RESTRICTED  WORLD TRADE  
ORGANIZATION  G/STR/M/18 
1 December 2008 
 (08-5870) 
Working Party on State Trading Enterprises    
  
 
MINUTES OF THE MEETING OF THE WORKING  
PARTY ON STATE TRADING ENTERPRISES 
HELD ON 3 OCTOBER 2008 
 
Chairperson:  Mrs. Virag DANI HALGAND (Hungary
) 
 
 
Page   
A.
 ADOPTION OF THE AGENDA ........................................................................................................1  
B. REVIEW OF NEW AND FULL NOTIFICATIONS SUBMITTED BY MEMBERS UNDER 
G/STR/N/10,  G/STR/N/11  AND G/STR/N/12  IN ACCORDANCE WITH THE 
RECOMMENDATION CONTAINED IN G/STR/5 .............................................................................1  
C. REVIEW OF UPDATING AND NEW AND FULL NOTIFICATIONS SUBMITTED BY 
MEMBERS UNDER G/STR/N/9.....................................................................................................4  
D. RECOMMENDATION ON THE FREQUENCY OF NOTIFICATIONS ....................................................5  
E. ANNUAL REPORT (2008)  TO THE COUNCIL FOR TRADE IN GOODS .............................................6  
F. OTHER BUSINESS ........................................................................................................................6  
 
A. ADOPTION OF THE AGENDA  
1. The Chairperson  referred to the proposed agenda contained in document WTO/AIR/3241 
circulated on 23 September 2008 and reiterated that me mbership in this Working Party is open to all 
Members of the WTO indicating their wish to serve on it.   
2. The Chairperson indicated that she would make  two statements under "Other Business".  The 
first related to exploring future steps to enhance compliance with the notification obligation, while the 
second pertained to the date of the next regular mee ting of the Working Party in the fall of 2009.   
3. The Working Party adopted  the agenda contained in WTO/AIR/3241, as amended.   
B. REVIEW OF NEW AND FULL NOTIFICATIONS SUBMITTED BY MEMBERS UNDER G/STR/N/10,  
G/STR/N/11  AND G/STR/N/12  IN ACCORDANCE WITH THE RECOMMENDATION CONTAINED IN 
G/STR/5 
4. Before starting the substantive discussions under this agenda item, the Chairperson  made a 
statement regarding the review of notifications  submitted by Members at this meeting.  The 
Chairperson recalled that, according to paragraph 5 of the Understanding on the Interpretation of 
Article XVII of the GATT 1994, the Working Party is  tasked with reviewing the notifications and 
counter-notifications submitted by Members on their st ate trading enterprises and, in light of this 
review, the Council for Trade in Goods may make r ecommendations with regard to the adequacy of 
notifications and the need for further information.   G/STR/M/18 
Page 2  
 
  5. The Chairperson suggested that the Working Party conduct this review in the same manner as 
that used for the review of notifications at prev ious meetings, that is, with a focus on two main 
elements:  (i) whether the notification responds ad equately to the information requested in the 
questionnaire contained in document G/STR/3, re vised on 14 November 2003 and contained in 
document G/STR/3/Rev.1;  and (ii) whether more info rmation is needed in order to permit – in the 
language of paragraph 2 of the U nderstanding – "a clear appreciation of the manner of operation of 
the enterprises notified and the effect of their operations on international trade".   
6. The Chairperson also recalled that, at its mee ting of 20 February 1995, the Council for Trade 
in Goods established a deadline of 30 June 1995 fo r new and full notifications by Members on their 
state trading enterprises, and that the Working Party subsequently agreed to maintain 30 June of each 
respective year as the date for all further notifi cations.  On 11 November 2003, the Working Party 
adopted the recommendation contained in G/STR/5 re garding the frequency of notifications.  The said 
recommendation, approved by the Council for Trad e in Goods on 26 November 2003, modified the 
periodicity of state trading notifications so that ne w and full notifications on state trading became due 
every two years instead of every three years and that the requirement of updating notifications in the 
intervening years is eliminated.   
7. Accordingly, the Chairperson suggested that the review of Members' notifications be carried 
out under two separate agenda items.  Agenda  item "B" which deals with the new and full 
notifications submitted by Members under G/STR/N /10 dated 17 February 2004, G/STR/N/11 dated 
27 January 2006 and G/STR/N/12 dated 5 February 2008 in accordance with the recommendation contained in G/STR/5;  and agenda item "C" relatin g to the review of updati ng notifications submitted 
by Members under G/STR/N/9 dated 21 February 2003.  These notifications, required of all
 
