RESTRICTED
WORLD TRADE G/STR/M/3
19April 1996
ORGANIZATION(96-1454)
Working Party onState Trading Enterprises
MINUTES OFTHE MEETING OFTHE
WORKING PARTY HELD ON
20FEBRUARY 1996
Chairman: Mr.Peter May(Australia)
Page
A. Adoption oftheAgenda 1
B. Review ofnotifications submitted byMembers pursuant tothe 1
request fornotifications inG/STR/N/1
C. Review oftheadequacy ofthe1960 questionnaire andthecoverage of 9
statetrading enterprises notified under paragraph 1oftheUnderstanding
D. Development ofanillustrative listshowing thekinds ofrelationships 9
between governments andenterprises andthekinds ofactivities engaged
inbythese enterprises
E. Dateofnextmeeting 11
A. Adoption ofagenda
1. TheWorking Party adopted theagenda proposed inWTO/AIR/265.
B. Review ofnotifications submitted byMembers pursuant totherequest fornotifications in
G/STR/N/1
2. TheChairman recalled thataccording toparagraph 5oftheUnderstanding ontheInterpretation
ofArticle XVII (the"Understanding"), theWorking Party wastasked toreview thenotifications and
counter-notifications onstatetrading submitted byMembers, andthatinthelightofthisreview, the
Council forTrade inGoods could make recommendations withregard totheadequacy ofnotifications
andtheneed forfurther information. TheCouncil forTrade inGoods, atitsmeeting on
20February1995,hadestablishedadeadlineof30June1995fornewandfullnotificationsbyMembers
ontheirstatetradingenterprises("STEs"),andaformalrequestforsuchnotificationshadbeencirculated
inG/STR/N/1 of13March 1995.
3. Hesaidthatheregretted toreport thatcompliance withthisobligation -leaving asidetheissue
ofthe30Junedeadline -hadbeenfarfrom complete. Asofthedateofcirculation oftheairgram
convening thepresent meeting (5February), atotalofonly34Members -counting the15ECMemberG/STR/M/3
Page2
states asone1-hadsubmitted anotification inresponse totheMarch 1995 request. Thissituation
wasofserious concern, given thatasof22February there would be119Members oftheWTO, and
inlightoftheneed, expressed repeatedly bydelegations inthepast,forgreater transparency inthe
trade conducted bystatetrading enterprises.
4. Henoted thattheWTO Understanding provided forthesubmission ofcounter-notifications
where aMember feltthatanotification byanother waseither incomplete orincorrect. Thus far,no
counter-notifications hadbeenreceived; however, inhisview some ofthequestions thathadbeen
submitted could almost qualify ascounter-notifications.
5. Hesuggested thattheWorking Party conduct thereview ofthenotifications inthesamemanner
asthatusedforthereview attheNovember meeting. Thus, thefocus would beontwomainelements:
(1)whether thenotification responded adequately totheinformation requested inthequestionnaire;
and(2)whether more information wasneeded inorder topermit -inthelanguage ofparagraph 2of
theUnderstanding -"aclear appreciation ofthemanner ofoperation oftheenterprises notified and
theeffect oftheiroperations oninternational trade". Hesaidthattheassessment ofthesecond element
would beanimportant input intothetaskofreviewing theadequacy ofthequestionnaire.
(i) Chile (G/STR/N/1/CHL)
6. Therepresentative ofAustralia asked Chile toexplain howpurchases ofwheat andothercereals
byCOTRISA werefunded, howprices forpurchases fromdomestic producers andsalestodomestic
purchasers were determined, andhowCOTRISA achieved itscharter ofsupporting thedomestic
marketing process.
7. Therepresentative ofJapan asked Chile toexplain thereason forCOTRISA 'spurchases of
domestic wheat, maize andriceinverysmall quantities, andthedestination ofsuchpurchases.
8. Therepresentative ofNewZealand asked Chile toclarify theproduct coverage ofCOTRISA
andtoexplain whatnational legislation governed COTRISA.
9. Therepresentative ofArgentina noted thatpoint 3ofthenotification stated thatCOTRISA
didnotengage inimport orexport operations, andasked whythisenterprise wasbeing reviewed in
theWorking Party.
