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G/STR/M/26
18 December 2014
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Working Party on State Trading Enterprises  
 
 MINUTES OF THE MEETING OF THE WORKING PARTY 
ON STATE TRADING ENTERPRISES 
HELD ON 9 OCTOBER 2014 
CHAIRMAN: MR MOHAMMED AL MARDHOOF AL SAADI (OMAN) 
1   ADOPTION OF  THE AGENDA ........................................................................................ 1  
2   REVIEW OF NEW AND FULL NOTI FICATIONS SUBMITTED BY MEMBERS ..................... 1  
3   REVIEW OF UPDATING NOTIFI CATIONS SUBMITTED BY MEMBERS ............................ 3  
4   COUNTER-NOTIFICATION OF THE STATE TRADING ENTERPRISES OF CHINA 
PURSUANT TO PARAGRAPH 4 OF  THE UNDERSTANDING ON THE 
INTERPRETATION OF  ARTICLE XVII ................................................................................ 3  
5   NOTIFICATION OF GAZPROM BY RU SSIA AS AN STE – ITEM REQUESTED BY 
THE EUROPEAN UNION AND THE UNITED STATES ............................................................ 4  
6   NON-NOTIFICATION AND OVERDUE NO TIFICATIONS – ITEM REQUESTED BY 
AUSTRALIA, CANADA, THE EUROPEAN UNION AND THE UNITED STATES ........................ 5  
7   OTHER BU SINESS ........................................................................................................ 6  
8   ANNUAL REPORT (2014) TO TH E COUNCIL FOR TRAD E IN GOODS .............................. 6  
9   DATE OF NE XT MEETING ............................................................................................. 6  
 
1  ADOPTION OF THE AGENDA 
1.  The Chairman referred to the proposed agenda contained in document WTO/AIR/4357, 
circulated on 29 September 2014. The Working Party adopted the agenda. 
2  REVIEW OF NEW AND FULL NOTI FICATIONS SUBMITTED BY MEMBERS 
2.  The Chairman recalled that, pursuant to paragraph 5 of the Understanding on the 
Interpretation of Article XVII of the GATT 1994, the Working Party was tasked with reviewing the 
notifications and counter-notifications submitted by Members on their state trading enterprises 
(STEs). Based on this review, the Council for Trade in Goods, to which the Working Party reported, 
would make recommendations on the adequacy of notifications and the need for further 
information. Pursuant to document G/STR/8, new and full notifications on STEs were due every two years. The deadline for the latest period under review was 30 June 2014. 
3.  The Chairman suggested that the Working Party conduct its review as at previous meetings, 
that is, with a focus on two main elements: (i) whether the notification responded adequately to 
the information requested in the questionnaire contained in document G/STR/3/Rev.1; and (ii) whether more information was needed in order to permit – in the language of paragraph 2 of 
the Understanding – "a clear appreciation of the manner of operation of the enterprises notified 
and the effect of their operations on international trade". 
4.  The Working Party reviewed the new and full notifications submitted by Members. G/STR/M/26 
 
