RESTRICTED
WORLD TRADE G/STR/Q1/THA/1
5July1996
ORGANIZATION(96-2583)
Original: English Working Party onState Trading Enterprises
REPLIES TOQUESTIONS FROM CANADA1,JAPAN2AND THE UNITED STATES3
ONTHE ARTICLE XVII NOTIFICATION OFTHAILAND4
Thefollowing communication, dated 25June1996, hasbeenreceived from thePermanent
Mission ofThailand.
_______________
Questions fromCanada
1. Thecurrent Thainotification refers tothreeSTEs. However, theWTOSecretariat TPRM Report
onThailand, presented onemonth laterinNovember 1995, refers to22STEs. Please provide further
detailed information withregard tothe19enterprises notnotified, inorder toclarify thismatter.
There areonlythreeStateTrading Enterprises inThailand whose activities involve importation
and/or exportation. These StateEnterprises comprise ofthePublic Warehouse Organization (PWO),
LiquorDistilleryOrganization(LDO)andThailandTobaccoMonopoly(TTM).ForotherStateTrading
Enterprises notmentioned here, theirfunctions primarily concern public services orother types of
economic activities which havenolinks withimport/export activities.
Asforthe19other State Trading Enterprises, theiractivities dealwithdomestic production
and/or distribution under theGovernment policy. Atthesame time, private enterprises canopenly
andfreely compete, interms ofproduction andimport/export withthese State Trading Enterprises
withoutanyrestrictions.Additionalinformationonthese19StateTradingEnterprisescanbesummarized
asfollows:
- STEs operating under thesupervision oftheMinistry ofDefense: Glass Manufacturing
Organization,LeatherTanningOrganization,TextileWeavingOrganizationandBattery
Manufacturing Organization. These STEs havebeenestablished primarily forthe
purpose ofmilitary utilization. None ofthem areengaged intheimport/export
undertakings.
- ThePetroleum Authority ofThailand (PTT) operates asanormal private enterprise;
receives nospecial privileges from theGovernment; andfreely competes withother
international anddomestic enterprises.
- Forest Industry Organization (FIO): notresponsible forexport orimport, generates
income from forest industry andrelated activities, iswithout special privileges and
freely competes withtheprivate sector.
1G/STR/W/13,2G/STR/W/13,3G/STR/W/2, G/STR/W/10.
4G/STR/N/1/THA.G/STR/Q1/THA/1
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- Rubber Estate Organization (REO): notresponsible forexport orimport;
objectives: rubber plantation; rubber production, iswithout special privileges and
freely competes withtheprivate sector.
- FishMarketing Organization (FMO): notresponsible forexport orimport;
objectives: provide domestic marketing facilities forfishery products, iswithout special
privileges andfreely competes withtheprivate sector.
- ColdStorageOrganization(CSO):notresponsibleforexportorimport,provideservices
inthecoldstorage industry totheStateandtothepublic, iswithout special privileges
andfreely competes withtheprivate sector.
- DairyFarmingPromotionOrganizationofThailand(DFPO):notresponsibleforexport
orimport, provide training anddisseminating dairy technology todairy farmers, is
without special privileges andfreely competes withtheprivate sector.
- Thai Plywood Company Limited (TPCL): notresponsible forexport orimport,
manufactures plywood, veneers andflushdoors, iswithout special privileges andfreely
competes withtheprivate sector.
- Marketing Organization forFarmers (MOF): notresponsible forexport orimport,
purchase andarrange forpurchasing agricultural products anddomestic commodities
fromfarmers anddistribute essential consumer goods tofarmers atreasonable prices,
iswithout special privileges andfreely competes withtheprivate sector.
- Provincial Trading Companies ofLampoon, Prachinburi andSurin -allarenolonger
inbusiness.
2. TheThainotifications oftheadministration oftariff quotas indicated theroleofthePublic
Warehouse Organization (forpotatoes) andtheThaiCane andSugar Corporation (forcaneorbeet
sugar) inadministering certain tariff quotas (G/AG/N/THA/2 andTHA/5, respectively). Thefirstof
these isdealt withinyourstatetrading notification, while thesecond oneisnot.TheThaiCane and
Sugar Corporation willbeprovided allallocations ofimports under theaccess commitment. Could
Thailand describe theother functions ofthiscorporation, andtheirrelation toitsroleinimports?
Should thisorganization benotified asastatetrading enterprise? Ifnot,whynot?