WTO Members, were due by 30 June of the respective years.   
8. The Chairperson reminded Members that as ag reed at the Working Party's meeting in 
September 1996, notifications which were alread y reviewed and on which there might be written 
questions would not  be retained on the air gram for the Working Party's next regular meeting unless  a 
Member specifically so requested.   
9. The Working Party then proceeded  with the review of the new and full notifications 
submitted by Members under G/STR/N/10, G/STR/N/11 and G/STR/N/12.   
10. No questions were posed regarding the notification of Argentina  (G/STR/N/12/ARG).   
11. No questions were posed regarding the notification of Armenia  (G/STR/N/12/ARM).   
12. On the notification of Australia  contained in document G/STR/N/12/AUS, the representative 
of Japan  thanked Australia for its comprehensive work  on its State Trading Enterprise System and 
posed oral questions1 regarding the Australian Barley Board (ABB), the Australian Wheat 
Board (AWB), the Grain Pool Pty, the Queensland Sugar and the Rice Marketing Board (RMB) for the State of New South Wales.   
13. On the ABB, the representative of Japan re ferred to the Australian notification which 
indicated that all exporters who obtain an export licence are allowed to export barley from Australia 
except Western Australia (WA).  He added that ma nagement of export licences functions practically 
to restrict export and that a registration system is more favourable in terms of promotion of free trade 
and increase in transparency.  In this context, he  requested Australia to explain the reason for the 
adoption of the export licence system, to illustrate how many business entities have obtained the 
                                                     
 
1 Now circulated as G/STR/Q1/AUS/7.    G/STR/M/18 
 Page 3 
 
 
  export licences so far and to explain why the export of barley from Western Australia has remained 
based on the monopoly system.   
14. On the AWB, the representative of Japan referred  to the transfer of the veto right against 
applications for the export of wheat from AWB to th e Ministry of Agriculture and requested Australia 
to explain why the export restriction system was kept .  He also requested further clarification on the 
reason Australia adopted an approval system rather  than a registration system for exporting wheat 
from Australia.  He was of the view that the approval system functions practically as a measure by 
which the Ministry of Agriculture can control the export of wheat.  The representative of Japan 
requested that future notifications by Australia, following the organizational restructuring, be based 
on data by individual enterprise for the sake of transp arency, and inquired if Australia could clarify, in 
detail, how it plans to handle its future notifications.   
15. On the Grain Pool Pty, the representative of  Japan referred to Section III, paragraph H on 
page 11 of the Australian notification which stat es that export regulatory arrangements exist for 
canola in the State of Western Australia, and inquired if  Australia could indicate, in more the detail, if 
it maintains export regulatory arrangements for canola other than the export license system.   
16. On Queensland Sugar, the representative of Jap an referred to Section II, paragraph A on 
page 13 of the Australian notification which states  that other entities are now able to freely purchase 
and export raw sugar from Queensland, on the same basis that purchases and sales of refined sugar are 
conducted, and requested Australia to clarify th e meaning of the term "the same basis".   
17. On the RMB for the State of New South Wales, the representative of Japan requested 
Australia to provide an explanation pertaining to the conditions and procedures which all agents are 
required to apply to the RMB for the State of Ne w South Wales in order to become "authorized 
buyers/sellers" of rice.   
18. The representative of Australia  thanked Japan for its questions and highlighted the fact that 
Australia is a very strong supporter of transparency in the multilateral system and that it is up-to-date 
with its state trading notifications.  However, as Japan's questions were received by Australia on the 
day prior to the meeting, he took note of the ques tions and expressed the intention to respond to all 
Japan's questions in due course.   
19. No questions were posed regarding the notification of Chile  (G/STR/N/12/CHL).   
20. No questions were posed regarding the notification of Hong Kong, China  
(G/STR/N/12/HKG).   
21. No questions were posed regardi ng the notification of Macao, China  (G/STR/N/12/MAC).   
22. No questions were posed regarding the notification of Singapore  (G/STR/N/12/SGP).   
23. No questions were posed regarding the notifications of Switzerland  
(G/STR/N/10/CHE/Suppl.1 - G/STR/N/11/CHE).   
24. No questions were posed regardi ng the notification of Chinese Taipei  (G/STR/N/12/TPKM).   
25. On the notification of Thailand  contained in document G/STR/N/12/THA, the representative 
of the United States  appreciated the information that Tha iland provided on the Public Warehouse 
Organization, the Thailand Tobacco Monopoly, and the Liquor Distillery Organization.  She added 
that in Thailand's last Trade Policy Review, there was a discussion of two additional state trading 
enterprises, the Playing Cards Factory (PCF) and th e Government Pharmaceutical Organization.  As G/STR/M/18 
Page 4  
 