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  5.  No questions were posed regarding the notifications of Albania (G/STR/N/13/ALB, 
G/STR/N/14/ALB and G/STR/N/15/ALB); Australia (G/STR/N/15/AUS); Burkina Faso 
(G/STR/N/1/BFA, G/STR/N/4/BFA, G/STR/N/ 7/BFA, G/STR/N/10/BFA, G/STR/N/11/BFA, 
G/STR/N/12/BFA, G/STR/N/13/BFA, G/STR/N/14/BFA and G/STR/N/15/BFA); Canada 
(G/STR/N/15/CAN); Cabo Verde (G/STR/N/13/ CPV); Chile (G/STR/N/15/CHL); Colombia 
(G/STR/N/15/COL); Costa Rica (G/STR/N/10/CRI, G/STR/N/11/CRI, G/STR/N/12/CRI, 
G/STR/N/13/CRI, G/STR/N/14/CRI, G/STR/N/15/CRI, G/STR/N/10/CRI/Corr.1, 
G/STR/N/11/CRI/Corr.1, G/STR/N/12/C RI/Corr.1, G/STR/N/13/CRI/Corr.1, 
G/STR/N/14/CRI/Corr.1 and G/STR/N/15/CRI/Corr.1); Egypt (G/STR/N/15/EGY); European Union 
(G/STR/N/15/EU); Georgia (G/STR/N/15/GEO); Ho nduras (G/STR/N/15/HND); Hong Kong, China 
(G/STR/N/15/HKG); Japan (G/STR/N/15/JPN); Kuwait, the state of (G/STR/N/15/KWT); 
Liechtenstein (G/STR/N/15/LIE); Macao, Chin a (G/STR/N/15/MAC); Mali (G/STR/N/15/MLI); 
Mauritius (G/STR/N/14/MUS and G/STR/N/15 /MUS); Norway (G/STR/N/15/NOR); Oman 
(G/STR/N/10/OMN, G/STR/N/11/OMN, G/STR/N/12/OMN, G/STR/N/13/OMN, G/STR/N/14/OMN 
and G/STR/N/15/OMN); Peru (G/STR/N/15/PER); Senegal (G/STR/N/1/SEN, G/STR/N/4/SEN, 
G/STR/N/7/SEN, G/STR/N/10/SEN, G/STR/N/11/SEN, G/STR/N/12/SEN, G/STR/N/13/SEN, 
G/STR/N/14/SEN and G/STR/N/15/SEN); Sing apore (G/STR/N/15/SGP); South Africa 
(G/STR/N/15/ZAF); Switzerland (G/STR/N/15/ CHE); Chinese Taipei (G/STR/N/15/TPKM, 
G/STR/N/15/TPKM/Corr.2, G/STR/N/14/TPKM/Corr.1 and G/STR/N/13/TPKM/Corr.1); Former 
Yugoslav Republic of Macedonia (G/STR/N/1 1/MKD, G/STR/N/12/MKD, G/STR/N/13/MKD and 
G/STR/N/14/MKD); Togo (G/STR/N/14/TGO); Ukrain e (G/STR/N/15/UKR); and the United States 
of America (G/STR/N/15/USA). 
6.  The European Union re-submitted a question regarding India's latest notifications 
(G/STR/N/12/IND; G/STR/N/13/IND; G/STR/N/14/IND) which had been submitted for the first 
time in October 2013.1 The EU reiterated its concern about the possible negative effects on world 
trade of numerous Indian agricultural STEs and the potential adverse spill-over effects of the operations aimed at maintaining stocks of food grains by procuring the products at minimum 
support prices and managing imports. The EU refe rred to the notification submitted by India in 
November 2012 (G/STR/N/14/IND) which stated: "The State Trading Enterprises (STEs) domestically procure/ purchase and import depending on the supply situation as well as prices…..The resale price of imported products is based on commercial considerations." Regardless 
of whether the STEs were directly involved in exports of the products concerned, the European 
Union requested information about the extent to which the food grains concerned were exported upon having been released from the stocks and at which price. 
7.  Canada shared EU concerns; it had posed similar questions to India in the Committee on 
Agriculture and was very interested in hearing India's response in this Working Party.  
8.  India noted that aspects of the EU questions were not clear and in particular the meaning or 
definition of the term "potential adverse spill-over effects" in the WTO or in the jurisprudence, if 
indeed such definition exists. India's notifications covered all three parameters, i.e. imports, exports and domestic operations. To the extent that the issues raised concerned policy matters brought over from the Committee on Agriculture, th e mandate of this Working Party did not "spill 
over" to the operation of principles governed by the Agreement on Agriculture. All requested 
information was available in India's notifications and it had no other data to share. 
9.  Australia understood the EU question to address imports, exports and their prices and asked 
India where in its notification it provided information on the price of exports of grain commodities 
and, in particular rice.  
10.  India referred to its notification's Table 1 for the year 2006-2007 which stated the quantity 
imported and the price of import. Table 2 addr essed exports and Table 3 domestic operations. 
India was not clear as to the information sought beyond that included in the Tables.  
11.  Australia noted that it could not see wheat and rice listed in Table 2.  
                                               
1 India's notifications G/STR/N/12/IND, G/STR/N/13/IND and G/STR/N/14/IND had been reviewed at 
the meeting of the Working Party of 19 October 2012 and 7 October 2013 respectively. At the previous 
meeting of the Working Party of 7 October 2013, the European Union had posed questions regarding those 
notifications, circulated in document G/STR/Q1/IND/5. At  the request of the European  Union, this question and 
item was placed again on the agenda of this meeting. G/STR/M/26 
 
