RESTRICTED  
  
G/STR/M/31  
 
24 August  2017 
(17-4517) Page: 1/6 
Working Party on State Trading Enterprises    
 
 MINUTES OF THE MEETI NG 
HELD ON 9 MAY 2017  
CHAIR: YEILI RANGEL PEÑARANDA (COLOMBIA)  
1   ADOPTION OF THE AGEN DA ................................ ................................ ........................  1 
2   REVIEW OF NEW AND FULL NOTIFICATIONS S UBMITTED BY MEMBERS  .....................  1 
3   REVIEW OF NOTIFICATI ONS PREVIOUSLY REVIE WED BY THE WORKING 
PARTY  ................................ ................................ ................................ ..............................  2 
4   CONTINUED N ON-NOTIFICATION OF STAT E TRADING ENTERPRISE S BY THE 
RUSSIAN  FEDERATION  ................................ ................................ ................................ ..... 4 
5   CONTINUED NON -NOTIFICATION OF STAT E TRADING ENTERPRISE S OF THE 
UNITED ARAB EMIRATES  ................................ ................................ ................................ . 5 
6   OTHER BUSINESS  ................................ ................................ ................................ ........  5 
7   DATE OF NEXT MEETING ................................ ................................ ..............................  6 
 
1  ADOPTION OF THE AGEND A 
1.  The Chair referred to the proposed a genda contained i n WTO/AIR/STR/6, circulated on 
28 April 2017. She indicated that, under Other Business, she would inform the Working Party of 
the reactions she had  had since the October meeting, in relation to the United States' proposal on 
transparency .  
2.  The Working Part y adopted  the agenda  as agreed . 
2  REVIEW OF NEW AND FU LL NOT IFICATIONS SUBMITTED  BY MEMBERS  
3.  The Chair  recall ed that, according to paragraph 5 of the Understanding on the Interpretation of 
Article XVII of GATT 1994, the Working Party was tasked with reviewing  the notifications and 
counter -notifications presented by Members on their State Trading E nterprises  (STEs) . As 
recommended by the Working Party (G/STR/8) and agreed by the Council for Trade in Goods on 
22 June 2012, these new and full notifications were n ow presented every two years.  
4.  The last new and full notification was due on 30 June 2016. The Working Party h ad already 
reviewed a number of the notifications for 2016 during its meetings in June and October 2016, and 
this meeting's agenda included 2016 n otifications received since that time, as well as recently 
submitted notifications corresponding to previous periods.  
5.  The Chair  propose d that the Working Party review the notifications in the same way as in 
previous meetings, focusing on two main elements : (i) whether  the notification respond ed 
adequately to the information requested in the Q uestionnaire (G/STR/3/Rev .1); and (ii) whether  
more information was required in order to permit, in the language  of paragraph 2 of the 
Understanding , "a clear apprecia tion of the manner of operation of the enterprises notified and the 
effect o f their operations on international trade ". 
6.  The Chair recalled that, a s provided in the Working Party 's 1995 Report ( G/L/35 ), Members 
wishing to raise questions on a notification u nder review were to  present them in writing to the G/STR/M/31  
 
