RESTRICTED
WORLD TRADE G/STR/M/7
28April 1997
ORGANIZATION(97-1827)
Working Party onState Trading Enterprises
MINUTES OFTHE MEETING OFTHE
WORKING PARTY HELD ON
18FEBRUARY 1997
Chairman: Mr.Peter May(Australia)
Page
A. Adoption oftheAgenda 1
B. Review ofnotifications submitted byMembers pursuant tothe 1
request fornotifications inG/STR/N/1 and2
C. Revision ofthe1960 questionnaire onstatetrading enterprises (G/STR/W/30) 7
- Progress report bytheChairman
D. Development ofanillustrative listshowing thekinds ofrelationships 7
between governments andenterprises andthekinds ofactivities engaged
inbythese enterprises (G/STR/W/31 and32)
- Progress report bytheChairman
E. Other business 8
- Appointment ofnewChairman
A. Adoption ofagenda
1. TheChairman saidthathewould make anannouncement under Other Business. TheWorking
Party adopted theagenda contained inWTO/AIR/521 asamended.
B. Review ofnotifications submitted byMembers pursuant totherequests fornotifications in
G/STR/N/1 and2
2. TheChairman recalled thataccording toparagraph 5oftheUnderstanding ontheInterpretation
ofArticle XVII, theWorking Party wastasked toreview thenotifications andcounter-notifications
onstatetrading submitted byMembers, andinthelightofthisreview, theCouncil forTrade inGoods
maymake recommendations withregard totheadequacy ofnotifications andtheneedforfurther
information.
3. Healsorecalled thattheCouncil forTrade inGoods, atitsmeeting on20February 1995,
hadestablished adeadline of30June1995 fornewandfullnotifications byMembers ontheirstate
trading enterprises, andthatsubsequently theWorking Party hadagreed tomaintain 30Juneasthe
dateforfurther (updating) notifications. Herecalled thaton10May1996 arequest forupdating
notifications -which were tobebased onthefullnotifications duein1995 -hadbeencirculated inG/STR/M/7
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document G/STR/N/2. These updating notifications, required ofallWTO Members, hadbeendue
by30June1996.
4. Hesaidthatasofthedateofcirculation oftheairgram convening thepresent meeting
(4February 1997), atotalof62Members (counting eachoftheEECMember states individually) had
submitteda"newandfull"notificationinresponsetothe1995request,andonly34updatingnotifications
hadbeenreceived. Six"new andfull"notifications hadbeenconsidered alsoasupdating notifications
duetothelateness oftheirsubmission.
5. While thenumber offullnotifications hadincreased somewhat, alarge number ofMembers
hadfailed tomake updating notifications. Hereminded Members thattheinformation provided in
these notifications wasessential input totheprocess ofrevising thequestionnaire anddeveloping an
illustrative list. Healsonoted thatwhile nocounter-notifications hadbeenreceived, some ofthe
questions submitted inwriting onvarious notifications could beconsidered tantamount tocounter-
notifications. "New andfull"notifications which hadbeensubmitted afterthedeadline forupdating
notifications (30June1996) hadbeenconsidered asresponding alsotothe1996request forupdating
notifications.
6. TherepresentativeofMexicosaidthathiscountryhadjustsubmitteditsnewandfullnotification.
7. Therepresentative ofCanada saidhisdelegation hoped thatMexico 'snotification would cover
entities suchasCOMOSUPO which Canada understood wasinvolved inthepurchase anddistribution
ofcornandskimmed milkpowder. Further, Canada understood from the1996 OECD Report on
Mexico 'stradepolicies thatthere wereuptoeightstatetrading enterprises, andhoped thatthese were
covered inthenotification.
8. Therepresentative ofMexico saidthatduetotherapidpaceofchange inhiscountry, enterprises
thatrecently existed might nolonger exist.
9. TheChairman noted thattheairgram divided thereview exercise intotwosections: onedealing
withnewandfullnotifications made under G/STR/N/1, andtheother withupdating notifications made
under G/STR/N/2. Hesuggested thattheWorking Party conduct thereview inthesame manner as
attheprevious meeting, i.e.withafocus ontwomainelements: (1)whether thenotification responded
adequately totheinformation requested inthequestionnaire; and(2)whether more information was
needed inorder topermit -inthelanguage ofparagraph 2oftheUnderstanding -"aclearappreciation
ofthemanner ofoperation oftheenterprises notified andtheeffect oftheiroperations oninternational
trade".