10. Therepresentative ofNorway saidthatthesection onstatetrading intheGATT Analytical
Index seemed toindicate thatanenterprise which didnotimport orexport could stillhaveaninfluence,
albeit indirectly, onimports andexports, andthusshould stillbeexamined intheWorking Party.
11. Therepresentative ofMexico saidthatinhisdelegation 'sview, domestic production and
purchase/sale activities should notbeconsidered tobestatetrading.
12. Therepresentative ofNewZealand supported Norway 'sstatement. ItwasuptoanyMember
toprovide transparency onanyentities whose operations itthought might haveaninfluence onimports
orexports. New Zealand hadnotified anumber ofentities thatwere notinvolved directly with
importation orexportation, anddidnotobject tothese being discussed intheWorking Party.
13. TherepresentativeoftheUnitedStatescomplimentedChileonitsthoroughnessandtransparency.
Hisdelegation, too,hadnotified several enterprises thatdidnotengage intrade, andencouraged others
1TheEEC Commission makes oneArticle XVII notification onbehalf ofall15Member states.G/STR/M/3
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todothesame. Thedefinition ofstatetrading intheUnderstanding wasbroad enough toencompass
enterprises thatdidnotengage intrade. However, itshould beconsidered, under theitemdealing
withtheadequacy ofthequestionnaire, whether infuture, Members should berequired toprovide
information onSTEs thatdidnotengage intrade. TheUShadanopenmind onthis,asthere could
beSTEs thatwereimportant enough inthedomestic market toinfluence, without engaging in,trade;
however, itwaslikely thatmostSTEs thatdidnotengage intradewerenotofinterest totheWorking
Party. Until thisquestion wasclarified, Members should erronthesideoftransparency.
14. Therepresentative ofCanada agreed thatMembers should keepanopenmindastowhatshould
benotified, asthiswasfarfromclear. While Chile'snotification wasamodel oftransparency regarding
STEs thatdidnottrade, itlacked information onhowCOTRISA operated. Forexample, whatwas
meant inSection 3by"transmitting asdirectly andaccurately aspossible thealternate import prices
fortheproducts"? IfCOTRISA wasengaged insetting ashadow price, itdidpotentially influence
import prices. Also, itmight havelicensing powers overprivate traders, although thiswasnotclear.
15. Therepresentative ofArgentina saidthataccording toChile'snotification, COTRISA, in
managing three agricultural products, might bemanaging internal aidordomestic support forthese
products, andfromthatpoint ofviewmight haveaninfluence onexternal trade. However, COTRISA
didnotimport orexport theseproducts. There wasaneedtodetermine where thelinewould bedrawn
between whatshould benotified andwhatwasnotrelevant regarding anSTE'spossible influence on
trade.
16. Therepresentative ofMexico saidthattransparency wasimportant andcongratulated Chile
onitsnotification. However, thepoint raised byArgentina wasimportant. Article XVII, its
Interpretative Notes andtheUnderstanding wereestablished, andtheseshould guide theWorking Party.
17. Therepresentative ofChile saidthatwhile therewassome question astowhether suchanSTE
hadtobenotified, Chile hadcome down onthesideoftransparency andfeltthatthiswasjustified
bytheUnderstanding. Thistypeofnotification wasindependent ofwhether ornotimports orexports
hadtaken place. COTRISA wasalegally incorporated enterprise regulated bytheChilean lawon
incorporated enterprises. Theonlybasis onwhich COTRISA setprices wasacommercial one. It
hadtheoption ofpurchasing toprovide stability forsmall- andmedium-sized enterprises. Hestressed
thatasitwasanincorporated enterprise, itoperated within thelawsofthemarket andhadnolegal
ability tomandate purchases. Producers were freetopurchase ornotfrom COTRISA.
(ii) Colombia (G/STR/N/1/COL)
18. TheChairman noted thatthisnotification hadbeensubmitted inJuly1995, butthatitwasbeing
reviewed forthefirsttimeatthepresent meeting duetodelays intheprocessing ofthedocument.
19. TherepresentativeofNewZealandaskedwhatcriteriadeterminedwhetherprivatetraderswould
begranted contracts bythedepartment concerned inorder tobeabletoimport orexport, howpricing
wasdetermined, andwhether long-term contracts were negotiated.
