 RESTRICTED  
  
G/SCM/M/117  
 
4 March  2022 
(22-2009) Page: 1/22 
Committee on Subsidies and Countervailing Measures    
 
 
MINUTES OF THE REGULAR MEETING  
HELD ON 26 OCTOBER 2021  
CHAIR: MS NORIKO TERANISHI (JAPAN)  
1. The Committee on Subsidies and Countervailing Measures ("Committee") held a regular 
meeting on 26 October 2021, convened in WTO/AIR/SCM/40 dated 15 October 2021.  
2. The United Kingdom  requested to be included as the co -sponsor of the agenda items nine and 
ten. 
3. The Committee adopted the following agenda:  
1   NATIONAL  LEGISLATION ................................ ................................ ............................  2 
1.1   Review of notifications of new or amended legislation or regulations  
not previously reviewed by the Committee ( including Supplemental Notifications  
of existing provisions not previously reviewed)  ................................ ................................ ...... 2 
1.1.1    India (G/SCM/N/1/IND/2/Suppl.12)  ................................ ................................ ...........  2 
1.2   Review of notifications of new or amended legislation or regulations  
with outstanding written que stions  ................................ ................................ .......................  2 
1.2.1    Cameroon (G/ADP/N/1/CMR/1/Suppl.1 – G/SCM/N/1/CMR/1/Suppl.1 – 
G/SG/N/1/CMR/1/Suppl.1)  ................................ ................................ ................................ .. 2 
1.2.2    Saint Kitts and Nevis (G/ADP/N/1/KNA/1 – G/SCM/N/1/KNA/1)  ................................ ..... 3 
2   NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE  
NOTIFICATIONS PREVIOUSLY REVIEWED BY THE COMMITTEE  ................................ ....... 3 
2.1   Peru (G/ADP/N/1/PER/2/Suppl.2 - G/SCM/N/1/PER/2/Suppl.2) and 
(G/ADP/N/1/PER/2/Suppl.3 - G/SCM/N/1/PER/2/Suppl.3)  ................................ .......................  3 
2.2   Ghana (G/ADP/N/1/GHA/2 - G/SCM/N/1/GHA/2 - G/SG/N/1/GHA/2)  ................................  3 
2.3   Kenya (G/ADP/N/1/KEN/3 - G/SCM/N/1/KEN/3 - G/SG/N/1/KEN/2)  ................................ .. 3 
3   SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS  
(ARTICLE  25.11) – G/SCM/N/379 AND G/SCM/N/379/SUPPL.1  ................................ .... 4 
4   PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS:  
NOTIFICATIONS (ARTICLE 25.11)  ................................ ................................ ..................  9 
5   ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR  
THE ELIMINATION OF EXPORT SUBSIDIES  ................................ ................................ ... 10 
6   IMPROVING THE TIMELINESS AND COMPLETENESS OF  
NOTIFICATIONS AND OTHER INFORMATION FLOWS ON  
TRADE MEASURES UNDER THE SCM AGREEMENT  ................................ ..........................  10 
7   ARTICLE 25.8 QUESTIONS TO CHINA ON POTENTIAL  
STEEL SUBSIDIES – ITEM REQUESTED BY THE EUROPEAN UNION  
AND THE UNITED STATES ................................ ................................ ..............................  14 
8   SUBSIDIES AND OVERCAPACITY – ITEM REQUESTED BY CANADA,  
THE EUROPEAN UNION, JAPAN, AND THE UNITED STATES  ................................ ...........  14 G/SCM/M/117  
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 9   SUBSIDY TRANSPARENCY AND CHINA'S PUBLICATION AND  
INQUIRY POINT OBLIGATIONS UNDER CHINA'S PROTOCOL OF ACCESSION  
– ITEM REQUESTED BY AUSTRALIA, CANADA, THE EUROPEAN UNION,  
JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  ................................ ............  18 
10   PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF NEW AND FULL 
SUBSIDY NOTIFICATIONS – ITEM REQUESTED BY CANADA, THE EUROPEAN UN ION, 
JAPAN, THE UNITED KINGDOM, AND THE UNITED STATES  ................................ ............  20 
11   OTHER BUSINESS  ................................ ................................ ................................ ... 22 
12   DATE OF NEXT REGULAR MEETING  ................................ ................................ .........  22 
13   ANNUAL REPORT OF THE COMMITTEE ON SUBSIDIES AND COUNTERVAILING 
MEASURES TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7)  ............................  22 
 
1  NATIONAL LEGISLATION  
1.1  Review of notifications of new or amended legislation or regulations not previously 
reviewed by the Committee (including Supplemental Notifications of existing provisi ons 
not previously reviewed)  
1.1.1   India (G/SCM/N/1/IND/2/Suppl.12)  
4. The written question posed by Canada and India's reply can be found in documents:  
• G/ADP/Q1/IND/32  - G/SCM/Q1/IND/32  and Corr.1  – question posed by Canada  
• G/ADP/Q1/IND/3 3 - G/SCM/Q1/IND/3 3 reply to Canada1 
5. Canada , mentioning its question pose d regarding  India's notification, asked India to clarify 
whether the Central Government could resort to the provisional assessment of the imports at issue 
at any -time during an anti-circumvention investigation .  
6. India stated that the notification sought  to further am end the Customs Tariff (Identification, 
Assessment and Collection of Countervailing Duty on Subsidised Articles and for Determination of 
Injury) Amendment Rules 1995 and the amended rules came into force on 2 February 2021. India 
explained that the amendme nt enabled the Central Government to conduct provisional assessment, 
in anti -circumvention proceedings, of the imports of the article alleged to be circumventing the 
countervailing duty in force and that it may also request guarantees from the importers un til the 
decision was taken. Additionally, India explained that the amendment at issue had the aim of 
bringing the subsidy law at the same level as the anti -dumping one. India recalled that the questions 
posed by Canada had been received two days earlier fr om the meeting and the replies would be 
provided in due course.  
1.2  Review of notifications of new or amended legislation or regulations with outstanding 
written questions  
1.2.1   Cameroon (G/ADP/N/1/CMR/1/Suppl.1 – G/SCM/N/1/CMR/1/Suppl.1 – 
G/SG/N/1/CMR/1/Suppl.1)  
7. Written questions with respect to this notification can be found in:  
• G/ADP/Q1/CMR/3 – G/SCM/Q1/CMR/3 – G/SG/Q1/CMR/3 – questions from the 
United  States  
8. The Chair  noted that these questions have been pending since the Committee meeting of 
October 2014.  
 
1 Circulated on 3 February 2022.  G/SCM/M/117  
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  9. Camero on was not present at the time.  Oral answers were not provided at the meeting, nor 
had written answers been received to date.  
1.2.2   Saint Kitts and Nevis (G/ADP/N/1/KNA/1 – G/SCM/N/1/KNA/1)  
10. Written questions regarding this notification were posed and can be foun d in document:  
• G/ADP/Q1/KNA/1 – G/SCM/Q1/KNA/1 – questions from the United States  
11. Saint Kitts and Nevis was not present at the time.  Oral answers were not provided at the 
meeting, nor had written answers been received to date.  
2  NATIONAL LEGISLATION – CONTINUING REVIEW OF LEGISLATIVE NOTIFICATIONS 
PREVIOUSLY REVIEWED BY THE COMMITTEE  
2.1  Peru (G/ADP/N/1/PER/2/Suppl.2 - G/SCM/N/1/PER/2/Suppl.2) and 
(G/ADP/N/1/PER/2/Suppl.3 - G/SCM/N/1/PER/2/Suppl.3)  
12. The written follow -up question posed by the U nited States and Peru's written reply can be 
found in documents:  
• G/ADP/Q1/PER/34 - G/SCM/Q1/PER/34 – follow -up question from the United States  
• G/ADP/Q1/PER/35 - G/SCM/Q1/PER/35 – reply to the United States  
13. The United States  noted that it had no further q uestions on countervailing duties but might 
have some questions on anti -dumping measures.  
2.2  Ghana (G/ADP/N/1/GHA/2 - G/SCM/N/1/GHA/2 - G/SG/N/1/GHA/2)  
14. Written follow -up questions were posed regarding this notification and can be found in 
document:  
• G/ADP/Q1/GHA/3 - G/SCM/Q1/GHA/3 - G/SG/Q1/GHA/3 – submitted by the United States  
15. The Chair noted that the notification and the questions would be taken up in the Committee 
on Anti -Dumping Practices.  
16. Ghana was not present at the time . Oral answers were not provided at the meeting, nor had 
written answers been received to date.  
2.3  Kenya (G/ADP/N/1/KEN/3 - G/SCM/N/1/KEN/3 - G/SG/N/1/KEN/2)  
17. Written follow -up questions and the replies can be found in documents:  
• G/ADP/Q1/KEN/6 - G/SCM/Q1/KEN/6 - G/SG/Q1/KEN/5 and G/ADP/Q1/KEN/6/Corr.1 – 
G/SCM/Q1/KEN/6/Corr.1 – G/SG/Q1/KEN/5/Corr.1 – follow -up question from the United States  
• G/ADP/Q1/KEN/7 - G/SCM/Q1/KEN/7 - G/SG/Q1/KEN/6 – replies to the United States  
18. The United States  noted that it had no further questions in the context of countervailing duties.  
19. The Chair, recalling the Committee's agreed procedures, informed Members that for new 
legislative notifications to be placed on the agenda of the spring 2022 meeting, they sho uld be 
circulated in all three languages by 14 March 2022. Shortly after that date, the Secretariat would 
circulate a document informing Members of all legislative notifications to be reviewed at the next 
autumn meeting. Pursuant to paragraph 8 of document  G/SCM/W/293/Rev.1, all unanswered written 
questions pertaining to new legislative notifications reviewed at the meeting, as well as the subject 
notifications, shall automatically be retained on the agenda of the next Committee meeting and on 
the agendas o f subsequent Committee meetings until written answers are submitted.  G/SCM/M/117  
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 20. The Chair also recalled that a new legislative notification from the United States would be 
considered under the first agenda item of the next meeting of the Committee. Written questions 
concerning that notification as well as any other new legislative notifications for the spring 2022 
meeting of the Committee should be submitted to the Member concerned and to the Secretariat by 
4 April 2022.  
21. In order to place previously -reviewed legislati on on the agenda of the autumn meeting for 
further review, written questions must be submitted to the Member concerned and the Secretariat, 
not later than 14 March 2022; and written answers to such questions must be submitted to the 
Member concerned and th e Secretariat, not later than 11 April 2022. The Chair also noted that the 
Russian Federation had submitted written questions regarding the legislative notifications of the 
European Union circulated in documents G/SCM/N/1/EU/2/Suppl .1 and G/SCM/N/1/EU/2/Su ppl.2. 