  these entities were not addressed in Thailand's notifica tion, she requested clarification as to whether 
these state trading enterprises were terminated or if  they were still functioning.  She also requested 
Thailand to complete its state trading questi onnaire on these entities and submit it for Members' 
review.   
26. The Chairperson
 indicated that the representative of Thailand  was not present at that time to 
react to the questions posed.   
27. No questions were posed regarding the notifications of Trinidad and Tobago  
(G/STR/N/10/TTO - G/STR/N/11/TTO).   
28. No questions were posed regarding the notification of Turkey  (G/STR/N/12/TUR).   
29. On the notification of Ukraine  contained in document G/STR/N/12/UKR, the representative 
of the European Communities  appreciated the fact that it was Uk raine's first time to notify its ethyl 
alcohol state trading enterprise in this context.  He indicated that the European Communities had no 
problem as far as the substance of the notificati on is concerned.  However, he expressed concern 
regarding the reference made in Section II paragr aph B of the Ukrainian notification to the term 
Cognac which appeared several times in this paragrap h.  He inquired whether it would be possible to 
replace the term "Cognac" by the term "Brandy".  He emphasised that the European Communities is a 
bit sensitive when the term "Cognac" is used fo r products which are not coming from the region of 
Cognac in France.  He added that he would not in duce any further discussions on this issue in this 
forum.   
30. The Chairperson  indicated that the representative of Ukraine  was not present at that time to 
react to the question posed.   
31. No questions were posed regarding the notification of the United States  (G/STR/N/12/USA).   
32. On the notification of Zimbabwe  contained in document G/STR/N/12/ZWE, The 
representative of the United States  noted her appreciation for Zimbabwe 's notification, which explains 
that Zimbabwe "does not maintain any state tr ading enterprises in acco rdance with the working 
definition contained in paragraph 1" of the Unde rstanding on the Interpretation of Article XVII.  
However, she noted that in Zimbabwe's most recen t trade policy review, there was a discussion of one 
state trading enterprise, the Zimbabwe Grain Mark eting Board.  She requested clarification as to 
whether this state trading enterprise was terminated or if it is still functioning.  She also requested 
Zimbabwe to complete its state trading questionnaire on this entity and submit it for Members' review.   
33. The Chairperson  indicated that the re presentative of Zimbabwe  was not present at that time to 
react to the question posed.   
C. REVIEW OF UPDATING AND NEW AND FULL NOTIFICATIONS SUBMITTED BY MEMBERS UNDER 
G/STR/N/9     
34. No questions were posed regarding the notification of Latvia  (G/STR/N/9/LVA).   
35. In light of the fact that some delegations were  not able to respond fully to the oral questions 
raised on their respective notifications  at the meeting, the Chairperson  invited the delegations that 
raised the oral questions, and wished to have writte n answers, to submit these in writing directly to the 
Member concerned, with a copy to the Secretariat for circulation.  The Chairperson noted that written 
responses to all written questions should be submitted directly to the inquiring country, also with a 
copy to the Secretariat for circulation, as soon as possible.    G/STR/M/18 
 Page 5 
 
