EEC - Subsidies on Export of Pasta Products
EEC Pasta Subsidies (Source: GATT Analytical Index)
|Products at issue
|Type of product
Other agriculture products
Key legal aspects
|D. M. McPhail (Hong Kong)
|F. Laschinger (Canada), M. Pullingen (Finland), D. M. McPhail (Hong Kong), Hardeep Puri (India)
|Legal basis at issue
|Claims at issue
|Defences at issue
|No of Pages (total / legal reasoning)
|Request for consultations
|Request for conciliation
|Request for establishment
|Outcome of the proceedings
|SCM/43 (19/05/1983) EEC – Subsidies on Export of Pasta Products – Report of the Panel: The Panel considered whether pasta was a primary product within the meaning of footnote 29 to Article 9 of the Code, and considered that pasta was not a primary product but was a processed agricultural product. The Panel noted that under the relevant EEC Regulations the EEC system for granting refunds to exporters of pasta products was financed from public funds and that it operated to increase exports of such products from the EEC. The Panel concluded that this system of granting refunds must be considered a form of subsidy in the sense of Article XVI of the General Agreement. The Panel further considered whether the subsidies in question were granted on exports of a primary product (durum wheat), which was incorporated in the processed product (pasta products), and therefore would fall under the provisions of Article 10 of the Code. The Panel was of the opinion that durum wheat incorporated in pasta products could not be considered as a separate "primary product" and that the EEC export refunds paid to exporters of pasta products could not be considered to be paid on the export of durum wheat. In the Panel's view, the ordinary meaning to be given to the terms of Article XVI of the General Agreement, as interpreted and applied in Articles 9 and 10 of the Code, in their context and in the light of their object and purpose excluded the possibility of considering the export of a processed product in terms of the export of its constituent components, be they primary or processed products. The Panel therefore concluded that the EEC export refunds were granted on the export of pasta products and operated to increase exports of pasta products by refunding a part of the cost of these processed products. The Panel concluded that the drafters of the Code had clearly recognized that the terms "primary product" and "agricultural product" were not synonyms and that an agricultural product, if it was not a primary product as defined above, should be subjected to different obligations (Article 9) than a primary product (Article 10). The Panel concluded that the EEC subsidies on exports of pasta products were granted in a manner inconsistent with Article 9 of the Code. While one member of the Panel agreed with the majority of the Panel on the conclusion that pasta was a processed agricultural product, he did not share the view of the majority regarding the nature of the refund. He considered that the refund improved the competitive position of the EEC durum wheat producers rather than the processing industry and should consequently be considered as a subsidy on durum wheat. This member therefore disagreed with the majority of the Panel that the EEC export refunds were granted on the export of pasta products. This member also disagreed with the majority of the Panel as far as the clarity and unambiguity of the relevant provisions of the General Agreement and the Code were concerned, and therefore was not able to agree with the majority of the Panel on their final conclusion that the EEC subsidies on exports of pasta products were granted in a manner inconsistent with Article 9 of the Code.
SCM/M/69 (21/09/1994) Minutes of SCM Committee Meeting (28/04/1994) Chairman: the Report had been examined in various meetings. EEC: "not in a position to agree to the adoption of the Report. In this case also the dispute was settled in a satisfactory manner between the parties."
C/190 (31/10/1994) Status of Work in Panels and Implementation of Panel Reports - Report by the Director-General to the Council (10/11/1994) Reported as a dispute at the panel stage.