RESTRICTED
WORLD TRADE G/STR/W/13
3April 1996
ORGANIZATION(96-1219)
Original: English/French Working Party onState Trading Enterprises
QUESTIONS FROM CANADA ONTHE ARTICLE XVII
NOTIFICATIONS OFCHILE1,COLOMBIA2,CYPRUS3,CZECH REPUBLIC4,
EUROPEAN COMMUNITY5,INDIA6,INDONESIA7,JAPAN8,KOREA9,NORWAY10,
PHILIPPINES11,ROMANIA12,SOUTH AFRICA13,SWITZERLAND14,THAILAND15,
TURKEY16AND THE UNITED STATES17
Thefollowing communication, dated 7March 1996, hasbeen received from thePermanent
Mission ofCanada.
_______________
Chile
Atthe20February meeting oftheWorking Party onState Trading Enterprises, Canada raised
thefollowing questions regarding Chile 'snotification ofCOTRISA:
(a) Product coverage: This isdescribed as"wheat andother cereals". Which other cereals -all,
oronly certain specific ones? Ifthelatter, please specify.
(b) Reason &purpose: Could thelegal basis beprovided? What ismeant by"transmitting as
directly andaccurately aspossible thealternative import prices fortheproducts"? How is
thisdone?
(c) Functioning: IfCOTRISA does notdealwith export orimport operations, areallitspurchases
soldonthedomestic market? Does COTRISA have anylicensing powers over private traders
engaged ininternational trade?
Colombia
Could Colombia provide further information regarding the'Departmental 'distilleries? Itwould
appear thattheDepartments control thequantity ofimported spirits through thecontractual agreements
signed with theDepartmental distilleries andwith individual traders. Under thisheading, further
information isrequested onvarious elements inthestate trading questionnaire, especially thecriteria
forquantities ofimports; theterms ofvalidity available forthecontractual agreements, andthecriteria
used todetermine thegranting ofvarious terms; andhow themark-up onimported products is
determined. Could Colombia alsoprovide anexplanation oftheterm 'ACODIL ',used intheheading
andfootnotes inTable 6?
1G/STR/N//1/CHL,2G/STR/N/1/COL,3G/STR/N/1/CYP,4G/STR/N/1/CZE +Corr.1,
5G/STR/N/1/EEC +Add.1,6G/STR/N/1/IND,7G/STR/N/1/IDN,8G/STR/N/1/JPN,9G/STR/N/1/KOR,
10G/STR/N/1/NOR,11G/STR/N/1/PHL,12G/STR/N/1/ROM,13G/STR/N/1/ZAF,14G/STR/N/1/CHE,
15G/STR/N/1/THA,16G/STR/N/1/TUR,17G/STR/N/1/USA.G/STR/W/13
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Canada noted from Colombia 'smarket access notification (G/AG/N/COL/1) thatthegranting
ofimportlicensesforpoultryisdeterminedbytheINCOMEX ImportCommittee,"whichbasesapproval
onthecriterion ofprotecting domestic industry". What istheINCOMEX Import Committee? Isit
astate trading enterprise which should benotified?
Cyprus
Inthestatistics fortheCyprus Grain Commission, thedataforfeed barley, maize andwheat
have been aggregated. Could Cyprus please provide disaggregated data forthese products?
Czech Republic
Canada seeks clarification oftwopoints inthenotification regarding theSFMR. Intheresponse
toQuestion III,part(b),line3,arewecorrect insupposing thatthestatement should read, "The SFMR
does notconduct directly anyforeign trade operations ofitsown"? And atline9,arewecorrect in
presuming thatthephrase should read, "...remain freetoexport ortoimport ..."?
European Communities
(a) Austria
Inthedescription ofthefunctioning ofthealcohol monopoly, atthesixth paragraph, itisstated
that, "The importation of...alcoholic beverages from countries outside theEuropean Union ("third
countries") isreserved tothemonopoly administration". Inview ofthis, could theEUprovide details
onhow themark-up onimported products isdetermined?
(b) Finland
According totheSecretariat TPRM Report ofNovember 1991, STEs operated inFinland.
Would theCommission confirm itsstatement thatnone ofthese continue tooperate? Weraise this
because, forexample, weunderstand thatALKO Inc.(which webelieve isstate-owned) has,bylaw,
thesoleright ofretail saleofalcoholic beverages (with theexception ofbeverages containing nomore
than4.7percentalcohol byvolume). Ifso,andifthisincludes thesaleofimported products, itwould
appear thatALKO should besubject toafullnotification. Ifourunderstanding oftheroleandpowers
ofALKO isfaulty weshould beobliged forcorrect information.
