RESTRICTED  WORLD TRADE  
ORGANIZATION  G/STR/M/14 
14 December 2004 
 
 (04-5505) 
Working Party on 
State Trading Enterprises  
 
  
MINUTES OF THE MEETING OF THE WORKING  
PARTY ON STATE TRADING ENTERPRISES 
HELD ON 9 NOVEMBER 2004 
 
Interim Chairperson: Mr. Be njamin Katjipuka (Namibia)
 
 
 
Page  
 
A. ELECTION OF THE INTERIM CHAIRPERSON AND ADOPTION OF THE AGENDA ..............................1  
B. REVIEW OF NEW AND FULL NOTIFICATIONS SUBMITTED BY MEMBERS UNDER 
G/STR/N/10  IN ACCORDANCE WITH THE RECOMMENDATION CONTAINED IN G/STR/5.............2  
C. REVIEW OF NEW AND FULL NOTIFICATIONS SUBMITTED BY MEMBERS UNDER 
G/STR/N/4  & 7 AND UPDATING NOTIFICATIONS SUBMITTED BY MEMBERS UNDER 
G/STR/N/5,  6, 8 AND 9................................................................................................................4  
D. ANNUAL REPORT (2004)  TO THE COUNCIL FOR TRADE IN GOODS ...............................................6  
E. OTHER BUSINESS .........................................................................................................................6  
1. United States –Questions posed to Egypt on the activities of ALCOTEXA ........................6  
2. Australia – Questions posed to the European Communities, Israel, India and 
Korea.......................................................................................................................... ................6  
3. European Communities – Absence of a no tification by New Zealand regarding 
an enterprise called Fonterra.................................................................................................. .8 
4. Interim Chairperson - Date of the next regular meeting of the Working Party in 
2005 ........................................................................................................................... .................8  
 
A. ELECTION OF THE INTERIM CHAIRPERSON AND ADOPTION OF THE AGENDA  
1. Mr. Jan Woznowski , Director of the Rules Division , referred to the resignation of 
Mr. Rethabile Mosisili (Lesotho ) from the Chairpersonship of the Working Party and recalled that as 
there are no specific Rules of Procedure for the Working Party on State Trading Enterprises, the Rules 
of Procedure for the Council for Trade in Goods apply in such circumstance.  The said Rules of 
Procedure in relevant part stipulat e that if the Chairperson can no longer perform the functions of the 
office, the Council for Trade in Goods shall de legate the Vice-Chairperson and if no Vice-
Chairperson was elected it shall elect an interim Chairperson to perform those functions pending the 
election of a new Chairperson.  As the Working Party has no Vice-Chairperson and owing to the fact 
that the next regular meeting of the Council for Trade in Goods was scheduled only for 
25 November 2004, Mr. Woznowski proposed that the Working Party elect Mr. Benjamin Katjipuka 
(Namibia ) as interim Chairperson.  He proposed th at Mr. Katjipuka perform the functions of the 
Chairperson for this meeting, pending the election of a Chairperson by the Council for Trade in 
Goods.   G/STR/M/14 
Page 2  
 