 
  36. Before closing this item, the Chairperson touche d upon the status of notifications made to the 
Working Party.  She noted that for the period 2003-2004, the European Communities and its then 
15 Member States are counted as one.  She indicated that as Cyprus;  the Czech Republic;  Estonia;  Hungary;  Latvia;  Lithuania;  Malta;  Pola nd;  the Slovak Republic and Slovenia became 
European Communities' Member States on 1 May 2004,  they were counted separately and not as part 
of the European Communities, for the period 2003-2004, in order to reflect their previous notification 
obligation.  With respect to th e year 2006, she noted that the Eu ropean Communities and its then 
25 Member States are counted as one and that  Bulgaria and Romania, which became 
European Communities' Member States as of 1 Janua ry 2007, were counted separately and not as part 
of the European Communities in order to reflect th eir previous notification obligation.  Finally, the 
Chairperson noted that for the year 2008, the Eu ropean Communities and its 27 Member States were 
counted as one.   
37. With respect to new and full notifications, as at the day of the meeting, only 35 out of 
133 Members have responded to the 2004 request;  which is 26.3 per cent of Members, 24 out of 
124 Members have responded to the 2006 request, wh ich is 19.4 per cent of Members, and finally 
13 out of 126 members have responded to the 2008 request, which is barely 10.3 per cent of 
Members.  In the area of updating notificati ons, only 34 out of 131 Members have submitted 
notifications for the year 2003, which is 26 per cent of Members.   
38. At this juncture, the Chairperson expressed gr ave concern about the deteriorating state of 
affairs regarding notifications.  She drew Members'  attention to the importance of prompt compliance 
with the notification obligation which became far less burdensome after the modification of the 
periodicity of state trading notifications.  She also referred to the new recommendation, that was to be 
adopted at the meeting, which extends the app lication of the recommendation on the frequency of 
notifications for a further period of time, after whic h the situation shall be reviewed once more.  She 
sincerely hoped that such extension would brin g about some tangible improvement and a higher 
degree of compliance with the notification obligation.   
39. The representative of Australia
 highlighted the problem of untimely notifications or lack 
thereof.  He expressed concern over the state of compliance with the notification obligation which 
continues to be less than satisfactory and whic h, in turn, had limited the opportunity for a 
comprehensive review process.  He emphasised that absent the transparency provided through 
notifications, it would be impossible to assess whet her Members have fulfilled their WTO obligations 
and commitments or to monitor the impact of their activities on international trade.  He added that 
drawing the data from the 2008 draft annual report of  the Working Party on State Trading Enterprises 
and the annual report for 2007, an overwhelming number of Members still have not submitted 
notifications.  In this respect, only about 10 pe r cent of Members submitted notifications in 2008 
covering the periods 2005, 200 6 and 2007, only around 17 per cent of Members have submitted 
notifications in 2006 for the periods 2003-2 004 and 2004-2005, and only around 9.6 per cent of 
Members have a full record of notifications which is  a very low level of compliance.  He added that 
between 80-90 per cent of Members have outstanding notifications at any one time, including some of 
the major economies and that Australia would urge Members to provide outstanding notifications as 
soon as possible.   
40. The Working Party took note  of the Chairperson's and Australia's statements.   
D. RECOMMENDATION ON THE FREQUENCY OF NOTIFICATIONS  
41. The Chairperson  explained that on 11 November 2003, the Working Party on State Trading 
Enterprises adopted the recommendation contained in  document G/STR/5 regarding the frequency of 
notifications.  This recommendation, approved by the CTG on 26 November 2003, modified the 
frequency of state trading notifications so that new and full notifications on state trading are now due G/STR/M/18 
Page 6  
 