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  delegation and to the Secretariat three weeks before  the meeting. Replies were also to be 
presented in writing. Both questions and replies w ould be distributed to all Members.  
7.  No questions were raised rega rding the notifications of Chile  (G/STR /N/16/ CHL); 
Indonesia  (G/STR/N/16/IDN) ; Malawi  (G/STR/N/1 6/MWI) ; Malaysia  (G/STR/ N/16/MYS ); 
Mali (G/STR/ N/16/MLI ); Mexico (G/STR/ N/16/MEX ); Republic of Moldova  (G/STR/ N/16/MDA ); 
Pakistan  (G/STR/N/14/PAK -G/STR/N/15/PAK -G/STR/N/16/PAK ); Qatar  (G/STR/N/1 6/QAT);  The 
former  Yugoslav Republic of Macedonia  (G/STR/N/15/MKD/R ev.1-G/STR/N/16/MKD/R ev.1); 
Togo  (G/STR/N/16/TGO ); Tunisia  (G/STR/N/15/TUN/S uppl.1-G/STR/N/16/TUN/S uppl.1); 
Turkey  (G/STR/N/15/TUR -G/STR/N/16/TUR);  United States  (G/STR/N/16/USA/R ev.1). 
8.  Regarding the notification by  the European Union  (G/STR/ N/16/EU/A dd.1), the 
Russian  Federation  thanked the European Union for submitting an addendum to its notification and 
reserved the right to revert to the document after a  more detailed examination of the notification.  
9.  The Working Party took note  of the notifications  and statements made.  
10.  The Chair drew the attention of delegations to document G/STR/ 16, which contains a Status 
of Notifications and noted  that many, i f not the majority, of Members were not fulfilling their 
notification obligations. Regarding the notification requirement for 2016, the Working Party had, to 
date, received notifications from just 42  Members. She recalled the steps taken by the Chair since 
the Oct ober meeting to encourage notifications from Members which had missed multiple 
notification cycles. The Chair encouraged Members to work with their capitals to improve the 
notification record .  
11.  The United States  thanked the Chair for her initiative to enco urage notifications and noted 
that 54 Members had made no STE notification in the last ten years. Transparency was an 
important requirement for all WTO Members and notifications and counter -notifications were 
sometimes the only way Members could be properl y informed of certain Members' activities in 
certain areas. Low levels of compliance undermined the transparency function of the Working 
Party. The United States also noted that the notification process need not be cumbersome, as 
much of the information to  be provided in the context of STE notifications was discussed in the 
Trade Policy Review process, in the WTO Committee on Agriculture, or had been otherwise 
provided to the WTO. The non -notification issue was a serious problem for the Working Party and 
required some kind of action. The United States supported the Chair's initiative in this regard.  
12.  The European Union  also expressed support for the Chair's initiative and called on Members to 
look for ways to improve transparency.  
13.  The Working Party  took not e of the statements made.  
3  REVIEW OF NOTIFICATI ONS PREVIOUSLY REVIE WED BY THE WORKING P ARTY  
14.  The Chair noted  that this item concerned the review of notifications previously reviewed by 
the Working Party. Delegations ha d asked the Working Party to revert  to seven notifications.  
15.  Regarding t he notification of Australia  (G/STR/ N/16/AUS ), the European Union  had posed  
written questions (G/STR/Q1/AUS/9) and Australia had provided written responses 
(G/STR/Q1/AUS/10).  
16.  The European Union  thanked Australia for the rep lies and raised a follow up issue in relation 
to an inquiry by the Productivity Commission into the regulation of Australian Agriculture and 
noted that the report of that inquiry had been publicly released with a recommendation to repeal 
the Rice Marketing  Act. The European Union  asked whether and when the government of Australia 
intended to respond to these suggestions.  
17.  Australia  responded that on 28 March 2017 the government tabled the Productivity 
Commission's report in the Australian Parliament. The go vernment was considering its responses 
to all recommendations made in the report.  G/STR/M/31  
 
