WORLD TRADE
ORGANIZATIONG/STR/N/4/EEC
26 February 1999
(99-0756)
Working Party on
State Trading EnterprisesOriginal:  French
STATE TRADING
New and Full Notification Pursuant to Article XVII:4(a) of the GATT 1994 and
Paragraph 1 of the Understanding on the Interpretation of Article XVII
EUROPEAN COMMUNITIES
The following communication, dated 8 February 1999, has been received from the Permanent
Delegation of the European Commission.
_______________
Pursuant to the provisions of Article XVII:4(a) of the GATT 1994 and paragraph 1 of the
Understanding on the Interpretation of Article XVII, the European Community has the honour to
submit herewith its new and full notification of state trading enterprises.  It contains three state trading
enterprises in France.  The European Community would also like to inform that there is no statetrading in Austria, Belgium, Denmark, Finland, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Sweden and the United Kingdom.G/STR/N/4/EEC
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1. GAZ DE FRANCE
2. ELECTRICITE DE FRANCE
3. ENTREPRISE MINIERE ET CHIMIQUE
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NOTIFICATION OF STATE TRADING ENTERPRISES AND
STATE MONOPOLIES TO THE WTO
I. STATE TRADING ENTERPRISES
Customs tariff No. Product description Enterprises that have privileges
27-05 bis Lighting gas, producer gas,
water gas and similar gasesGAZ DE FRANCE
23, rue Philibert Delorme
Paris 75017
27-17 Electrical energy ELECTRICITE DE FRANCE
2, rue Louis Murat
Paris 75008
1. Reason and purpose for introducing a nd maintaining state trading enterprises
1.1 Electricity
The decision to create EDF as a "state trading enterprise" was taken when the sector was
nationalized after the war.  The structure specified in the Law of 8 April 1949 allows EDF to carry out
the task entrusted to it, namely, the obligation to supply electricity on competitive terms in the whole
of France, guaranteeing equal treatment for consumers and respecting the requirements of availability
of supplies and environmental conservation.  This organization of the French electricity system is notprompted by any desire to protect the domestic market nor any discriminatory practice vis-à-vis
foreign operators.
On 9 December 1998, the French Government submitted to the French Parliament a draft law
on the modernization and development of the public electricity service.  This draft law providesproducers established on French territory and the largest electricity customers with the possibility of
concluding supply contracts with authorized producers and suppliers established on the territory of a
member State of the European Community or, in connection with the implementation of international
agreements, on the territory of any other State.  Similarly, producers and suppliers established on
French territory may conclude export contracts.
It rests with the French Parliament to adopt the law on the modernization and development of
the public electricity service.  Once the law has been adopted, the French authorities will notify it to
the World Trade Organization.
1.2 Gas
The tasks entrusted to GDF are similar to those of EDF:  supplying gas in France while at the
same time respecting a number of obligations as a public service and making an active contribution
towards the implementation of energy, environmental and physical planning policies.G/STR/N/4/EEC
Page 3
The context in which GDF operates is nevertheless different from that of EDF since the whole
of France cannot be supplied with gas.  It ensures, as part of its task, continuous supply, equality of
treatment and the lowest possible costs for the community.
The directive concerning the internal market in natural gas, which deals with import and
export matters, is to be transposed into French law by the year 2000 at the latest.
2. Description of the functioning of the state trading enterprises
2.1 Electricity
Under the 1946 Law, EDF has a monopoly on the import and export of electricity.
The volume of electricity imports or exports is not fixed.  EDF imports electricity to the
extent necessary to fulfil its role of guaranteeing availability of supplies at the lowest cost.  It exports
the electricity that remains available after meeting domestic demand in conformity with its obligation
to supply electricity.
The prices fixed in electricity import and export contracts are the result of commercial
negotiations among operators.
The contracts negotiated by the enterprise are short-term, medium-term or long-term
commercial contracts.  The Government does not enter into any contractual obligations.
2.2 Gas
Like EDF, the 1946 Law gives GDF a monopoly on the export and import of natural gas.
Imports of natural gas are determined in the context of trade agreements aimed at ensuring
reliable supplies in the long term as well as competitive prices in comparison with other forms of
energy.  The role of exports is modest, but they obey the same principles.
The prices fixed in contracts for the import and export of natural gas are the result of
commercial negotiations among operators.
Import contracts are in fact long-term contracts.  They are subject to approval by the Minister
for Industry pursuant to the Order of 17 October 1987 (regime for the transport of natural gas), who
ensures that the availability of supplies in France is guaranteed in the long term.  These contracts do
not contain any clauses binding the State in the form of commercial transactions.
