N/71/USA/Suppl 1.
37. The Chairman reminded Members that any written follow-up questions should be submitted
to the Member concerned and to the Secretariat no later than 16 May 2003.  Written responses to anysuch follow-up questions should be submitted by 13 June 2003.
38. The Committee took note of statements made.
3. Working Party on Subsidy Notifications – Chairman's Report on 8 May meeting
39. The Chairman stated that the purpose of th e Working Party meeting was to continue the
discussions on further possible steps to facilitate notification by Members, including possible follow-
up on the very successful subsidy notification seminar for capital-based officials held on 29 and
30 October 2002.  First, he sought delegations' views on the possible changes to the notification
format in G/SCM/6, on the basis of the proposals annexed to the note prepared by the Chairman last
year, in document G/SCM/W/505.  He took note of the constructive discussion and stated his
intention to ask his successor to consider continuing the consultations with Members on this issue of
revising the agreed format in order to facilitate Members' subsidy notifications.  He also indicated his
intention to ask his successor to consider consultation on other notification-related issues, such as the
possibility of enhancing the know-how and capacity of notification on a regional basis.
40. The timing and emphasis for submission of notifications and procedures that would govern
the Committee's review of 2003 new and full subsidy notifications and the draft procedures circulated
in document G/SCM/W/524 in respect of procedures  for the review of 2003 new and full subsidies
notifications had also been discussed.  However, the Chairman said that he would not go into
substance with regard to those two issues because they would be taken up by the Committee in thenext two agenda items.
41. The Committee took note of the Chairman's statement.
4. Timing and emphasis for submission of subsidy notifications
42. As indicated in the Chairman's 17 February 2003 fax to Members, and in the annotated
agenda for this meeting, the Chairman recalled the understanding concerning the timing and emphasis
for submission of subsidy notifications reache d at the Committee's special meeting in May 2001G/SCM/M/46
Page 9
(G/SCM/M/30), including the need to review the situation after a trial period of two years (i.e. in
2003).  The Chairman further recalled that, at that special meeting in 2001, the former Chairman's
perception of Members' views had been that Members believed that their resources would be best
utilized by giving maximum priority to submitting new and full notifications, every two years, and by
de-emphasizing the review of the annual updating notifications.  In respect of new and fullnotifications, Members could focus, in alternating years, first on making their own notifications, and
then on reviewing other Members’ notifications.  It was expected that this would have the effect of
increasing transparency, which was the objective of the obligations in question, but none of the steps
suggested was intended to add to or detract from Members' rights and obligations.  It had been the
Chair's sense that Members would want to see whether in practice an intensified effort in respect of
new and full notifications was effective in improving compliance, and therefore that they would want
to review the situation after a trial period of tw o years, that is, now, in 2003.  Thus, Members needed
now to consider whether to continue these arrangements concerning the timing and emphasis for the
submission of subsidy notifications for a further trial period.
43. The Chairman noted that, while the Article 27.4 process within the Committee during 2001-
2002 resulted in the notification of subsidies by certain Members which had not previously submitteda subsidy notification, the overall record of Members' compliance with the obligation in Article 25.1
to submit subsidy notifications remained extremely poor.  As of 31 December 2002, 54 Members
(counting the European Communities as a single Member) had submitted a 2001 new and full
notification, including 15 which notified that they provided no notifiable specific subsidies.  This
meant that 75 Members had not submitted a 2001 new and full notification.  He recalled that aprimary motivation for the trial arrangement from 2001-2003 had been to encourage all Members to
comply with their transparency  obligation to submit a new and full subsidy notification.  The
Chairman stated that it was his sense that Members’ views in this connection remained largely the
same as those described by the Chairman in 2001.  That is, he understood Members to believe that
their resources would be best utilized by giving maximum priority to submitting new and fullnotifications, every two years, and by de-emphasizing the review of the annual updating notifications.
It would be expected that this would have the effect of increasing transparency, which was the
objective of the obligations in question, but none of the steps suggested was intended to add to or
detract from Members' rights and obligations.  T hus – and notwithstanding the continued poor record
of compliance – as he had indicated in his 17 February fax to Members as well as in the annotated
agenda for this meeting, it was the Chairman's understanding that the Committee would find it
acceptable to continue the existing arrangement for a further trial period of two years in order toencourage the submission of new and full subsidy notifications by all Members, and that the
Committee once again review this arrangement in two years, i.e. in 2005.
44. The Committee took note of the statement made by the Chairman.
5. Procedures for review of 2003 new and full subsidy notifications
45. The Chairman stated that Members had already been reminded several times in the course of
this meeting that, in accordance with Article 25 of the Agreement, 2003 new and full subsidies
notifications by all Members were due by 30 June 2003.  An invitation for Members to submit their2003 new and full subsidy had been circulated in document G/SCM/N/95 in February 2003.