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  12.  India clarified that periods for which a commodity had not been listed, meant that it had not 
been exported. 
13.  Chile2 and the European Union3 had submitted written questions to New Zealand, with respect 
to its notification (G/STR/N/15/NZL).  
14.  Chile had received just before the meeting the written replies of New Zealand. It thus needed 
some time to reflect on them and might pose follow-up questions.  
15.  The European Union confirmed it had also re ceived New Zealand's reply just before the start 
of the meeting and noted it would review the reply with great interest.  
16.  New Zealand noted it would continue answering any additional questions and maintain 
dialogue regarding its notification. 17.  The Working Party took note of the stat ements, questions made and answers provided. 
3  REVIEW OF UPDATING NOTIFICATIONS SUBMITTED BY MEMBERS 
18.  No questions were posed regarding the updating notifications of Burkina Faso 
(G/STR/N/2/BFA, G/STR/N/3/BFA, G/STR/N/ 5/BFA, G/STR/N/6/BFA G/STR/N/8/BFA and 
G/STR/N/9/BFA); Costa Rica (G/STR/N/9/CRI; G/STR/N/9/CRI/Corr.1); and Senegal 
(G/STR/N/2/SEN, G/STR/N/3/SEN, G/STR/N/5/SEN, G/STR/N/6/SEN, G/STR/N/8/SEN and 
G/STR/N/9/SEN). 
19.  The Chairman drew the attention of Members to the table in room document RD/STR/5 with 
the status of notifications. The table recorded all notifications, including "nil notifications", made 
from N1 in 1995 to N15 in 2014, up to 6 October 2014. The large number of blank boxes in the table indicated that many Members remained in arrears in completing their notification obligations. 
For N15, the new and full notification requir ement for 2014, the Working Party had, to date, 
received notifications from just 32 Members. The Chairman encouraged Members to continue to work with capitals and, where necessary, to take advantage of the resources of the Secretariat, to 
improve the notification record. 
20.  The Working Party took note of the Chairman's statement. 
4  COUNTER-NOTIFICATION OF THE ST ATE TRADING ENTERPRISES OF CHINA 
PURSUANT TO PARAGRAPH 4 OF THE UNDE RSTANDING ON THE INTERPRETATION OF 
ARTICLE XVII 
21.  The Chairman recalled that the next item on the agenda was the first counter-notification that 
this Working Party had ever reviewed. It ha d been submitted by the United States on 
7 August 2014 and circulated in document G/C/W/701-G/STR/Q1/CHN/2. 
22.  The United States recalled that Paragraph 4 of the Understanding stated that: "[a]ny Member 
which has reason to believe that another Member has not adequately met its notification obligation 
may raise the matter with the Member concerned.  If the matter is not satisfactorily resolved it 
may make a counter-notification to the Council for Trade in Goods, for consideration by the working party . . ." The last time China had submitted a notification to this Working Party was in 
2003 as an update to its 2002 notification. China had not submitted a new or updated notification 
since then, despite a biennial obligation to do so even if there were no changes to the information 
previously notified. This failure to notify had also been raised by other Members in previous 
meetings. Because China had persistently failed to meet this important obligation, the 
United States finally had had to act - as it was entitled to under the Understanding – and provided, 
at least in part, the voluminous information that China should have been providing all along. China's failure to provide any updated information about its STEs for 11 years had severely 
constrained the ability of Members to understand and evaluate the operations of China's STEs.  
                                               
2 Circulated in document G/STR/Q1/NZL/8, dated 19 September 2014. 
3 The question of the European Union was circulated after the circulation of the airgram convening this 
meeting in document G/STR/Q1/NZL/9, dated 2 October 2014. G/STR/M/26 
 
