./.WORLD TRADE
ORGANIZATIONG/STR/W/42
30 October 2003
(03-5766)
Working Party on
State Trading EnterprisesOriginal:  English
QUESTIONS POSED BY THE GOVERNMENT OF THE
UNITED STATES PURSUANT TO ARTICLE XVII OF
GATT 1994 TO THE GOVERNMENT OF EGYPT
The following communication, dated 29 October 2003, has been received from the Permanent
Mission of the United States.
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Article XVII:4(c) of GATT 1994 provides that a Member that has reason to believe that its
interests are being adversely affected by the operations of a state trading enterprise (STE) may request
that the Member establishing, maintaining or author izing such enterprise supply information about its
operations related to the General Agreement on Tariffs and Trade.  The Government of theUnited States believes that its interests are being adversely affected by the operations of the
Alexandria Cotton Exporters’ Association (ALCOT EXA) and its members.  Accordingly, the
United States submits the following questions to the Government of Egypt (GOE) regarding
ALCOTEXA.
Exclusive or Special Privileges Granted to ALCOTEXA
1. The United States has reason to believe that the GOE grants ALCOTEXA the following
exclusive or special privileges in the cotton trade:
(a) To limit or restrict to ALCOTEXA member s the right to practice or engage in the
cotton trade in Egypt;
(b) To determine the sales price and other terms and conditions for the sale of all cotton
exported from Egypt;
(c) To approve all bids submitted to Egyptian cotton export firms prior to their
acceptance and the finalization of contracts;
(d) To require that all transactions for the sale of cotton abroad be concluded in
accordance with ALCOTEXA’s “cotton export sales conditions”;
(e) To mandate that all contracts registered with ALCOTEXA are final; and(f) To require all disputes to be arbitrated by ALCOTEXA.
2. Please elaborate upon the requirement that all cotton export sales contracts must be registered
with ALCOTEXA, and the approval process for such contracts.G/STR/W/42
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3. Please explain whether ALCOTEXA members have exclusive rights to purchase from
Egyptian cotton producers for export markets and from Egyptian cotton producers for the domestic
market.
4. Please identify and explain any other exclusive or special privileges of ALCOTEXA or its
members in the cotton trade.
5. Please identify and provide citations to the specific legal authority that the GOE has used to
grant the exclusive or special privileges to ALCOTEXA and its members.
Operation of ALCOTEXA and Status as an STE
1. Please elaborate upon the Management Committee that has the power to manage
ALCOTEXA and handle its affairs, including the authority and the role of the Committee in setting
cotton export prices and conducting the export policy described on ALCOTEXA’s web page.  Please
explain the manner in which the members of the Management Committee are selected.  Also, please
describe the manner in which the GOE exercises control over ALCOTEXA, including through the
Management Committee.
2. Please explain the reason the GOE has not notified ALCOTEXA as a State Trading
Enterprise, in accordance with the Understanding on the Interpretation of Article XVII of the
GATT 1994.
Pricing and Sales Determinations Made by ALCOTEXA
1. Please explain ALCOTEXA's pricing policies, including how it determines the export prices
for Egyptian cotton.
2. Please provide the legal citation to any requirement that ALCOTEXA make its sales solely in
accordance with commercial considerations, and elaborate upon such requirement.  If there is no legal
requirement, please describe how the GOE ensures that ALCOTEXA’s sales are made solely in
accordance with commercial considerations, including whether this is accomplished through
purchase, sale or cost data.
3. Please elaborate upon how the GOE and ALCOTEXA ensure that foreign and domestic
buyers have equal opportunities to purchase Egyptian cotton.
4. Please elaborate upon the subsidies that the GOE provides to domestic cotton mills based on
the purchase of Egyptian cotton.  Also, please explain the subsidy program, including the method for
determining the level of subsidy and indicate whether foreign buyers of Egyptian cotton are eligible to
receive the subsidy.
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