Those questions could be found in document G/ADP/Q1/EU/15 - G/SCM/Q1/EU/15 and would be 
taken up under agenda item two at the next meeting. The Secretariat would circulate the usual 
triple-symbolled document containing all the relevant deadlines sho rtly after the meeting.2 
22. The Chair expressed concern that some Members had yet to submit any notification concerning 
legislations. She underlined the importance of these notifications in terms of transparency and 
recalled that for many Members all that wo uld be required was a single nil notification. For any 
Members that conducted countervailing duty investigations but had not yet notified their legislation, 
it was all the more important for the Committee to have the opportunity to review and ask questions  
about that legislation. Therefore, the Chair encouraged all Members that had not yet made a 
legislative notification to do so as promptly as possible.  
23. The Chair referred to the document G/SCM/N/18/Add.55 which contained the latest revision 
of the list of authorities competent to initiate and conduct investigations within the meaning of 
Article  25.12 of the SCM Agreement and invited all Members with such an authority to submit the 
required notification pursuant to Article 25.12 of the SCM Agreement, or to r eview and update as 
necessary their previously -submitted notifications.  
24. The Committee took note  of the notifications, statements, questions, and answers.  
3  SEMI -ANNUAL REPORTS OF COUNTERVAILING DUTY ACTIONS (ARTICLE  25.11) – 
G/SCM/N/37 9 AND G/SCM/N/37 9/SUPPL .1 
25. The Chair  recalled that document G/SCM/N/379 and G/SCM/N/379/Suppl.1 had invited all 
Members to submit their semi -annual reports under Article 25.11 of the SCM  Agreement of 
countervailing duty actions taken during the period 1 January through 30 June  2021. Document 
G/SCM/N/379/Add.1 provided the current status of Members' reporting for that period. Paragraph 1 
of the document listed those Members reporting countervailing duty actions during the period. 
Paragraph 2 listed Membe rs that had notified having taken no countervailing duty action during the 
period. Paragraph 5 of the document listed the 45  Members that had submitted a one -time 
notification that they had no investigating authority, had taken no countervailing actions to  date, 
and did not anticipate taking any such actions in the foreseeable future.  
26. One-time notifications served a useful transparency function, as they assisted non -active 
Members to meet their notification requirements in a streamlined way. Any eligible Me mber that had 
not already done so thus was urged to submit a one -time notification. The Secretariat was ready to 
assist any Member in this regard.  
27. Unfortunately, as listed in paragraphs 3 and 4 of the document, a number of Members had 
not submitted their s emi-annual reports. The Chair urged those Members to submit their reports as 
soon as possible.  
28. No comments or questions were raised concerning the semi -annual reports of Australia, Brazil, 
Canada, India, Peru, Turkey, Ukraine, the United Kingdom, and Viet Nam.  
29. China  expressed its concerns over the application of the countervailing measures noting that 
there were some problems which might hinder economic recovery and disrupt the global trade order. 
 
2 G/ADP/W/50 8 – G/SCM/W/ 584 – G/SG/W/ 254. G/SCM/M/117  
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  According to China, the legitimate rights and interests of d eveloping Members have been threatened 
by countervailing measures. Between 1995 and 2020, there were 632 countervailing investigations 
78% of which was initiated by developed Members. The top five Members that were subject to 
investigations were developing  Members accounting for 58% of all the investigations.  
30. China noted that more than half of the WTO dispute settlement cases were related to trade 
remedies reflecting the widespread disputes over trade remedy measures including countervailing 
measures.  
31. Some Members' domestic legislation and practices have deviated from multilateral rules which 
deserve d the common attention of all Members. For instance, countervailing investigations have 
been conducted on the so -called subsidy program of currency underval uation. The concept of public 
body has been unreasonably expanded in application by mixing the normal commercial behaviour of 
enterprises with the behaviour of performing government functions. The external benchmark has 
been applied increasingly as a norma l method. Some Members tried to break through WTO rules by 
unilateral legislation and investigation practice and conducted countervailing investigations on 
normal bilateral economic and trade cooperation projects.  
32. Since the Doha Round, multilateral negoti ations on anti -dumping and countervailing rules 
have stalled. In addition, the Appellate Body was paralyzed which has made it more difficult to 
effectively restrict the abuse or misuse of multilateral anti -dumping and countervailing rules in 
practice.  
33. China called on all Members to pay attention to those problems, oppose trade protectionism 
and uphold the authority and effectiveness of rules -based multilateral trading system.   
34. On the semi -annual report of China , the United States  reiterated its concerns wi th respect to 
completed and ongoing proceedings on petrochemical products form the United States. The United 
States recalled that at the previous meeting of the Committee it had noted that China had made 
numerous methodological errors which appeared to be inconsistent with its obligations under the 
SCM Agreement. In its final findings on the investigation on N -propanol, China found that dozens of 
subsidy programmes alleged to confer countervailable subsidies to the oil and natural gas industries 
in the Unit ed States passed through in their entirety to producers of N -propanol, resulting in subsidy 
rates exceeding 3 0%. China had similar findings in more recent investigations resulting in subsidy 
rates exceeding 15 %. China failed to consider that each of the ch emical products at issue were two 
stages downstream from oil and natural gas and to conduct a proper pass -through analysis. In 
addition, China determined that the mere existence of subsidization in a sector was sufficient to 
deem the entire sector distorte d and domestic prices unsuitable for benchmark purposes. China's 
conclusions in those cases lacked evidentiary support and contradicted other record evidence 
concerning the relative insignificance of any upstream subsidization on the downstream products. 
China ha d yet to address the comments from the United States or respondent companies in a 
meaningful way and maintained those erroneous findings in all of the recent investigations against 
the United States. China has continued to provide inadequate explana tions for its decisions and 
findings and failed to take into account its methodological errors. The United States continued to be 
concerned by China's findings in those cases and urged China not to make the same methodological 
errors in future investigatio ns. 
35. In response to the United States, China  stated that the investigation on petrochemical 
products had been conducted in strict compliance with the WTO rules and domestic laws and 
regulations. The investigating procedures  were open and transparent . The rights of interested parties 
were properly protected  and the authority had provided all interested parties with sufficient 
opportunities to submit comments.  The authority obtained information from interested parties 
through questionnaires, comments and on -the-spot verification and reminded all interested parties 
of the importance of cooperation and the consequences of failure to do so. However, some necessary 
information such as the allocation  of each subsidy to the oil and natural gas industry and the deta ils 
of some subsidy programs were not provided  by the  interested parties. For that reason, the authority 
had to make determinations on the basis of facts available. Following the preliminary determination 
and prior to the final determination, the essential  facts were disclosed in detail to the relevant 
interested parties, and the comments on the disclosure were carefully considered by the authority. 
In addition, the authority gave reasonable  consideration on the requests of the United States 
Government and the exporters to extend  the period to submit questionnaires. China recalled that G/SCM/M/117  
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 there were two ongoing cases and noted that the investigating authority would carefully consider 
the comments of the interested parties.   
36. On the semi -annual report of the Euro pean Union , Morocco  expressed its concerns over the 
anti-circumvention investigations initiated on 31 May 2021 by the European Commission on glass 
fibre fabrics originating in the People's Republic of China and Egypt and shipped from Morocco . Since 
the ini tiation of the investigations, PGTEX Morocco,  the exporting producer of the product concerned 
in Morocco has faced serious problems during the customs clearance of its products in several 
Member States of the European Union. Almost all of its shipments to the European Union have been 
blocked by the European customs authorities and became subject to additional controls as to their 
origin. In addition, in some Member States, the customs authorities made custom clearance 
conditional to the payment of the resid ual anti -dumping and countervailing duty of 9 9% which were 
applicable to imports from China.  
37. Despite the acknowledgment and confirmation by the Moroccan customs services that the 
certificates accompanying the Moroccan shipments of the products concerned w ere authentic and 
met the conditions of origin as set by the Morocco -EU Association Agreement, the goods were 
blocked at the level of European customs requesting the payment of MFN customs duties, which 
should not apply as the glass fibre fabrics benefit ed from Moroccan preferential origin, as confirmed 
by the certificates of origin. Morocco recalled Article 11.10 of the SCM Agreement which stipulate d 
that "an investigation shall not hinder the procedures of customs clearance".  
38. With respect to the issue of circumvention, Morocco noted that the production of the product 
concerned stemmed  from a significant investment establishing a production site in Morocco. This 
investment was fully justified given the scale of the production operations taking place at the PGTEX 
Morocco site. In addition, certificates of origin issued by Moroccan customs authorities demonstrated 
that production operations in Morocco included substantial transformation. Likewise, the reason for 
the installation of a production facility by PGT EX China was to supply wind turbines in Morocco as 
well as to the customers of PGTEX in Europe. The investment was therefore economically justified. 
These elements show ed the existence of obvious advantages and sufficient economic justifications 
for the es tablishment of PGTEX Morocco other than the circumvention of the measures imposed by 
the European Union.  