20. Therepresentative oftheUnited States asked whatcriteria determined whether aprivate trader
could engage intrade, whatthevalue oftheSTE'strade was,whatthecomparable leveloftrade by
private enterprises intheproducts covered was,andforanexplanation oftherelation among domestic
export, import andproducer prices.
21. Therepresentative ofCanada asked whattheacronym "ACODIL" referred tointhefootnotes
toTable 6.More information wasneeded onthefunctioning oftheSTE, especially withregard to
howcriteriawereestablishedfordeterminingthequantitiesofimports,thetermsavailableforcontractualG/STR/M/3
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arrangements, thecriteria usedtodetermine thegranting ofthevarious terms forthetraders, andhow
themark-up onimported products wasdetermined.
22. Therepresentative ofArgentina saidthatinmostcases theinformation inthenotifications was
notsufficient topermit anappreciation oftheoperations oftheSTEs notified andtheeffects oftheir
operation oninternational trade. Oneobjective ofthetransparency exercise wastogetinformation
onhowthedetails ofthemarketing operation weredecided, andhowimport andexport procedures
were determined. Thiswastheheart oftheWorking Party'sdiscussion.
23. Therepresentative ofColombia saidthatshewould submit these questions toherauthorities
which would furnish written answers.
(iii) European Communities (G/STR/N/1/EEC andAdd.1)
24. TheChairman recalled thattheEC'snotification hadbeenreceived toolateforcirculation
asaWTO document attheNovember meeting. Inaddition, theEChadsubsequently submitted, on
22December 1995, anaddendum tothenotification.
25. Therepresentative ofArgentina, referring topages 3and5ofG/STR/N/1/EEC, saidthatthe
notification failed toexplain howthetobacco monopoly inItalyandthetobacco andalcohol monopolies
inAustria administered foreign trade procedures andother elements thathadaninfluence onforeign
trade.
26. Therepresentative ofNew Zealand asked whytheEEC hadnotnotified itsagricultural
intervention agencies. Henoted thattheUnited States hadnotified theCommodity Credit Corporation,
andhisdelegation feltthattheEECintervention agencies would alsobecovered bythedefinition of
statetrading enterprise, astheyappeared tomeetsome oftheobjectives ofSTEs setout,forexample,
intheSecretariat background paper (G/STR/2).
27. Therepresentative ofMexico saidthatthenotification regarding France included "Electricité
deFrance" (theFrench electricity company) withrespect toelectrical energy. InMexico 'sview, the
provision ofelectricity wasaservice anddidnotinvolve trade ingoods. Assuchitwasoutside the
scope ofSTEs thatwere tobenotified.
28. Therepresentative ofCanada asked forclarification regarding theEEC'snotification. Canada
understoodthattheformerstatetradingmonopolyfortobaccoinFrance("Sociéténationaled'exploitation
industrielle destabacs etdesallumettes") hadbeenprivatized oneyearago,andasked forconfirmation
thatthisenterprise nolonger enjoyed special rights orprivileges inthesense ofArticle XVII. He
alsoasked formore information onhowtheAustrian alcohol monopoly determined themark-up on
imports. Regarding theItalian fiscal monopoly ontobacco, heasked formore information onthe
different treatment accorded toEUandnon-EU countries. Henoted thatthemostrecent WTO Trade
Policy Reviews ofSweden (November 1994) andFinland (November 1991) listed STEs, andasked
ifthesecontinued tooperate and,ifso,iftheywould benotified. Canada shared NewZealand 'squestion
andconcern astowhether Member stateintervention agencies should benotified. Itseemed clear
fromtheinformation publicly available thatintervention agencies didinfactbuy,storeandsellvarious
commodities andissued import/export licenses, paying export refunds onagricultural products that
varied according todestination. InCanada 'sview, thisentire areaofEUactivity should notgo
unnotified asnotinfluencing thelevelordirection ofexports orimports.
29. Therepresentative ofPoland saidthattheissueofquota allocation, which wasveryimportant,
wasclosely linked totheissue ofimport licensing, andthatthere seemed tobeasignificant overlap
between theinformation sought onstatetrading andthatsought inotherCommittees suchasAgricultureG/STR/M/3
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andMarket Access. Theneed toavoid thisoverlap should bekeptinmind inexamining the
questionnaire. Regarding Mexico 'scomment onelectricity, Poland toohadnotified anSTEwhich
dealtwithtrade inelectricity, andhewould liketohearother views onthisissue.
