RESTRICTED  WORLD TRADE  
ORGANIZATION  G/STR/M/16 
15 November 2006 
 
 (06-5521) 
Working Party on State Trading Enterprises    
  
MINUTES OF THE MEETING OF THE WORKING  
PARTY ON STATE TRADING ENTERPRISES 
HELD ON 12 OCTOBER 2006 
 
Chairperson: Mr. Benjamin Katjipuka (Namibia
) 
Page  
 
A. ADOPTION OF THE AGENDA .........................................................................................................1  
B. REVIEW OF NEW AND FULL NOTIFICATI ONS SUBMITTED BY MEMBERS UNDER 
G/STR/N/10 AND G /STR/N/11 IN ACCORDANCE WITH THE RECOMMENDATION 
CONTAINED IN G /STR/5................................................................................................................1  
C. REVIEW OF UPDATING NOTIFICATIONS SUBMITTED BY MEMBERS UNDER G /STR/N/8 
AND G /STR/N/9 ............................................................................................................................4  
D. ANNUAL REPORT (2006)  TO THE COUNCIL FOR TRADE IN GOODS ...............................................6  
E. OTHER BUSINESS .........................................................................................................................6  
 
A. ADOPTION OF THE AGENDA  
1. The Chairman  referred to the proposed agenda contained in document WTO/AIR/2899 
circulated on 2 October 2006 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 Chairman  indicated that he would make an announcement under "Other Business" with 
respect to the date of the next regular meeting of the Working Party in the fall of 2007. 
3. The Working Party adopted  the agenda contained in WTO/AIR/2899, as amended. 
B. REVIEW OF NEW AND FULL NOTIFICATIONS  SUBMITTED BY MEMBERS UNDER G /STR/N/10 AND 
G/STR/N/11 IN ACCORDANCE WITH THE RE COMMENDATION CONTAINED IN G /STR/5 
4. Before starting the substantive discussions  under this agenda item, the Chairman  made a 
statement regarding the review of notifications subm itted by Members at this meeting.  The Chairman 
recalled that, according to paragraph 5 of the Unde rstanding on the Interpretation of Article XVII of 
the GATT 1994, the Working Party is tasked to re view the notifications and counter-notifications 
submitted by Members on their state trading enterprises and, in light of this review, the Council for 
Trade in Goods may make recommendations with regard  to the adequacy of notifications and the need 
for further information.  
5. The Chairman  suggested that the Working Party con duct 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 G/STR/3/Rev.1;  and (ii) whether more information is needed in order to 
permit – in the language of paragr aph 2 of the Understanding – "a cl ear appreciation of the manner of 
operation of the enterprises notified and the eff ect of their operations on international trade". G/STR/M/16 
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  6. The Chairman
 also recalled that, at its meeting of 20 February 1995, the Council for Trade in 
Goods established a deadline of 30 June 1995 for ne w and full notifications by Members on their state 
trading enterprises, and that the Working Party sub sequently 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 was eliminated. 
7. Accordingly, the Chairman
 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 and G/STR/N/11 dated 
27 January 2006 in accordance with the recommendati on contained in G/STR/5;  and agenda item "C" 
relating to the review of updating notificati ons submitted by Members under G/STR/N/8 and 
G/STR/N/9 dated 20 February 2002  and 21 February 2003 respectively.   These notifications, required 
of all  WTO Members, were due by 30 June of the respective years.  
8. The Chairman  reminded Members that as agreed 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 airgram for the Working Party's next regular meeting unless  a 
Member specifically so requested. 
9. The Chairman  drew Members' attention to the fact that although the United States' 
notification contained in document G/STR/N/10/USA wa s reviewed at the last regular meeting of the 
Working Party held in January 2006, it was, upon the request of Australia, retained on the airgram of 
the October regular meeting.1  He noted that the United States submitted written answers2 to the 
written questions posed by Australia3 and the European Communities4 at the last regular meeting.  He 
also referred to the 2004 & 2006 new and full notifications submitted by Chile5 and the European 
Communities6 under G/STR/N/10 and G/STR/N/11, and their 2002 & 2003 updating notifications 
submitted under G/STR/N/8 and G/STR/N/9.  Furthermore, the Chairman  referred to the 2006 new 
and full notifications submitted by Saudi Arabia7 and the United States8 under G/STR/N/11.  As these 
notifications arrived late, they could not be transl ated into the WTO working languages, circulated in 
time for the October regular meeting, and they were not included in the airgram convening this 
meeting.  Accordingly, these notifi cations were not reviewed at the me eting, but would be reviewed at 
the subsequent meeting of the Working Party in 20 07.  Nevertheless, these notifications would be 
referred to in the 2006 Annual Report to the Council for Trade in Goods and its annex.  
10. The Working Party then proceeded  with the review of the new and full notifications 
submitted by Members under G/STR/N/10 and G/STR/N/11. 
11. No questions were posed regardi ng the notifications of Argentina  (G/STR/N/10/ARG) and 
G/STR/N/11/ARG/Rev.1). 
                                                      