39. In this regard, Morocco requested the European Union to ensure proper conduct of customs 
clearance operations for products exported by PGTEX from the Kingdom of Morocco, until the 
investigations were finalized and to terminate the anti -circumvention investigations without 
extending the anti -dumping and anti -subsidy measures to the shipments from Morocco.  
40. Egypt  expressed its concern regarding the anti -circumvention investigation initiated by the 
European Union on glass fibre fabrics. It requested the European Union to account Egypt's view in 
its submission and not to extend the measure to special economic zone.  
41. In response to Morocco, the European Union  indicated that the investigation has been ongoing , 
and the EU Basic Regulation included specific provisions that allowed companies to show that they 
were genuine producers of the product concerned. If the companie s prove d the existence of 
necessary conditions , they would  not be subject to the extension of measures. Regarding the alleged 
difficulties mentioned by Morocco, the European Union noted that companies could directly contact 
the relevant customs authorities  of Member States.  
42. With respect to the comments from Egypt, the European Union stated that the investigation 
has been ongoing and recalled that the Egyptian authorities could submit their views in the course 
of the proceeding. It also noted that the EU Bas ic Regulation allowed the extension of measures to 
such zones. The European Union invited Egypt to actively participate in the investigation  and to 
make any submissions they deem ed necessary.  
43. Regarding the semi-annual report of the United States , the Russian Federation  expressed its 
concerns over two countervailing duty investigations on fertilizers and seamless pipes. The 
Russian  Federation recalled its statements at the previous meeting and noted that the flawed 
determinations were not eliminated in thos e and other investigations. The Russian Federation 
recalled  that some  aspects of the determinations made by the Department of Commerce 
("Commerce") deserve d attention from a systemic point of view.  G/SCM/M/117  
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  44. With respect to public body determinations, the Russian F ederation noted that Commerce 
deemed an entity as a public body based on a so -called meaningful control by the state. It analyse d 
the level of state ownership over an entity by the presence of state officials in its managing bodies 
and involvement of the e ntity in policies of the state. These factors, however, were not sufficient to 
illustrate that an entity possesses, exercises, and was vested with governmental authority to provide 
a subsidy as per the WTO jurisprudence. Such loose standard of public body determination could not  
be consistent with Article 1 of the SCM Agreement.  
45. With respect to the identification of de facto  specificity, the Russian Federation stated that 
Commerce took into account only the number of actual recipients of the alleged govern ment 
assistance disregarding the commercial realities in the economy in question and the corresponding 
level of the economic activities. As a result, any programme may be determined as de facto  specific 
by stating that the number of its users were limited.  According to the Russian Federation this 
approach could not be in line with Article 2.1(c) of the SCM  Agreement and would render the 
provisions on non -specific subsidies in the Agreement meaningless.  
46. The Russian Federation was also concerned with low stan dards applied by Commerce in 
assessing the grounds for the initiation of investigations. All the above -mentioned and ongoing 
investigations including the one regarding urea ammonium nitrate solutions from the 
Russian  Federation were initiated based on appl ications that lacked sufficient evidence on 
subsidization in the meaning of Article 11.2 of the SCM Agreement. The petitions provided allegations 
and assumptions shifting the burden of proof to the investigating authority. The Russian Federation 
urged the United States to reconsider its approach in investigations , bringing its countervailing duty 
procedures and measures into compliance with the WTO rules.  
47. China  echoed the concerns raised by the Russian Federation with respect to the United States' 
countervailing duty practices and methodologies including determinations on public body  and 
specificity, as well as  the standard for initiation of investigations. Thos e concerns were problematic 
not only for China but also for all other Members and were a threat to an open and free international 
trade order. China drew attention of the Membership and called on all Members to take active part 
in future negotiations in or der to clarify and improve the rules.  
48. China recalled that the United States had made preliminary or final determinations on the 
so-called subsidy program of "currency undervaluation" in five countervailing duty investigations 
against the imports of twist t ies, chassis, pentafluoroethane, mobile access equipment and 
walk-behind snow throwers from China. Even though Commerce did not make affirmative 
determinations in those cases, China reiterated its systemic concerns on the investigations regarding 
the alleg ed programs related with currency exchange rate issues.  
49. According to China, the government of a Member did not have the authority to unilaterally 
determine whether other Members' currencies were undervalued. Currency exchange rate was a 
very complicated is sue and difficult, if not impossible, to accurately evaluate. When two WTO 
Members had different views on the exchange rate between their currencies, the unilateral 
determination by one Member could not be deemed superior to the evaluation made by the 
corresponding governmental authority of the other Member or international organizations like the 
IMF. 
50. Noting that the currency exchange rates in Members with single exchange rate system were 
generally applied and therefore not specific under the SCM Agreement,  China invited the 
United  States to elaborate why generally applicable exchange rates could be deemed specific and 
why all companies that engaged in international trade, especially considering the huge number and 
significant diversity of Chinese internatio nal trade companies, could constitute a "group " under 
Article 2.1 of the SCM Agreement.  
51. China recalled that Commerce relied upon the U nited States  Department of Treasury's 
currency exchange rate evaluation reports for renminbi when making its determination s. Those 
reports, however, disclosed neither the quantitative calculation methods nor data which made it 
impossible to ascertain whether the conclusions of the reports were correct and accurate. Commerce 
considered it appropriate to base its determinations  on such questionable, inaccurate , and non -
transparent reports and attempted to calculate so -called subsidy rates accordingly. China stated that 
such determinations could not be consistent with the obligations of the United States under the G/SCM/M/117  
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 SCM Agreement n oting that the countervailing duties levied must not exceed the level of benefits 
received by the responding companies.  
52. China also noted that when calculating the benefits conferred, Commerce did not deduct the 
corresponding losses of the responding compan ies when they converted renminbi into US dollars if 
the so -called "currency undervaluation " existed. Such practices would inflate the countervailing duty 
rates and infringe on the legitimate rights and interests of Chinese companies.  
53. With respect to the co mments from the Russian Federation regarding the countervailing 
measures on phosphate fertilizers, the United States  stated that Commerce's identification of 
Gazprom as a public body was fully consistent with its WTO obligations and the standard for public  
body as interpreted by the Appellate Body. The m ajority of the shares of Gazprom was owned by 
the Russian Government which had designated that company as a strategic enterprise because of 
its important role in carrying out the government's policy objectiv es. The company's board of 
directors, the majority of which were appointed by the government, included former high -ranking 
officials such as a former prime minister. The government also set the prices for natural gas produced 
and supplied by Gazprom and it s affiliates for all industrial consumers and households. These and 
other factors had been explained in detail in Commerce's findings in investigations on cold -rolled 
steel, phosphate fertilizers and more recently in the investigation on seamless pipe. Bas ed on these 
facts, Commerce's conclusions that the Government of the Russian Federation had meaningful 
control over Gazprom and that Gazprom was a public body were fully justified and consistent with 
Article 1.1 of the SCM Agreement.  
54. With respect to the i ssue of specificity, the United States noted that the agro -chemistry sector, 
which included the producers of phosphate fertilizers, was a predominant user of natural gas. This 
sector was one of the top five consum er groups during the period of investigatio n. Similarly, as 
explained in the final determination for seamless pipes, the metals industry, which included 
producers of seamless pipes, was also a predominant user of natural gas and one of the three largest 
industrial consumers of natural gas sold by G azprom during the investigation.  
55. Regarding the points raised by the Russian Federation on the initiation threshold, the 
United  States noted that domestic industries might not have perfect information all the time. 
Domestic producers were required to provi de all the information that was reasonably available to 
them. In case that information was sufficient to initiate an investigation, the investigating authority 
would investigate the allegations in accordance with the domestic law and its WTO obligations.  
56. With respect to the comments from China, the United State s noted that it would not comment 
on the ongoing investigations mentioned by China. In two investigations concerning twist ties and 
chassis, Commerce decided to defer making a final determination wit h respect to the 
countervailability of currency exchange practices. These decisions were made due to the time 
constraints faced by Commerce to fully consider the arguments and to determine whether and if so 
which additional information might be required an d available to conduct a more complete and 
thorough analysis of the novel issues presented concerning this programme.  
57. In addition, on 12 October 2021, Commerce determined in the investigation on mobile access 
equipment that Chinese companies had not recei ved countervailable benefits in 2020 as a result of 
exchange rate of undervalued currency that could be attributed to government actions. This finding 
was based on an evaluation from the U nited States  Department of Treasury which indicated that the 
underva luation in renminbi was not a result of  government action on the exchange rates. 
Commerce's regulations clearly set for th the circumstances under which it would consider a benefit 
to be conferred by the exchange rate of undervalued currency. According to t he regulation, 
Commerce would normally make an affirmative finding of undervaluation only if there had been a 
government action on the exchange rate that contributed to that undervaluation. In this respect, 
consistent with its regulations and Treasury's an alysis, Commerce determined that no 
countervailable benefit had been provided by that programme in that particular investigation.  
58. The United States reiterated that there was nothing in its domestic law, the SCM Agreement 
or the IMF Agreement preventing a sovereign member of the WTO or IMF from analysing whether 
an exchange involving an undervalued currency would constitute a countervailable subsidy under a 
national c ountervailing duty law. Commerce's new regulation strictly pertained to a domestic trade 
remedy. It neither restricted nor infringed upon the IMF's authority as a multinational organization G/SCM/M/117  
- 9 - 
  to engage in exchange rate surveillance or other currency related actions. The United States also 
noted that the SCM Agreement explicitly included certain currency related practices in item (b) of 
the Illustrative List of Export Subsidies in Annex I. Therefore, it was not correct to suggest that the 
issue was beyond the bounds of the WTO or the SCM Agreement.  
59. With respect to the issue of public body, the United States recalled that in DS437 the 
Appellate  Body upheld its decisions on public body which showed that its practice had been 
consistent. With respect to the use of  external benchmarks, the United States often needed to use 
all available facts because the Chinese Government did not provide adequate information regarding 
the composition of the industry in question.  