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  18.  Regarding t he notification of Canada  (G/STR/N/16/CAN ), written  questions  had been posed 
by the European Union  (G/STR/Q1/CAN/12) and Canada had provided written responses 
(G/STR/Q1/CAN/16).  
19.  The European Union  thanked Canada for the replies and had no further questions.  
20.  Regarding the notification of China  (G/STR/N/15/CHN -G/STR/N/14/CHN -G/STR/N/13/CHN -
G/STR/N/12/CHN -G/STR/N/11/CHN -G/STR/N/10/CHN ), the United States had asked wr itten 
questions (G/STR/Q1/CHN/5) and China had provided written responses (G/STR/Q1/CHN/8).  
21.  The United States  thanked China for its replies and indica ted that it would submit follow -up 
questions at a future date. The United States also indicated that it h ad been surprised at some of 
China's responses and the unwillingness to provide the information requested, on the grounds that 
some of the responses were business secrets of the State Trading Enterprises concerned. The 
United States said that based on its own preliminary research, much of this information was in fact 
publicly available. For STEs having the exclusive right to import or export products such as 
tobacco, rice, maize, cotton, coal, crude oil, processed oil, tungsten, antimony and silver, the 
United States wondered why China could not provide the average import and export price using 
Chinese customs data, which is publicly available. Similarly, for chemical fertilizers, cotton, rice, 
corn, coal, antimony and silver, information such as import quan tities, average import price, 
average domestic sales price, average export price and export quantities were publicly available. 
The United States thus urged China to re -review these categories and to submit a revised 
notification in a near future. Finally,  the United States asked China when it intended to submit its 
2016 STE notification.  
22.  The European Union  thanked China for the responses provided and noted a disagreement on 
the format of China's notification. It called on China to undertake additional eff orts when 
presenting the outstanding 2016 notification and to follow the 2003 template. The European Union 
also asked when the 2016 notification would be provided. The European Union asked two follow -up 
questions: whether Chinese STEs operated non -commerci al stocks apart from their state trading 
activities and whether there had been any development since the latest Trade Policy Review of 
China in relation to the fact that imports subject to State trading could only be made by authorized 
enterprises.  
23.  China  said it would be pleased to receive the concerns and follow -up questions of the 
United  States and of the European Union in writing. China indicated that its capital was preparing 
the information for 2015  and would submit it once it is ready.  
24.  Regarding the notification of India  (G/STR/N/14/IND), the European Union had asked 
questions in writing (G/STR/Q1/IND/13) and India had provided replies (G/STR/Q1/IND/14).  
25.  The European Union  thanked India for the answers provided and indicated that it still had a 
disag reement with regard to the status of TASMAC. India had reiterated in its replies that it did not 
consider TASMAC to be an STE as defined in the  Foreign T rade Policy of India. The European Union 
considered that TASMAC fell under the definition of Article XV II of GATT and should be notified to 
the Working Party. Despite India's confirmation that TASMAC was a governmental entity and 
enjoyed special privileges, India considered that it was not subject to notification because it did 
not have exclusive privileges , so that the third criterion of the STE definition was not met. The 
European Union disagreed and explained that the level of imports of beverages and spirits into 
Tamil Nadu was influenced by the activities of TASMAC. TASMAC was mandated to undertake 
several commercial activities within Tamil Nadu such as off -trade retail sale and purchases of 
imported foreign liquor brands for local manufacturing and bottling units. These activities 
influenced imports and exports of alcoholic beverages and spirits into Ta mil Nadu. Finally, as a 
follow up to India's response, the European Union asked whether additional details were available.  
26.  India responded that it would convey to capital any follow up questions provided in writing. 
India noted that it had responded to qu estions regarding TASMAC in documents G/STR/Q1/IND/10 
and G/STR/Q1/IND/14. India reiterated that, in its point of view, TASMAC was not an STE  under 
the Foreign Trade Policy of India (available at www.dgft.gov.in). India noted that none of the HS 
lines unde r Chapter 22, comprising beverages, spirits and vinegar, were under the STE category. 
Therefore there were no STEs designated for these imports. In addition, TASMAC being a G/STR/M/31  
 