1 G/STR/M/15, paragraph 27. 
2 G/STR/Q1/USA/11. 
3 G/STR/Q1/USA/10. 
4 G/STR/Q1/USA/9. 
5G/STR/N/10/CHL & Corr.1, G/STR/N/11/CHL & Corr.1, G/STR/N/8/CHL & Corr.1, and 
G/STR/N/CHL/9 & Corr.1. 
6 G/STR/N/10/EEC,  G/STR/N/11/EEC , G/STR/N/8/EEC, G/STR/N/9/EEC. 
7 G/STR/N/11/SAU. 
8 G/STR/N/11/USA.  G/STR/M/16 
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  12. No questions were posed regarding the notification of Armenia  (G/STR/N/11/ARM). 
13. On the new and full notification of Australia  contained in document G/STR/N/11/AUS, the 
representative of the European Communities  posed oral questions regarding the ABB Grain Export 
Limited;  the Australian Wheat Board;  the Queensland Sugar Limited9;  and the New South Wales 
Grain Export Board.  
14. On the ABB Grain Export Limite d, the European Communities  inquired as to why the ABB 
Grain Export Limited had only statutory acquisition powers over barley produced in South Australia 
and not in other States, which also seemed to be the case for the Grain Pool Pty Ltd., and why export marketing was regulated in some States and not in  others.  Reference was also made to ABB Grain 
Export Limited and the Australian Wheat Board (A WB) as not being used to fulfil contractual 
obligations entered into by the government, and the European Communities also inquired whether it 
would be possible for the ABB and the AWB to enter into contractual obligations on behalf of the 
government.  
15. On the AWB, the representativ e of the European Communities
 referred to the AWB's veto 
right over bulk export requests from third parties to the Wheat Export Authority (WEA), and 
requested Australia to provide information as to the tonnage requested by applicants to export and the 
tonnage actually approved in the last three years.  He requested Australia to clarify the grounds on which the AWB vetoed requests for exports from thir d parties to the WEA, and inquired as to which 
of the Review Panel's recommendations in October 2004 were implemented and whether any of these 
recommendations suggested removing AWB's right to veto bulk exports. 
16. On the Queensland Sugar Limited, the re presentative of the European Communities
 
mentioned that it was clear from Australia's notifica tion, that all other Australian entities (private or 
government owned) could export raw sugar as of January 2006.  He asked whether this also 
concerned all sugar products, such as refined sugar or et hanol produced from sugar, and whether there 
were any exemptions.  The European Communities inquired if any exemptions existed for foreign 
companies to export raw sugar.  
17. The representative of the European Communities  referred also to the New South Wales Grain 
Export Board and the removal of its statutory powers.  He requested the reasons underlying this decision, whether such rights were allocated to some other entity, and whether Australia intended to 
remove statutory powers from other state trading enterprises as well. 
18. The representative of Australia
 provided some preliminary responses to the European 
Communities' questions.  He explained that its notification included six Australian STEs for the 
period 2004-2006.  ABB Grain Export Limited, AWB International Limited, Grain Pool Pty Ltd., 
New South Wales Grain Board, Queensland Sugar Limited, and the Rice Marketing Board of New 
South Wales.  He confirmed that the New Sout h Wales Grain Board had ceased to be an STE and 
ceased to have any special privileges as of 1 Oct ober 2005.  In fact, it had ceased trading and that 
would be the final STE notification for this Board.   
19. On the question posed with respect to the Queensland Sugar Limited and the ABB, the 
representative of Australia  indicated that he would refer these questions back to Canberra.   
20. On the questions pertaining to the AWB In ternational, the representative of Australia  
confirmed that there was an independent review  conducted in 2004, in accordance with the Wheat 
Marketing Act of 1989.  That Review Panel recommended a range of changes to the AWB 
International Limited, to further enhance its independence from AWB Limited at a corporate and 
                                                      