However, the Committee needed to adopt procedures with respect to the Committee's review of these
subsidy notifications.  Therefore, the Chairman asked Members to consider whether the Committee
could adopt the draft procedures circulated in document G/SCM/W/524 in respect the review of 2003
new and full subsidies notifications.  He stated that the proposal put before the Committee containedthe timeframes as originally submitted, and that, based on his understanding of certain delegations'
positions as indicated in discussions in the Working Party, he was no longer proposing the possibility
of abbreviating those timeframes.  The Chairman asked whether this way of proceeding was
acceptable to Members.G/SCM/M/46
Page 10
46. The Committee took note of the statement made by the Chairman and so agreed .
S. ARTICLE 27.4 EXTENSIONS OF THE EXPORT SUBSIDY TRANSITION PERIOD OF
CERTAIN MEMBERS' ELIGIBLE PROGRAMMES
1. Deadlines for submission of notifications and questions and answers for the Committee's
review of transparency and standstill obligations in the decisions in G/SCM/50-102
relating to the Article 27.4 process (extension  of export subsidy transition period of
certain Members' eligible programmes)
47. As he had indicated in his 7 March 2003 fax to Members concerning the 6 March informal
consultations he had convened on this topic, the Chairman proposed that the Committee agree to the
following dates for the Committee's mandated review of the standstill and transparency commitmentscontained in the decisions adopted by the Committee in November and December 2002 relating to the
extension of the transition period for certain Members' export subsidy programmes (documents
G/SCM/50-102):  the Members concerned would submit the required notification by 30 June 2003,i.e., the same deadline as applicable to the submission of 2003 new and full subsidy notifications.
This would allow for an exchange of questions and answers, to the extent necessary, in advance of the
autumn 2003 meeting of the Committee (currently scheduled to take place during the week of
27 October 2003).  Any written questions would be due by 1 September 2003 and any written answers
would be due by 6 October 2003.
48. By way of clarification, the Chairman stated that, while he was proposing that the Members
concerned submit the required notifications by 30 June 2003, he wished to underline his expectation
that this would be the latest  possible date and would strongly encourage the Members concerned to
submit their notifications as much in advance of that date as possible.  This would facilitate aneffective exchange of information.  By way of further clarification, this deadline related to
notifications in connection with the standstill and transparency commitments contained in the
Committee's decisions taken last year.  He stated that, as no Member had expressed any difficulties
with these proposed procedures by 15 April – the dead line indicated in his 7 March fax for them to do
so – he assumed that this approach was generally acceptable to Members.
49. The Committee took note of the statement made by the Chairman and so agreed
.
2. Information of Thailand referred to in the Committee's decisions in G/SCM/101 and
G/SCM/102
50. The Chairman recalled that the Committee's decisions in documents G/SCM/101 and /102
referred to certain information to be submitted by the delegation of Thailand.  Document G/SCM/101,
dealing with the Industrial Estate Authority of Thailand (the "IEAT"), noted the "commitment of
Thailand to submit a corresponding modified work plan of the IEAT Act amendment to the
Committee not later than 31 March 2003".  In this respect, he referred to document
G/SCM/101/Suppl.1, submitted by Thailand, dated 28 March 2003, and recalled that the United States
submitted questions with respect to this notification, circulated in document G/SCM/Q3/THA/19.
With respect to the BOI programme, the Chairman recalled that that decision contained in document
G/SCM/102 noted the commitment by Thailand to make every effort to submit as soon as possible,
and not later than 15 April 2003, for the consideration of the Committee at its Spring 2003 meeting,
all of the additional information referred to in document G/SCM/Q3/THA/18.  As Members wouldrecall, document G/SCM/102 contained questions posed by various delegations in respect of the BOI
programme.  In this connection, he drew Members' attention to the submission by Thailand, circulated
as document G/SCM/Q3/THA/20, dated 23 April 2003.  Follow-up questions and a list of missingG/SCM/M/46
Page 11
information had just been submitted by a group of delegations.4  The Chairman invited the delegation
of Thailand to take the floor to introduce its paper and to respond to the questions raised by the
delegation of the United States concerning the IEAT programme.
