RESTRICTEDWORLD TRADE
ORGANIZATIONG/STR/M/12
7 January 2003
(03-0016)
Working Party on
State Trading Enterprises
MINUTES OF THE MEETING OF THE WORKING
PARTY ON STATE TRADING ENTERPRISES
HELD ON 19 NOVEMBER 2002
Chairman:  Mr. Aliyu Abubakar (Nigeria)
Page
A. A DOPTION OF THE AGENDA ........................................................................................................1
B. R EVIEW OF NEW AND FULL AND UPDATING NOTIFICATIONS SUBMITTED BY
MEMBERS UNDER G/STR/N/3, 4, 5, 6, 7 AND 8 .........................................................................1
C. A NNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS ........................................................6
D. O THER BUSINESS ........................................................................................................................6
1. Requests from the Chairman of the Special Session of the Committee on Trade
and Development and the Chairman of the Working Group on Trade and
Transfer of Technology. ........................................................................................................ ...6
A. ADOPTION OF THE AGENDA
1. The Chairman proposed the inclusion of a point under "Other Business" in connection with
requests received from the Chairman of the Special Session of the Committee on Trade and
Development and the Chairman of the Working Group on Trade and Transfer of Technology.
2. The Working Party adopted the agenda contained in WTO/AIR/1921, as amended.
B. REVIEW OF NEW AND FULL AND UPDATING NOTIFICATIONS SUBMITTED BY MEMBERS
UNDER G/STR/N/3, 4, 5, 6, 7 AND 8
3. The Chairman recalled that, according to paragraph 5 of the Understanding on the
Interpretation of Article XVII ("the Understanding" ), the Working Party was tasked to review the
notifications and counter-notifications on state trading submitted by Members, and in the 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.
4. The Chairman suggested that the Working Part y conduct the review in the same manner as at
previous meetings, i.e. with a focus on two main elements: (i) whether the notification responded
adequately to the information requested in the questionnaire; and (ii) whether more information was
needed in order to permit – in the language of paragraph 2 of the Understanding – "a clearG/STR/M/12
Page 2
appreciation of the manner of operation of the enterprises notified and the effect of their operations on
international trade".
5. The Chairman recalled that the Council for Trade in Goods, at its meeting on
20 February 1995, had established a deadline of 30 June 1995 for new and full notifications by
Members on their state trading enterprises ("STEs"), and that subsequently the Working Party hadagreed to maintain 30 June as the date for further (updating) notifications.
6. The Chairman recalled that, on 22 April 1998, a request for new and full notifications was
circulated in document G/STR/N/4.  On 10 Marc h 1999, a request for updating notifications was
circulated in document G/STR/N/5.  On 1 Ma rch 2000, a request for updating notifications was
circulated in document G/STR/N/6.  On 26 February 2001, a request for new and full
notifications was circulated in document G/STR/N/7.  On 20 February 2002, a request for updating
notifications was circulated in document G/STR/N/8.  These notifications, required of allWTO Members, were due by 30 June of the respective year, with the exception of notifications
pursuant to G/STR/N/4, which were due by 30 September 1998, in order to allow for the fact that a
revised questionnaire had been adopted that year.
7. The Chairman noted that the notifications by Canada in G/STR/N/4/CAN and Malta in
G/STR/N/8/MLT had been received after the Airgram setting the Agenda for the meeting wascirculated.  These notifications could be found in the document packages for the meeting.  The
Chairman asked Members if they agreed to include the notifications by Canada and Malta in the list of
notifications to be reviewed at the meeting, as th ey were circulated some time before the meeting, at
least in English.
8. The Working Party so decided.
9. The Chairman noted that the 2002 updating notification from Macao, China in document
G/STR/N/8/MAC, had been received on 6 February 2002, however, due to a mistake by the
Secretariat it was not circulated at that time.  The delegation of Macao, China had brought this to the
attention of the Secretariat and an advance copy of the notification had been made available as a room
document.  The Chairman noted that this was a nil notification, therefore, although this notificationhad not yet circulated officially, he asked whether the Working Party would agree to include Macao's
notification among those which would be reviewed at the meeting.