  every two years instead of every three years.  It also eliminated the requirement of updating 
notifications in the intervening years.  The new frequency of notifications as contained in G/STR/5 
was to be implemented for a trial phase of four years, commencing on 30 June 2004.  Paragraph 4 of 
the recommendation directs the Working Party to review  the situation with regard to compliance with 
the new notification obligation at the end of the four  year trial phase.  The objective of this review 
was to determine whether to extend the application of the recommendation, either as presently drafted 
or in a modified form, for a further period.   
42. The Chairperson referred to the informal cons ultations she conducted on 9 May 2008, in order 
to explore the Membership's views in this respect.  She indicated that the debate focused on whether 
the modification of the frequency of the notifica tions has improved Members' compliance with the 
notification obligation, whether the application of that recommendation should be extended for a 
further specified period or indefinitely, and whether such extension should be made on the basis of the 
substance of the recommendation as presently drafted or in a modified form.   
43. The Chairperson added that the Working Party observed that as the period of the application 
of the current recommendation was too short to  obtain the necessary clarity as to whether the 
frequency of notifications applied as of the year 2004 has improved the compliance with the 
notifications obligation, the Working Party has info rmally concluded that it would be desirable to 
extend the application of this recommendation for two additional years until 30 June 2010.  Based on 
that, the Chairperson requested the Secretariat to send, by the end of May, a draft recommendation on 
the frequency of notifications to Members for thei r consideration and comments.  On 30 May 2008, 
the draft recommendation was faxed to all Members w ith a request to provide the Secretariat  with 
any comments Members might have had by 27 June 2008.   The Chairperson also indicated in that fax 
that the draft recommendation, reflecting any comments Members might have had, shall be placed as a separate item on the agenda of this formal m eeting of the Working Party for adoption by the 
Working Party and referral to the CTG for action.   
44. The Working Party adopted
 the recommendation2 and referred it to the Council for Trade in 
Goods for action.   
E. ANNUAL REPORT (2008)  TO THE COUNCIL FOR TRADE IN GOODS  
45. The Working Party adopted  the Annual Report (2008) to the Council for Trade in Goods 
which was circulated as document G/L/857.   
F. OTHER BUSINESS  
46. The Chairperson  made two statements under this agenda item.  The first related to exploring 
future steps to enhance compliance with the notifi cation obligation, while the second pertained to the 
date of the next regular meeting of the Working Party in the fall of 2009.   
47. On the first issue, the Chairperson referred to the deteriorating state of compliance with the 
notification obligation despite the modification in troduced to the frequency of notifications and 
emphasised that the pressing goal should be to amelio rate this unhealthy picture.  She was of the view 
that extending the application of the recommendati on on the frequency of notifications may help 
alleviate the burden.  Having said that, she added th at it could be useful to explore other possible 
options to achieve the goal of better compliance a nd to see how the Secretariat could assist in this 
regard.  She proposed certain options and requested Members' views on the matter.  As an option, she 
suggested to request the Secretariat to develop a guide or a manual, including examples, explaining 
how to complete the questionnaire and that such ma nual could be made available on line for Members 
                                                      