3. Statistical information
3.1 Electricity
Replies (a), (b), (c)
Domestic
production
TWhExports
volume
TWhExports
value
GFImports
volume
TWhImports
value
GF
1995 471.4 73.9 17.7 4.8 1.5
1996 489.8 72.7 16.7 4.0 0.8
1997 480.9 71.4 16.4 6.1 1.1G/STR/N/4/EEC
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3.2 Gas
Replies (a), (b), (c)
Domestic
production
TWhExports
volume
TWhExports
value
MFImports
volume
TWhImports
value
MF
1995 34.1 8 399 394 22,276
1996 29.1 9 472 392 19,234
1997 25.5 15 964 363 16,981
4. Reason for not trading abroad
Not applicable.
5. Additional information
None.
HS tariff code Type of product Enterprise concerned Observations
31.04 (in its totality)
i.e. 31.04.10.00
31.04.20.10
31.04.20.50
31.04.20.90
31.04.30.0031.04.90.00Mineral or chemical
potassium fertilizersEntreprise minière et
chimique
62, rue Jeanne d'Arc
75641 Paris Cedex 13State monopoly
delegated to the
Entreprise minière et
chimique for direct
imports from third
countries into theEuropean Economic
Area
31.05 (in part)(for the potassium
component)
i.e. 31.05.10.00
31.05.20.1031.05.20.90
31.05.60.10
31.05.60.90
31.05.90.10
31.05.90.91
31.05.90.99Mineral or chemical
potassium fertilizers
containing two or more
of the following
fertilizing elements:nitrogen, phosphorus,
potassiumIdem Idem
II. REASON AND PURPOSE
The potassium mines in Alsace formed part of the German assets confiscated in 1919 and
were attributed to the French State under instruments adopted in 1924, following which the Law of
23 January 1937 established on the one hand the Mines domaniales de potasse d'Alsace (MDPA) and,
on the other, the Comptoir de vente (trading agency).
The 1937 Law laid down the following principles:- The working of potassium salt mines that had not been the subject of a concession
before 1937 is reserved to the State;
- the potassium mines are State property;G/STR/N/4/EEC
Page 5
- a public enterprise called the "Mines domaniales de potasse d'Alsace" was created;
- the potassium mines are worked on behalf of the State by the State company MDPA.These arrangements were reaffirmed in 1955-1956 when the 1937 Law was incorporated in
the Mining Code, established by Law No. 55-720 of 26 May 1955 and Decree No. 56-838 of
16 August 1956 establishing the Mining Code.
Decree No. 67-796 of 20 September 1967 (Official Journal of the French Republic of
22 September 1967) on the Merging of the Mines domaniales de potasse d'Alsace and the Office
national industriel de l'azote laid down the following principles:
"The Mines domaniales de potasse d'Alsace are replaced by a single State enterprise of an
industrial and commercial nature, carrying out the same activities, called the Entreprise
Minière et Chimique (EMC), under the supervisio n of the Minister for Industry" (Article 1).
The combination of these provisions meant that the legal monopoly over the working of
potassium mines (potassium and related salts) in France was transferred from the State to the EMC
and to the new company, a subsidiary of the EMC, namely MDPA S.A.
This organization of the French potassium production system is not prompted by any desire to
protect the domestic market nor any discriminatory practices vis-à-vis  foreign operators.
III. DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISE
The role of the Entreprise Minière et Chimique is to carry out directly or through its
subsidiaries all operations concerning, inter alia , the distribution and marketing of potassium,
fertilizers and other chemical products.  It supervises and controls the activities of the SociéteCommerciale des Potasses d'Alsace as its subsidiary, and decides upon sales plans, the programme of
activities and investment, and forecasts of revenue and expenditure.
The exclusive right to trade in potassium salts is conferred by a legislative provision
established by a law codified in the Mining Code.  The regulatory power has amended by decree the
actual modalities of implementation of this provision.
These amendments are designed to bring the Code into conformity with the Treaty of Rome
and concern the holder of the monopoly and customs procedures, with treatment that varies according
to the product concerned, its origin or source.
Holder of the monopoly
The functions of the trading agency provided  for in Article 183 of the Mining Code were
conferred on the EMC under Article 3 of the 1967 D ecree, which states that EMC may exercise these
functions directly or through a subsidiary commercial company.
A Decree of 23 March 1973 modified this monopoly "in respect of some compound and
complex potassium fertilizers".
From 1967 to 1980, the EMC in practice delegated the exercise of the monopoly to the SCPA.Since 1980, exercise of the monopoly, and in particular the decision whether or not to
authorize a particular import of potassium products requested by a third party, has been the
responsibility of the Board of Directors of the EMC (after the Government Commissioner has given
his opinion), which gives the SCPA global au thorization for its own import programmes.G/STR/N/4/EEC
Page 6
Successive amendments to the customs regulations
A Decree of 6 February 1974 concerning modi fication of the potassium monopoly in respect
of simple potassium fertilizers allowed these to be imported by third parties, subject to the same
restrictions, conditions and procedures as compound and complex potassium fertilizers.