10. The Working Party so decided.
11. The Chairman noted that Nigeria's new and full notification for 1998 in document
G/STR/N/4/NGA had been submitte d on 16 February 1998, however, due to a mistake by the
Secretariat this notification was not circulated at that time.  He said that he had brought this to the
attention of the Secretariat and an advance copy of  this notification had been made available as a
room document.  The Chairman also noted that Nigeria had recently submitted its new and full
notification for 2001 and updating notifications for 1999, 2000 and 2002.  These were all nil
notifications and would be circulated in a sing le multi-symbol document as G/STR/N/5/NGA through
G/STR/N/8/NGA, an advance copy of which had been made available in the room.  The Chairman
asked whether the Working Party would agree to in clude Nigeria's notifications among those which
would be reviewed at the meeting, although Nigeria's notifications had not yet circulated officially.
12. The Working Party so decided.
13. The Chairman noted that Jordan's new and full and updating notification for 2001 and 2002
had been received only the previous week and would be circulated as a dual-symbol document
G/STR/N/7/JOR and G/STR/N/8/JOR.  An advance copy  of this notification had been made availableG/STR/M/12
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as a room document.  The chairman noted that Jordan's notification was quite substantive and
understood that Members would need some time to fully evaluate it, however, given that the next
review of notifications would happen only at the e nd of next year, the Chairman proposed to include
Jordan's notification among those which were to be reviewed at the meeting.  This review was to be
conducted with the understanding that if Members had any questions on Jordan's notification theycould submit them in writing at a later date and any Member could also request that Jordan's
notification be retained on the airgram for the next meeting of the Working Party.
14. The Working Party so decided.
15. The Chairman indicated that, as agreed at the Working Party's meeting in September 1996,
notifications that had already been reviewed and on which there may be written questions would not
be retained on the airgram for the Working Party's next meeting unless a Member specifically so
requested.
16. The Working Party proceeded with the review of notifications.
17. No questions were posed regarding the notifications of Argentina (G/STR/N/6/ARG –
G/STR/N/7/ARG).
18. No questions were posed regarding the notifications of Bulgaria (G/STR/N/7/BGR –
G/STR/N/8/BGR).
19. Regarding the notification of Canada (G/STR/N/4/CAN) the delegate of the European
Community noted that this notification covered the period 1994-1997 and that this was quite late.  He
asked what was the reason for such a delay and whether more updated information would be
submitted by Canada.
20. The representative of Canada confirmed that this was the new and full notification which was
due in 1998.  He also noted that they were in the process of preparing the rest of the notifications
which Canada still owed and that would contain more updated information.
21. No questions were posed regarding the notification of Chile (G/STR/N/7/CHL).
22. Regarding the notification of Chinese Taipei (G/STR/N/8/TPKM), the delegate of Thailand
noted that questions from Thailand on Chinese Taipei's notifications were circulated in document
G/STR/Q1/TPKM/1.
23. The delegate of Chinese Taipei noted that the government of the Separate Customs Territory
had lifted the import ban on rice and allowed imports under the provisions of Annex V of the
Agreement on Agriculture since January 2002.  The annual minimum access quota for 2002 was
144,720 metric tons with 35 per cent of the quota allocated to the private sector and 65 per cent
imported by the government on the condition that it be tendered to meet internationally recognized
standards for trade in rice.  He expressed that in compliance with WTO commitments, the
government-imported rice would have full access to normal marketing channels for table use.  Since
the rice imported by the public sector had to be resold on the domestic market, market preference was
one of the most important factors when decidi ng the specification of imported rice.  The
representative of Chinese Taipei stated that most consumers in the separate customs territory preferred
medium and short-grain rice.  Therefore, the gove rnment of the Separate Customs Territory should
import the rice which consumers prefer.  Otherwise the imported rice could not be sold and the
government would bear the loss.  He stressed that the specifications of the publicly imported rice were
not stricter than those of other members, and the implementation of the quota was in compliance withG/STR/M/12
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WTO obligations.  The delegation of Chinese Taipei would also provide written answers to Thailand's
questions.
24. No questions were posed regarding the notifications of Costa Rica (G/STR/N/5/CRI –
G/STR/N/6/CRI – G/STR/N/7/CRI).
25. No questions were posed regarding the notification of the Czech Republic (G/STR/N/8/CZE).
26. No questions were posed regarding the notification of Estonia (G/STR/N/8/EST).
27. No questions were posed regarding the notifications of the European Community
(G/STR/N/3/EEC – G/STR/N/5/EEC – G/STR/N/6/EEC – G/STR/N/7/EEC).