30. Therepresentative ofNorway saidthathiscountry soldelectricity toDenmark through seabed
cables, thusproving thattrade inthisproduct waspossible.
31. Therepresentative ofUruguay saidthathisdelegation hadbeenstruck bytheEEC'sfailure
toinclude agricultural intervention agencies initsnotification. Theactivities ofthese entities were
important; theypurchased, soldandstored agricultural commodities forlongperiods oftime. He
asked theEEC toexplain whytheyhadnotbeennotified.
32. Therepresentative ofArgentina saidthatwhile some ofthesame questions would necessarily
beraised intheWorking Party asinother Committees, theywerenevertheless validinthestatetrading
context. Thefocus intheWorking Party wasonwhether theoperations ofanenterprise thathad
exclusive orspecial rights orprivileges might beattherootoftrade distortions.
33. Therepresentative oftheEuropean Communities saidthathehadtaken noteofthequestions
andwould forward them tohisauthorities forawritten response. Regarding theSTEs thatformerly
existed inFinland andSweden, these hadbeen abolished withthose countries 'accession tothe
Community. Hesaidthatelectricity hadbeenincluded inthenotification forFrance asthere wasa
tariff lineforthisproduct. Regarding thescope oftheEuropean Communities 'notification, hesaid
thatunder thisagenda itemtheWorking Party wasconducting areview ofthenotifications submitted
andnotofwhatshould benotified; thelatter fellunder another agenda item. However, therationale
fortheEEC'snotnotifying theintervention agencies wasthattheEECdidnotconsider those entities
tobeSTEs inthesense ofArticle XVII oroftheUnderstanding. TheWorking Party seemed tohave
come totheconclusion thatthere werestatetraders which didnottrade, which wasanewnotion to
him. Thefactwasthattheintervention boards didnottrade ontheworld market. Hethusdidnot
seehowtheiractivities could influence purchases orsalesonthatmarket, orthedirection ofimports
orexports. Regarding exports, intervention stocks were exported, butthiswaseffected byprivate
traders. Theintervention boards soldtheintervention stocks ontheinternal market totheprivate trader
onthecondition thatthestocks would beexported. Theprivate trader found abuyer, fixed theprice
andconcluded thecontract. Theintervention board hadnothing todowiththese activities, nordid
itinfluence thevolumes involved, astheprivate trader would cover hiscontracts either withintervention
stocks orwithpurchases onthefreemarket. Thus, theconditions setoutintheUnderstanding were
notmetbecause theintervention board wasnotactive onthemarket atall.Ontheimport side, he
saidthatcertificates weregranted automatically; thus,theintervention boards could notexercise any
influence onthemarket. TheWorking Party should notextend thescope oftheconcept ofstatetrading
toobroadly; forexample, allcountries which hadaninternal support system fortheirfarmers could
beconsidered tobestatetraders because theyinfluenced thelevelofimports ofcertain products. It
would bemore useful toexamine information fromrealstatetraders which soldontheworld market.
34. Therepresentative oftheUnited States saidthatthisissuewasrelated tothatoftheinclusion -in
theChilean notification -ofanenterprise thatdidnottrade externally. Itwastruethatintervention
agencies didnotengage directly ininternational trade; however, there were situations inwhich the
levelofECexports hadbeendirectly affected bytheavailability ofintervention stocks anddecisions
about release prices forthose stocks. Thus, itcould beargued thatunder certain circumstances,
intervention agencies hadaneffect onECexport prices andconditions. Thiswasadefinitional question
thatwould havetoberesolved indiscussions onthequestionnaire andtheillustrative list.Conversely,
itmight bethateventhough anenterprise wasconsidered tobecovered bythedefinition ofSTE, no
notification onitwould berequired.G/STR/M/3
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(iv) India (G/STR/N/1/IND)
35. Therepresentative oftheUnited States saidthattheUSfound ithardtounderstand many of
thespecific details onhowtheentities notified operated andwhattheirreason andpurpose might be,
duetotheformat usedbyIndia. TheUShadspecific questions onthefunctioning ofcertain entities.