51. The delegate of Thailand stated that, after Thailand's request for extension under Article 27.4
of the SCM Agreement was granted last year, as contained documents G/SCM/101 & Suppl.1 on the
IEAT programme, and G/SCM/102 on the BOI progra mme, Thailand had taken steps to review its
database and explore ways and means to see what had to be done with a view to implementing the
decisions in an appropriate and constructive manner, bearing in mind the economic disaster during
1997-2000 in Asia which had driven Thailand to unsuccessfully do away with export subsidies.  Apart
from that, Thailand had spent a lot of time  working on several documents, including
G/SCM/Q3/THA/18, which contained questions posed by  various delegations, in order to make sure
that Members would receive relevant information prior to this Committee meeting.
52. Concerning the IEAT, the delegate of Thailand stated that, in accordance with G/SCM/101,
Thailand was obligated to reduce export requirements under the programme to no more than 20 per
cent as from the 1 January 2003 and to no more than 10 per cent as from 1 July 2004 and to so notifyall investors no later than 31 January 2003.  The Board of Directors of the IEAT had decided, on
4 February 2003, to eliminate all export requirements retroactively as of 1 January 2003, in order to
comply with the Agreement and the commitment Thailand made in G/SCM/Q3/THA/17/Suppl.1.
Thailand had already notified its action, as envisaged in G/SCM/101/Suppl.1.  The delegate of
Thailand emphasized that the amendment relevant to IEAT’s export requirement was contained inparagraph 1 of clause 10 of Announcement No. 1/2003.  The other parts of clause 10 remained
unchanged, such as subparagraphs 10.1 and 10.2.  In the same notification, Thailand also attached its
revised work plan to shorten the period of its legislative amendment so as to ensure the elimination of
export subsidies as required by the same Decision.  With respect to the present status of the work plan
on IEAT legislative amendment, he stated that stage 4 of the notified work plan was being reached.As Members were aware, the IEAT imposed its export requirement of 100 per cent in 1988.
Subsequently, its export requirement was reduced to 40 per cent in 1995 and Thailand took a major
step in eliminating its export requirement to 0 per cent in January of this year.  Relevant
announcements were also attached in the mentioned document.  All operators in Export Processing
Zones had already been notified by the IEAT Announcement no. 1/2003.  The translation of the
Announcement was provided in the document submitted.  This information could clarify some
concerns expressed, mainly by the United  States, in document G/SCM/Q3/THA/19, dated
22 April 2003.  The decision of the IEAT’s Board showed Thailand’s sincere effort to eliminate
export subsidies and to strive to comply  with the obligation under the Agreement.
53. With regard to the BOI programme, the delegate of Thailand first stated that Thailand
remained committed not to approve any new projects involving the provision of export subsidies and
not to modify the programme so as to make it more favourable, including with respect to scope and
intensity of benefits during the extension period and the final two-year period.  Secondly, Thailand
was also committed to providing additional information listed in G/SCM/Q3/THA/18 and to
implementing the standstill commitment and el imination of export subsidies under the BOI
programme.  Thailand wished to reiterate that the BOI abolished its export requirement scheme inAugust 2000, which resulted in no export subsidies being granted to new operators since then.
However, there were still a number of investors benefiting from investment incentives granted before
the said period, as reported in G/SCM/Q3/THA/17.  The BOI Board of Directors, chaired by the
Deputy Prime Minister of Thailand, had decided th at those export requirements granted be removed.
Thailand wished to clarify that export subsidies for 101 projects out of 178 would be eliminated by2005 and the remaining 77 projects, while they were scheduled to expire by the end of 2011, were
                                                     
4 Circulated in documents G/SCM/Q3/THA/21 and /22.  Thailand's responses to these were
subsequently circulated in G/SCM/Q3/THA/23.G/SCM/M/46
Page 12
currently being reviewed by a working group set up by the BOI regarding potential determination of
export requirements.  Relevant information was also  reflected in G/SCM/Q3/THA/20 so as to respond
to questions posed by various delegations pursuant to the request for an extension.  He indicated that
paragraph 2 of Thailand's response to question 1 should read as follows:  "The export subsidies for
101 projects out of 178 projects will be eliminated by 2005 and the export subsidies for the remaining77 projects are currently scheduled to expire by the end of 2011."  In response to questions posed by
Members, Thailand had sent out questionnaires to investors for the purpose of obtaining information
that was not available in its database.  It should be noted that failure to react to certain questions was
subject mainly to lack of response from the responde nts.  In fact, investors were reluctant to provide
information to the BOI for fear of potential negative consequences for their business.  Nevertheless,
the BOI had still managed to procure most of the requested information.