(1) Newandfullnotifications under G/STR/N/1
(i) Côted'Ivoire (G/STR/N/1/CIV)
10. Therepresentative ofNewZealand asked whether certain monopolies listed inCôted'Ivoire 's
1995 Trade Policy Review were stillinexistence.1
11. Therepresentative ofCanada shared NewZealand 'sinterest regarding wheat flour, riceand
sugar. Canada found thenotification uninformative withrespect totheSociété Ivoirienne deRaffinage
andhoped formore detail inarevised notification.
1Thequestions were subsequently submitted inwriting indocument G/STR/Q1/CIV/1.G/STR/M/7
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(ii) ElSalvador (G/STR/N/1/SLV)
12. Therepresentative ofNewZealand asked aquestion regarding theprivatization oftheNational
Sugar Institute.2
(iii) Iceland (G/STR/N/1/ISL)
13. TherepresentativeofNewZealandaskedIcelandtoindicatewhethertheAgriculturalProduction
Board continued tofunction andifso,whatthenature ofitsfunctions wasandwhatproducts itcovered.
14. Therepresentative ofIceland saidthattheBoard hadnobearing onthelevel ofimports of
anyagricultural product. Hesaidthatthebasis ofNewZealand 'squestion appeared tobeIceland 's
pre-WTO1994TPRReportwhichstatedthatfreshvegetablescouldbeimportedonlybytheAgricultural
Production Board. However, thiswasnolonger thecase. In-quota rateswere applied seasonally,
without quantitative restrictions, meaning thatanyquantity ofvegetables could beimported byanyone
atanytime.
15. Therepresentative ofArgentina asked forclarification regarding thelinkbetween theconditions
considered bythemonopoly forseasonal imports andtherequest thatduring thisperiod, national
production beabsorbed first.
16. Therepresentative ofIceland saidthatIceland 'sMA/1 notification totheAgriculture Committee
referred tothefactthatdomestic supply wastaken intoconsideration when thequotas wereopened;
however, thisdidnotmean thatithadtobeexhausted firstwhen thein-quota rateperiod wasopened.
(iv) Israel (G/STR/N/1/ISR/REV.1, G/STR/Q1/ISR/1-6)
17. TherepresentativeoftheUnitedStatessaidthathisdelegationhadsubmittedquestionsinwriting
ontheCotton Production andMarketing Board (G/STR/Q1/ISR/5).
18. Therepresentative ofArgentina noted thatmany ofthenotifications onstatetrading, inthe
section onthefunctions oftheSTE, indicated thatexport prices andquantities ofprivate traders were
determined bymarket demand andproduction capacity. Heasked Israel toclarify whether inits
notification, therelevant factor wasproduction capacity oractual supply.
19. Therepresentative ofAustralia asked Israel ifitintended tonotify theIsraeli Cotton Production
andMarketing Board andtheAgricultural Export Company (AGREXCO).3
20. Therepresentative ofNewZealand welcomed therevised notification andasked forfurther
details concerning theboards notified.4
21. Therepresentative ofIsrael provided answers tothequestions fromtheUnited States, which
weresubsequently circulated indocument G/STR/Q1/ISR/7. Hewould consult withhisauthorities
regarding thequestions from Argentina, Australia andNewZealand.
2Thequestion wassubsequently submitted inwriting indocument G/STR/Q1/SLV/1.
3Thequestion wassubsequently submitted inwriting indocument G/STR/Q1/ISR/8.
4Thequestions were subsequently submitted inwriting indocument G/STR/Q1/ISR/6.G/STR/M/7
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(v) Jamaica (G/STR/N/1/JAM, G/STR/Q1/JAM/2)
22. TherepresentativeoftheUnitedStatesrecalledthathisdelegationhadsubmittedwrittenquestions
(G/STR/Q1/JAM/1 and2)andasked when aresponse could beexpected.
23. TherepresentativeofAustraliasaidthathisdelegationhadsubmittedwrittenquestionstoJamaica
earlier thatday(G/STR/Q1/JAM/3).
24. Therepresentative ofJamaica saidthatthequestions fromtheUnited States andAustralia had
beensenttohercapital andthatanswers were being prepared.
(vi) Slovenia (G/STR/N/1/SVN, G/STR/Q1/SVN/4)
25. Therepresentative oftheUnited States noted thatSlovenia hadsubmitted written responses
(G/STR/Q1/SVN/4) totheUSquestions.