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  The United States called upon China to use the information provided, to conduct its own due 
diligence, and to provide the information that was normally required in a STE notification. If China was unable to do so in a timely fashion, the United States requested that the Secretariat keep this item as an agenda item for the next meeting.  
23.  China stated that the main reason for China not timely notifying the status of STEs since 2003 
was that there was no change in China's state trading system since then, except for some 
individual agricultural products which were not under the state trading administration any more. 
Nevertheless, China was preparing its 2004-2013 notifications on STEs, and would notify this 
Working Party immediately after the preparation work was completed. Regarding the US counter-notification, China had no comments at the meeting and reserved the right to comment later. China might request consultations with the United States on this counter-notification and remained 
open to questions and clarifications raised by any other Member concerning China's STEs. 
24.  Canada was surprised by the length of the counter-notification considering the very little 
information in it, which demonstrated the lack of knowledge about China's STEs. Canada 
welcomed China's statement and looked forward to  reviewing China's updated notification by the 
next meeting of the Working Party. 
25.  Both the European Union and Australia expre ssed their appreciation of China's response and 
were interested in reviewing the information in China's upcoming notification. 
26.  Colombia also noted the need to improve transparency and to comply with the procedures and 
requirements regarding the submission of notifications. 27.  The United States recalled that the biennial obligation of Members to provide their STEs 
notification existed even if there were no change s to the information previously notified. Even in 
the hypothetical scenario that the notification obligation only called for notifications if there had been changes to previously notified information (which it did not), China did not fit into this 
category. As explained in the US counter-notification, the STEs identified fell into three distinct 
categories: (1) entities that China had previously notified as STEs; (2) entities that either the enterprise itself or China has otherwise identified as being a STE in publicly-available information; 
and (3) additional entities that qualify as STEs under paragraph 1 of the Understanding. More 
specifically, 109 of these entities fell into the first category, and 44 fell into the latter two; 
therefore, in China's case, the failure to notify was particularly egregious because China had demonstrably failed to notify despite public ev idence of a large number of STEs that had never 
been included in prior notifications. 
28.  The Working Party took note of the statements made. 
5  NOTIFICATION OF GAZPROM BY RUSSIA AS AN STE – ITEM REQUESTED BY THE 
EUROPEAN UNION AND THE UNITED STATES 
29.  The European Union reiterated its concern with the lack of Gazprom's notification as a STE in 
accordance with Article XVII of GATT 1994 and in line with Russia's commitment contained in 
Paragraph 88 of the Report of the Working Party on accession of the Russian Federation to the 
WTO (WT/ACC/RUS/70, WT/MIN(11)/2, 17 November 2011). At the Working Party on STEs in October 2012, the Russian Federation had informed  Members that the notification of Gazprom was 
being finalised in Moscow and would be presented very soon. As Gazprom's notification had not yet 
been submitted, the European Union asked when the Russian Federation envisaged submitting it, 
and invited the Russian Federation to explain the reasons behind this delay. 
30.  The United States supported the European Union's statement regarding the need for Russia to 
submit its STEs notification and that such notification should include Gazprom given its influence, 
through its purchases and sales, on imports or exports. In Paragraph 88 of its Working Party 
Report when Russia had acceded to the WTO, Russia had "confirmed that Gazprom would be 
notified as a STE in accordance with Article XVII of the GATT 1994."  Russia had also stated before 
this Working Party in 2012 that its STE notification "was nearly finalized and would be submitted in the near future."  Transparency was an import ant WTO requirement that Russia had agreed to 
abide by when it joined, and helped Members to better understand and evaluate a Member's STE's 
operations and its compliance with relevant WTO obligations. The United States urged Russia to G/STR/M/26 
 
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  fulfil its notification obligation as quickly as possible. If Russia was unable or unwilling to do so, the 
United States requested that the Secretariat keep this as an agenda item for the next meeting. 
31.  The Russian Federation assured Members that it took its WTO obligations very seriously. 
However, paragraph 88 of the Russian Federation  Working Party Report was merely descriptive 
and did not impose any specific commitment on the Russian Federation as well as it did not include 
time frames. At the same time, some changes in the regulation of export of natural gas in the Russian Federation had taken place recently. Accord ing to the Regulation of the Government of the 
Russian Federation as of 14 July 2014 No. 1277-r a li st of organizations granted the exclusive right 
to export liquefied natural gas had been adopted. This list included JSC "Gazprom"; JSC "Oil Company "Rosneft"; JSC "Yamal SPG"; and LLC "G azprom export". Following the provisions of 
Article XVII of GATT 1994 respective notifications on  above mentioned organizations as well as on 
JSC "Gazprom", as the organization possessing the exclusive right on export natural gas in 
gaseous form, would be finalized in the near future. 
32.  The European Union reserved the right to po se follow-up questions on the information just 
provided by Russia. 
33.  The Working Party took note of the statements made. 
6  NON-NOTIFICATION AND OVERDUE NO TIFICATIONS – ITEM REQUESTED BY 
AUSTRALIA, CANADA, THE EUROPEAN UNION AND THE UNITED STATES 
34.  The United States appreciated the Chair's and this Working Party's attempts to encourage 
Members to make their required notifications, but noted that a number of Members had either 
failed to make any notification or had not done so for some time. This was a particularly important 
issue for Members that have many STEs in their systems. Transparency was an important WTO 
requirement, and notifications (and counter-notifications) were sometimes the only way that other Members could be properly informed as to a certain Member's activity in any given area. Much of 
the information that should be provided in STE notifications had been provided and discussed in 
the Trade Policy Review process or otherwise provided through the Reports or question-and-
answer phases. Therefore, if it was a matter of updating a notification, the notification process 
need not be cumbersome. For those that had never filed, the United States urged them to 
investigate why such a notification had not been provided and promptly inform this Working Party when a notification could be expected.  Paragrap h 4 of the Understanding provided the opportunity 
for other Members to submit counter-notifications when a Member had otherwise failed to meet its 
notification obligation, but Members should not need to utilize this mechanism with any regularity. 
35.  Canada echoed the US statement about the importance of complying with the notification 
obligations and noted that Members needed to address the issue collectively. Although there were 
obvious challenges, not specific to this Working Party, the record of notifications to this Working 
Party was particularly low compared to other Committees. Canada suggested that the Working Party could generate more momentum for its works in Members' capitals if it met with greater 
regularity, which would also increase the pace of dialogue among Members. Currently, Members 
might need to wait one year to get responses to their questions. 
36.  The European Union stated that transparency was central to the operation of the WTO and the 
European Union had been raising notification compliance issues in several other WTO Committees. 
An improvement in transparency and participatio n would enhance the processes of consultations, 
discussion, negotiations and decision-making in the WTO in general. With reference to this 
Working Party, the European Union was particularly concerned about the possible negative effects 
on the world trade of numerous STEs. This Working Party had a role to play in evaluating the 
impact on trade. The European Union was interested in improving the visibility of the Working Party in capitals. More frequent communication from the Secretariat ahead of the meeting would 
be useful, such as the issuance of a draft agenda more in advance of the meeting.  
37.  Australia was concerned about the number of notifications which were not up to date. 
Transparency was critical as STEs play an increasing role in Members' economies and in the flow of 
imports and exports. Australia had a STE on rice and understood Members' interest in its STE. It 
encouraged all Members to provide and update their notifications. It offered technical assistance to 
any Member and was ready also to assist the WTO Secretariat in its efforts to do so. Australia G/STR/M/26 
 