54. The delegate of Thailand expressed his appreciation to other Members who had supported
Thailand's request for extension.  Thailand wished to emphasize that, since January 2003, Thailand
had done more than was required under the decisions of 19 December 2002 with regard to the
elimination of export subsidies.  Thailand would continue to do its best to ensure that prohibited
export subsidies would come to an end with the minimum impact on Thai and non-Thai companies.This required cooperation from Members whose nationals were investors in Thailand to respond to
questionnaires sent out by the BOI.  The delegate of Thailand stated that Thailand was ready to work
with Members in a constructive manner.  Two officials from capital were present in the meeting to
clarify concerns of Members and also to respond to any questions that Members might have.
55. The delegate of the United States stated that his delegation appreciated the information
provided by Thailand on the IEAT and looked forward to receiving responses to the US questions.5
The United States recalled that it was the firm intention of Thailand to not request any further
extension of the transition period for this programme and to make every effort to ensure that the
elimination of export subsidies occurred no later than 31 December 2005.  To this end, theUnited States was pleased to note that Thailand had revised the IEAT legislative active plan, with the
objective of completing the legislative process by March 2004 and having full enforcement of the new
Act by September 2004.  The United States welcomed a report from Thailand on the current status of
the legislation as well as legislative updates at future SCM Committee meetings.
56. The delegate of the United States stated that the situation with respect to the BOI programme
remained unclear.  He recalled that, as a condition of granting the extension for 2003, Thailand hadcommitted to make every effort to submit as soon as possible, and not later than 15 April 2003, for the
consideration of the Committee at this meeting, all the additional information sought by various
delegations, including the United States, the European Communities, Japan, Canada, Australia,
Switzerland, Venezuela and Peru, as contained in document G/SCM/Q3/THA/18.  These questions
were designed to allow the Committee to assess the scope of the BOI programme, including thesensitivity of the sectors involved and the trade distorting effects that were being caused by the
provision of export subsidies.  While the United States appreciated the efforts made so far by Thailand
to respond to the questions, his delegation was disappointed that the answers were incomplete and
inadequate to form the basis for an informed as sessment of the BOI programme as required by the
Decision for this meeting.  The United States had joined the various other delegations whichoriginally submitted questions to Thailand to prepare a comprehensive document identifying missing
items and follow-up questions.
6  The United States looked forward to receiving responses to this
comprehensive document in the near future.  It might be useful to consider reverting to this item after
additional responses were received at an informal session of the Committee.  The United States
delegate noted that the Rules Negotiating Group had rescheduled its 20 June session, which mightpresent an opportunity for a meeting with the pa rticipation of capital-based experts.  From the
                                                     
5 Thailand subsequently submitted document G/SCM/101/Suppl. 2.
6 Document G/SCM/Q3/THA/21.G/SCM/M/46
Page 13
information that was available, the United States was troubled that many of the projects extended far
beyond 2005, in some cases with subsidies being provided as far into the future as 2011, with export
requirements expiring even later.  The United States noted that a working group had been established
by the Government of Thailand to study the economic  impact that would result from the elimination
of the export requirement for the remaining projects by the end of 2005.  It should be recalled that theCommittee had dealt with many requests from Members to extend the transition period to eliminate
export subsidies.  The possibility of a continuation of extensions for five years, plus the two years
provided by Article 27.4, was the maximum period that had been granted, and only to those
developing country Members with a small share of global trade.  Many of Thailand’s projects
currently envisioned expiration far beyond such dates and this Committee did not have the authority
to grant multi-year extensions.  If the Thai working group did not recommend elimination of the
export requirements, the United States was intere sted to know how Thailand intended to satisfy its
WTO obligations.
57. The delegate of the European Communities thanked Thailand for the documents it had
presented to the Committee on both the IEAT and the BOI schemes and for the further information it
had presented orally in the course of the Committee's meeting.  On the IEAT scheme, the EuropeanCommunities shared the questions which were posed by the United States
7 and looked forward to
seeing the answers to those questions in writing.  The European Communities was not able to
understand from the text submitted how the outcome claimed by Thailand was achieved.
58. On the BOI scheme, the delegate of the European Communities noted that the authorities of
Thailand had taken certain actions to remove certain export requirements.  However, the European
Communities regretted that not all of the information sought in document G/SCM/Q3/THA/18 had
been provided.  This lack of information hampered  the European Communities' ability to assess the
scale and trade-distorting effects of the projects for which export requirements had not been removed.
The European Communities recalled the statements which both it and Thailand had made at themeeting of the Committee on 19 December 2002.  The European Communities confirmed its intention
to pay considerable attention to this issue wh ile it remained under consideration by the Committee.
The European Communities attached considerable importance to Thailand’s confirmation in
December of its intention to meet its WTO obligations.  It appeared from the documents so far
provided that Thailand had not identified, at the time of the Committee meeting, the means by which
it intended to meet its obligations in respect of  the BOI programme.  The European Communities
associated itself fully with the observations made  and follow-up questions posed and looked forward
to working further with Thailand and other delegations to examine this issue further.