26. Therepresentative ofAustralia asked Slovenia toexplain thereasoning behind theintroduction
ofatariffquota forsugar, andwhether theAgency oftheRepublic ofSlovenia forCommodity Reserves
issued import licenses forwheat andsugar.5
27. Therepresentative ofNewZealand saidthathisdelegation hadsubmitted written questions
(G/STR/Q1/SVN/2) inSeptember 1996 towhich ithadnotyetreceived replies.
28. Therepresentative ofArgentina referred toparagraph 2ofthenotification andsaidthatitwas
notclearwhatthecommercialconsiderationswere.Forexample,didtheAgencyconsiderthepossibility
ofabsorbing domestic production before itwentontoopentherelevant quotas.
29. TherepresentativeofSloveniasaid6thathisdelegationhadrespondedtoNewZealand'squestions
inSeptember andhadindicated thatitwasprepared toprovide anappropriate levelofdetail infuture
notifications concerning theAgency forCommodity Reserves. Regarding theadministered prices for
milkandcream, thiswasnotunder thejurisdiction oftheAgency butrather theMinistry forAgriculture.
Regarding Australia 'squestion, hesaidthatthere wasnoimport licensing forwheat orsugar. On
thereason fortheimposition ofatariffquota forsugar, hewould consult withhisauthorities. Regarding
Argentina 'squestion, hesaidthatSlovenia hadalarge shortage ofwheat andcereals ingeneral. The
Agency estimated thedomestic production ofcereals andtherequirements ofthemilling industry, which
alsorelated tothequality ofthecereals. There wasnomandatory orstatutory obligation fordomestic
supplies tobeabsorbed first. Often thedomestic supplies didnotmeetthequality standards required.
Thus, therecould always beadditional imports depending ontherequirements ofthemilling industry.
(vii) Tunisia (G/STR/N/1/TUN andCorr.1, G/STR/Q1/TUN/2)
30. Therepresentative oftheUnited States saidthathisdelegation hadsubmitted written questions
(G/STR/Q1/TUN/2) onTunisia 'snotification.
31. Therepresentative ofAustralia saidthatastheUSquestions covered hisdelegation 'saswell,
Australia would beinterested toseethewritten responses.
5Thequestions were subsequently submitted inwriting indocument G/STR/Q1/SVN/6.
6Slovenia subsequently provided written responses tothequestions fromAustralia andNewZealand
which were circulated indocument G/STR/Q1/SVN/5.G/STR/M/7
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32. Therepresentative ofNewZealand saidthatthere seemed tobeadivergence between the
information inthenotification andinformation supplied inTunisia 'sMA:1 notification.7
33. Therepresentative ofTunisia agreed thatthenotification wasincomplete andsaidthatarevised
notification would besubmitted induecourse which would respond tothequestions raised.
(viii) Venezuela (G/STR/N/1/VEN)
34. Therepresentative ofVenezuela noted thatthestatistical section ofhiscountry 'snotification
hadnotbeenprovided andsaidthatitwould besubmitted immediately.8
35. There were nocomments orquestions onthefollowing notification:
- United Arab Emirates (G/STR/N/1/ARE)
(2) Updating notifications under G/STR/N/2
(i) Colombia (G/STR/N/2/COL, G/STR/Q1/COL/3)
36. Therepresentative oftheUnited States saidthathisdelegation hadsubmitted awritten question
concerning IDEMA (G/STR/Q1/COL/3) andwhether ornotitwasanSTE. Colombia hadgiven a
preliminary response thatthiswasnotanSTE.
37. Therepresentative ofColombia saidthatIDEMA hadbeentransformed inrecent years and
nolonger existed asanSTEinthesense ofArticle XVII. Acomplete reply would befurnished in
writing.