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  supported Canada's and the EU's suggestions for more frequent meetings and for receiving the 
draft agenda of the meeting earlier. The latter would also serve fairness among Members as more 
time would be available for placing questions or providing answers. 
38.  Costa Rica noted that although transparency was essential in the WTO the level of information 
included in the draft report about notifications received so far was gloomy. This low level of 
notifications deprived the WTO from one of its essential functions. Because it understood the challenges of pulling the information required, having gone through the same process, Costa Rica 
would support any effort of the Secretariat to move forward. 
39.  Hong Kong, China shared concerns about the poor record of notification and overdue 
notifications and agreed that transparency was essential. It supported both proposals on ways to 
improve the situation and urged the Wo rking Party to follow-up on them. 
40.  Chile supported the idea to speed up the momentum within this Working Party and noted that 
transparency had grave consequences for the future  of all Members. Although it acknowledged the 
varying levels of technical capacity among Members, leading to some Members facing more 
challenges than others in complying with their notification obligations, this was not a justification 
not to notify at all. All Members had to have access to the information they needed. 
41.  The United States supported the suggestion of increasing transparency and opportunities for 
substantive discussion in the Working Party. Coordination with capital was a key element to 
maximizing a Member's engagement in WTO meetin gs and these suggestions would greatly assist 
in this regard. 
42.  Colombia agreed with the need to improve transparency and joined Canada to suggest the 
increase of meetings per year and the offer of technical assistance to Members for submitting their 
notification. It would also be helpful to receive more in advance information about meetings so that capitals could have more time to prepare. 
43.  New Zealand stated that transparency ha d systemic importance. The performance of the 
notification obligation in the Working Party was essential to New Zealand who welcomed the 
proposals put forward by other Members. Involving capitals more was a key element. However, in 
doing so, Members should improve the substance and quality of dialogue within this Working 
Party. New Zealand was reluctant to have two meetings per year only to go through a list of notifications without questions, which did not a dd any value to the process. Members needed to 
improve the dialogue in Geneva so that they could engage more their capitals. 
44.  Chinese Taipei shared the concerns of pr evious speakers, supported the proposals of the 
European Union and Australia and urged Members to  submit any pending notifications as soon as 
possible.  
45.  The Working Party took note of the statements made. 
7  OTHER BUSINESS 
46.  No item was raised under other business.  
8  ANNUAL REPORT (2014) TO THE COUNCIL FOR TRADE IN GOODS 
47.  The Working Party adopted the Annual Report (2014) to the Council for Trade in Goods, which 
was subsequently circulated as document G/L/1090. 
48.  The Chairman stated that the table with the status of notifications would be issued as 
document G/STR/11 and updated annually before  the next meeting of the Working Party. 
9  DATE OF NEXT MEETING 49.  The Chairman informed Members that the next meeting of the Working Party would be held 
on 12 October 2015. G/STR/M/26 
 
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  50.  The Chairman urged Members to provide th eir pending notifications. He requested that 
written questions be provided 3 weeks before th e date of the next meeting, and that written 
answers to written questions be provided well in advance of the next meeting. 
51.  The meeting was adjourned. 
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