8  The European
Communities was open to the suggestion made by the United States in terms of timing for any further
process.
59. The delegate of Canada stated that a key requirement of the extension decision for the BOI
programme granted in December 2002 was that Thailand would provide additional information on
this programme.  Canada had been pleased to receive the information in April 2003 and, although the
information was useful, Canada considered it incomplete to fulfil the requirements of the extension
decision.  For this reason, Canada had joined with other Members in submitting additional questions
which Canada considered were necessary to satisfy the requirements of the extension decision.9
Canada supported the statements made by the European Communities and the United States and
looked forward to working further with Thaila nd to receive the additional information.  Canada
supported an informal meeting, as suggested by the United States.
                                                     
7 Document G/SCM/Q3/THA/19.
8 Document G/SCM/Q3/THA/21.
9 Ibid.G/SCM/M/46
Page 14
60. The delegate of Australia thanked Thailand for its notification in document
G/SCM/101/Suppl.1 with respect to the IEAT programme.  However, Australia asked for further
clarification and explanation of how the fourth am endment of the notified announcement achieved the
stated objective.  In line with this question, Australia endorsed the US questions contained in
G/SCM/Q3/THA/19.  Australia  also thanked Thailand for its responses to questions posed in the
context of the 2003 extension granted in December 2002 to their BOI programme.  Australia had a
number of follow-up questions found in the document jointly submitted by various delegations.10
Australia also posed additional follow-up questions which are contained in documentG/SCM/Q3/THA/22.
61. The delegate of Peru expressed the gratitude of her delegation with respect to the efforts made
by the delegation of Thailand to respond to the questionnaire contained in G/SCM/Q3/THA/18 on the
BOI programme.  Although the Committee did not receive these replies within the deadline
established, Peru, jointly with other Members, had posed some additional questions.11  Her delegation
associated itself with the comments made by the delegations which had posed these questions, since
Peru considered that the information provided by Th ailand was insufficient to give a clear idea of the
structure of the programmes and the plans for dismantling them.  Peru expressed concern at thetimeframe established for the dismantling of the BO I programme.  It went as far as 2014 in some
instances, whereas the extension granted by the Committee covered until 31 December 2002, as
provided for in document G/SCM/102.
62. The delegate of Switzerland first thanked Thailand for the information provided about both
programmes – the IEAT and the BOI – since the Committee's last meeting, as well as for the very
comprehensive introduction and presentation given during this Committee's meeting.  Regarding the
IEAT, Switzerland understood from the document distributed by the Thai delegation that the export
requirement in the IEAT programme had been lifte d.  This being the case, Switzerland welcomed this
change made by Thailand in advance of the timeframe decided by the Committee and thankedThailand for its efforts in doing so.  However, the Swiss delegate stated that his delegation had faced
difficulties in understanding the exact scope of the Announcement of the IEAT reproduced in
G/SCM/101/Suppl.1.  Hence, Switzerland welcomed the questions submitted by the United States
12 in
this regard, as well as the proposal made during the meeting that Members could have additional
updates regarding the evolution of the legislative wo rk programme.  Switzerland considered that this,
as well as the answers that would be provided to the US questions would be very interesting.
Regarding the BOI programme, Switzerland thanked Thailand for the additional information Thailand
had submitted in responding to questions various delegations had posed in the Article 27.4 process,
contained in document G/SCM/Q3/THA/20.  Switzer land would need more time to study these
answers.  In the meantime, and like other delegations, Switzerland had co-sponsored a set of
additional questions, as Switzerland still had not managed to reach a clear and full picture as to the
nature of this programme.13  Moreover, Switzerland understood from the reply to question 1 in
document G/SCM/Q3/THA/20 that Thailand would still have projects under this scheme going
beyond the extension granted for the elimination of these export subsidies.  The Committee had
granted an extension of the deadline until the end of 2002, plus the additional two-year phase-out
period.  Therefore, the Swiss delegate urged Thailand to make every effort possible to adapt the
programme in such a manner that it respected these deadlines.  Switzerland looked forward tocontinuing this process in this Committee and remained open to various possibilities as to how to
proceed.