(ii) Indonesia (G/STR/N/2/IDN, G/STR/Q1/IDN/3)
38. Therepresentative ofAustralia asked forconfirmation thatthearrangements ofBULOG had
notchanged asaresult ofIndonesia 'sUruguay Round commitments, andwasparticularly interested
toknow whether private importers were allowed tohandle anyportion ofthetrade.9
39. Therepresentative oftheUnited States asked forclarification ofBULOG 'sroleinthedomestic
andinternational marketing ofotheragricultural commodities, andnoted thatIndonesia hadnotincluded
Indonesian Plywood Producers 'Association (APKINDO) initsinitial notification.10
40. Therepresentative ofIndonesia saidthathisauthorities would respond inwriting induecourse.
Hesaidthatthere hadbeenaslight change inBULOG 'srolesince theUruguay Round, inparticular
regarding soyabean meal, where asfrom1April 1996BULOG would nolonger havemonopoly import
rights andtheimport tariff would become zeropercent andthelocalcontent requirement would be
phased outahead ofthecommitment. Regarding Australia 'squestion, hesaidthatprivate importers
wereallowed tohandle some portion oftrade, especially forcertain types ofsugar forthesoft-drink
industry. Further clarification would beprovided induecourse. Regarding theUSquestions, his
government wasoftheviewthatonlySTEs thathadamonopoly orexclusive rights within themeaning
7Thequestions were subsequently circulated indocument G/STR/Q1/TUN/3.
8Theinformation wassubsequently circulated indocument G/STR/N/1/VEN/Suppl.1.
9Thequestion wassubsequently circulated indocument G/STR/Q1/IDN/4.
10These questions were subsequently circulated indocument G/STR/Q1/IDN/3.G/STR/M/7
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ofArticle XVII hadtobenotified. Thiswasthereason APKINDO hadnotbeennotified. However,
hisauthorities would examine thismatter further. Concerning BULOG 'sroleintheprocurement,
storage, processing andmarketing ofother commodities, adetailed answer hadalready beenprovided
inG/STR/W/16; however, hisauthorities would lookatthisquestion again.
(iii) Japan (G/STR/N/2/JPN)
41. Therepresentative ofArgentina asked whether thetakeover oftheLivestock Industry Promotion
Corporation (LIPC) would change thegoals andactivities oftheprevious organization, andifthiswere
thecase, when Japan would make therelevant notification.
42. Therepresentative ofAustralia asked questions concerning Japan'snotification thatwere
subsequently circulated inG/STR/Q1/JPN/2.
43. Therepresentative ofJapan saidthatthereason forthemerger ofthetwoorganizations was
purely theneedforadministrative reform. InJapan, quasi-government organizations wereunder review
inthelightofefficiency, andthismerger waspartofthatprocess. There hadbeennochange inthe
arrangement ofprograms which hadbeencarried outbytheprevious organizations.
(iv) Slovak Republic (G/STR/N/2/SVK, G/STR/Q1/SVK/1)
44. Therepresentative oftheUnited States asked questions concerning theroleoftheStateFund
forMarket Regulation (SFMR) inmalttrade andwhether exports attributable totheSFMR werethe
solesubsidized exports.11
45. Therepresentative oftheSlovak Republic provided adetailed oralresponse totheUnited States '
questions which wassubsequently circulated inG/STR/Q1/SVN/4.
46. Therepresentative ofNewZealand saidthatthisnotification differed fromtheother updating
notifications inthatitprovided statistical information ontheactivities oftheSTEinthepastyear.
Hecommended theSlovak Republic onthisincreased transparency, andsaidthatthiswould bean
issue toconsider incontext oftherevision ofthe1960 questionnaire.
(v) South Africa (G/STR/N/2/ZAF)
47. Therepresentative ofSouth Africa saidthatattheendof1996 newlegislation hadbeenput
inplace which governed theareaofstatetrading. Thislegislation would benotified induecourse.
(vi) Thailand (G/STR/N/2/THA)
48. Therepresentative ofNew Zealand asked questions concerning thePublic Warehouse
Organization (PWO) which were subsequently circulated inG/STR/Q1/THA/2.
49. Therepresentative ofArgentina asked forfurther clarification ofparts ofthenotification.12
50. Therepresentative ofThailand saidthatoncewritten questions werereceived, hisauthorities
would provide written answers toArgentina andNewZealand.
11Thequestions were subsequently circulated indocument G/STR/Q1/SVK/1.
12Thequestion wassubsequently circulated indocument G/STR/Q1/THA/3.G/STR/M/7
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51. There were nocomments orquestions onthefollowing notification:
- Peru (G/STR/N/2/PER)
52. TheChairman invited delegations having raised questions atthepresent meeting tosubmit
theseinwriting directly totheMember concerned, withacopytotheSecretariat forcirculation. Written
answers tothose questions should besubmitted directly totheenquiring country, withacopytothe
Secretariat, assoonaspossible. Heemphasized theneedforMembers towhom written questions
hadbeenaddressed -insome cases several months earlier -torespond inwriting tothose questions.