60. China  thanked the United States for its replies recalling that no explanation was provided 
regarding the issue of specificity. While a dual currency regime could be considered as an export 
subsidy, a single currency system could not be deemed as specific. In su ch a case, the relevant 
Member had to provide strong evidence on specificity. It would not be sufficient to note that it was 
specific to companies that engaged in international trade. Members could clarify this issue in the 
future negotiations on rules.  
61. The United States  noted that specificity, i.e. , when a group would be big enough such that the 
programme was no longer specific, was one of the most difficult questions under the 
SCM Agreement. In the currency cases, Commerce has been looking at whether the  exchange rate 
system had benefited the trade in goods sector predominantly.  
62. The Committee took note  of all semi -annual reports submitted as well as the statements 
made.   
63. Referring to the Anti -Dumping notification portal, the Chair informed the Committee that the 
Secretariat has been actively exploring and prototyping a similar portal for countervailable duty 
actions.  
4  PRELIMINARY AND FINAL COUNTERVAILING DUTY ACTIONS: NOTIFICATIONS 
(ARTICLE 25.11)  
64. The Chair reported that since the Committee's April 2021 r egular meeting, notifications under 
Article 25.11 of the SCM Agreement with respect to preliminary and final countervailing duty actions 
had been received from Australia, Brazil, Canada, China, the European Union, India, the United 
States, and Viet Nam. Those notifications were listed in documents G/SCM/N/377; 
G/SCM/N/377/Corr .1 and G/SCM/N/377/Corr .2; G/SCM/N/378; G/SCM/N/380; G/SCM/N/381; 
G/SCM/N/382; and G/SCM/N/383.  
65. Brazil  expressed its concerns over review investigations by the United States on cold -rolled 
and hot -rolled steel sheets. According to Brazil , those measures had serious technical flaws which 
caused Brazil to initiate a n ongoing  dispute in DS514 . The programmes in question were not 
actionable subsidies and the export volume of Brazil has been  very low , even below the 
Section  232 quotas. Therefore , they have caused no injury. While the domestic demand has been 
increasing , the production capacity has been decreasing as also explained in the Global Forum on 
Steel Excess Capacity. For these reason s, it was highly unlikely that Brazilian exports could increase 
in such a way to cause injury in the next few years. Brazil also recalled the investigation on 
aluminium alloy by the United States, which was finalized in March 2021, noting that the same 
23 programmes that were analysed were found to be non -actionable. In this respect, Brazil 
requested the United States to apply the same analysis in the ongoing investigations.  
66. In response, the United States  indicated that the investigations mentioned by Brazi l were 
ongoing sunset reviews which have been conducted in an open and transparent manner in 
accordance with its domestic law and international obligations. It also noted that Brazil's and all 
other parties' written comments submitted in the proceedings wo uld be fully considered by 
Commerce.  
67. The Committee took note  of the notifications and statements made.  G/SCM/M/117  
- 10 - 
 5  ARTICLE 27.4 EXTENSIONS OF THE TRANSITION PERIOD FOR THE ELIMINATION OF 
EXPORT SUBSIDIES  
68. The Chair  recalled that Members that had been granted extensions  under Article 27.4 pursuant 
to the procedures in WT/L/691 were required, under paragraph 2(c) of the procedures, to submit 
transparency notifications in respect of each year of the final two -year phase -out period, i.e. , 
calendar years 2014 and 2015. The deadline for the notification pertaining to 2014 was 
30 June 2015. A reminder to this effect had been circulated in document G/SCM/N/290/INF.  
69. Antigua and Barbuda, Belize, Costa Rica, Dominica, Dominican Republic, El Salva dor, 
Guatemala, Jamaica, Jordan, Mauritius, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, and 
Saint Vincent and the Grenadines had submitted these notifications, which had been circulated in 
the G/SCM/N/290 series.  
70. Furthermore, given that 2015 was the final year of the two -year phase -out period pursuant 
to the previously mentioned procedures, the Members with extensions needed to have completed 
the elimination of their export subsidies by 31 December 2015. They also had to provide a final 
transparen cy notification in respect of calendar year 2015 not later than 30 June 2016. A reminder 
concerning that final round of Article 27.4 –related notifications had been circulated in document 
G/SCM/N/299. The  Secretariat circulated a room document indicating th e current status of 
notifications and of actions reported by Members with extensions under Article  27.4.3 
71. To date, 15 of the beneficiary Members out of a total of 19 had submitted their final 
transparency notifications which had been circulated in the G/S CM/N/299 series. The Chair reminded 
other four Members with extensions, namely, Barbados, Fiji, Panama, and Uruguay to submit their 
final transparency notifications as soon as possible. The deadline for the elimination of the export 
subsidies had been more  than five years earlier while for submitting the final notification had been 
almost five years earlier. She emphasized the importance for the system that both the Members 
benefit from extensions complete their compliance with the corresponding substantive  and 
transparency obligations.  
72. New Zealand  noted that this agenda item had been before the Committee for a number of 
years . It also  strongly encouraged those Members to submit their outstanding notifications prior to 
the next meeting of the Committee. New Zealand requested to keep this item on the agenda for the 
fall meeting.  
73. The United States  reiterated that the success of the procedures under Article 27.4 was an 
excellent example illustrating how developed and developing Members could work together to 
resolve problems. The United States urged the remaining four Members to provide their final 
transparency notifications as soon as possible and echoed New Zealand's request to keep this agenda 
item for the next meeting.  
74. Australia  thanked the Secretariat for th e document on the status of transparency notifications 
noting that it was not so clear from the notifications whether those four Members had amended their 
export subsidy programmes. Australia requested the remaining four Members to provide final 
transparen cy notifications clarifying the status of their subsidy programmes.  
75. The Chair  noted that the Committee would revert to that issue at the next meeting.  
76. The Committee took note  of the statements made.  
6  IMPROVING THE TIMELINESS AND COMPLETENESS OF NOTIFICATIONS AND OTHER 
INFORMATION FLOWS ON TRADE MEASURES UNDER THE SCM AGREEMENT  
77. The Chair  recalled that since the request of the Chairman of the Trade Policy Review Body in 
spring 2009, the Committee had been discussing, at formal and informal meetings , "ways to improve 
the timeliness and completeness of notifications and other information flows on trade measures". 
The substance of those discussions was reflected in the minutes of the previous meetings.  
 
3 RD/SCM/36/Rev. 5. G/SCM/M/117  
- 11 - 
  78. The Chair recalled that at Committee's April 2021 meeting a number of Members had indicated 
their willingness to continue discussions on ways to improve timeliness and completeness of 
notification obligations under the SCM Agreement, with the notification of subsidies being the most 
fundamental. In this r egard, there were two topics to cover under this agenda item, (i) the status 
of Members' notifications of subsidies and (ii) the US proposal regarding a written process for 
questions and answers under Articles 25.8 and 25.9 of the SCM Agreement.  
79. Regarding the status of subsidy notifications, the Chair noted that the Secretariat had 
prepared and updated a background note at the request of Members, providing a snapshot of the 
level of compliance with the various notification obligations under the SCM Agreemen t since 1995, 
the most recent of which had been circulated in document G/SCM/W/546/Rev.12. Since that 
document was circulated in March 2021, following Members have submitted their 2021 new and full 
subsidy notifications: Australia; Brazil; Cambodia; Canada ; Chile; China; Costa Rica; Ecuador; 
El Salvador; the European Union; Georgia; Hong Kong, China; Iceland; Israel; Japan; Kazakhstan; 
Republic of Korea; Lao People's Democratic Republic; Liechtenstein; Macao, China; Madagascar; 
Malaysia; Mauritius; Monteneg ro; New Zealand; Norway; the Philippines; Singapore; Chinese Taipei; 
Thailand; Ukraine; the United Kingdom; and the United States.  
80. Despite those submissions, however, compliance with the obligation to notify subsidies 
unfortunately remained significantly low. One -hundred -nine Members have not yet made their 2021 
new and full subsidy notification. Seventy -eight Members have not made their 2019 new and full 
subsidy notification, although the deadline was more than two years earlier. Further, 67 Members 
still have not made their 2017 notifications, which were due more than four years earlier. Many of 
those Members either have never notified or have done so only in the distant past.  
81. Noting that the chronic low compliance with this fundamental transparency obli gation 
constituted a serious problem in the proper functioning of the Agreement, the Chair invited the 
Members that had not yet submitted their 2021 notifications to provide an update to the Committee 
on their progress in preparing those notifications. No such delegation took the floor.  
82. The Chair urged Members that had not yet submitted their notifications to do so and recalled 
that the Secretariat continued to be available for enquiries about compliance with notification 
obligations. The Secretariat had as sisted many Members in the past and Members finding themselves 
unable to comply with their obligations were encouraged to consult the Secretariat. There was a 
range of resources that delegations could draw upon in working to rectify the situation, includin g the 
Secretariat Handbook on Notification Requirements for the SCM  Agreement.  
83. New Zealand  welcomed the notifications received to date but remained concerned with the 
overall status of notifications . It encouraged Members to fulfil their notification oblig ations without 
further delay. Timely and complete notifications were fundamental for transparency and effective 
monitoring. New Zealand acknowledged that compiling notifications could be a resource -intensive 
process and encouraged Members facing difficulti es to seek assistance from the Secretariat. For 
Members who had no subsidy programmes, "nil" notifications were useful to enhance transparency.  
84. The United Kingdom  noted that the notification of subsidies was an integral part of the work 
of the Committee an d essential for the proper functioning of the SCM Agreement. It remained 
concerned with the low levels of compliance with the notification obligations and recognized that 
completing notifications was a resource -intensive exercise which required coordinatio n between 
central and sub -central levels of government. It was also an important exercise for the effective 
functioning of the SCM Agreement. In most cases, the submission and subsequent review of 
notifications was the only way for Members to understand wh at subsidies have been provided and 
assess any trade effects. The United Kingdom also encouraged all Members to take the necessary 
steps to complete their notifications in a timely manner and seek assistance from the Secretariat if 
needed.  