                                                     
10 Ibid.
11 Ibid.
12 Document G/SCM/Q3/THA/19.
13 Document G/SCM/Q3/THA/21.G/SCM/M/46
Page 15
63. The delegate of Venezuela thanked the delegation of Thailand for the new responses
submitted to the Committee.  Venezuela echoed what had been stated by other delegations previously
and endorsed the list of follow-up questions submitted on behalf of a group of countries.14  The
delegation of Venezuela followed the process with great attention, not only because of trade concerns,
but also for systemic reasons.  While acknowledging the very difficult circumstances that Thailandhad gone through and which have been described by the Thai delegation, the Venezuelan delegation
considered that no further extension should be granted for the submission of remaining responses and
other very relevant information not yet submitted by Thailand because, as other delegations had said,
the submission of that information was one of the conditions for granting the extension of this
exemption.  The delegate of Venezuela stated that the granting of that extension might affect the
orderly and harmonious working of this Committee.  The delegation of Venezuela encouraged
Thailand to continue its efforts to supply full replies on very important points including, inter alia , the
description of the process of the elimination of export requirements (e.g. the different categories
referred to in the document, by sectors, by product and by status of the projects),  as well as
information about the legal effectiveness of the decisions taken by the BOI for the dismantling of
these export requirements.  The Venezuelan delega te stated that Venezuela remained flexible with
respect to the ways in which this further information could be submitted in the future and welcomedthe proposal made by the United States regarding a future date so as to continue following up this
matter very closely.
64. The delegation of Japan thanked the Thai delegation for providing information and
comprehensive explanations in the course of the Committee meeting.  Since enhancing the
transparency of the programmes was at the core of the exercise of this Committee, Japan was pleased
that Thailand had made it clear in December 2002 that it would make every effort to provide the
information regarding all the outstanding questions on the BOI programme.  That was a condition for
its extension for the year 2003.  Concerning the IEAT, Japan thanked Thailand for its notification that
the export requirement under the IEAT programme had been eliminated as of 1 January 2003.  TheJapanese delegation associated itself with the questions posed by the United States and with the
interest expressed by other delegations about the legal implications of the notified IEAT
Announcement.
15  The Committee would benefit from further clarification on this.
65. In terms of the BOI programme, Japan welcom ed the answers from Thailand to the questions
posed by various Members.  Japan was aware that it required substantial work on the part of the Thai
Government in terms of sending questionnaires, collecting their responses, going through them andanalysing the information contained therein.  Japan appreciated Thailand’s efforts to eliminate the
export requirement for a substantial proportion of the programme.  However, as was the case with
other delegations, Japan considered that there were several items which merited further clarification
and which were outlined in the joint list of questions referred to by the US delegation.
16  The delegate
of Japan also expressed his delegation's intenti on to follow the developments regarding the BOI
Working Group on the remaining 78 projects, bearing in mind that the extension of the BOI
programme which had been granted in December 2002 was for the year 2003.  Japan supported the
suggestions by the United States for having informal meetings to enhance further clarification and
understanding of the programmes.
66. The delegate of Thailand thanked Members for posing questions and making comments on
Thailand's replies.  He stated that it had taken Thailand more time than expected to revamp its
database in order to come up with relevant information.  The Thai delegate stated that a significant
portion of responses to questions had been provided.  Even though certain questions had not yet been
appropriately or adequately responded to, Thailand would do its best to respond to questions at a later
                                                     
14 Ibid.
15 Document G/SCM/Q3/THA/19
16 Document G/SCM/Q3/THA/21G/SCM/M/46
Page 16
date.  However, Members should bear in mind that certain questions could not be answered at all, not
because Thailand did  not want to do so, but because the requested information was not available.  For
example, concerning question 5(b) in G/SCM/Q3 /THA/21 on the HTS number, Thailand did not have
information available in its database.  That was why Thailand could not give an answer to that
question posed by certain Members.
67. The Thai delegate stated that since questionnaires were sent out to investors, the investment
atmosphere in Thailand had been stirred up.  Requests for information from the companies concerned
needed to be made discreetly.  The delegate of Thailand stated that this did not mean that Thailand
was not committed to its obligations under the Agreement.  What Thailand had done was to ensure
that it was on the right track.  While the working group was working, Thailand would make sure that
ways and means would be adequately explored in order to abide by its commitment.  Regarding the
IEAT programme, some concerns had been expressed relating to the notification in
G/SCM/101/Suppl. 1.  Thailand wished to reiterate that the export requirement had been removed
because such requirement had been excluded in clause 10 of the relevant announcement.  It might be
problem with the translation that Thailand had circulated to Members.  Clause 10, as a whole, was
circulated.  However, only paragraph 1, which dealt with export requirements, was repealed andreplaced by the new version.  From paragraph 2 onwards, it remained the same.  With respect to other
questions that Members had asked, Thailand would do its best in trying to respond to them in due
time.
