SUBSIDIES AND COUNTERVAILING MEASURES
Committee Chair, Luis Fernandez of Costa Rica, told the Committee that 78 WTO members (of 164) have not yet made their new and full subsidy notifications that were due in 2017, 63 members have not made the notifications due in 2015 and 56 members have still to deliver their notifications due in 2013.
"The chronic low compliance with the fundamental obligation to notify subsidies constitutes a serious problem in the proper functioning of the Agreement … I strongly urge all members that have not yet done so to submit their notifications as soon as possible," the Chair said. New Zealand, Canada, the European Union, Norway, Switzerland, the United States, Australia, Chinese Taipei, Japan and Singapore all took the floor to join the Chair in expressing their disquiet about the slow pace of notification.
The Chair explained to the Committee that technical assistance from the WTO Secretariat is available for members experiencing difficulties in providing notifications regarding subsidies programmes or countervailing measures taken. The Chair also raised with the Committee that some members have not made notifications about legislation for the application of countervailing duty investigations, and that 41 members have not notified the Committee regarding countervailing duty actions taken in the first six months of 2018, although in both cases, in the absence of legislation and/or actions, simple nil notifications suffice.
On a brighter note, the Chair said that since the Committee’s spring special meeting, 23 new and full notifications for the 2017 notification cycle had been sent to the Committee. In the case of the Philippines, a new and full notification covering the 2017, 2015, 2013, 2011, 2009, 2007, 2003, 2001 and 1998 cycles was submitted. Madagascar and Saudi Arabia delivered notifications covering both the 2017 and 2015 cycles. Notifications for the 2013 cycle were submitted by Argentina, Iceland and Tunisia.
The Chair underscored for members that according to agreed procedures, members can submit written questions to any notifying member and that prompt responses to these questions were important to ensure full transparency during the process of reviewing submitted notifications.
"Failure to reply promptly to such questions undermines transparency and thus frustrates the purpose of the review," he said.
At the following regular meeting of the Committee, a joint item proposed by the EU, Japan and the United States centered on the impact of subsidies on industrial overcapacity. The EU drew the Committee's attention to a presentation on this topic held earlier this month during the WTO's 2018 Public Forum. The United States said G-20 leaders had agreed there was a link between overcapacity and subsidies and that the recommendations put forward at the Public Forum event centred on the need for greater WTO transparency requirements on subsidies, stronger subsidy rules and stricter disciplines on public bodies and state-owned enterprises. Japan said government support created trade distortions in the iron and steel and shipbuilding sectors.
Canada, Mexico, Norway, Australia, New Zealand, Chinese Taipei and Switzerland supported the joint statement.
China considered that the issue of overcapacity is not in the terms of reference of the SCM Committee. It argued that slow recovery from the financial crisis and sluggish demand rather than subsidies were to blame for global overcapacity, noted that China had cut steel capacity by more than 100 million tons and considered that any response to the problem of overcapacity should be global in nature.
On the issue of fisheries subsidies, nine members requested that the Committee discuss a decision taken by ministers at the Ministerial Conference in December which recommitted WTO members to fulfil their existing transparency obligations in respect of fisheries subsidies, in the context of the negotiations to reach agreement by 2019 on disciplines on subsidies linked to the depletion of global fisheries stocks.
The United States said the negotiations were being undermined by the failure of members to notify their fisheries subsidies, noting that more than half of WTO members have not notified any fisheries subsidies to the Committee. The EU also noted the low level of compliance. New Zealand said 54% of the world's fishing grounds would be unprofitable were it not for government support extended to fishing fleets.Separately, the European Union raised objections to the application by the United States of countervailing duties on imports of ripe Spanish olives. Turkey reiterated its concerns regarding the decisions made by the US on public body, specificity, benefit calculation, cross-cumulation and Turkey's developing country status in countervailing duty investigations.