85. Canada  reiterate d the importance of compliance with the notification requirements of the 
SCM Agreement and remained concerned with the status of notifications. It acknowledged that it 
was a resource -intensive undertaking that required coordination between multiple levels of 
government, but also fundamentally important transparency exercise. Canada encouraged Members 
to make their best efforts to fulfil their notification obligations, including by making nil notifications, 
and to seek assistance in their efforts.  G/SCM/M/117  
- 12 - 
 86. Japan  echoed the concerns raised by the Chair and Members noting that transparency and 
notification obligations were fundamental to the WTO system. It also reiterated that all Members 
were required to make their notifications properly within the deadlines in accorda nce with the 
Agreement.  
87. Australia  indicated that it attached considerable importance to the transparency of subsidy 
programmes. It also noted that the low compliance with the notification obligation was of continuing 
concern. It acknowledged the existence of genuine capacity constraints but reiterated its concern 
over the fact that many non -notifying Members had the capacity to provide subsidies. Australia 
invited those Members, who had indicated capacity constraints, to elaborate and specify the nature 
of such concerns so that the Committee could consider how individual Members or the Secretariat 
could provide assistance. According to Australia , the more Members did not notify, the more the 
uncertainty for exporters in being able to compete fairly in international markets which underpinned 
the SCM  Agreement.  
88. The European Union  indicated that two thirds of the Membership had not yet filed their 20 21 
subsidy notifications although the due date was four months earlier. It acknowledged that many 
Members had resource problems which might have caused delays. However, all Members had to 
push themselves as filing the notifications was an obligation , not a  voluntary exercise. The 
notification process was a critical component of the work of the Committee as it enabled Members 
to see the type and level of subsidies granted by their trading partners. The European Union urged 
Members who had not yet submitted t heir notifications to do so without delay.  
89. The United States  echoed the concerns raised by Members and noted that it had found 
Australia's comments particularly useful. It invited Members facing difficulties to explain those 
difficulties and seek help from  the Secretariat or other Members.  
90. With respect to the second topic under this agenda item, the Chair recalled that at the 
Committee's April 2021 regular meeting, a number of Members had indicated their willingness to 
continue discussions on the proposal from the United States regarding procedures for questions and 
answers under Articles 25.8 and 25.9 of the SCM  Agreement.4 
91. The United States  recalled that many years ago it had introduced in its formal proposal that 
written answers to initial questions under Article 25.8 be provided within 60 days and that follow -up 
questions be answered in 30 days. Although the United States was of the view t hat the mandatory 
deadlines were preferable, it recognized the concerns raised by some Members with respect to strict 
deadlines. Therefore, it proposed that Members simply agree d to make their best efforts to submit 
written responses within 60 days and wri tten responses to follow -up questions within 30 days. The 
United States recalled that while the deadlines might not be binding or mandatory in its proposal, a 
Member should respond to a question "as quickly as possible" under Article 25.9.  
92. The United Stat es noted that the proposed approach had generally been well received together 
with some expressed concerns about the need to take into account time for consulting with 
sub-central governments which had been explicitly recognized in the last revision of the  proposal. 
In order to address the concern raised with respect to the last paragraph, namely the question of 
"who would decide that the questions were adequately answered ", the United States had removed 
the word "adequately" from the proposal.  
93. The United S tates would continue to work with Members regarding some remaining concerns. 
It reiterated that there was nothing extraordinary about the proposal because it mirrored the existing 
practice of providing answers to questions on regular notifications and refl ected the practice most 
Members had followed when answering Article  25.8 questions.  
94. China  recalled its position at the previous meetings noting that Article 25.9 neither stipulates 
that Members should submit written replies, nor specifies a deadline for su bmitting answers. The 
requirement for making written answers and setting compulsory deadlines would impose 
newly -added substantial obligations on Members. China also recalled that many questions raised by 
Members pursuant to Article 25.8 had been incorpora ted into the normal questions upon subsidies 
notifications. Therefore, the proposal would not only cause difficulties to the LDC Members but would 
 
4 G/SCM/W/557/Rev. 4. G/SCM/M/117  
- 13 - 
  also pose challenges to many developing Members facing capacity constraints increasing their 
workload and dis tracting their focus on preparing the notifications. China reiterated the importance 
of transparency , expecting that the relevant discussions could be conducted in a pragmatic manner 
and Members would do their best to fulfil their respective transparency o bligations in accordance 
with the relevant provisions of the SCM  Agreement.  
95. India noted that it had already discussed the proposal bilaterally with the United States not to 
fix proposed timelines as firm deadlines but rather as best endeavour objectives. K eeping in view 
the difficulties for developing and least -developed Members facing capacity constraints, India 
suggested revising the timelines on the best endeavour basis for a period of 90 days for initial 
questions and 60 days for follow -up questions.  
96. Canada reiterated its support for the proposal. According to Canada, the subsidy notifications 
and responses to questions from Members should be provided in a timely and complete manner. The 
subsidy notification process along with the information requests co ntemplated under Articles 25.8 
and 25.9 of the SCM Agreement were fundamental to ensuring transparency objectives. Canada 
encourage d constructive discussions between Members to move the proposal forward.  
97. The United Kingdom  welcomed the continued discussion  on the proposal and reiterated its 
support  to it. Timely sharing of information was in the interest of all Members and essential for the 
effective functioning of the SCM Agreement. It thanked Members that had contributed to the 
discussions so far and enco uraged all Members to engage constructively on the proposal.  
98. Australia  support ed the proposal noting that it mirrored current practice within the Committee. 
Article 25.9 did not prevent Members from developing and improving a practice to deal with these 
requests for information. With this proposal , all Members would have improved clarity in the 
Committee's procedures as well as improved transparency and understanding of Members' subsidy 
programmes. The proposal also gave best endeavours guidance on timely replies. At the heart of 
the proposal was the requirement to have a written reply so that the information provided could be 
properly understood by other Members. The revisions made to the proposal addressed the concerns 
expressed by some Members acknowledg ing time pressures relating to consultation with sub -central 
governments. Australia requested  that this item remain on the agenda for further discussion at the 
next meeting.  
99. The European Union  referred to its previous statements in support of the proposal  which 
presented practical means and response to address some of the shortcomings in the notifications. 
This pragmatic approach would enhance transparency provisions in the SCM Agreement. It would 
fill in the gaps in the notifications which were not made i n a complete manner. The European Union 
reiterated its support for the proposal encouraging other Members to do the same .  
100.  Recalling its statements in previous meetings, Brazil  reiterated its support for the proposal.  
101.  The Russian Federation  remained conce rned with the proposal which needed amendments. 
The time needed to prepare responses should  depend on the complexity of the questions posed and 
the number of authorities engaged in the preparation of the responses in addition to many other 
factors. Therefo re, establishing universal deadlines would hardly be possible and the appropriate 
time for the preparation of the responses would differ on a case -by-case basis. Sixty and thirty -day 
periods might be too short to prepare high quality responses. Although th e proposed periods would 
not be mandatory , they should be brought to at least 90 and 60 days in a way not to constrain the 
ability to consult with sub -central governments. The Russian Federation also stated that any 
timeframe for the preparation of the rep lies should neither be binding nor mandatory. Noting its 
support to the efforts for increased transparency , it remained ready for further discussion.  
102.  The United States  welcomed the support expressed by Members. It would seriously consider 
India's proposal to move the best -effort deadlines to 90 and 60 days and hoped to continue the 
discussion with the Russian Federation to find a satisfactory solution.  
103.  The Chair  stated  that it appeared that Members wished to continue discussions on those issues 
at the next regular meeting of the Committee.  
104.  The Committee took note  of the statements made.  G/SCM/M/117  
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 7  ARTICLE 25.8 QUESTIONS TO CHINA ON POTENTIAL STEEL SUBSIDIES – ITEM 
REQUESTED BY THE  EUROPEAN UNION AND THE UNITED STATES  
105.  The United States  recalled that it had been concerned with the lack of transparency of China's 
industrial subsidy regime since 2001. To prompt a more fulsome disclosure of China 's subsidy 
programs, the United States ha d asked questions to China under the old Transitional Review 
Mechanism, under the formal provisions of Article 25.8, under the normal Committee procedures of 
reviewing Members ' subsidy notifications and also counter -notified subsidy measures under 
Article  25.10. Since steel was a vital sector of the United States economy, it had raised questions 
about, and counter -notified numerous possible steel subsidy measures in China. Notwithstanding its 
claim to the contrary at prior meetings, China had neither notifi ed the vast majority of its steel 
subsidy programmes over the last 20 years of its WTO Membership nor meaningfully addressed the 
Article 25 .8 questions the United States and the European Union asked about government support 
specifically listed in the annua l reports of several Chinese steel companies under the heading of 
"government subsidies " or "government grants ". 
 
106.  According to the United States, after having this item on the agenda for several years, no 
information would be provided by China on those sub sidies and grants , which was unfortunate and 
represented a failure by China to constructively engage in the transparency exercise established 
under Article 25.8 of the SCM Agreement. This exercise had also demonstrated the inability of 
Members to obtain ev en the most elementary information concerning China 's industrial subsidy 
policies, and thereby, undermining the transparency and monitoring principles fundamental to the 
proper functioning of the SCM Agreement. The United States noted that it would not tak e up the 
Committee's time any further on this matter.  
107.  The European Union  noted that it had expected to receive information from China about 
government support given to several Chinese steel companies in the form of subsidies and/or grants 
listed  in many of  the steel companies' annual reports. Unfortunately , that information had not been 
provided and the evidence suggested that no satisfactory answer would be given to the questions 
posed by the European Union and the United States. Although China ha d repeate dly reiterated its 
commitment to full transparency under the SCM Agreement, the experience under this agenda item 
had not supported such a practice. For that reason, the European Union was of the view that it was 
time to close this chapter on that particul ar agenda item expressing its frustration over returning to 
such issues in every meeting with an effort to get information that should have been provided under 
Article 25 of the SCM Agreement.  