(c) France
Previously, France hadastate trading monopoly fortobacco (SEITA -Société nationale
d'exploitation industrielle destabacs etdesallumettes); inFebruary 1995, SEITA wasprivatized.
However, werequest confirmation thatSEITA nolonger possesses special rights orprivileges inthe
sense ofArticle XVII.
(d) Italy
TheEUnotification refers totheItalian Amministrazione Autonoma deiMonopoli diStato
(AAMS), theagency responsible fortheproduction, import, distribution andlicensing oftobacco
products. Itisstated thattheAAMS operates afiscal monopoly for,inter alia,theimportation and
distribution oftobacco products manufactured innon-EC countries. Would theCommission please
describe thedifferent treatments accorded ECandnon-EC countries?G/STR/W/13
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(e) Sweden
According totheSecretariat TPRM Report ofNovember 1994, STEs operated inSweden.
Would theCommission confirm itsstatement thatnone ofthese continue tooperate?
India
1. Itisstated thatimport trade incanalized goods issubstantially reserved forthedesignated
agencies, butthattheGovernment may grant licences toprivate parties toimport these goods. Does
theGovernment actually dothis? Ifnot,why not? Ifso,bywhat procedure? Aretheparties eligible
forthistreatment subject toanyownership requirements?
2. Itisstated thattheimportation ofcereals andedible oilsisundertaken ontheadvice ofthe
Government from time totime. Annex 2shows noimports ofwheat in1994-1995: didanyimports
ofwheat occur inthatyear?
3. Itisstated inthenote toAnnex 2thattheHindustan Vegetable Oils Corporation wasnot
authorized toimport anyoilsoroilseeds during thelastthree years. Itisalsostated thattheState
Trading Corporation ofIndia isanother canalizing agency fortheimport/export ofcertain oilsand
oilseeds, butdoes notdealwith anycanalized itemofimport/export. Didanyimports ofoilsoroilseeds
take place inthelastthree years, andifso,through which agency?
Indonesia
Canada notes thatoneofBULOG 'straded products includes "soybean". Does BULOG control
imports ofsoyabeans forcrushing? Does italsotrade incanola/rapeseed products? Ifnot,does some
other entity trade inthelatter products? Given thatsoya andcanola arelargely substitutable asoilseeds,
does Indonesia maintain apreference forsoya products? Ifso,why?
Japan
Japan 'snotification oftheadministration ofTRQs (G/AG/N/JPN/1) indicated theroles ofthe
Japanese Food Agency, theLivestock Industry Promotion Corporation, andtheRaw SilkandSugar
Prices Stabilization Agency inadministering certain tariff quotas. Thefirsttwoofthese aredealt with
inJapan 'sstate trading notification, while thethird oneisnot. The Raw Silk andSugar Prices
Stabilization Agency "imports [raw silk] through importers whomake contracts with theAgency under
anopen andcompetitive bidding system". Could Japan describe theother functions ofthisagency,
andtheir relation toitsroleinimports? Should thisorganization benotified asastate trading enterprise?
Ifnot,why not?
Korea
TheKoreannotificationoftheadministrationofTRQs(G/AG/N/KOR/1)indicatedthatanumber
ofgovernmentalandnon-governmentalorganizations,includingproducerorganizations,wereresponsible
forTRQ allocation onbehalf oftheMinistry ofAgriculture, Forestry andFisheries, with therespective
organizations being responsible fortheissuance ofimport permits. Forexample, thefollowing
organizations areindicated intheKorean notification ofthedetails ofadministration ofagricultural
tariff ratequotas, buthave notbeen included inKorea 'sstate trading notification:
• theKorean Animal Improvement Association (KAIA), forlivebovine animals and
swine);
• theKorea Poultry Association (live purebred chicks, eggs);G/STR/W/13
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• theKorea Dairy Industry Association (KDIA), forskim andwhole milk powders,
buttermilk, other milk andcream, whey, etc;
• theKorea Feed Milk-substitute Association (KFMA), forwhey powder;
• theKorea Feed Ingredients Association (KFIA), forbone powder;
• theKorea Nursery Fruit Tree Growers 'Association (KNFTGA), forapple, pear, peach
andcitrus trees.
TheKorean state trading notification (G/STR/N/1/KOR) includes thefollowing (most ofwhich
alsohave aroleintheadministration ofcertain agricultural tariff quotas):
• theMinistry ofAgriculture, Forestry &Fisheries (MAFF),
• theAgricultural andFishery Marketing Corporation (AFMC),
• theLivestock Products Marketing Organization (LPMO),
• theNational Livestock Cooperative Federation (NLCF),
• theCheju Citrus Grower 'sAgricultural Cooperative (CCGAC),
• theNational Ginseng Cooperative Federation (NGCF), and
• theKorea Raw SilkExporters Association (KRSEA).