68. The Chairman's impression from the interventions made by Members was, first, that they
appreciated greatly the efforts the Thai delegation had made to provide the information referred to in
decisions G/SCM/101 and 102.  At the same time, it was his understanding that, despite these efforts,
there were certain questions or issues which wo uld require additional attention.  Some of the
questions originally proposed had not been responded to by the time of this Committee meeting.  In
addition, some additional questions had been posed during this meeting.  At the same time, there weresome indications on the part of certain Members that they might have some follow-up questions after
reflecting on the Committee's discussions.  In terms of process, the Chairman proposed setting a
deadline for any follow-up questions, which could be 23 May.  Another deadline would have to be set
for the Thai delegation to kindly respond to those questions, which he suggested could be 6 June.
Once that information was available, then it might be convenient to have some informal consultations
in mid-June.  The purpose of those consultations would clearly be, as indicated by the delegate of
Japan, to enhance better understanding of the situation with respect to the IEAT and BOIprogrammes.
69. The delegate of Thailand thanked the Chairman for his initiative in proposing deadlines for
follow-up questions and also responses to be made by the first week of June.  The Thai delegate stated
that Thailand would do its best in order to try to reply questions within the deadline. However, the
Thai delegate stated that, if there were many follow-up questions posed on 23 May, two weeks’ time
might not be sufficient for the submission of replies.
70. With respect to the conduct of the informal consultations, the Chairman stated that he would
be in touch with the incoming Chairperson with a view to asking her to conduct those consultations.
71. The Committee took note of the statements made and agreed  to proceed as suggested by the
Chairman.
T. CONSTANT DOLLAR METHODOLOGY FOR GRADUATION FROM SCM
ANNEX VII(B)
72. The Chairman reminded Members that, pursuant to the Doha Ministerial Decision on
Implementation-Related Issues and Concerns (document WT/MIN(01)/17, para. 10.1) – in whichG/SCM/M/46
Page 17
Ministers agreed that Annex VII(b) to the Agreement includes the Members that are listed therein
until their GNP per capita reaches US $1,000 in constant 1990 dollars for three consecutive years – as
of 1 January 2003, the methodology set forth in G/SCM/ 38, Appendix 2 applied.  As foreseen in that
document, the Secretariat would circulate updated figures as and when the necessary calculations had
been conducted on the basis of the appropriate World Bank data.
73. The Committee took note of the statement made by the Chairman.
U. PERMANENT GROUP OF EXPERTS – ELECTION OF AN EXPERT
74. The Chairman recalled that Professor Flores' term as a member of the Permanent Group of
Experts ("PGE") expired in the spring of 2003, and there was therefore a need for the Committee to
elect a new expert.  Pursuant to a Committee decision (G/SCM/4), the Chairman and Vice-Chairman
were to propose to the Committee candidates for election to the PGE.  The proposal was to be based
on suggestions submitted by Members and to be made after informal consultations.  Candidates
proposed had to meet the requirement that the PGE be composed of independent persons, highly
qualified in the fields of subsidies and trade relations.
75. Members would recall that, in document G/SCM/105, the Chairman had invited suggestions
from Members by 14 March 2003.  However, in view of the fact that no suggestions had been
received, the Chairman had then extended this deadline to 10 April 2003 (in document G/SCM/106).
On that final date, two suggestions were received.  Members would then recall that the Chairmaninformed them of this situation by fax dated 14 April 2003, and indicated that interested Members
could request the curriculum vitae  of the two suggested individuals from the Secretariat.
Subsequently, by fax of 29 April, the Chairman indicated his readiness to conduct informal
consultations with interested Members with a view to identifying a basis for consensus.  However, to
the Chairman's disappointment, only a minimal number of delegations took advantage of thisopportunity to express any view on this matter.  Given this extremely low level of participation by
delegations, the Chairman was unable to identify any possible basis for consensus on the election of
an expert in advance of this meeting, and theref ore it was the Chairman's view that the Committee
was not yet in a position to take a decision on the election of an expert at this time.  In this situation,
the Chairman believed that the best course of action was for him to implore Members to re-double
their efforts on this matter with a view to reaching an agreement as soon as possible.  To this end, the
Chairman suggested that the incoming Chair continue to conduct informal consultations withMembers with a view to identifying a basis for consensus.  Once such a basis for consensus was
found, the Chairman suggested that the Committee foll ow a written procedure in order to formalize
the election of the new expert.  That is, the Chairman suggested that, once the incoming Chair was in
a position to do so, the Chair would communicate to Members the candidate which had been
identified as the basis for an emerging consensus, and subject to no comments being received by a setdate, that candidate would then be deemed to be elected to the PGE.  The Chairman asked Members
whether they would be ready to give positive consideration to this way of proceeding.