An Order of 22 August 1974 retains the requirem ent to obtain prior agreement for the import
of compound potassium fertilizers - and consequently approval - solely for fertilizers released for free
circulation (therefore originating from countries outside the EC).
An Order of 28 November 1974 exempted from pr ior approval import declarations for simple
potassium salts originating in member countries of the EC.
An Order of 25 November 1986 abolished the prior import declaration for compound and
complex potassium fertilizers from other member countries of the EU (i.e. produced or released for
free circulation in one of those States).
An Order of 29 January 1987 abolished the prior import declaration for simple potassium
salts in free circulation in other member States of the EC.
Following these amendments, in conformity with Article 37 of the EEC Treaty, potassium
products, whether simple potassium salts or compound or complex potassium fertilizers, freely enter
France from one of the other member States of the European Community if they originate there or iftheir original source is a third country but they have previously been cleared by customs and lawfully
imported, in other words released for free circulation within the customs territory of the
European Community, or else if they originate in one of the States party to the agreement establishing
the European Economic Area.
IV. STATISTICAL INFORMATION
Table I - Imports
Name of the state trading enterprise:  Entreprise Minière et Chimique (EMC)
Type of product Total quantity
importedQuantity
imported by the
state trading
enterpriseAverage price
of import by the
state trading
enterpriseRepresentative
selling price on the
domestic marketPrice mark-up Domestic
production
TK20 TK20 FF/TK20 FF/TK20 FF/TK20 TK20
1 234 5 6 7
31.04
Potassium salts
1995 907,150 182,500 1,205 1,415 210 802,000
1996 948,400 204,700 1,110 1,310 200 751,000
1997 1,070,900 165,300 1,100 1,290 190 665,300
31.05Compound fertilizers
11 2 3
1995 189,000 (=34,000) - - - 816,000
1996 153,000 (=15,000) - - - 799,000
1997 152,000 (=17,000) - - - 800,000
1K20 fertilizer units contained in all imported compound fertilizers.
2Estimated K20 tonnage for compound fertilizers approved for import by the EMC executive board.
3K20 fertilizer units contained in all compound fertilizers manufactured in France - the K20 may or
may not be of domestic origin .G/STR/N/4/EEC
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Table II - Exports
Name of the state trading enterprise:  Entreprise Minière et Chimique (EMC)
Type of product Total quantity
exportedQuantity
exported by the
state trading
enterpriseAverage
purchase priceRepresentative
average selling
price on the
average domestic
marketAverage
export priceDomestic
production
TK20 TK20 FF/TK20 FF/TK20 FF/TK20 TK20
1 234 5 6 7
31.04Potassium salts
2
1995 180,700 178,100 1,017 1,415 1,263 802,000
1996 172,300 170,600 968 1,310 1,206 751,000
1997 158,000 158,000 944 1,290 1,174 665,300
31.05Compound fertilizers
1 3
1995 36,000 - - - - 816,000
1996 48,000 - - - - 799,000
1997 48,000 - - - - 800,000
1K20 fertilizer units contained in all imported compound fertilizers.
2Domestic production being an own resource of the st ate trading enterprise, the purchase price is the
price paid by the trading subsidiary (SCPA) to the production subsidiary (MDPA).
3K20 fertilizer units contained in all compound fertilizers manufactured in France - the K20 may or
may not be of domestic origin.
Table III - Domestic market activities
Name of the state trading enterprise:  Entreprise Minière et Chimique (EMC)
Type of product EEC purchases on the
domestic marketDomestic production EEC sales on the
domestic marketDomestic consumption
TK20 TK20 TK20
12 3 4 5
31.04
Potassium salts11 1 2
1995 - 802,000 822,500 1,564,000
1996 - 751,000 800,900 1,573,000
1997 - 665,300 770,600 1,648,000
31.05Compound fertilizers
34 5
1995 - 816,000 59,400 969,000
1996 - 799,000 51,300 899,000
1997 - 800,000 41,800 912,000
1There is no purchase on the domestic market - domestic production is an own resource covering, in
part, the sales of the trading enterprise on the domestic market.
2Evaluation of the total market in potassium salts.
3K20 fertilizer units contained in all compound fertilizers manufactured in France - the K20 may or
may not be of domestic origin.
4Tonnage of K20 in compound fertilizers manufactured by the trading enterprise.
5Tonnage of K20 in the compound fertilizers placed on the market (distribution).  This K20 is not
added to 1 but is included in 2 (leaving room for inventory adjustment), which constitutes an "upstream" market
for composed fertilizers.
V. REASONS FOR NOT TRADING ABROAD
Not applicable.
VI. ADDITIONAL INFORMATION
Not applicable.
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