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  provincial level entity, India was consulting with the relevant entities at differe nt levels of 
government and seeking more information to respond to the issues raised by the European Union. 
India's response in this regard would be provided in due course.  
27.  Regarding the notification of Tunisia  (G/STR/N/15/TUN -G/STR/ N/16/TUN), the 
Europea n Union had asked questions in writing  (G/STR/Q1/TUN/7) and responses had been 
provided (G/STR/Q1/TUN/8).  
28.  The European Union  thanked Tunisia for the prompt replies and indicated that it continued to 
monitor the conditions applied by the Pharmacie Centrale  de Tunisie because this entity held a 
monopoly on imports of medicines. The European Union welcomed the fact that Pharmacie 
Centrale de Tunisie no longer requested importers to bear the risk of depreciation of the national 
currency over a period of four y ears in order to be able to register and market new pharmaceutical 
products. However, importers were still required to bear this risk and the cost of the depreciation 
of the national currency for products which were already registered in Tunisia and which had local 
equivalent, since the final market price of these products was fixed. The EU called upon Tunisia to 
implement the decisions and recommendations which had emerged from the public -private 
dialogue on the pharmaceutical sector and in particular to s peed up the implementation of 
decisions to move towards a market based pricing for imports of pharmaceutical products with 
local equivalents. This would have no negative repercussions on patients or Social Security. The 
European Union also encouraged Tunis ia to apply the recommendations concerning the 
establishment of the Comité Unique des Prix in order to improve transparency and predictability in 
pricing decisions. The European Union hoped that Tunisia would continue to try and maintain an 
open environmen t for pharmaceutical products and stated that it would continue the discussion 
with Tunisia at the next meeting.  
29.  Regarding the notification of the United States  (G/STR/N/16/USA -G/STR/N/15/USA -
G/STR/N/14/USA -G/STR/N/13/USA -G/STR/N/12/USA -G/STR/N/11/USA), qu estions were asked by 
China (G/STR/Q1/USA/14).  
30.  China  noted that the United States had circulated a revision of its notification in document 
G/STR/N/16/USA/R ev.1) and said that it appreciated this revision. However, China asked why the 
statistical informat ion for certain years (2004, 2006, 2008, 2010, 2012) had not been provided by 
the United States and when  it would do so.  
31.  The United States  indicated that responses to China's questions had been provided on the day 
of the meeting and recognized that statis tics for certain years had been inadvertently omitted. The 
United States  had already reviewed the notification for 2016 and had submitted a revised 
notification in April. The United States was in the process of reviewing previous notifications and 
would pr ovide revisions as needed. It wanted to ensure that Members had all the information 
required in a notification, that it wanted to be totally transparent in the information it provided and 
that it would submit additional information soon.   
32.  Regarding the no tification of Viet Nam  (G/STR/N/16/VNM -G/STR/N/15/VNM), written 
questions had been posed by the United States (G/STR/Q1/VNM/1), but no response was 
provided.  
33.  The United States  reminded Viet Nam of its questions of June 2016 and looked forward to the 
written response of Viet Nam.  
34.  The delegate of Viet Nam indicated that he expected responses from capital soon.  
4  CONTINUED NON -NOTIFICATION OF STAT E TRADING ENTERPRISE S BY THE 
RUSSIAN  FEDERATION  
35.  The European Union  reiterate d its concern with the lack of notifi cations of Russian STEs under  
Article XVII. On the basis of replies submitted by the Russian Federation at meetings of the  
Working Party  and in the context of its Trade Policy Review , the European Union had understood 
that Russia granted exclusive rights t o several companies established by the government of the 
Russian Federation. At the last meeting of the Working Party, Russia had indicated that the 
notifications for Gazprom in response to the 2014 call for notifications, as well as other G/STR/M/31  
 