108.  The United Kingdom  shared the concerns raised by the United Sta tes and the European Union 
noting that addressing such concerns was essential to ensure transparency and the functioning of 
the SCM Agreement.  
109.  China  reiterated that the annual reports of the six steel enterprises had been sent to the 
competent local govern ments for further verifications and the verified subsidies relating to steel had 
been included in China's 2017 -2018 local subsidy notification submitted on 30 June 2019. China also 
noted that its latest sub -central level notification for the period 2019 -2020 also covered those 
recently verified subsidy programmes and asked Members to refer to its latest subsidy notification.  
110.  While the annual report was formulated upon supporting programmes, China's notification has 
been based on policies. In this case, different programmes sometimes might come from the same 
policy and there was no one -to-one correlation between these two. Even with the same program, 
there could be duplication of statistics among different subsidiaries. According to the Agreement, 
however , not every programme released in the annual report shall be notified and not every 
programme disclosed in the enterprises' annual reports corresponded to the ones in the notifications.  
111.  The Committee took note  of the statements made.  
8  SUBSIDIES AND OVERCAPA CITY – ITEM REQUESTED BY CANADA, THE EUROPEAN 
UNION, JAPAN, AND THE UNITED STATES  
112.  The United States  recalled that the co -sponsors of this agenda item had highlighted the role 
of subsidies in creating global overcapacity, which was harmful for the workers, industries, and 
growth of WTO Members. The co -sponsors had brought to the Committee 's attention two reports on G/SCM/M/117  
- 15 - 
  government support by the Organization for Economic Cooperation and Development (OECD) on 
aluminium and semiconductors, as well as a horizontal study on below -market finance and its impact 
on capacity and prices. However, the problems posed by massive subsidization and overcapacity 
existed across numerous sectors and had the potential to harm additional sectors if Members' 
industrial po licies and market -share targeting were realized.  
113.  According to the United States, beyond subsidies leading to overcapacity, price suppression 
and lost revenue, it was also important to consider the impact of massive subsidization on the 
innovation landscape ; specifically, how certain Members ' subsidies and industrial targeting policies 
disincentivize d innovation by market -oriented firms. When a government intervene d in an economy 
through subsidies and engage d in other harmful trade practices leading to overc apacity and 
below -market prices, competing industries often los t revenue and thus, their full ability to invest in 
R&D and to innovate.  
114.  The United States referred to studies concluding that in the United States accelerating import 
competition from China du ring the 2000s, largely fuelled by subsidies, could explain roughly 40% of 
the slowdown in patents sought in the period 1999 –2007 relative to 1991 –1999. It also quoted an 
academic who noted that "[i]nnovation incentives are low if ex -post competition is so  intense that 
even successful innovators cannot earn profits sufficient to allow a reasonable risk -adjusted rate of 
return on their R&D cost. " 
115.  For example, in the solar sector, research by the Information Technology Innovation 
Foundation (ITIF) showed that  "[b]ecause of massively subsidized Chinese solar producers, many 
foreign firms could not compete and either went out of business or shrank in size, and these more 
innovative firms applied for fewer patents. By 2015 this number of patent applications was d own 
over 75 % from its global peak. " Hundreds of solar -panel companies in developed economies went 
out business because of Chinese subsidy and industrial policies. ITIF concluded that "the prospect 
of shifting to better, cheaper PV products with the potenti al for even greater emissions reductions 
over the long run has been deferred or even lost. " 
116.  In semiconductors, ITIF concluded that Chinese chip sales largely depended on subsidies and 
other support from the Chinese Government with each sale reducing the pa ce of global 
semiconductor innovation by taking market share and revenue away from more -innovative 
non-Chinese firms that have received far less support. According to ITIF, without China's  innovation 
mercantilist policies in the semiconductor industry, the re would be more than 5,000 additional 
patents in the United States  annually than there were currently.  
117.  While it might be said that there was a role for government in encouraging and even 
subsidizing innovation, this could be true if countries followed int ernational best practices such as 
by supporting basic, early -stage research; funding research universities and education in science, 
technology, engineering, and mathematics allowing open markets and protecting intellectual 
property. Those best practice po licies, however, were often overwhelmed by the negative impact on 
innovation from industrial subsidies and other harmful trading practices used to capture market 
share on zero -sum terms.  
118.  Japan  stated that overcapacity continued to be at high levels in the steel industry and cyclical 
weakness in demand could have a significant negative impact on the international markets. At the 
ministerial meeting of the Global Forum on Steel Excess Capacity ("GFSEC") held in October 2021,  
the global steel industry had poin ted out the importance of continuing to address structural 
overcapacity, as well as the importance of a fair steel market, concerns about market -distorting 
government support, and warnings about protectionism. In addition, the GFSEC Ministerial Report 
mentioned collaboration with the WTO to discipline subsidies that lead to overcapacity. Japan was 
of the view that the expectations were high to ensure transparency in subsidies and to create 
discipline on market -distorting industrial subsidies.  
119.  While investme nt in the development of innovative technologies was essential to move toward 
a low-carbon society, for the steel industry for example, the existence of overcapacity was a serious 
problem that would reduce the profitability of the industry and would depriv e it of necessary 
investment resources. To promote a low -carbon society, it was necessary to remove 
market -distorting industrial subsidies and prevent new investments that were not based on market 
principles.  G/SCM/M/117  
- 16 - 
 120.  Japan also referred to a study by the Internati onal Aluminium Association which emphasized 
the need for investment to reduce industry GHG emissions. Such investments should not be hindered 
by reduced profitability due to overcapacity. According to Japan, with support being considered and 
deployed in va rious countries for advanced industries, overcapacity challenges would rise in sectors 
other than steel.  
121.  Japan noted that ensuring a level playing field has become even more necessary and important 
and it would like to continue to discuss the issue in the Committee, including improving the 
transparency of subsidies, so as not to create overcapacity in the future.  
122.  The European Union  recalled the G20 Summit in Hangzhou in September 2016 where the 
leaders highlighted the role of subsidies and other types of go vernment support in creating excess 
capacity. According to the European Union,  this was a crucial issue which Members should continue 
to examine. Subsidies might contribute to overcapacity by allowing investment s that were not 
commercially viable. They might lead to more capacity in sectors where there was no sufficient 
demand to ab sorb the additional volumes of production, thereby creating overcapacity. While many 
examples of negative effects of overcapacity had been discussed, negative environmental and 
climate effects of such subsidies had received less attention.  
123.  First, subsidies  generating overcapacity might lead to inefficiencies. Excess capacity would 
consume natural resources of raw materials and subsidized producers could afford to use inefficient 
production technologies and would have fewer incentives to innovate and improve  their processes 
overtime.  
124.  Second, overcapacities might be built in jurisdictions with low environmental and climate 
standards as a result of which subsidized production would generate pollution and higher GHG 
emissions. This effect would be worsened by d isplacement of production with excess capacity 
creating a risk of carbon leakage which would cancel out climate efforts. According to the 
European  Union , Members needed subsidy policies that would do the opposite. Members had to 
remove market distorting in dustrial subsidies that led to overcapacity and excess emission to combat 
climate change. Environmental cost of overcapacity was one of the shortcomings of the current 
international subsidy rules which should better recognize the environmental impacts of s ubsidies 
and combat harmful overcapacities.  
125.  Canada  remained concerned with the contribution of government interventions such as 
subsidies creating global excess capacity in several sectors. It recalled that the co -sponsors of this 
agenda item had highlight ed several important findings by the OECD with respect to the prevalence 
of government support in various sectors as well as its trade impacts. Industrial subsidies in sectors 
with excess capacity, however, could also have important negative impacts on inn ovation , creating 
disincentives to innovate. Massive subsidization across the value chain in the most carbon -intensive 
sectors would enable producers to continue their operations with current production technologies , 
discouraging development of new technol ogies. As a study by the International Aluminium Institute 
has shown, one of the best ways to reduce the carbon footprint of aluminium production was to 
reduce carbon intensive electricity use by the sector and to improve waste -reducing recycling 
systems. However, currently the government support has been contributing to continued reliance of 
aluminium producers in certain countries on carbon intensive electricity resources. In addition, by 
maintaining artificially low aluminium production costs, government  support has been discouraging 
research and investment in energy saving and waste -reducing recycling technologies. Similar 
harmful dynamics could be observed in other sectors where government intervention remained of a 
significant concern, such as solar pa nels. 
126.  Canada also reiterated that the GFSEC continued to provide a useful forum to discuss support 
to steel industry , noting the importance of participation of all major steel -producing economies in 
its work to maintain transparency.  
127.  The United Kingdom  welcomed the continued discussion on this issue and shared the concerns 
raised by other Members. Unjustifiable subsidies had the potential to distort markets and stall 
competition including by causing overcapacity across important economic sectors such as 
semiconductors, steel and aluminium. This would be bad not only for competition but also for the 
environment. The United Kingdom would continue to work productively with Members on efforts to G/SCM/M/117  
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  address this issue including at the GFSEC. It also encouraged all M embers to engage in those crucial 
discussions.  
128.  Brazil  acknowledged the need to curb subsidies causing overcapacity both in the industrial 
and agricultural sectors. It commended the work carried out by the GFSEC and its important role as 
a transparency and coordination mechanism addressing overcapacity in the steel sector. There had 
been significant advances in establishing guiding principles and recommendations to curb excess 
capacity in that sector. Although the market conditions had been improving in the aftermath of the 
COVID -19 pandemic, the structural problem of overcapacity remained  reaffirming the need to 
continue the work in the GFSEC and to bring it back to its original composition.  