2 Now circulated as G/STR/6.    G/STR/M/18 
 Page 7 
 
 
  to consult whenever they so wish .  Also related to this idea, sh e proposed that each Member could 
identify a contact point in the competent authoritie s responsible for completing the questionnaire to 
facilitate interaction.  As another possible optio n, she suggested that the Working Party hold an 
informal session, back to back with its next fo rmal meeting, at which Members could discuss any 
questions they may have on the notifications and conduct a free interaction amongst themselves 
during which experiences could be exchanged and ques tions on technical matters could be answered.   
48. The representative of Australia  welcomed any steps towards improving compliance and 
transparency in the Working Party on State Tradi ng Enterprises.  He emphasised that Australia and 
the Cairns Group have always been strong propone nts of improving monitoring and surveillance in 
the agriculture negotiations and have a clear interest in other fields such as st ate trading enterprises.  
In terms of options suggested by the Chairperson, he was of the view that it would be a bit too early to 
provide any sort of views on such options, but indicated that he would certainly welcome a forum to explore some of these options and discuss how to improve Members' compliance and reverse its deteriorating trend.   
49. The representative of Canada
 was of the view that compliance with the notification obligation 
is an important issue which merits further reflecti on and perhaps a separate informal discussion of the 
reasons before considering solutions.  On the Chai rperson's suggestion to develop a guide or a manual 
on how to complete the notification, the representativ e of Canada pointed out that one already exists 
through G/STR/3/Rev.1 which contains the questionnaire for the notification itself as well as useful guidelines for completing the questionnaire.  She expl ained that such guidelines were very helpful in 
understanding exactly what is needed and have he lped Capital-based officials in preparing the 
notifications.   
50. The representative of the United States
 expressed her utmost concern with the large number 
of missing notifications and agreed that some r esolution should be reached in this regard.  She 
mentioned that the United States would reflect on the options proposed by the Chairperson. She urged 
all Members to submit all outstanding notifications , even if that meant only to make the basic 
submission to indicate or confirm that the Member has no state trading ente rprise.  She was of the 
view that further information is needed from those Members that are currently not submitting 
notifications, as to whether it is an issue of the fre quency of the notifications or the format of the 
notifications that is causing the large number of mi ssing notifications.  She hoped that with further 
information from all the Members that the Workin g Party can best determine the solution for the 
delinquency of the notifications.   
51. The representative of New Zealand  considered this issue to be an important one which merits 
further consideration by the Working Party in an  attempt to better understand the precise reasons why 
notifications are not coming in at the frequency they  should and why there is a delay.  She supported 
Canada and saw that it might be useful, as a first st ep, to hold informal consultations to explore the 
reasons behind the lagging of notifications rather th an jumping to solutions or forwarding any options 
back to Capitals.   
52. The representative of the European Communities  supported the idea of holding informal 
consultations prior to which the Secretariat coul d prepare a paper containing some ideas to be 
communicated to Members to facilitate  such consultations.  He was of the view that more time would 
be needed to reflect on this issue.  He added th at the European Communities is currently making the 
necessary coordination and will provide its 2008 new and full notification very soon.   
53. The Chairperson  stated that as this was her last meeting prior to her departure from Geneva, 
she would convey, through the Secretariat, this discussion to her successor to elaborate on it further 
with Members and decide which steps shoul d be taken to enhance compliance.   G/STR/M/18 
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  54. The second statement made by the Chairperson pertained to the date of the next regular 
meeting of the Working Party in the fall of 2009.  Sh e proposed that the next regular meeting of this 
Working Party be held on Friday, 16 October 2009.   The air gram convening the meeting will be 
circulated to all Members on 6 October 2009.  The l ast date for inscription of items on the agenda of 
the meeting will be Wednesday, 30 September 2009 by close of business.  She urged all Members to 
respect the deadline of 30 June for submitting their notifications and strongly emphasised the 
significance of this deadline for the smooth sailing of the notifications review process, for giving 
Members an ample opportunity to study the notificati ons ahead of the meeting in their preferred WTO 
working language, and for allowing the Secretariat to carry on with the transl ation and circulation of 
documents in a timely and efficient manner.  In case  of delays, Members should endeavour to submit 
their notifications at least 10 weeks prior to the date of the meeting at which the notifications are to be 
reviewed.  She also requested that written questi ons be provided 6 weeks before the date of the 
meeting, and that written answers to written ques tions should be provided well in advance of the 
meeting.   
55. The meeting was adjourned
.   
 
  
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