28. No questions were posed regarding the notifications of Georgia (G/STR/N/7/GEO –
G/STR/N/8/GEO).
29. No questions were posed regarding the notification of Guatemala (G/STR/N/8/GTM).
30. No questions were posed regarding the notification of Honduras (G/STR/N/7/HND).
31. No questions were posed regarding the notifi cation of Hong Kong, China (G/STR/N/8/HKG).
32. No questions were posed regarding the notifications of Hungary (G/STR/N/7/HUN –
G/STR/N/8/HUN).
33. No questions were posed regarding the notification of India (G/STR/N/7/IND).
34. No questions were posed regarding the notifications of Indonesia (G/STR/N/7/IDN –
G/STR/N/8/IDN).
35. No questions were posed regarding the notifications of Jordan (G/STR/N/7/JOR -
G/STR/N/8/JOR).
36. No questions were posed regarding the notification of Liechtenstein (G/STR/N/8/LIE).
37. No questions were posed regarding the notification of Lithuania (G/STR/N/7/LTU).
38. No questions were posed regarding the notification of Macao, China (G/STR/N/8/MAC).
39. No questions were posed regarding the notification of Malta (G/STR/N/8/MLT).
40. No questions were posed regarding the notification of Mauritius (G/STR/N/8/MUS).
41. No questions were posed regarding the notification of Moldova (G/STR/N/7/MDA).
42. No questions were posed regarding the notifications of Nigeria (G/STR/N/4/NGA-
G/STR/N/5/NGA - G/STR/N/6/NGA - G/STR/N/7/NGA - G/STR/N/8/NGA).
43. No questions were posed regarding the notification of Norw ay (G/STR/N/7/NOR).
44. No questions were posed regarding the notifications of Pakistan (G/STR/N/7/PAK -
G/STR/N/8/PAK).
45. No questions were posed regarding the notification of Panama (G/STR/N/8/PAN).G/STR/M/12
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46. No questions were posed regarding the notifications of Philippines (G/STR/N/4/PHL –
G/STR/N/5/PHL – G/STR/N/6/PHL – G/STR/N/7/PHL).
47. No questions were posed regarding the notification of Poland (G/STR/N/7/POL).
48. No questions were posed regarding the notification of Romania (G/STR/N/8/ROM).
49. No questions were posed regarding the notification of South Africa (G/STR/N/8/ZAF).
50. No questions were posed regarding the no tification of Switzerland (G/STR/N/8/CHE).
51. No questions were posed regarding the notifications of Tunisia (G/STR/N/3/TUN -
G/STR/N/3/TUN/CORR.1 – G/STR/N/4/TUN – G/STR/N/4/TUN/CORR.1 – G/STR/N/5/TUN –
G/STR/N/5/TUN/CORR.1 – G/STR/N/6/TUN - G/STR/N/6/TUN/CORR.1).
52. No questions were posed regarding the notification of Venezuela (G/STR/N/7/VEN).
53. No questions were posed regarding the notifications of Zambia (G/STR/N/7/ZMB-
G/STR/N/8/ZMB).
54. The Chairman noted that China's notification had just been received and that it would be
circulated promptly and reviewed at the next meeting of the Working Party
55. The delegate of the European Community asked the delegation of New Zealand whether they
were going to produce their 2002 notification.  The delegation of the European Community was
particularly interested to follow the transforma tion of the Dairy Board into a new company called
Fonterra.  According to his information this new company retained statutory monopoly rights on
exports from New Zealand, and accounted for 97 per cent of the milk supply in New Zealand.  The
delegate of the European Community urged New Zealand to submit their notification as soon as
possible.
56. The delegate of New Zealand assured the EC delegate that they would submit their
information in very good time.  He noted that the EC delegate was correct in that the New Zealand
government was implementing major changes in the operation of the New Zealand Dairy Board
which had been subsumed into Fonterra Cooperative Group.  In light of these major developments,
New Zealand officials were still assessing the nature and scope of an updated STE notification for
2002, when this assessment was completed New Zealand would notify accordingly and as appropriatethe Working Party.