Insomecases,bothanotifiedSTEandanon-notifiedenterpriseareinvolvedintheadministration
ofthesame tariff ratequota, sotheprecise roleofeach isnotclear (e.g., whey, where both theLPMC
andtheKDIA areinvolved).
Could Korea describe theother functions ofthegovernmental andnon-governmental agencies
thatareinvolved intariff quota administration, butthathave notbeen included initsstate trading
notification? Given their roleinaffecting thelevel anddirection ofimports aswellas,insome cases,
their roleinbuying andselling, should these organizations benotified asstate trading enterprises?
Ifnot,why not? Onwhat basis didKorea decide tonotify some ofthese enterprises andnotothers?
TheMAFF hastheexclusive right toimport riceandacertain amount ofbarley. According
toKorea, there isa"wide gap" between domestic andimport prices ofthese products. Forbarley,
private companies may import partofthetariff quota. Apparently, equal opportunity isgiven toall
interested parties thatwant toexport riceandbarley toMAFF. However, noimports took place in
1992-1994 because border protection measures were inplace until 1994. Since 1994, have private
companies orMAFF imported anybarley? Ifanyimports ofthisproduct have occurred since then,
please provide details.
Itisnoted thatoneoftheAFMC 'straded products includes "soya beans". Does AFMC also
trade incanola/rapeseed products? Ifnot,does some other entity trade inthelatter products? Ifnot,
given thatsoya andcanola arelargely substitutable, does Korea maintain apreference forsoya products?
Ifso,why?
Norway
Norway'smarketaccessnotificationtotheCommitteeonAgriculture(G/AG/N/NOR/1)indicates
thattheNorwegian Grain Corporation hasbeen delegated theentire responsibility ofadministering
theimport regime foragricultural products, including theadministration oftariff quotas formeat, butter,
eggs, cabbage andfruits. TheNorwegian state trading notification indicates thattheformer Norwegian
Grain Corporation hasbeen sub-divided intotwoentities: Statens Kornforretning (thepartwhich, inter
alia,isresponsible forTRQ administration); andStatkorn Holding Ltd.(aholding company tomanage
thebusiness partoftheformer Norwegian Grain Corporation). Thenotification reports only thesecond
ofthese, noting thatitwould notnotify itinfuture; since theexclusive rights oftheformer Norwegian
Grain Corporation areabolished, there would benorequirement tonotify Statkorn Holdings.G/STR/W/13
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However, itisnotclear why thefirstentity, Statens Kornforretning, which isresponsible for
theadministration ofagricultural TRQs aswellasfortheadministration ofcertain agricultural support
schemes, including maintaining emergency stocks ofgrain, hasnotbeen notified. Why hasNorway
notincluded theactivities ofStatens Kornforretning initsnotification?
Philippines
ThePhilippine notification oftheadministration ofTRQs (G/AG/N/PHL/1) indicated therole
oftheNational Food Authority (forcorn andrice) andtheNational Sugar Refinery Corporation (for
cane andbeet sugar) inadministering certain tariff quotas. Thefirst ofthese isdealt with inthe
Philippines 'state trading notification, while thesecond oneisnot. TheNational Sugar Refinery
Corporation willbesolely responsible fortheimportation ofsugar within theaccess commitment.
Could thePhilippines describe theother functions ofthiscorporation, andtheir relation toitsrolein
imports? Should thisorganization benotified asastate trading enterprise? Ifnot,why not?
Romania
AttheNovember meeting oftheWorking Party onState Trading Enterprises, Canada invited
Romania toreview its"nil" notification inthelight ofother notifications received andoftheSecretariat 's
draft illustrative listofSTE practices which wefindauseful guide. You willhave noted thatmany
countries areadopting abroad approach tonotification, intheinterest oftransparency. While weaccept
thatallformer Romanian state trading organizations have been converted toprivate companies, we
would request written confirmation thatnone ofthenow-privatized entities continues toenjoy, even
foralimited period, anyspecial rights orprivileges whatsoever bywhich they could influence the
level ordirection ofexports orimports.
South Africa
Weunderstand thatSouth African trade policy isundergoing change, both administratively
andinterms ofpractice. Aregrain conglomerates allowed toimport directly, oristheWheat Board
thesolepurchaser ofimports?
Weunderstand thatSouth Africa isreviewing anew"Marketing ofAgricultural Products Bill"
which mayhave animpact onexisting STEs. Hasthislegislation been brought intoforce? Ifso,please
describe itsprovisions.
Apparently, South Africa intends toreintroduce statutory agricultural boards which were
previously abolished. Weunderstand thattherelevant legislation (which wepresume tobetheabove-
mentioned "Marketing ofAgricultural Products Bill") provides forthereintroduction ofmarketing
boards with funding from levies onagricultural products. Weshould begrateful fordetails.
