China

The United States once again raised concerns regarding China's non-notification of possible subsidy programmes for steel producers as well as the fisheries sector. The US said information on the subsidy programmes was based on annual reports from Chinese steel producers as well as fisheries subsidies identified in the WTO's Trade Policy Review of China. The United States also expressed concerns regarding the WTO consistency of the “Internationally Well-Known Brand” programme of China.

Regarding steel, China reiterated that its notification included programmes that were specific to the steel industry. It indicated, however, that it would try to respond to the concerns raised by the United States in its new subsidy notification. On fisheries, China said that it previously had provided clarification on some of the programmes, and would do so for others, where necessary. Finally, China noted that many of the alleged programmes under the “Internationally Well-Known Brand” initiative had already been cancelled or abolished, while some of these programmes had been notified.

For its part, China expressed concerns about methodologies used in countervailing duty (CVD) investigations by the European Union and the United States, in particular related to public body determinations regarding state-owned banks. The European Union and the United States both responded that their practices were in conformity with WTO rules. 

United States

Several members raised concerns about methodologies applied by the US investigating authority in certain specific CVD investigations targeting imports from Kazakhstan, Turkey and Spain. The United States responded that the investigations in question had been conducted in compliance with WTO rules. In addition, India raised certain systemic concerns over the conduct of US CVD investigations, regarding in particular initiation and simultaneous application of CV and anti-dumping duties.

Finally, China pointed to the lack of information in the US subsidy notification regarding renewable energy subsidies at both the federal and state levels.  

India

Referring to past WTO Secretariat calculations showing that India had reached "export competitiveness" in textiles and clothing no later than 2007, the United States considered that India should have already ended export subsidisation of that industry pursuant to the eight-year phase-out rule in Article 27.5 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement). India replied that it considered 2018 to be the timeline for ending the export subsidisation. India stated that most of the existing programmes were in the form of remission or exemption of duties and were therefore not subsidies, and that India was committed to meeting its SCM Agreement obligations on the other programmes. 

The United States also raised India's recent graduation from Annex VII(b) of the SCM Agreement, and thus its exemption from the prohibition of export subsidies, and asked about India's timing and progress in eliminating such subsidies. India referred to its negotiating proposal from 2011 (TN/RL/GEN/177/Rev.1) which argues that upon graduation from Annex VII(b), the members listed therein have an additional eight-year transition period, and then the right to seek further extensions pursuant to SCM Article 27.4.

Subsidies and overcapacity

This item was placed on the agenda by Canada, the European Union, Japan, Mexico and the United States. On behalf of these delegations, the European Union noted that the EU, the United States, Canada and Mexico had co-hosted a seminar on 2 October to discuss the contribution of subsidies to overcapacity in sectors such as steel, aluminium and others. The EU provided a summary of the issues discussed and the conclusions of the speakers. It added that the co-sponsors of this agenda item were looking to use the seminar to further steps aimed at strengthening disciplines on subsidies that create overcapacity.

China said the WTO committee was not the proper forum to discuss the issue of overcapacity, which was the result of  a number of factors, including the slow recovery of the global economy and sluggish demand since 2008. G20 leaders in Hamburg earlier this year had called for the removal of market-distorting subsidies and the OECD's Global Forum on steel excess capacity was examining the problem. China said that it had made efforts to address overcapacity at home through new regulations at both the central and sub-central level. Russia also cited the G20 commitment and the Global Forum's work and said that all factors needed to be examined. 

Continued concerns about missing subsidy notifications

The chair of the SCM committee, Ms Ieva Baršauskaitê of Lithuania, as well as a number of members, once again voiced concern with the poor compliance in submitting required subsidy notifications. Members are required to notify, every two years, any "specific" subsidies that they provide.

The chair reported that despite a batch of new notifications from members for the committee meeting, compliance "remains low", with more than 100 members behind on their 2017 notifications, 75 behind on their 2015 notifications, and 60 still having failed to submit notifications for 2013. The "chronic low compliance" with this fundamental transparency obligation "constitutes a serious problem" in the proper functioning of the Agreement, she said.

Next meeting

The next meeting of the SCM committee will take place the week of 23 April 2018.