The Committee reviewed five notifications of countervailing duty legislation of the following members: Brazil, Ecuador, Japan, Kuwait and Togo. At the special meeting held before the regular meeting, the Committee reviewed 2011 new and full subsidy notifications by eight members (Armenia, Colombia, Croatia, Cuba, Ecuador, Mexico, Qatar and Hong Kong, China).
The Chair, Mr Andreas Krallmann (Germany), expressed serious concern about the state of notifications in the Committee. He said that 73 members have not yet made their 2009 notifications, and only 36 have submitted their 2011 notifications. He said he would be asking the delegations concerned to explain why they have so far failed to submit their subsidy notifications.
US requests to China and India
The United States, expressing concern about inadequate notification of subsidy programmes by China and India, respectively, submitted separate counter-notifications against these two countries, under Article 25.10 of the Subsidies Agreement.
The United States said its counter notification listed 200 subsidy programmes by China, adding that 190 of these are still not notified despite the recent notification by China. It said half of the 200 programmes were by sub-central governments. Canada, Japan, EU, Turkey, Australia, New Zealand and Norway shared the US concerns.
China said the US paper showed misunderstanding of China’s subsidies. It said subsidy notification posed a great challenge to developing countries, but that it would continue its work and incorporate local government programmes.
Regarding India, the United States said it had listed 50 subsidy programmes that had not been notified to the Committee. It also said that India’s subsidies on textiles and apparel should be phased out. Japan, Canada, Turkey, the European Union, Australia and Norway urged India to submit full subsidy notifications.
India said it was carefully studying the US paper with the government agencies concerned. It believed that many of the subsidies listed by the United States do not have to be notified under the Subsidies Agreement.
The Committee reviewed semi-annual reports of countervailing actions for the first half of 2011 submitted by six members (Australia, Canada, China, European Union, Mexico and the United States).
China expressed concern that the US countervailing measures on aluminium extrusions and on certain steel wheels from China represented “double remedies” (anti-dumping and countervailing actions at the same time) that violated previous Appellate Body rulings. It also complained that the US countervailing investigation on high pressure steel cylinders had selected only one Chinese company as respondent. China also criticized what it said were new US certification requirements in countervailing investigations, and the US administrative review on citric acid.
The US defended its countervailing duty investigations as consistent with the Subsidies Agreement.
Extension of transition period for developing countries
The Committee reviewed reports from the 19 developing countries that have been granted transition periods for the elimination of their export subsidy programmes, and decided to extend the transition period until the end of 2012.
The beneficiary countries are Antigua and Barbuda, Barbados, Belize, Costa Rica, Dominica, Dominican Republic, El Salvador, Fiji, Grenada, Guatemala, Jamaica, Jordan, Mauritius, Panama, Papua New Guinea, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, and Uruguay.
Transitional review of China
The Committee carried out the transitional review of China’s subsidies regime. The United States said China has made many impressive steps to reform its economy, but expressed concern that it still pursued an industrial policy in which subsidies are widely used to protect domestic industry. It said China has an opaque subsidies regime, and that the US had had to file counter-notification on China’s unreported subsidy programmes. Canada expressed concerns about China’s subsidies in the iron and steel sector. Japan urged more transparency, and welcomed China’s recent subsidy notification. Mexico, the European Union and Norway shared the US concerns.
China said that during the past ten years, it had made continuous and persistent efforts to meet its WTO commitments. It said that although it is the number one target of countervailing measures, it had only initiated one countervailing case. On transparency, China said it had made tremendous efforts, starting from scratch, to gather information on subsidies. It had recently submitted a second subsidies notification, covering the period until 2008, and promised to accelerate work in including local government subsidies in its next notification.
The United States expressed concern that India has so far taken no concrete action regarding the phasing out of its subsidies on textiles and apparel, noting that Secretariat calculation had found India to be export competitive in this sector and therefore, under the Agreement, should have started phasing out its subsidies. The United States said it was disturbed by press reports that India is providing new incentives in this area. Turkey shared the US concern, adding that India’s phase-out should have begun in 2007, when India became export competitive in those products. Turkey said India’s subsidies are creating unfair competition to Turkish producers.India said the Committee should first come to a common understanding on certain issues, such as definition of products covered, and when should the eight-year phase-out provided under the Agreement begin. It added that there is no specific provision on “standstill” in this area.