 2. No delegation objected and the Working Party on State Trading Enterprises elected
 
Mr. Benjamin Katjipuka as interim Chairperson . 
3. The interim Chairperson  referred to the proposed agenda contained in document 
WTO/AIR/2409 circulated on 15 October 2004 and reiterated that membership in this Working Party 
is open to all Members of the WTO indicatin g their wish to serve on it.      
4. The United States  requested the inclusion of a point under "Other Business" in connection 
with the questions it previously pose d to Egypt on ALCOTEXA's activities.  
5. Australia  requested the inclusion of an item under "Other Business" concerning the questions 
it wished to pose to the European Commu nities, India, Israel and Korea.  
6. Also under "Other Business ", the European Communities  referred to the absence of a 
notification by New Zealand regardin g an enterprise called Fonterra. 
7. The interim Chairperson  indicated that he would make an announcement under "Other 
Business" regarding the date of the next re gular meeting of the Working Party in 2005. 
8. The Working Party adopted  the agenda contained in WTO/AIR/2409, as amended. 
B. REVIEW OF NEW AND FULL NOTIFICATI ONS SUBMITTED BY MEMBERS UNDER G/STR/N/10  IN 
ACCORDANCE WITH THE RECOMMENDATION CONTAINED IN G/STR/5 
9. Before starting the substantive discussions u nder this agenda item, the interim Chairperson  
made a statement regarding the revi ew of notifications submitted by Members at this meeting.  The 
interim Chairperson recalled that, according to paragraph 5 of the Understanding on the Interpretation 
of Article XVII of GATT 1994, the Working Party is  tasked to review the notifications and counter-
notifications submitted by Members on their state trad ing enterprises and, in light of this review, the 
Council for Trade in Goods may make recommendation s with regard to the adequacy of notifications 
and the need for further information.  
10. He suggested that the Working Party conduct this review in the same manner as that used for 
the review of notifications at previous meetings, that is, with a focus on two main elements:  (i) 
whether the notification responds adequately to the information requested in the questionnaire 
contained in G/STR/3/ & G/STR/3/Rev.1; and (ii) whether more information is needed in order to permit – in the language of paragraph 2 of the Unde rstanding – "a clear appreciation of the manner of 
operation of the enterprises notified and the effect  of their operations on international trade". 
11. The interim Chairperson
 also recalled that, at its meeting of  20 February 1995, the Council 
for Trade in Goods established a deadline of 30 June 1995 for new and full notifications by Members 
on their state trading enterprises, and that the Work ing Party subsequently agreed to maintain 30 June 
as the date for all further notifications.  On 11 November 2003, the Working Party adopted the 
recommendation contained in G/STR/5 regardin g the frequency of notifications.  The said 
recommendation, approved by the Council for Trade in Goods on 26 November 2003, modified the 
periodicity of state trading notifications so that ne w & full notifications on state trading are due every 
two years instead of every three years and that the requirement of updating notifications in the 
intervening years is eliminated. 
12. Accordingly, the interim Chairperson  suggested that the review of Members' notifications be 
carried out under two separate agenda items.  Ag enda item "B" which deals with the new and full 
notifications submitted by Members under G/STR/N/ 10 dated 17 February 2004  in accordance with 
the  recommendation contained in G/STR/5, and agenda item "C" relating to the review of new and  G/STR/M/14 
 Page 3 
 