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  organizations in  response to the call for notifications for 2016, were under internal coordination. 
The European Union regretted that Russia had not yet fulfilled its notification obligation and urged 
it to transform these positive announcements into concrete actions.  
36.  The United States  continued  to have concerns regarding Russia's non -notification of its STEs. 
Russia had  struggled to meet its transparency commitments in a number of WTO bodies, but the 
United States  had hoped that these struggles would not  transfer to this  Working Party . 
Unfortunately this did not appear to be the case, as Russia had missed three consecutive 
notification cycles as indicated in Secretariat document G/STR/16 of 1 May 2017, and had not 
fulfilled a single STE notification since it had joined th e WTO. This being said, the United States 
welcomed Russia's indication at the October 2016 meeting of the Working Party that both 
Gazprom and Rosneft held or had been granted the exclusi ve right to export natural gas . The 
United States trusted that Russia would provide all the required information in its eventual 
notifications, both for the last six years and going forward. Russia had repeatedly stated in the 
Working Party that its notification was "nearly finalized and would be submitted in the near 
future ". Transparency wa s an important WTO requirement that Russia agreed to abide by when it 
joined the WTO. It allowed WTO Members to better understand and evaluate a Member 's STE 
operations and its compliance with relevant WTO  obligations. The United States urged Russia to 
fulfil its notification obligation as quickly as possible. It was willing to further engage with Russia 
either here in the Working Party , or outside the room if that would be helpful , on helping it make 
its required  notification.  
37.  The Russian  Federation  thanked the United States and the European Union and confirmed that 
it paid great attention to its notification obligations in the WTO. The delegate for the 
Russian  Federation explained that the preparation of the notification was ongoing. The delegation 
of the Russian Federation in Geneva had held consultations with the WTO Secretariat to clarify 
some points in the Questionnaire. The Russian Federation confirmed that it would submit the 
notification when the necessary internal procedures are co mpleted  
38.  The Working Party took note  of the statements made.  
5  CONTINUED NON -NOTIFICATION OF STAT E TRADING ENTERPRISE S OF THE UNITED 
ARAB EMIRATES  
39.  The United States  noted  that during the United Arab Emirates'  Trade Policy Review in 
June 2016, the United State s had inquired as to the status of the United Arab Emirates' 
notification, as it had not submitted a notification since 1996. The United Arab Emirates had stated 
that making a notification on STEs was not a priority and that such a notification would be 
challenging because of the definition of STEs and the federal structure of the United Arab Emirates 
government. The United States continued to be concerned by this response because it gave the 
impression that the United Arab Emirates did not place much value  in its transparency obligations. 
Furthermore, being itself a federal government, the United States did not find the federal structure 
of the United  Arab Emirates a compelling reason not to notify. As to the definition issue, the 
United  States urged the Un ited Arab Emirates to seek the technical assistance of the 
WTO Secretariat. The United States was willing to provide assistance on a technical level to help 
the United Arab Emirates fulfil its obligation.  
40.  The Working Party took note of the statement  made . 
6  OTHER BUSINESS  
41.  The Chair informed the Worki ng Party about the contacts she had  had with delegations 
regarding the United States' proposal on transparency in STE notifications. This proposal would 
require the WTO Secretariat to place automatically on the a genda of a meeting written questions 
for which answers have not yet provided, and written questions or answers which have been 
submitted since the last meeting of the Working Party.  After the October meeting, the WTO 
Secretariat circulated to Members an em ail containing the United States' proposal and indicating 
that the Chair would assume agreement unless any delegati on indicated to the contrary. The Chair 
said that she had  received comments from one Member which i ndicated that, at this stage,  it was 
not in a position to accept the proposal made by the United States.  G/STR/M/31  
 
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  42.  The United States  thanked the Chair for its efforts. The United States' proposal was a simple 
one. It would require the WTO Secretariat to place automatically on the agenda of a meeting 
written  questions for which answers have not yet provided  and written questions or answers which 
have been submitted since the last meeting of the Working Party . This was no different from what 
was currently being done at committee level throughout the Rules Divi sion. There were no 
additional burden on Members for any of this and it would benefit Members to ensure that the 
questions and replies process is functional. The United States was willing to consult with any 
Member after the meeting regarding any concern i t might have. The United States intended to 
consult with the Chair on the best way forward before the next meeting of the Working Party.   
43.  China  thanked the United States for its proposal but considered that the current procedures 
had been working well ove r the past years and that the discussions in the Working Party had been 
specific and efficient. The United States' suggestion might lead to unnecessarily lengthy meetings 
and impose new burdens on Members, therefore China wished to maintain the current pro cedures 
for the inclusion of items on the agenda of the Working Party.  
44.  India thanked the United States for its proposal and considered that if a Member wished to 
have a particular item on the agenda it could always ask for it to be placed on the agenda be fore 
the meeting.  
45.  The Chair recommended that if the Working Party so wished, consultations on this issue could 
continue with the incoming Chairperson. The Chair invited the Working Party to take note of the 
statements made.  
7  DATE OF NEXT MEETING  
46.  The Chair indicated that the Working Party was holding two meetings per  year and interest 
had been expressed in continuing with this approach. The Chair proposed to  hold the next meeting 
on 10 November 2017. The draft annotated a genda would go out on 20 October 201 7 and the 
airgram would be issued on  1 November 2017 . 
47.  The United States  stated that having the Working Party meet twice a year had already 
produced significant benefits and had increased everybody's understanding of the key issues 
related to STE generally and of the notification process specifically. The United States proposed 
alternative dates on 19 or 20 October 2017, in order to allow for participation of officials travelling 
from capital for the Rules Week.  
48.  The Chair indicated that she would consult wi th Members in relation to the date of the next 
meeting.  
49.  The meeting was adjourned .  
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