RESTRICTED
WORLD TRADE G/STR/Q1/CAN/5
14November 1997
ORGANIZATION(97-4995)
Original: English Working Party on
State Trading Enterprises
STATE TRADING
Replies toQuestions Posed bytheUNITED STATES1
Concerning theArticle XVII Notification ofCANADA2
Thefollowing communication, wasreceived 10November 1997fromthePermanent Mission
ofCanada.
_______________
Indocument G/STR/Q1/CAN/3, dated 6March 1997, Canada responds toQ.2. posed
bytheUnited States that"prices forsales ofbutter toprivate traders wishing toresell inexport
markets aredetermined bycommercial negotiations between theCDC andtheprivate traders
concerned. Domestic butter prices inCanada aregenerally higher thanthose prevailing onworld
markets."
Q.1. Could Canada please explain further theroleoftheCDC intheexport ofbutter from
Canada, particularly asitrelates tothe10,416 tonnes ofbutter thatCanada claims were
exported in1995/96 without subsidy? Wewould appreciate adetailed explanation ofhow
these exports were abletotakeplace, especially given thefactthatdomestic butter prices
inCanada arehigher thanworld market prices.
Q.2. Towhat extent wastheCDC involved inthese exports?
Q.3. Could Canada explain theprocess bywhich "special classpermits" areissued bytheCDC,
sothatbutter forexport canbepurchased atprevailing world prices?
Q.4. Howarethese special classpermits allocated, whoreceives them, andwhat roledoesthe
CDC playintheir allocation?
Q.5. Please describe indetail thespecific mechanism thatenables Canada, through theCDC,
toequalize higher-priced domestically produced butter withlower prevailing world prices.
1G/STR/Q1/CAN/4.
2G/STR/N/2/CAN.
./.G/STR/Q1/CAN/5
Page2
Reply
Canada hasprovided detailed answers toalarge number ofquestions from other Members
atmeetings ofthisWorking Party andtheCommittee onAgriculture concerning theoperation ofour
dairy pricing system. Ithasbecome apparent thatthere isadifference inviewbetween Canada and
some other Members about whether thissystem isconsistent withourobligations. On8October 1997,
theUnited States requested GATT Article XXII consultations onthismatter. On16October 1997,
Canada notified theUnited States thatitagrees toenter intoconsultations. These consultations will
beheldon19November 1997. Canada believes thatitwould beinappropriate fortheWorking Party
todiscuss these questions while thatprocess isongoing.