 
 full notifications submitted by Members under G/STR/N/4 & G/STR/N/7 dated 22 April 1998 and 
26 February 2001 respectively as well as the updating notifications submitted by Members under 
G/STR/N/5, 6, 8 and 9 dated 10 March 1999, 1 Ma rch 2000, 20 February 2002 and 21 February 2003 
respectively.  These notifications, required of all  WTO Members, were due by 30 June of the 
respective years.  
13. The interim Chairperson  reminded Members that as agreed at the Working Party's meeting in 
September 1996, notifications that have already been reviewed and on which there may be written 
questions will not  be retained on the airgram for the Working Party's next meeting unless  a Member 
specifically so requests.  
14. The interim Chairperson  also drew Members' attention to the 2004 new and full notification 
by New Zealand contained in document G/STR/N/10/NZL dated 8 November 2004.  As this 
notification was received only one day before th e meeting, it was not included in the airgram 
convening the meeting and was not reviewed at this meeting, but it was decided  that it will be 
reviewed at the subsequent meeting of the Working Party.  This was also reflected in the 2004 annual 
report to the Council for Trade in Goods and its annex.    
15. The Working Party then proceeded  with the review of the new and full notifications 
submitted by Members under G/STR/N/10. 
16. No questions were posed regarding the notification of Armenia  (G/STR/N/10/ARM). 
17. Regarding the notification  of Bulgaria  (G/STR/N/10/BGR), the delegate of Australia  noted 
that although Bulgaria has indicated that it does not maintain any state trading enterprises pursuant to 
Article XVII, recent media reports have been referring to the Bulgarian tobacco company, 
Bulgartabac, as a state-owned company.  The delega te of Australia requested Bulgaria to explain the 
current structure and operations of the tobacco company Bulgartabac and why Bulgaria does not 
consider it necessary to notify Bulgartabac as a state trading enterprise.1  
18. The Ambassador of Bulgaria  explained that Bulgartabac is not an entirely state-owned 
company, but a shareholding company with state par ticipation in the shares.  On the question relating 
to its structure, the Ambassador mentioned that  Bulgartabac Holding comprises 22 joint stock 
companies which are separate legal entities.  No special or exclusiv e rights and privileges have been 
provided to the Holding or its subsidiaries under Bulg arian legislation.  With respect to its operations,  
the Ambassador of Bulgaria stated that such operations are not related in any way to any rights or 
privileges since there are none.  Its status is not different from that of any other entity and it operates 
on commercial basis.  He added that every judicial or physical person in Bulgaria can engage in the 
production, processing or trade including imports and exports and that in Bulgaria equal requirements 
apply to domestic and foreign companies irrespectiv e of their ownership.  He finally said that 
Bulgaria does not have state trading enterprises.     
19. No questions were posed regarding the notification of Croatia  (G/STR/N/10/HRV). 
20. No questions were posed regarding the notification of Ghana  (G/STR/N/10/GHA). 
21. No questions were posed regarding the notification of Hong Kong, China 
(G/STR/N/10/HKG). 
22. No questions were posed regarding the notification of Indonesia  (G/STR/N/10/IDN). 
                                                      
1 The questions posed by Australia to Bulgaria are now contained in document G/STR/Q1/BGR/3 
dated 10 November 2004. G/STR/M/14 
Page 4  
 
 23. No questions were posed regarding the notification of Japan 
 (G/STR/N/10/JPN). 
24. No questions were posed regard ing the notification of Latvia  (G/STR/N/10/LVA). 
25. No questions were posed regarding the notification of Liechtenstein   (G/STR/N/10/LIE). 
26. No questions were posed regarding the notification of Macao, China  (G/STR/N/10/MAC). 
27. No questions were posed regarding the notification of Panama  (G/STR/N/10/PAN). 
28. No questions were posed regarding the notification of Singapore  (G/STR/N/10/SGP). 
29. No questions were posed regarding the notification of Suriname  (G/STR/N/10/SUR). 
30. No questions were posed regardin g the notification of Switzerland  (G/STR/N/10/CHE). 
31. No questions were posed regarding the notification of Thailand  (G/STR/N/10/THA). 
32.  No questions were posed regarding the notification of Chinese Taipei  (G/STR/N/10/TPKM). 
C. REVIEW OF NEW AND FULL NOTIFICATIONS SUBMITTED BY MEMBERS UNDER G/STR/N/4  & 7 
AND UPDATING NOTIFICATIONS SUBMITTED BY MEMBERS UNDER G/STR/N/5,  6, 8 AND 9    
33. The Working Party proceeded with the review  of new and full notifications submitted by 
Members under G/STR/N/4 & 7 and updating notifications submitted by Members under G/STR/N/5, 
6, 8 and 9.   
34. No questions were posed regardin g the notifications of Australia  (G/STR/N/6/AUS-
G/STR/N/7/AUS- G/STR/N/8/AUS- G/STR/N/9/AUS). 
35. No questions were posed regarding the notifications of Colombia  (G/STR/N/7/COL/REV.1- 
G/STR/N/8/COL/REV.1 - G/STR/N/9/COL). 
36. No questions were posed regarding the notifications of Croatia ( G/STR/N/8/HRV-  
G/STR/N/9/HRV). 
37. No questions were posed regarding the notification of  Czech Republic  (G/STR/N/9/CZE). 
38. No questions were posed regarding the notification of Estonia  (G/STR/N/9/EST). 
39. No questions were posed regarding the notification of  Oman  (G/STR/N/9/OMN). 
40. No questions were posed regarding the notification of Panama  (G/STR/N/9/PAN). 
41. No questions were posed regarding the notification of Romania  (G/STR/N/9/ROM). 
42. No questions were posed regarding the notification of  Singapore  (G/STR/N/9/SGP). 
43. No questions were posed regarding the notification of Slovak Republic  (G/STR/N/9/SVK). 
44. No questions were posed regarding the notification of  Thailand  (G/STR/N/9/THA). 
45. No questions were posed regarding the notification of Chinese Taipei  (G/STR/N/9/TPKM).  G/STR/M/14 
 Page 5 
 