Forexample, itwasstated thatimport andexport ofcanalized goods wassubstantially reserved for
designated agencies, however thegovernment could grant licenses toprivate parties toimport orexport
anyofthese goods. Heasked India toprovide more information ontheshare oftrade incanalized
goods accounted forbySTEs andbyprivate traders, andthecriteria usedtodetermine when andhow
much private traders could participate insuchtrade. Thenotification indicated thatinthecaseof
fertilizer, crude oilandpetroleum products, availability offoreign exchange wasthemajor consideration
indeciding thequantity ofimports, andthatimports ofedible oilsandcereals were undertaken by
thegovernment onlyfrom timetotime. Heasked formore information onhowtheimport ofthese
products wasmade bythegovernment andthefrequency ofthatactivity. TheUShadaparticular
interest inthisissue inlightofIndia'sfavourable balance-of-payments situation. Heasked whether
theimport ofoilseeds wassubject tomonopoly control bytheHindustan Vegetable OilsCorporation
orbyadifferent STE, andforanexplanation ofthefunctioning oftheFood Corporation ofIndia as
itrelated tothenotification.
36. Therepresentative ofNewZealand saidthatsome ofthedescriptions inparagraphs 3and5
ofthenotification seemed toindicate thatthefunctions ofthecanalizing agencies included the
implementation ofquantitative restrictions. Inhisdelegation 'sview, theoperation ofSTEs toregulate
themarket bytheuseofquantitative restrictions wasareason andpurpose formaintaining theSTE
andshould havebeenlisted assuchinthenotification.
37. TherepresentativeofArgentinasaidthatifonlythemonopolisticenterprisescouldimportcereals
andedible oils,there should beconditions toguarantee permanently theformula ofminimum access,
andasked India formore information onthismatter.
38. Therepresentative ofCanada asked formore information onthefollowing: whether the
government granted licenses toprivate parties toimport canalized goods and,ifnot,whynot;ifso,
whatprocedure andwhatconditions applied tosuchrights toimport; whether there wereimports of
wheat in1994 and1995; regarding oilsandoilseeds imports inparticular, whether there were any
imports inthelastthree years andifso,whether theywere through theHindustan Vegetable oils
Corporation ortheState Trading Corporation ofIndia.
39. Therepresentative ofIndia saidthathewould forward these questions tohisauthorities for
reply.
(v) Norway (G/STR/N/1/NOR)
40. TheChairman recalled thatthenotification from Norway hadbeen ontheagenda ofthe
November meeting buthadnotbeentaken upatthatmeeting.
41. Therepresentative oftheUnited States recalled thathisdelegation hadsubmitted aquestion
toNorway (G/STR/W/2), regarding whether certain enterprises should havebeenincluded inNorway 's
notification. Norway 'swritten response indicated thatitdidnotbelieve theseenterprises tofallwithin
thedefinition ofSTEintheUnderstanding. Heasked Norway toexplain thereason forthisview.
42. Therepresentatives ofAustralia andArgentina saidthatitwasnotclearwhether STATCORN
enjoyed anyspecial orexclusive privileges interms ofArticle XVII, andasked Norway toelaborate
ontheconditions applying toSTATCORN. They understood thattheNorwegian Grain CorporationG/STR/M/3
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wasresponsible foradministering alltariff quotas, andasked Norway toconfirm thisandtoprovide
further information regarding itsoperation.
43. Therepresentative ofCanada referred totheformer National Grain Corporation which had
beensplitintotwobodies, andasked whyNorway hadchosen nottonotify theStatens Kornforretning
which, itwasstated, would manage market regulation andthebargaining fordomestic grain which
theNorwegian government hadanobligation tobuy.
44. Therepresentative ofNorway reiterated thathisdelegation wasprepared toparticipate with
anopenmind indiscussions onthescope ofresponsibilities intheareaofnotifications. Hisauthorities
werecontinuing theirdeliberations onhowtointerpret thenotification requirements onstatetrading.
Written answers tothequestions posed would besubmitted induecourse.