129.  China  reiterated that the issue of overcapacity was not in the term s of reference of the 
Committee , and it was not an appropriate forum for the discussion of that issue. To take such topics 
into the agenda was not helpful for an overall and exact understanding of the problem. According to 
China, overcapacity was a univers al, cyclical , and structural problem which was a common challenge 
facing the whole world. The current overcapacity in steel industry was caused by the global economic 
recession resulting from the 2008 international financial crisis and the consequent decre ase in 
demand for steel.  A few Members  had attempted to attribute the current overcapacity to China 's 
industrial subsidies and support measures, claiming that China had  distorted the market. These 
claims  were inconsistent with the facts.  Since 2015, China had been carrying out the supply -side 
structural reform, producing remarkable progress in over -capacity reduction. For example, between 
2018 and 2020, China had reduced over 150 million tons of crude steel production capacity and the 
utilization rate had returned to an appropriate range of over 80%. The capacity utilization rate in 
the aluminium industry was above 85%. The net export of China 's crude steel was 16.72 million  tons 
the previous year accounting for only 1.6% of China 's total crude steel output and China 's net steel 
export took up only 4.2% of the global export. For the aluminium industry , China had exported 
4.6 million tons of aluminium the previous year, down by 10%, accounting for only 8% of China 's 
aluminium total output.  China would maintain controls over new capacity and was committed to 
establishing and improving a long -term mechanism for resolving excess capacity through 
marketization and rule of law.  
130.  The Russian Federation  reiterated that excess capacity in the world st eel industry was a global 
problem requiring a collective response. Subsidies were not the only problem to be addressed and 
sufficient attention should be paid to other factors contributing to overcapacity. Application of less 
trade -restrictive measures wou ld contribute to establishing a level playing field and be beneficial for 
all parties. Steel was a vital material for any economy and the development of a sustainable 
international steel industry was essential for any jurisdiction. The efforts to tackle wi th the excess 
capacity should continue and best practices should be used. In this context, steel investment 
decisions supported by government authorities in some jurisdictions should stem from 
understanding the medium - and long -term risks and contingencies . The developing Members need ed 
to take into account certain long -term risks associated with overcapacity as well as the global 
environmental challenges to avoid costly mistakes made previously by other countries. The Russian 
Federation  recalled that earli er that year it had presented some ideas regarding the special focus of 
the GFSEC on prevention of further expansion of excess steel capacities. The analysis of past 
mistakes made by developed Members should be shared with others to avoid new overcapacitie s 
and prevent exacerbation of the situation of the global market. In addition, it has become more 
important to take into account the impacts of COVID -19 on the global steel market.  
131.  Australia  referred to the ministerial meeting of the GFSEC that was held in October 2021 where 
the participants had reaffirmed their commitment to support market -driven restructuring in their 
steel industries and in ways that would not contribute to excess capacity. The Global Forum 
continued to play a constructive role in  promoting a market -based approach in the international steel 
sector,  including through greater transparency. Australia noted that the Ministerial Report by the 
GFSEC had highlighted the role of innovation in addressing the environmental impact of the stee l 
sector , noting that investment in technologies to lower the sector's environmental impact required 
a level playing field. According to Australia, this showed the need for new rules to limit market -
distorting subsidies while encouraging innovation technol ogies in ways which would not subsequently 
create spiralling excess capacity. For this reason, Australia welcomed the commitment by the GFSEC 
to work closely with the WTO on excess capacity.  
132.  Australia also referred to a recent work by the OECD , which  was looking at the role of support 
for energy inputs , and  a sectoral study on rolling railway stock. According to Australia, keeping G/SCM/M/117  
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 apprised of this work and sharing the results of the OECD 's analysis would be valuable for the 
Committee. Core to that study was  the need for transparency in policy settings in markets in the 
context of excess capacity, in capacity development in markets and in support measures affecting 
sectors where overcapacity has featured.  
133.  Finally, Australia considered this as an appropriate and valuable area of discussion by Members 
consistent with the competency and scope of responsibilities of the Committee.  
134.  Chinese Taipei  referred to the latest Ministerial Report of the GFSEC particularly with respect 
to the policy recommendati on in addressing the challenge of overcapacity in the steel sector. It 
recognized the pressing need of supporting the steel industry 's transition towards a low carbon 
emission technology aiming at achieving environmental goal and sustainable prosperity. En suring 
government policies that incentivize d and promote d significant investment in future innovative 
technologies would be vital in this regard. The report also noted that inappropriate government 
subsidy measures might go in a different direction and lea d to a decrease in resources for supporting 
innovation efforts. Chinese Taipei was interested in learning more about the potential negative 
impact of distorted government measures from this perspective and welcomed the continued 
discussion on this subject with a view to further understand the correlation between subsidy 
measures and global excess capacity and how Members could address this issue collectively.  
135.  The Committee took note  of the statements.  
9  SUBSIDY TRANSPARENCY AND CHINA'S PUBLICATION AND INQUIRY  POINT 
OBLIGATIONS UNDER CHINA'S PROTOCOL OF ACCESSION – ITEM REQUESTED BY 
AUSTRALIA, CANADA, THE EUROPEAN UNION, JAPAN, THE UNITED KINGDOM, AND THE 
UNITED STATES  
136.  The United States  reiterated that together with other Members, it had numerous concerns 
with respect to the transparency of China's industrial subsidy regime, even after 20 years of its 
accession.  
137.  The United States recalled that in China's Protocol of Accession, China had agreed to publish 
all trade -related measures in a single journal, which Chi na had designated as the MOFCOM Gazette. 
Often – if not normally – however, subsidy measures – especially normative measures and 
sub-central measures – were not published in the MOFCOM Gazette. In addition, sometimes those 
measures were nowhere to be found . It had also agreed to establish or designate an "enquiry point 
where, upon request of any individual, enterprise, or WTO Member all information relating to the 
measures required to be published may be obtained".  
138.  The United States had come across referen ces to five legal measures, two relating to fuel 
subsidies for fishermen, one relating to the development of China's distant water fishing fleet, and 
two relating to the semiconductor industry. Since it could not find these measures in the MOFCOM 
Gazette, or anywhere else, the United States  had submitted a request to China's WTO inquiry point 
in April 2020.  
139.  Under China's Protocol of Accession, China had agreed that "replies to requests for information 
shall generally be provided within 30 days after receipt  of a request. In exceptional cases, replies 
may be provided within 45 days after receipt of a request. Notice of the delay and the reasons 
therefore shall be provided in writing to the interested party." Although the United States had 
submitted its initia l request in April  2020, no formal response had been provided.  
140.  Additionally, in September of 2020, a Ministry of Commerce representative contacted the 
United States  Embassy and stated that China would not be providing copies of any of the requested 
measur es because they were either soon to be replaced by new measures or not relevant to China 's 
WTO commitments. According to the United States, China 's handling of its request would be 
inadequate and contrary to China 's WTO commitments, because copies of the r equested measures 
should have been provided. Regarding the measures soon to be replaced, in the United States' view, 
China 's Protocol of Accession to the WTO contained no provision for China to withhold measures that 
might be superseded at some point in th e future. And when new measures came out, it was nearly 
a year after the United States ' initial request and well beyond the 45 -day response time mandated 
in the Protocol of Accession. Second, on the measures that would not be relevant to China's WTO G/SCM/M/117  
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  commit ments, the United States stressed that the requested measures clearly appeared to address 
policies and guidelines relating to the development of China 's fisheries and semiconductor sectors 
and therefore, clearly appeared to satisfy the standard of "pertain ing to or affecting trade in goods " 
in paragraph 2(c) of China 's Protocol of Accession to the WTO.  
141.  The United States also noted that none of the requested measures nor the two new fishery 
support measures appeared to have been published in China 's designa ted official journal, the 
MOFCOM Gazette, as required by paragraph 2(c) of China 's Protocol of Accession.  
142.  The United States stated that  China's Protocol of Accession contained transparency obligations 
because Members had been concerned in part with the la ck of transparency of China's industrial 
subsidy regime. B eyond the legal technicalities, it was hard to understand why China was refusing 
to make public these measures. Moreover, it also stated that, contrarily to China's statement that it 
took its WTO tr ansparency obligations very seriously, the United States' experience in making a 
simple request to China's inquiry point seemed to demonstrate otherwise.  
143.  The European Union  recalled that China's obligation on transparency would not only stem from 
Article 25.8 of the SCM Agreement, but also from its Protocol of Accession to the WTO. China had 
agreed to fulfil these obligations, including the enquiry point mechanism and the publication of 
measures in the MOFCOM gazette. However, if China did not provide answ ers to the requests for 
information, these obligations would not be met. The European Union urged China to back its 
commitment to transparency by practical actions and to provide answers.  
144.  Canada  echoed the United States' concerns and recalled that it was important that all Members 
provided notifications in accordance with WTO requirements. When China acceded to the WTO in 
2001, it agreed not only to publish its measures but also to respond the enquiries related to those 
measures. This would be critical to the successful functioning of the rules -based Multilateral Trade 
System.  
145.  The United Kingdom  reiterated that transparency was central to the proper functioning of the 
WTO. It was vital that all Members took all steps necessary to fulfil their obligations, including any 
Member -specific commitment in a timely manner.  
146.  Japan  noted that the notification obligation and transparency were one of the most important 
foundations of the WTO system and complying with them would benefit all Members. If transparency 
in the expenditure of subsidies was not ensured, grant of distortive subsid ies would be encouraged, 
which might lead to challenges such as overcapacity.  
147.  Regarding China's subsidies, Japan noted that various Members had expressed concerns about 
transparency and  the possibility of non -notification. Japan then requested China to ensure 
transparency and compliance with the notification obligation, especially about the expenditure of 
subsidies and to ensure the effectiveness of mechanisms that contributed to increase transparency, 
by fulfilling its transparency obligations agreed upon in its Protocol of Accession.  