 
 46. Regarding the notification of the United States  (G/STR/N/4/USA), the delegate of Australia  
mentioned that it was indicated in this document th at the US Department of Agriculture’s Commodity 
Credit Corporation (CCC) has not made any direct  export sales since 1995 and inquired whether the 
United States has given any consideration to winding back the CCC’s right to do so. 
47. The delegate of Australia  stated that it is his delegation's understanding that the CCC is 
indirectly involved in export sales through the donation of CCC's stocks to other governments, private 
voluntary organisations and US cooperatives which are subsequently sold into commercial market 
(i.e. the monetisation of food aid) and he inquired whether the United States could provide the most 
recent data available on the quantity and value of CCC' s  stocks that have been sold in this manner. 
48. The delegate of Australia  added that it is also his delegati on's understanding that American 
agricultural cooperatives are afforded certain legal protection by the Capper-Volstead Act from 
antitrust laws.  He inquired whether the United States  could  explain why it does not notify as state 
trading enterprises major exporting agricultural cooperatives such as CHS Inc. (formerly Cenex 
Harvest States Cooperatives) which enjoy special privileges of immunity from competition law under 
the Capper-Volstead Act, and whether the United States could provide details on the number of entities which receive immunity from antitrust laws  under the Capper-Volstead Act and the quantity 
of agricultural production exported overseas by these entities.
2 
49. The delegate of the United States  confirmed that he has received an early version of these 
questions from Australia on 1 November 2004 and that he has referred them to his authorities in 
Washington for review. 
50. The delegates of  China , the European Communities  and Thailand  requested a copy of the 
questions posed by Australia and the future answers of the United States.  The delegate of  Zambia  
requested that the answers be circulated to all Members.     
51. No questions were posed regarding the notifications of the United States  (G/STR/N/5/USA & 
G/STR/N/6/USA & G/STR/N/7/USA & G/STR/N/8/USA & G/STR/N/9/USA). 
52. No questions were posed regarding the notification of Zambia  (G/STR/N/9/ZMB).  
53. The interim Chairperson  noted that some delegations were not able to respond fully to the 
questions raised on their respective notifications at  the present meeting, and invited delegations that 
have raised questions to submit these in writing direc tly to the Member concerne d, with a copy to the 
Secretariat for circulation.  The interim Chairperson also invited delegations that have raised 
questions and received oral responses at that meeting and wish to have written responses, to submit 
their questions in writing directly  to the Member concerned, with  a copy to the Secretariat for 
circulation.  Written responses to all written questions should be su bmitted directly to the inquiring 
country, with a copy to the Secretariat, as soon as possible. 
54. The interim Chairperson  reported on the status of notifications made to the Working Party.  
He noted that for the period 1998-2003, the European Communities and its then 15 Member States 
were counted as one.  As for 2004, he noted that as  Cyprus; the Czech Republic; Estonia; Hungary; 
Latvia; Lithuania; Malta; Poland; the Slovak Republ ic and Slovenia became European Communities' 
Member States in 2004, they were  counted separately and not as pa rt of the European Communities in 
order to reflect their previous notification obligation.   With regard to new and full notifications, as of 
9 November 2004, only 52 out of 120 Members have responded to the 1998 request; which is 43 per 
cent of Members;  52 out of 128 Members have res ponded to the 2001 request; which is 40 per cent of 
                                                      