76. The Committee took note of the statement made and so agreed
.
V. OTHER BUSINESS
1. Statement of the United States concerning the US request for a Secretariat export
competitiveness  calculation with respect to India's textiles and clothing sector
77. For the Committee’s information, the delegate of the United States noted that the
United States had requested the Secretariat to perform an export competitiveness calculation withG/SCM/M/46
Page 18
respect to certain textile products exported from India.17  The Secretariat had performed those
calculations, circulated in G/SCM/103/Add. 1, and the United States was reviewing them.  In the near
future, the United States expected to enter into bi lateral discussions with India with respect to the
calculations performed.
78. The Committee took note of the statement made.
2. Statement of India concerning the US request  for a Secretariat export competitiveness
calculation with respect to India's textiles and clothing sector
79. The delegate of India stated that, following a request by the United States, the Secretariat had
circulated the document G/SCM/103/Add.1, containing a calculation of export competitiveness of
India’s textile and clothing exports.  India was carefully studying this calculation undertaken by the
Secretariat.  India sought clarification from the Secretariat as to whether the figures for world trade
contained in this computation included trade unde r RTAs, FTAs and GSP schemes.  It was India's
understanding that the clock of phasing-out export subsidies, as appropriate, would start on the receipt
of this clarification.
80. The Chairman stated the Secretariat would send its reply not just to the delegation of India but
also to other Members of the Committee.  This clarification was subsequently circulated in document
G/SCM/103/Add.2.
81. With respect to the issue of when the clock started in terms of a Member’s obligation to
phase-out its export subsidy programmes, the delegate of the United States stated that, in the view of
his delegation, this occurred when export competiveness was reached pursuant to Article 27 of theAgreement.  He stated that Members had had this discussion before in the implementation context and
it appeared that this discussion would continue.  Evidently, there was a disagreement as to how the
Agreement was to be interpreted with respect to this issue.
82. The Committee took note of the statements made.
W. DATE OF NEXT REGULAR MEETING
83. With respect to the date for the Committee’s ne xt regular meeting, the Chairman recalled the
statement by the Chair of the Anti-Dumping Committee in the meeting held on 1-2 May 2003 that, in
order to accommodate the rules area meetings in autumn 2003, the Secretariat had reserved rooms for
the weeks of 20 and 27 October.  The first week would be meetings of the Safeguards Committee, on
Monday, 20 October (and not Friday, 24 October, as was originally announced in the 28 April
meeting of the Safeguards Committee).  The Anti-Dumping Committee bodies would meet onTuesday to Friday, 21-24 October 2003.  The second week would be the meetings of the Subsidies
Committee bodies and, likely, a meeting of the Rules Negotiating Group.  Of course, Members would
be receiving reminders of the dates, and official notice in the airgrams convening those meetings.
84. The Committee took note of the Chairman's statement.
X. ELECTION OF OFFICERS
85. The Chairman recalled that the Chairman of the Council for Trade in Goods carried out
informal consultations on the nomination of Chairpersons for the different bodies operating under the
auspices of the Council for Trade in Goods.  The proposed nominations were taken note of by the
Council for Trade in Goods at its meeting on 12-13 March 2003.  As concerned this Committee, the
                                                     
17 Circulated as document G/SCM/103.G/SCM/M/46
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Chairperson of the Council for Trade in Goods had proposed the nomination of Ms. Lozano of
Colombia.  He asked the Committee whether it would be able to agree to elect Ms. Lozano as
Chairperson.
86. The Committee agreed to elect Ms. Lozano as Chairperson by acclamation.
87. Regarding the question of Vice-Chairperson for the Committee, the Chairman stated that he
had conducted consultations with Members.  On the basis of those consultations, and as he indicated
to Members by fax dated 30 April 2003, the Chairman proposed the election of Mr. Naoshi Hirose of
Japan as Vice-Chairperson of the Committee.  The Chairman asked the Committee whether it would
be able to agree to elect Mr. Hirose as Vice-Chairperson.
88. The Committee agreed to elect Mr. Hirose as Vice-Chairperson by acclamation.
89. At the invitation of the Chairman, the incoming Chairperson, Ms. Lozano,  addressed the
Committee.  She expressed her gratitude to be able to take the Chair in the name of Colombia.  She
thanked Members for their vote of confidence.  She thanked and expressed her appreciation toAmbassador Hovorka for his hard work and dedication in the Committee.
90. The Chairman expressed his sincerest gratitude to the Secretariat for its invaluable assistance
and advice during his term as Chairman.
91. The Committee took note of the statements made.
92. The meeting was adjourned.
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