57. The Chairman reported on the status of notifications made to the Working Party.  With regard
to new and full notifications, as of the day of the meeting, only 43 out of 127 Members had responded
to the 2001 request, which was 33 per cent of Members, and only 49 out of 117 Members had
responded to the 1998 request, which was 41 per cent of Members.  In the area of updating
notifications, the situation was even worse.  Only 21 out of 144 Members had submitted notifications
for 2002, which was 14 per cent of Members, only 40 out of 124 Members had submitted notificationsfor 2000, which was 32 per cent of Members, and only 43 out of 119 Members had submitted
notifications for 1999, which was 36 per cent of Members.  The situation had therefore deteriorated
rather than improved.
58. The Chairman stressed that the situation regarding notifications was of great concern as it
seriously undermined the ability for this Working Party to carry out its main function, meaning the
review of Member's notifications, in the light of which the Council for Trade in Goods may make
recommendations with regard to the adequacy of no tifications and the need for further information.G/STR/M/12
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Compliance with the notification obligations continued to be extremely poor and deteriorated with
every new cycle of notifications.  The Chairman noted that the Working Party was in a situation in
which the vast majority of Members, including a significant group of major trading countries, had not
even made a new and full notification under the requests that were issued in 1998 and 2001.  Since the
last meeting of the Working Party the Secretariat had received several new and full notifications thatwere to be submitted in 2001.  In other words even when Members complied with their notification
obligations, this was usually with a significant delay.  The tardiness of the notifications, when they
were made, greatly reduced the usefulness of the information notified and removed any incentives for
those few Members who do notify on time to continue to do so.  The Chairman highlighted what he
considered was another worrying development in the process of review of notifications, which was
that for the previous two years the Working Party had had only one question being asked on those few
notifications that were submitted.  According to the Chairman this could only be interpreted in twoways, either Members were satisfied with the information provided in the notification or Members
had lost interest in the notification review process.  The Chairman recalled that, the raison d'être  of
the Working Party was the process of review of notifications, and he feared that this process was in
danger of becoming irrelevant or of no use in the near future if something was not done to improve
the situation regarding the submission of notifications and to revive the notification review process.
59. The Chairman suggested that the Working Part y undertake a process of identifying solutions
to the problem of compliance with notifications in the area of state trading enterprises.  In this process
the Working Party might draw inspiration from the actions undertaken in the Committee on Subsidies
and Countervailing Measures in order to improve Member's compliance with their subsidies
notifications.  Concretely, the Chairman proposed, as a first step in this process, that the WorkingParty hold an informal meeting during the month of February 2003.  At this informal meeting, the
issue of notification compliance would be further discussed and the Working Party could try to
identify any problems Members might have in preparing their notifications.  The Working Party might
also examine what had been done in the contex t of the SCM Committee to see whether the actions
taken to improve notification compliance in that body might be of use, in the context of the WorkingParty on State Trading Enterprises.
60. The Working Party so decided.
61. The Chairman asked the Secretariat to schedule the meeting and to inform Members on the
exact date and venue for this informal meeting.
62. The Working Party took note of the statements made.
C. ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS
63. The Working Party adopted the Annual Report to the Council for Trade in Goods which was
circulated as document (G/L/591).
D. OTHER BUSINESS
1. Requests from the Chairman of the Special Session of the Committee on Trade and
Development and the Chairman of the Working Group on Trade and Transfer of
Technology.
64. The Chairman informed the Working Party th at he had received two letters from the
Chairpersons of other WTO bodies.
65. The first letter was from H.E. Ambassador Smith, the Chairman of the Special Session of the
Committee on Trade and Development.  Ambassador Smith requested information on any discussionsG/STR/M/12
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or other developments relating to special and differential treatment that have taken place in the
Working Party on State Trade Enterprises, in the form of a report before 30 November 2002.
66. The Chairman stated that in response to this  request, he intended to send a letter to
Ambassador Smith, reporting that there had been no discussions, submissions, or other developments
in the Working Party relating to special and differential treatment for developing countries.
67. The second letter was from H.E. Ambassador Stefan Johannesson, Chairman of the Working
Group on Trade and Transfer of Technology.  Ambassador Johannesson's letter requested information
on any discussion, submissions and/or other devel opments relating to trade and technology transfer
that may have taken place in the Working Party.
68. The Chairman stated that in response to this  request, he intended to send a letter to
Ambassador Johannesson, informing him that there ha ve been no discussions, submissions, or other
developments in the Working Party relating to trade and technology transfer.
69. The meeting was adjourned.
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