2 The questions posed by Australia to the United States are now contained in document 
G/STR/Q1/USA/7 dated 10 November 2004. G/STR/M/14 
Page 6  
 
 Members and finally 17 out of 133 Members have responded to the 2004 request, which is barely 
12 per cent of  Members.  In the area of updating notifications, the situation is  worse.  Only 45 out of 
121 Members have submitted notifications for  1999; 42 out of 125 in 2000; 37 out of 129 in 2002; 
and 26 out of 131 in 2003, which is 37 per cent;  33 per cent;  28 per cent and 19 per cent of  
Members respectively.  He added that although the modification of the frequency of notifications has 
been adopted to facilitate the notification process, a quick look at the figures relating to the new and 
full notification obligation for the year 2004 shows that the situation has deteriorated rather than 
improved. 
55. The interim Chairperson
 expressed grave concern about the dismal state of affairs regarding 
notifications.  He drew Members' attention to the importance of prompt compliance with the 
notification obligation which became far less burdenso me after the modification of the periodicity of 
state trading notifications.  The new and full notificat ions on state trading are currently due every two 
years instead of every three years and the requirem ent of updating notifications in the intervening 
years has been eliminated.  The interim Chairperson also reminded Members that paragraph 4 of the 
recommendation contained in document G/STR/5 states: "After a trial period of four years, commencing on 30 June 2004, the Working Party shall review the situation, with regard to 
compliance with the notification obligation and th e frequency of notifications, with a view to 
determining whether to extend the application of th is recommendation, either as presently drafted or 
in a modified form for a further period." The inte rim Chairperson expressed his sincere hope that by 
the end of this trial period, tangible improvement could be achieved in the notification status and thus   
the application of this recommendation would be further extended.  
56. The Working Party took note
 of the statement made. 
D. ANNUAL REPORT (2004)  TO THE COUNCIL FOR TRADE IN GOODS  
57. The Working Party adopted  the Annual Report (2004) to the Council for Trade in Goods 
which is circulated as (G/L/716). 
E. OTHER BUSINESS  
1. United States –Questions posed to Egypt on the activities of ALCOTEXA 
58. The delegate of the United States  recalled that his delegation has submitted questions to the 
Working Party at its last meeting held in November 2003 regarding Egypt's Alexandria Cotton Exporters Association (ALCOTEXA).
3  He inquired if Egypt was in a position to provide answers to 
these questions at this meeting and if not when it would expect to provide such responses. He 
expressed his hopes to receive such answers as soon as possible. 
59. The delegate of Egypt  said that he will convey the United States' statement to Cairo for 
consideration and he hoped to have the answers av ailable before the next meeting of the Working 
Party. 
2. Australia – Questions posed to the European Communities, Israel, India and Korea 
60. The delegate of Australia  drew the European Communities' atte ntion to the Minutes of the last 
meeting of the Working Party (G/STR/M/13), in pa rticular, paragraphs 14 and 15 which relate to 
Australia's question regarding Cyprus's state trad ing arrangements.  He requested the European 
Communities to provide a detailed update on the status of each of the six entities notified by Cyprus in an earlier state trading notification (G/STR/N /1/CYP).  The delegate of Australia asked the 
                                                     
