The German federal government has defended itself against the charge that it has not been fulfilling its WTO obligations to notify its trade-distorting subsidies. A German parliamentary committee posed a series of questions to the federal government after the FiFo Institute for Public Economics of the University of Cologne and the Global Subsidies Initiative released a report that accused Germany of vastly under reported its subsidies to the WTO. 

Fifo’s “shadow” subsidy notification identified 180 specific subsidy programmes that, according to the authors, should have been notified (totalling € 10.8 billion), instead of the mere 11 subsidies notified by Germany for 2006 (with a total value of € 1.25 billion). The shadow notification used a template developed by the GSI that aims to improve upon the notification format currently used at the WTO.

Under the Agreement on Subsidies and Countervailing Measures (ASCM), WTO member states are obligated to notify to the WTO all specific subsidies that could affect the economic interests of other members. However, many governments do a poor job of it: notifications are routinely submitted late and many are incomplete.

Fifo and the GSI said Germany was chosen as a subject for the shadow notification because, despite collecting detailed data on its subsidies, "it has one of the poorest records among large OECD economies for notifying specific subsidies to the WTO.”

The German government, in reply to the questions posed by a parliamentary committee, said that the notification conducted by Fifo was “altogether too extensive”.  The government argues that it should not be required to notify subsidies in which there is some doubt over whether they are trade distorting.

Asked whether the German government shared the view that it had one of the poorest records among OECD countries for notifying its subsidies to the WTO, it answered “No.” Other WTO members are worse, says Germany, pointing to the United States, which has only notified up to 2004.

However, the most recent U.S. notification covers 171 pages of subsidy programmes, compared with Germany, whose latest report is only 11 pages long.

The FIFO-GSI report, "Assessing German subsidies under the GSI notification template proposed for the WTO", is available here.