148.  Australia  stated that it was co -sponsoring this item as it sought further details from these 
discussions since the previous Committee meeting. Austr alia attached considerable importance to 
the WTO notification and transparency obligations. Transparency remained critical to the proper 
functioning of the WTO and underpinned the S CM Agreement, as it created certainty for all exporters 
in being able to co mpete fairly in international markets. At the previous Committee meeting, China 
referred to its publication of an official gazette but did not elaborate on the inquiry point that it  was 
obliged to establish under its Protocol of Accession. Australia reques ted China to clarify the 
mechanism and the procedures it had  established in order for WTO Members to avail themselves of 
this inquiry point. Australia questioned (i) whether  the request to China had to be lodged via 
Members ' respective Embassies, (ii) whether this required a specific request format and (iii) whether  
there was a specific website address.  
149.  China  noted that its Ministry of Commerce published, annually, 80 issues of China Foreign 
Trade and Economic Cooperation Gazette (the official journal dedi cated to the publication of trade 
policies). The Gazette could be subscribed through mail and was published on the website of 
MOFCOM, with over 3.9 million page views annually. China also stated that it had always paid high 
attention to abiding by the WTO rules and fulfilling its obligations. Regarding the transparency G/SCM/M/117  
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 obligation of the enquiry point, as required by paragraph 2( c)3 of its Protocol on the Accession, 
China had established the Bureau of WTO Notification and Enquiry as the enquiry point to earn estly 
fulfil the Chinese government's transparency obligation under the WTO framework. According to 
China, it had responded to the questions raised by the United States  as promised.  
150.  The United States  asked China whether  it had the intention to provide the five legal measures 
requested through the inquiry point.  
151.  China  noted that in the previous week it had accomplished its Trade Policy Review exercise 
and that it had submitted written replies to questions raised by Members, including the United 
States. China asked the United States to refer to these written replies on the specific matter of 
transparency of China's gazette.  
152.  The United States  stressed that it wanted to know for sure whether China would provide it 
with the five legal measures requested.  
153.  China  stated that it would take note and study the issue after the me eting.  
154.  The Committee took note  of the statements made.  
10  PROPOSED AMENDMENT TO PROCEDURES FOR REVIEW OF NEW AND FULL SUBSIDY 
NOTIFICATIONS – ITEM REQUESTED BY CANADA, THE EUROPEAN UNION, JAPAN, THE 
UNITED KINGDOM, AND THE UNITED STATES  
155.  The United States  recalled that in 2005 the SCM Committee had agreed upon a procedure for 
the review of Members ' subsidy notifications which would continue to be followed for the review of 
Members ' 2021 New and Full Subsidy Notifications. This was a straight -forward Committee document 
that established a written question and written answer process to occur within a specific timeframe.  
156.  For many years, in the normal course of the Committee 's review of notifications, Members 
have asked about programs not included in the notificati on being reviewed . Responding to such 
questions has become part of the routine question and answer process for subsidy notifications 
aiding  in the overall transparency of Members ' subsidy regimes. Only one Member reserved the right 
not to answer questions on programs not included in its notification.  
157.  To clarify the Committee 's procedures, the Unites States proposed a n amendment that would 
require all Members to provide written answers to all written questions posed, including questions 
regarding specific su bsidies not included in a Member 's notification. The only substantive change 
was the one bolded sentence in the third paragraph – all other changes would only be to change the 
dates such that the amended process would begin with the review of the 2023 new and full subsidy 
notifications.  
158.  According to the United States,  it was a simple amendment that nearly all Members have been 
following since the very beginning. Its adoption would encourage a degree of transparency that the 
drafters of the Agreement had assumed would exist in the normal course of the Committee 's review, 
even in the absence of a written obligation . 
159.  The European Union  recalled that it had expressed concerns at previous meetings about the 
approach by some Members that questions regarding the s ubsidy notification should focus only on 
the particular subsidies already mentioned  in the notification . The European Union stated that this 
approach undermined the effectiveness of the review process and hindered Members from achieving 
fully understanding  of all the subsidies being granted. The process of posing questions in writing was 
not to highlight shortcomings of Members in subsidy notifications but rather to complete the picture 
where the information appeared to be lacking. Over the years, the Europ ean Union has made a 
number of supplementary notification of subsidies in response to questions from other Members 
regarding subsidy programmes that were overlooked in the notification process. This has helped the 
European Union to achieve greater and impr oved transparency. The European Union stated that the 
proposal presented by the United States was important, as the one discussed under agenda item 6, 
to further enhance the transparency of subsidy notification and to improve the work of the 
SCM Committee.  The European Union encouraged Members to support the proposal.  G/SCM/M/117  
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  160.  Canada  stated that the subsidies notification process was a fundamentally important 
transparency exercise. This included the written question and answer process. According to Canada, 
without i nformation on subsidy measures being made available as part of a Member's subsidy 
notification or a response to questions posed on that notification, it would be impossible for Members 
to assess the subsidies' possible impacts on trade and to exercise thei r right in respect of the 
implementation and enforcement of such measures. This would significantly undermin e the 
effectiveness of the SCM Agreement and the predictability of the rules -based trading system. Canada 
stated that it strongly supported the prop osal, which clarified that Members were expected to provide 
written answers to all written questions posed to them, including questions regarding specific subsidy 
measures not included in the notification. In Canada's view, this change formalized the pract ice that 
many Members already respected and would help to enhance transparency by promoting a 
consistent practice responding to Members' question on subsidy notifications.  
161.  Japan  noted that timely submission of complete notification with all necessary info rmation was 
an agreed -upon obligation of all Members. If un -notified subsidies were not subject to the review by 
the Committee due to incomplete notification, it would seriously undermine the fundamental 
obligation under the Agreement that stipulated the n otification of all specific subsidies. According to 
Japan, transparency would be enhanced if information on un -notified subsidies was shared in writing. 
Japan looked forward to the support of Members for this proposal.  
162.  The United Kingdom  noted that the rev iew of notifications was fundamental for the work of 
the Committee and the proper functioning of the SCM Agreement. The ability of all Members to ask 
questions and to receive timely responses in writing was an essential component of ensuring 
transparency. The United Kingdom encouraged all Members to support the proposal.  
163.  Australia  noted that it considered it was timely and useful to consider the procedures for 
submission and review of the 2023 new and full subsidy notifications. It added that it was incumb ent 
on Members, as the Committee, to agree on how the Committee would carry out its functions ; the 
review of Members' subsidy notification was the core business of the Committee. In terms of the 
proposal, Australia showed support to the requirement of prov iding written answers to written 
questions, which reflected the established practice of the Committee. According to Australia, the 
written procedure was to ensure that the replies were fully understandable to the Member posing 
questions. Indeed, it was ope n to a Member to pose additional written questions if the replies were 
incomplete or unclear.  
164.  Australia  expressed  support to posing questions on all subsidy programs including specific 
ones that were not included in the notification of the subsidizing Mem ber, which has also reflected 
the practice of the Committee, since 1995. This has occurred in Members' review of Australia's 
subsidy notifications on some occasions.  
165.   Australia saw this as intrinsically part of the review function of the Committee and ref lected 
Members ' interest in subsidy programs. This also provided an opportunity for the subsidizing Member 
to clarify whether the specific subsidy program existed and if so, the details of the program.  
166.  New Zealand  noted that it was reviewing the proposal positively, being consistent with the 
spirit of the existing transparency obligations and a useful contribution to and effective monitoring 
function. It stated that it would discuss it with delegations in the coming months.  
167.  The Russian Federation  noted th at it needed additional time to consider the proposal 
thoroughly, but that it raised some questions and doubts. The Russian Federation argued that 
according to Article 25.8 of the SCM Agreement, any Member m ight make a written request at any 
time for infor mation on the nature and extension of any subsidy granted or maintained by other 
Member. Article 25.9 of the SCM Agreement prescribed to provide the requested information as 
quickly as possible and in a comprehensive manner and, upon request, to provide ad ditional 
information to the requesting Member. Given that these rights were included in the SCM Agreement 
and m ight be exercised at any time, it was unclear why should there be a need to repeat them in 
the proposed amendment. Second, the proposal suggested  that written answers should be provided 
to all written questions posed, including questions regarding specific subsidies not included in the 
notification. The Russian Federation was of the view that this part of the proposal was puzzling. 
Article 25.2 of the SCM Agreement prescribed to notify all specific subsidies. The language "specific 
subsidies not included in the notification" might suggest that there could  be some specific subsidies G/SCM/M/117  
- 22 - 
 which may be not notified. This suggestion would run counter to Arti cle 25.2 of the SCM Agreement. 
Thus, the Russian Federation noted that it seemed odd to introduce a language to the procedure 
that would contradict the SCM Agreement. The Russian Federation would consider the proposal 
further in detail and might have furth er questions.  
168.  Chinese Taipei  stated that it had always been supportive in promoting the transparency and 
efforts of improving Member 's notification compliance according to the relevant WTO agreements. 
Chinese Taipei argued that in this Committee, it attach ed great value to the exercise of the review 
process on Members ' subsidy notifications and it was of the view that any pertinent questions posed 
by the interested Members needed to be properly addressed. Chinese Taipei stated that while still 
reviewing the  proposal, it was willing to work with Members on how to tackle the current information 
gap illustrated by the proponents.  
169.  The Chair  noted that while some Members were in favour of the proposal, some others had 
expressed their concerns or indicated that th ey needed more time to consider the proposal. She 
suggested that the co -sponsors continue to discuss the proposal with other Members until the next 
meeting of the Committee and to inscribe this item on the agenda of that meeting if they so wish.  
170.  The Commit tee took note  of the statements made.  
11  OTHER BUSINESS  
171.  No issues were raised under this agenda item.  
12  DATE OF NEXT REGULAR MEETING  
172.  The next regular meeting of the Committee would be held in the week of 25 April 2022 . 
13  ANNUAL REPORT OF THE COMMITTEE ON SUBSIDIES AND COUNTERVAILING 
MEASURES TO THE COUNCIL FOR TRADE IN GOODS (ARTICLE 32.7)  
173.  The Committee adopted its 2021 Annual Report to the Council for Trade in Goods.  
 
__________  