G/SCM/Q2/CHN/59 21 April 2016 (16-2252) Page: 1/297 Committee on Subsidies and Countervailing Measures Original: English SUBSIDIES REQUEST FROM THE UNITED STATES TO CHINA PURSUANT TO ARTICLE 25.10 OF THE AGREEMENT The following communication, dated 15 April 2016, is being circulated at the request of the Delegation of the United States. _______________ In the report that it prepared for China's most recent Trade Policy Review, held in July 2014, the Secretariat included information that it had uncovered on 30 support programs for China's fisheries sector.1 The Secretariat's Report noted that China had not notified any of these support programs to the Committee on Subsidies and Countervailing Measures (Committee) and that China could not verify any of the information provided to it by the Secretariat. During the ensuing Trade Policy Review meetings, China responded to Members' questions about these support programs by stating that it needed more time to identify and verify information regarding these support programs. In April of last year, the United States submitted questions to China with respect to these programs and other fishery support measures the United States had uncovered through its own efforts.2 Once again, despite its obligation under Article 25.9 of the Agreement to provide answers "as quickly as possible and in a comprehensive manner", China to date has not meaningfully responded to the United States' request and has refused repeated requests to meet bilaterally to discuss the issue, and the issue of subsidy notifications more generally. 1 See WT/TPR/S/300, page 88, paragraph 3.126, and pages 191-98, Table A3.6. 2 See G/SCM/Q2/CHN/52, 17 April 2015. G/SCM/Q2/CHN/59 - 2 - In November of last year, China submitted its latest subsidy notification covering the period 2009 through 2014.3 In this notification, China did not include: (1) any of the fishery subsidy programs identified in China's 2014 TPR report, (2) any of the additional measures identified by the United States in its Article 25.8 submission or (3) any of the fisheries subsidies measures identified in the 2014 Article 25.10 submission of the United States.4 Beyond the obligations all WTO Members have to notify their subsidy programs under Article 25 of the SCM Agreement, the dire state of the world's fisheries has led to calls for greater disciplines on fisheries subsidies that contribute to overfishing and overcapacity. While reaching agreement on such disciplines has been difficult, countries have recognized that an initial step should be greater transparency with respect to the fisheries subsidy programs currently in place. For example, on 28 August 2014, at the 4th APEC Ocean-Related Ministerial Meeting, APEC Ministers agreed to the Xiamen Declaration. Paragraph 21 of this Declaration states: In light of the Rio+20 outcome document, particularly paragraph 173, we encourage APEC members to further improve the transparency and reporting of existing fisheries subsidies programmes through the WTO, and to eliminate subsidies that contribute to overcapacity and over-fishing, and to refrain from introducing new such subsidies or from extending or enhancing existing such subsidies, without prejudice to the WTO Doha negotiations. In light of China's failure to substantially respond to questions raised in the context of its trade policy review, and the questions submitted by the United States under Article 25.8, the United States, once again, has no other choice but to avail itself of the mechanism under Article 25.10. The United States requests that China notify the programs and measures identified below to the Committee under Article 25.10 of the Agreement. Should a notification not be made promptly, the United States reserves its right to raise the alleged subsidies for discussion at the next regular meeting of the Committee. Although not required under Article 25.10, full translations of each of the measures cited below are attached to this submission. I. POLICIES TO DEVELOP MARINE FISHERIES 1. Ministry of Agriculture Opinions on Promoting Sustainable and Healthy Development of Distant Marine Fishery Industry, Ministry of Agriculture, Nong Yu Fa [2012] No. 30 (7 November 2012).5 3 See G/SCM/N/220/CHN,G/SCM/N/253/CHN,/SCM/N/284/CHN; 30 October 2015. 