 
3 G/STR/W/42 dated 30 October 2004.  G/STR/M/14 
 Page 7 
 
 
 European Communities to indicate whether recently acceded Members to the European Communities 
continue to grant exclusive or special rights or pr ivileges to entities engaged in international trade and 
which entities are these.  The delegate of Australia also noted that the European Communities did not 
submit a state trading notification since 2002 and requested the European Communities to indicate 
when it expects to submit its next state trading notification.    
61. The delegate of the European Communities  mentioned that he can respond to the first two 
questions at the meeting.  He said that it is true that before its accession to the European 
Communities, Cyprus operated various state trading enterprises in the agricultural sector, for example, 
the marketing boards for grain, olive oil and the milk  sector.  However, no derogations or transition 
periods were granted to Cyprus on accession to the European Communities and that being a Member 
State of the European Communities means even stricter rules than the WTO rules in this respect.  He 
added that this is also valid for all newly acceded Me mber States.  Over the last few years and as part 
of its accession requirements to the European Communities, Cyprus has established independent 
systems to maintain the functioning and operation of  these entities.  Market organisation changes have 
been introduced in a move to align Cyprus' Mark et Regulation System with the Common Agricultural 
Policy and to ensure that the operation of thes e organisations is consistent with commercial 
considerations and European Communities' regulations.  With respect to the third question concerning 
absence of notification since 2002, the European Co mmunities' delegate expressed his hope to notify 
all the elements until the end of the year, in accord ance with the WTO rules and that this will also 
cover the newly acceded States.  
62. The interim Chairperson  proposed that Australia's questi ons and the European Communities' 
answers be submitted for circulation.  
63. The delegate of Australia  addressed a question to Israel whose delegation was not present in 
the room.  He proceeded to state that Israel has not submitted a state trading notification since 1996, at 
which time it identified six entities as state trading enterprises.  He requested Israel to provide an 
update on the status of each of the six entities notif ied in 1996 and indicate when it expects to submit 
its next state trading notification.  
64. The interim Chairperson  proposed that Australia's questi ons be submitted for circulation.  
65. The delegate of Australia  noted that India has not submitted a state trading notification since 
2001, at which time it identified a nu mber of entities as state trading enterprises.  He requested India 
to provide an update on the status of each of the entities notified in 2001 and indicate when it expects 
to submit its next state trading notification.  
66. The delegate of India  mentioned that he has already conveyed an advance copy of the 
questions to his authorities in Delhi and he assu red the Working Party and the Australian delegation 
that this notification is presently under prepara tion and would be notified to the Working Party 
shortly.  
67. The delegate of Australia  noted that Korea has not submitted a state trading notification since 
1998, at which time it identified seven entities as st ate trading enterprises.  He requested Korea to 
provide an update on the status of each of the seven entities notified in 1998 and indicate when it 
expects to submit its next state trading notification.  
68. The delegate of Korea  provided preliminary responses in which he clarified that Korea has 
currently five state trading entities, not seven.  He  explained that Korea has reduced the seven entities 
to five entities, as the Livestock Products Marke ting Organization (LPMO) wa s abolished due to the 
full liberalization of the beef market in 2001 in accordance with the Uruguay Round Commitments 
and as the National Livestock Cooperatives Fede ration (NLCF) and the Korea Ginseng Cooperative G/STR/M/14 
Page 8  
 
 Federation (KGCF) have been merg ed into the National Agricultural Cooperative Federation (NACF) 
as of 1 July 2000.  Apart from these changes, the delegate of Korea mentioned that there were no 
significant changes introduced to the operation of  the state trading enterprises, including product 
coverage.  He added that his Capita l is currently preparing a notifica tion that will include official and 
detailed information in response to the questions posed by Australia.  He expected this notification to 
be submitted in the near future.  
3. European Communities – Absence of a notification by New Zealand regarding an 
enterprise called Fonterra   
69. The delegate of the European Communities
 referred to his request, made at the last meeting of 
the Working Party held in November 2003, to New Zealand to notify an enterprise called Fonterra, 
which the European Communities consid ers to be an entity that is not absolutely in conformity with 
Article XVII of GATT 1994.  
70. The delegate of New Zealand  confirmed that New Zealand has provided its new and full 
notification (G/STR/N/10/NZL) on 8 November 20 04 which was not submitted on time to be 
reviewed at this meeting.  She hoped that th e said notification could answer the European 
Communities' question.  
4. Interim Chairperson - Date of the next regu lar meeting of the Working Party in 2005 
71. The interim Chairperson  Proposed that the next regular meeting of the Working Party be held 
on Monday, 17 October 2005.  The last date for the inscription of items on the agenda will be 
Thursday, 6 October 2005 at noon.  The airgram convening the meeting will be issued on Friday, 
7 October 2005. 
72. The meeting was  adjourned .       
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