9 Now circulated as G/STR/Q1/AUS/5. G/STR/M/16 
Page 4  
 
  operational level.  It also recommended enhancemen t, refinement of the operations of the wheat 
export authority, improving the relationship with st akeholders, further developing its skill base, and 
the introduction of a three-year trial to provide a l onger term consent system for wheat sold in bags 
and containers.  He added that the nature of th e review in October 2004, related mainly to the 
performance of AWB International as the commercial manager of the 'single desk arrangement', as 
well as the performance of the Wheat Export Authority as a regulatory manager.  He clarified that the 
implementation of these review findings had been underway for some time.  The representative of Australia
 offered to follow up on this matter in more detail if the European Communities would be 
interested in obtaining additional informati on on how those recommendations were being 
implemented, as well as the progress of this implementation process.  
21. No questions were posed regarding the notification of the Czech Republic  
(G/STR/N/10/CZE). 
22. No questions were posed regarding the notification of Hong Kong, China  
(G/STR/N/11/HKG). 
23. No questions were posed regarding the notification of Kenya  (G/STR/N/11/KEN). 
24. No questions were posed regardi ng the notification of Macao, China  (G/STR/N/11/MAC). 
25. No questions were posed regarding the notification of Moldova  (G/STR/N/11/MDA). 
26. No questions were posed regarding the notification of Romania  (G/STR/N/11/ROU). 
27. No questions were posed regarding the notification of Thailand  (G/STR/N/11/THA). 
28. No questions were posed regarding the notification of Tunisia  (G/STR/N/10/TUN & Suppl.1). 
29. On the notification of the United States contained in document G/STR/N/10/USA, no 
additional questions were posed, but the representative of Australia  took the floor to confirm that it 
had requested at the last regular meeting of the Wo rking Party that this notification be placed on the 
agenda of the October regular mee ting in order to have an opportunity to examine the questions which 
Australia posed at the January regular meeting.  He  noted that the United States provided responses to 
these questions on 11 October 2006 and that these res ponses were being reviewed in Canberra.  On 
the same notification, the represen tative of the European Communities  took the floor to refer to the 
responses provided by the United States to the qu estion posed by the Eur opean Communities at the 
last regular meeting of the Working Party.  He added that the European Communities would review 
the responses and it would reserve its right to come  back with follow-up questions, if necessary.    
C. REVIEW OF UPDATING NOTIFICATION S SUBMITTED BY MEMBERS UNDER G /STR/N/8 AND 
G/STR/N/9    
30. No questions were posed regarding the notifications of Argentina  (G/STR/N/8/ARG) and 
G/STR/N/9/ARG). 
31. No questions were posed regarding the notifications of Tunisia (G/STR/N/8/TUN/Rev.1 & 
Suppl.1 and G/STR/N/9/TUN & Suppl.1). 
32. In light of the fact that one delegation was not able to respond fully to the oral questions 
raised on its respective notification at the meeting, the Chairman  invited the delegation that raised the 
oral questions, and wished to have written answers, to submit these in writing directly to the Member 
concerned, with a copy to the Secretariat for circulation.  The Chairman  noted that written responses 
to all written questions should be su bmitted directly to the inquiring country, also with a copy to the 
Secretariat, as soon as possible.  G/STR/M/16 
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  33. Before closing this item, the Chairman  touched upon 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.  For the y ear 2004, he noted that as Cyprus;  the Czech 
Republic;  Estonia;  Hungary;  Latvia;  Lithuania;   Malta;  Poland;  the Slovak Republic and Slovenia 
became European Communities' Member States in 2 004, they were counted separately and not as part 
of the European Communities in order to reflect thei r previous notification obligation.  With respect 
to the year 2006, the European Communities and its currently 25 Member States were counted as one.  
34. With respect to new and full notifications, the Chairman  stated that the situation was 
worsening.  As of 12 October 2006, only 53 out  of 120 Members responded to the 1998 notification 