4 In its 2014 Article 25.10 submission, the United States counter notified and provided full translations of the following fisheries subsidies measures: State Council Notice on the Implementation of Refined Oil Price and Tax Reforms, State Council, Guo Fa [2008] No. 37 (18 December 2008); Notice on Further Refining the Subsidy Mechanism for Farmers, Some Impoverished Groups, and the Public Welfare Sectors After Refined Oil Price and Tax Reforms, Ministry of Finance, National Development and Reform Commission, Ministry of Supervision, Ministry of Transportation, Ministry of Agriculture, National Audit Office, State Forestry Administration, Cai Jian [2009] No. 1 (7 January 2009); Interim Measures for the Administration of the Fisheries Refined Oil Price Subsidy Special Fund, Ministry of Finance, Ministry of Agriculture, Cai Jian [2009] No. 1006 (31 December 2009); Shandong Province Plan for the Implementation of Fisheries Oil Price Subsidies in the First Half of 2009, Shandong Provincial Government (13 March 2009); Notice on Relevant Matters for the Allocation of Fisheries Diesel Oil Subsidies in the First Half of 2009, Zhejiang Ocean and Fishery Bureau, Zhe Hai Yu Ji [2009] No. 43 (23 March 2009); Notice on the Implementation of the Ministry of Finance and Ministry of Agriculture Interim Measures for the Administration of the Fisheries Refined Oil Price Subsidy Special Fund, Jiangsu Provincial Oceanic and Fishery Bureau, Su Cai Jian [2012] No. 47 (27 February 2012); Hubei Province Rules for the Implementation of the Administration of the Fisheries Refined Oil Price Subsidy Special Fund, Hubei Provincial People’s Government, E Nong Gui [2013] No. 1 (12 July 2013); Shanghai Municipal Finance Bureau Notice on Passing Down the Fishermen and Fishery Enterprises Oil Price Subsidies for this Municipality in the First Half of 2009, Shanghai Municipal Finance Bureau, Hu Cai Qi [2009] No. 42 (10 August 2009); Tianjin Municipal Finance Bureau, Municipal Commission on Rural Affairs Notice on Issuing the Rules for the Implementation of the Tianjin Municipality "Interim Measures for the Administration of the Fisheries Refined Oil Price Subsidy Special Fund", Tianjin Municipal Finance Bureau, Municipal Commission on Rural Affairs, Jin Cai Nong [2010] No. 23 (19 May 2010); Qidong City Public Notice on Fisheries Refined Oil Price Subsidies, Qidong City Finance Bureau, Qidong City Ocean and Fishery Bureau (20 June 2012); Liyang City Plan for the Disbursement of the 2012 Fisheries Refined Oil Price Reform Financial Subsidies Fund in 2012, Liyang City People’s Government, Li Nong Fa [2013] No. 207 (30 September 2013). See, G/SCM/Q2/CHN/51, 21 October 2014. 5 See 2.2a, in G/SCM/Q2/CHN/52. G/SCM/Q2/CHN/59 - 3 - 2. State Council Opinions on Promoting Sustainable and Healthy Development of Distant Marine Fishery Industry, State Council, Guo Fa [2013] No. 11 (8 March 2013).6 3. Guangdong Province Opinions on Upgrading Marine Fishery Industry, Guangdong Provincial People's Government, Yue Fu [2013] No. 67 (21 June 2013).7 4. Notice on the Issuance of Shenzhen City Interim Measure on Agriculture Development Fund Supporting Marine Distant Fishery, Shenzhen Municipal Economy, Trade and Information Technology Commission, and Shenzhen Municipal Finance Commission, Shen Jing Mao Xin Xi Hai Yang Zi [2014] No. 22 (28 February 2014).8 5. Notice on the Issuance of the "Twelfth Five Year Plan" for the Development of the Distant Water Fishery in the Zhejiang Province, Zhejiang Provincial Ocean and Fishery Bureau (21 December 2011).9 6. Zhejiang Province Measures on Funding Distant Marine Fishery Projects, Zhejiang Province Department of Finance and Zhejiang Province Ocean and Fishery Bureau, Zhe Cai Nong [2011] No. 28 (17 February 2011).10 7. Shandong Province Opinions on Further Accelerate Distant Marine Fishery Industry, Shandong Provincial People's Government, Lu Zheng Ban Fa [2007] No. 76 (26 September 2007).11 8. Office of the Shandong Province People's Government Opinion on promoting the implementation of Building the "Maritime Granary", People's Government of Shandong Province, Lu Zheng Ban Fa [2014] No. 49 (4 January 2015).12 9. Fujian Province Nine Measures Regarding Supporting and Furthering Marine Economy, People's Government of the Fujian Province, Ming Zheng [2012] No. 43 (15 August 2012).13 10. Notice Regarding the Issuance of the "Provisional Measures for the Administration of the Fujian Province Marine Economic Development Special Fund", Fujian Development and Reform Commission, Fujian Department of Finance, and Fujian Ocean and Fishery Department, Ming Cai Nong [2012] No. 125 (18 October 2012). 11. Application Guide for 2013 Annual Second Batch Support Fund for Fujian Marine Economy, Xiamen Municipal Ocean and Fishery Bureau, (27 January 2014).14 12. Notice of the Fujian Provincial Department of Finance, the Fujian Provincial Development and Reform Commission, and the Fujian Provincial Ocean and Fishery Department on the Issuance of the Fujian Province Marine Economic Development Subsidy Funds Application Guide, Fujian Development and Reform Commission, Fujian Department of Finance, and Fujian Ocean and Fishery Department (13 January 2015).15 13. Notice of the Fujian Provincial People's Government Regarding Six Measures Accelerating the Development of the Distant Water Fishing Industry People's Government of Fujian Province, Fujian Provincial People's Government, Ming Zhen [2014] No. 36 (4 August 2014).16 6 See 2.2b, in G/SCM/Q2/CHN/52. 7 Id. 8 Id. 9 See 2.1a, in G/SCM/Q2/CHN/52. 10 See 2.2e, in G/SCM/Q2/CHN/52. 11 See 2.2c, in G/SCM/Q2/CHN/52. 12 See 2.2d, in G/SCM/Q2/CHN/52.