TheThai Cane andSugar Corporation Limited (TCSC) isanenterprise with aspecial
organizationalarrangement.Thecompany'sholdingsaredividedamongthreemajorgroups,comprising
sugarcanegrowers,millersandtheGovernment(representedbytheMinistryofCommerce,theMinistry
ofIndustry andtheMinistry ofAgriculture andCo-operatives). Theunderlying objective insetting
uptheenterprise wastoprovide amechanism toestablish areference export price which istobeused
inthecalculation ofcaneprice under therevenue sharing system between canegrowers andmillers.
Prior toitsdesignation withregard totheWTO obligations, theTCSC hadnever engaged in
import activities. Besides theprimary function oftheagency which concerns theexporting ofsugar
anditslimited rolewithimports under theaccess commitment, TCSC isnotinvolved inanyother
functions oractivities thatwould berelated toimports other thanwhathasbeenmentioned. Bythe
natureofitsorganizationalstructure,althoughtheGovernmenthasaroleintheTCSC,itsrole,however,
islimited toonlymonitoring thepolicy where alldecisions aretheresult ofcompromised positions,
based entirely onbusiness standpoints, between millers andcanegrowers. Thestatus ofTCSC is,
therefore, notconsidered asbeing qualified asaStateTrading Enterprise astheorganization isrelatively
freefrom Government intervention interms ofequity holdings.G/STR/Q1/THA/1
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Question fromJapan
WenotethatThailand states inthenotification thatthePublic Warehouse Organization (PWO)
hasthesoleauthority toimport potatoes andtea.Could Thailand elaborate onthecriteria forthe
choice oftheseproducts asproducts tobehandled bythePWO? Isthereanypossibility thattheproduct
coverage ofthePWO bebroadened infuture?
With reference toThailand 'snotification onadministering tariff quotas under theAgreement
onAgriculture, thePublic Warehouse Organization hasbeendesignated astheagency responsible for
theimportation ofcertain quantities under tariff quota regarding potatoes, copra, coconut oil,palm
oil,coffee andgarlic. Itshould bereiterated thattherightgranted toPWO toimport these agricultural
products doesnotcover all,butislimited toonlyaspecific quantity oftariff quota ineachcategory.
Inaddition, thePWO'sroleonimportation doesnotcover anyagricultural products which
falloutside thetariff quota scheme.
Atpresent, Thailand hasnopolicy orplanthatcallsforenlarging orbroadening ofproduct
coverage under thePWO inthefuture.
Questions fromtheUnited States
1. Thenotification regarding potatoes andteacould befurther elaborated. ThePublic Warehouse
Organization (PWO) wastasked withensuring thatlocal production ofpotatoes would notcreate an
over-supply situation inthecountry, andthatimported products wereusedonlyforplanting andnot
forconsumption. Regarding theimport monopoly fortea,oneofthemainfunctions stated wastoensure
thatlocal content ofimported teaproducts wasmaintained .Astheconsistency ofthese measures
withWTO provisions might beinquestion, further information would beuseful.
Since September 1995, theMinistry ofCommerce hasdesignated thePWO toadminister the
importation ofpotatoes under tariffquota. Thepurpose ofsuchanarrangement ismainly tofacilitate
theimportation process under theAgreement onAgriculture. Regarding theimportation oftea,the
localcontent requirement regulation hasbeenabolished since September 1995.
2. Wenoted thatThailand reported thatthe"Thailand Tobacco Monopoly isauthorized tobe
thesoleimporter oftobacco which isusedforproducing cigarettes inThailand", butThailand did
notreport onimport activity oftheThailand Tobacco Monopoly. Could Thailand report onthequantity
ofimports bytheThailand Tobacco Monopoly andreport onhowtheimported prices relate todomestic
prices?
Tobacco -Import Statistics
Year
(1)Quantity
(2)Value
(3)Average Price
(4)=(3)/(2)
1991 8,800,500 1,381,860,000 157.0
1992 7,896,008 1,265,218,530 160.2
1993 7,700,965 940,500,014 122.1
1994 8,726,762 1,438,881,599 164.9G/STR/Q1/THA/1
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Year
(1)Quantity
(2)Value
(3)Average Price
(4)=(3)/(2)
1995 9,702,295 1,597,428,042 164.6
Quantity: Kilogram
Price: Baht/Kg
Domestic Statistics: Domestic price andquantity bought byTTM
Year Quantity Price (average)
1991 36,669,826 36.2
1992 46,306,067 38.5
1993 42,614,243 38.1
1994 31,509,366 38.7
1995 32,065,534 39.5
Quantity: Kilogram
Price: Baht/Kg