request;  which is 44% of Members;  53 out of 128 Members responded to the 2001 request;  which is 
41% of Members, 30 out of 133 Members responded to the 2004 request, which is 22% of Members, 
and finally 13 out of 124 Members responded to  the 2006 request, which was barely 10% of 
Members.  In the area of updating notifications, the figures were also deteriorating.  Only 46 out of 
121 Members submitted notifications fo r 1999;  43 out of 125 for 2000;  41 out of 129 for 2002;  and 
32 out of 131 for 2003, which is 38%;  34%;  31% and 24% of Members respectively.  The Chairman  
stated that although the modification of the frequenc y of notifications was adopted to facilitate the 
notification process, a quick look at the figures rela ting to the new and full notification obligation for 
the year 2004 and indeed the year 2006 showed that the situation has deteriorated rather than 
improved.  
35. The Chairman  expressed grave concern about this deteriorating state of affairs regarding 
notifications.  He drew Members' attention to  the importance of prompt compliance with the 
notification obligation which became far less burdens ome after the modification of the periodicity of 
state trading notifications.  The new & full notifications on state trading became due every two years instead of every three years and the requirement of updating notifications in the intervening years was 
eliminated.  He reminded the Members that in accordance with paragraph 4 of the recommendation 
contained in document G/STR/5, a trial phase of four  years commenced on 30 June 2004, after which 
the Working Party should review the situation, w ith regard to compliance with the notification 
obligation and the frequency of notifications, with  a view to determining whether to extend the 
application of this recommendation, whether as presently drafted or in a modified form for a further period.  He sincerely hoped that by the end of this trial period a more tangible improvement and a 
higher degree of compliance with the notifi cation obligation could be achieved.   
36. The Working Party took note
 of the statement made. 
37. The Chairman  also made a brief statement with respect to the timing of the submission of the 
notifications.  He mentioned that, at its meeting of  20 February 1995, the Council for Trade in Goods 
established the deadline of 30 June 1995 for new a nd full notifications by Members on their state 
trading enterprises, and that the Working Party subs equently agreed to maintain 30 June as the date 
for all further notifications.  He strongly emphasi zed the significance of this deadline for the smooth 
sailing of the notifications review process, for gi ving Members an ample opportunity to study the 
notifications ahead of the meeting in their pr eferred WTO working language, and for allowing the 
Secretariat to carry on with the translation and circulation of documents in a timely and efficient 
manner.  As delays beyond that date would in creasingly cause difficulties for the translation and 
circulation of the notifications in time for them to be placed on the airgram of the meeting, and 
without prejudice to the date of 30 June, he urged Members to endeavour to submit their notifications 
at least 10 weeks prior to the date of the meeting at which the notifications should be reviewed.  He 
suggested that written questions shoul d be provided 6 weeks before the date of the meeting, and that 
written answers to written questions should be provid ed well in advance of the meeting.  He hoped 
that these suggestions could help the Working Party to  tackle its notification review task efficiently.  G/STR/M/16 
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  38. The Working Party took note
 of the statement made. 
D. ANNUAL REPORT (2006)  TO THE COUNCIL FOR TRADE IN GOODS  
39. The Working Party adopted  the Annual Report (2006) to the Council for Trade in Goods 
which was circulated as document G/L/788. 
E. OTHER BUSINESS  
40. The Chairman proposed that the next regular m eeting of the Working Party would be held on 
Friday, 5 October 2007.  The airgram convening the meeting will be circulated to all Members on 
Tuesday, 25 September 2007.  The last date for inscr iption of items on the agenda of the meeting will 
be Friday, 21 September 2007 by close of business.   
41. The meeting was adjourned . 
__________