Switzerland
TheSwiss notification oftheadministration oftariff quotas (G/AG/N/CHE/1) indicated the
roleoftheSwiss Butter Supply Board (BUTYRA), theFederal Alcohol Administration andtheSwiss
Feed Grain andFodder Cooperative (CCF) inadministering certain tariff quotas. Thefirst twoof
these arementioned inSwitzerland 'sstate trading notification, butnotthethird. However, theCCF
isgranted amonopoly bytheGovernment intheimporting ofundenatured durum wheat, bread grains,
other cereals andcereal products andcoarse grain forhuman consumption. Could Switzerland describe
thefunctioning ofthisCooperative andinparticular how itsrole relates toimports? Should this
Cooperative benotified asastate trading enterprise? Ifnot,why not?G/STR/W/13
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Thailand
Thecurrent Thai notification refers tothree STEs. However, theWTO Secretariat TPRM
Report onThailand, presented onemonth later inNovember 1995, refers to22STEs. Please provide
further detailed information withregard tothe19enterprises notnotified, inorder toclarify thismatter.
TheThai notifications oftheadministration oftariff quotas indicated theroleofthePublic
Warehouse Organization (forpotatoes) andtheThai Cane andSugar Corporation (forcane orbeet
sugar) inadministering certain tariff quotas (G/AG/N/THA/2 andTHA/5, respectively). Thefirst
ofthese isdealt with inyour state trading notification, while thesecond oneisnot. TheThai Cane
andSugar Corporation willbeprovided allallocations ofimports under theaccess commitment. Could
Thailand describe theother functions ofthiscorporation, andtheir relation toitsroleinimports? Should
thisorganization benotified asastate trading enterprise? Ifnot,why not?
Turkey
Turkey 'snotification wassubmitted prior tothecommencement oftheEU-Turkey Customs
Union. Asaresult ofthisagreement, Turkey hashadtoalign (forthemost part) itstrade regime
with thatoftheEU. Consequently, many oftheState Trading Enterprises appear tohave losttheir
exclusive rights orprivileges thatwould affect imports orexports. Inreviewing thenewTurkish tariff
(effective 1January 1996), itappears thatallreferences toimport monopolies have been removed.
However, weunderstand thatthemonopolies stillexist inpractice andaremaintained asaresult of
earlier legislation which pre-dates thenew Customs Code.
Asaresult oftheCustoms Union agreement, alltrade-related legislation enacted byMinisterial
Decree (asopposed tothatenacted byaLaw passed through Parliament) hasbeen abolished. This
included thegranting ofanimport monopoly tosuch firms asTEKEL foralcohol andcigarettes, MKEK
forsmall arms, andtheRedCrescent Society forsome pharmaceuticals intheprevious Customs Code.
With theabolition oftheMinisterial Decrees, references tospecial status forthese agencies donot
appear inthenew Customs Code. However, where "special status" hadbeen granted because ofa
Lawpassed byParliament, themonopolies remain even iftheyarenotreferred tointheCustoms Code.
Forexample, until 1996, themonopoly ofTEKEL fortheimport ofbeer, wine, grape must,
vermouth, undenatured ethyl alcohol, compound alcoholic beverages, whiskies andalcoholic drinks
produced from agro-products, wasreflected intheTurkish Customs Code. InthenewCustoms Code
dealing with these items, nomention ofthestate monopoly appears. However, theLaw establishing
TEKEL isstillinforce andthisLaw grants TEKEL amonopoly ontheimportation oftheproducts
listed above.
Based onourinformation, wewould assume thatTEKEL, MKEK andtheRedCrescent Society
retain their earlier import monopolies. This isnotreflected, however, inthenewCustoms Code and
would only beevident when imports ofthese products bynon-state monopoly purchasers arerestricted
orforbiddenbyTurkishCustomsauthorities.WouldTurkeypleaseclarifythecurrentsituationregarding
import monopolies inthenewTurkish trade regime?
United States
With regard totheUSnotification oftheCommodity Credit Corporation (CCC), nomention
ismade ofitsfishandseafood program. Weunderstand thattheCCC isauthorized tosupport theprices
ofagricultural andfishproducts through loans, purchases, payments andother operations. Thelatter
includes exports oraidindevelopment offoreign markets. Could theUSelaborate further onthe
operations ofthiscomponent oftheCCC'smandate?G/STR/W/13
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TheUSprovided agreat deal ofdetail ontheCCC, butitdidnotprovide specific answers
tothequestions listed inpartIIIofthequestionnaire. Could theUSprovide answers toeach ofthose
questions, orindicate which questions itdoes notwish toanswer?