53. Therepresentative ofNewZealand expressed hisdelegation 'sconcern overthenumber of
questions submitted inwriting forwhich noreplies hadyetbeenprovided.
54. Therepresentative oftheUnited States noted thathisdelegation hadsubmitted further questions
inwriting toAustralia (G/STR/Q1/AUS/3 andCorr.1) regarding theAustralian Wheat Board, theNew
South Wales RiceMarketing Board andtheAustralian Barley Board.
55. TheWorking Party tooknoteofthestatements.
C. Revision ofthe1960 questionnaire onstatetrading enterprises
-Progress report bytheChairman (G/STR/W/30)
56. TheChairman recalled thatatitsmeeting inSeptember 1996, theWorking Party hadbefore
itaworking text(G/STR/W/30) which attempted toreflect thediscussions intheinformal meetings
thathadbeenheldthusfar.Atthatmeeting theWorking Party hadhadaveryuseful discussion of
thedraftrevised questionnaire which inhisviewmoved theprocess wellforward. Inaddition, afurther
informal meeting hadjustbeenheldatwhich considerable progress hadbeenmade. Heemphasized
thatparticipation intheinformal meetings wasopentoanydelegation wishing toattend.
57. Hesaidthatwhile there were stillproblems toresolve, itappeared thatthegroup wasclose
toreaching aconsensus onadrafttextthatcould beputtothisWorking Party andconsidered for
adoption. Arevised drafttextwould becirculated shortly toallMembers.13Thetextwould reflect
theresultsofthemostrecentinformalmeetingwithsquarebracketsaroundthetwoareaswhereconcerted
further work wasneeded, oneofwhich wasTable IIcwhere, inhisview, itwasnecessary toreach
aconsensus onsome other typeofnotification ofprices.
58. TheWorking Party tooknoteofthestatement.
D. Development ofanillustrative listshowing thekinds ofrelationships between governments
andenterprises andthekinds ofactivities engaged inbythese enterprises
-Progress report bytheChairman (G/STR/W/31 and32)
59. TheChairman recalled thatatitsmeeting inJune, theWorking Party haddecided thatwork
onthisissue should continue tobepursued inaninformal setting along withtherevision ofthe
1960 questionnaire, towhich itwasclosely linked. Atthatmeeting, hehadstressed theimportance
ofthisexercise inthecontext notonlyofwork onarevised questionnaire, butalso-andperhaps more
fundamentally -inthecontext ofdeveloping aclearer understanding ofwhatnotifiable statetrading
wasunder theWTO. Subsequently, attheSeptember 1996meeting, thedelegations oftheUnited States
andNewZealandhadintroducedwrittenproposalsforadraftillustrativelist(indocumentsG/STR/W/31
13Thetextwassubsequently circulated asG/STR/W/30/Rev.1.G/STR/M/7
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andG/STR/W/32 respectively), andtheWorking Party hadhadauseful exchange ofviews onthe
texts.
60. Todate, work ontheillustrative listintheinformal consultations hadlagged behind thaton
thequestionnaire. However, twoMembers hadmade written submissions andtherehadbeenafurther
exchange ofviews onthese proposals bothattheSeptember meeting andininformal consultations.
Hestressed thatwhile there werealready proposals onthetable, anyMember wishing todosowas
encouraged tomake itsownsubmission. Hehoped thatonthebasis ofthese submissions thegroup
could soondevelop aworking textofadraftillustrative list,andwelcomed anycomments inwriting
onthetwoproposals.
61. Hesaidthere seemed tobeconsiderable misunderstanding about whatstatetrading was,and
thatdevelopment ofanillustrative listwould helptoovercome this.Atthemostrecent informal meeting
oftheWorking Party there hadnotbeen sufficient timetoconsider theillustrative list,except
tangentially. However, given theclose linkbetween theillustrative listandthequestionnaire, work
onthelatter would facilitate progress onthelist.
62. TheWorking Party tooknoteofthestatement andagreed thatthisissue would continue to
beconsidered ininformal consultations.
E. Other Business
-Appointment ofnewChairman
63. TheChairman drew attention tothefactthattheCouncil forTrade inGoods, atitsmeeting
on12February, hadappointed Ms.Vibeke Roosen (Denmark) asthenewChairman oftheWorking
Party.
64. TheWorking Party tooknoteofthestatement.