(vi) Switzerland (G/STR/N/1/CHE)
45. Therepresentative ofArgentina saidthatthenotification didnotdescribe howdecisions of
thestatemonopolies wereadopted. Heasked forclarification ofhowthevolume ofimports andthe
price relationship were established, asthiswould have adirect influence onthelevel ofnational
production andimports. Regarding alcohol, therewasnoinformation onthewayinwhich itsexternal
andinternal marketing wereinfluenced bydecisions taken bytheFederal Council. Thesame would
appear toapply tobread flour, forwhich decisions weretaken bytheFederal Office ofAgriculture,
which wasapparently notastateenterprise butrather adepartment oftheagricultural secretariat.
46. TherepresentativeofNewZealandsaidthatthesectiononthereasonandpurposeforintroducing
andmaintaining theSTEwastoogeneral. Regarding BUTYRA, thenotification suggested thatone
ofitspurposes wastheoperation ofrestrictions onimports duetotariff quotas. Heasked whether
thisfunction should notbeenincluded under "reasons andpurpose".
47. Therepresentative oftheUnited States asked foranexplanation ofthecriteria usedbyBUTYRA
fordeciding when toimport products, theprocedures usedforimports andhowtheprice ofimported
products related totheprice ofdomestic products. Heasked whatthecriteria werefordetermining
ifbread flour wasoverpriced inSwitzerland, andhowthedetermination wasmade onallowing private
firms toengage intrade toensure asupply ofthisproduct atafairprice. Heasked forabreakout,
inthestatistical annex, ofprivate trade andtrade bytheSTEs, andwhether exports ofwheat flour
anddurum wheat mealwere undertaken bytheFederal Office ofAgriculture orbyprivate traders.
48. Therepresentative ofAustralia asked whether anychanges hadbeenmade toarrangements
applying totheimportation ofbread flour resulting from Switzerland 'sUruguay Round agricultural
commitments.
49. Therepresentative ofCanada saidthathisauthorities hadcompared Switzerland 'smarket access
notification totheAgriculture Committee toitsstatetrading notification, andasked Switzerland to
clarify whether theSwiss Feedgrain andFodder Cooperative functioned asanSTEinrelation toimports
andifso,whether itwould benotified.
50. TherepresentativeofSwitzerlandsaidthatwrittenanswerstothesequestionswouldbesubmitted
induecourse.
(vii) Hungary (G/STR/N/1/HUN)
51. Therepresentative ofNewZealand noted thatHungary hadstated thatitdidnothaveanySTEs
according totheworking definition intheUnderstanding. However, Hungary 's1991 Trade PolicyG/STR/M/3
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Review Report stated thattherewerethreestate-owned foreign tradeenterprises under "administrative
management" which enjoyed exclusive export andimport rights formilitary goods andenergy carriers
suchasgasoline, some oilproducts, fueloilandcoke. Heasked Hungary toprovide details onwhether
these foreign trade enterprises were stillfunctioning andifso,whether theycontinued toenjoy any
exclusive orspecial rights orprivileges.
52. Therepresentative ofCanada asked Hungary torevisit itsnotification inthelightoftheapproach
taken byother Members andthebreadth ofinterpretation thatsome hadgiven totheconcept ofstate
trading enterprise, inorder todetermine whether therewerenoenterprises inHungary thatwould meet
thedefinition.
53. Therepresentative ofHungary saidthatthequestions raised related tothepastsituation in
Hungary. Herauthorities hadcarefully examined theobligations under theUnderstanding, andhad
determined thatnoexclusive orspecial rights orprivileges hadbeengranted toanyenterprises in
Hungary intheexercise ofwhich theyinfluenced, through theirpurchases orsales, thelevelordirection
ofimports orexports.
54. There were nocomments orquestions onthefollowing notifications:
- Guinea (G/STR/N/1/GIN)
- Honduras (G/STR/N/1/HND)
55. Therepresentative ofTurkey saidthatherauthorities were preparing awritten response to
theUSquestions onTurkey 'snotification (G/STR/N/1/TUR) andwanted tomake anoralresponse
atthepresent meeting. TheUnited States hadasked whythenotification hadnotincluded ETIBANK,
TURKIYETASKOMURIKURUMUandTURKIYEKUMURISLETMELERI.ShesaidthatETIBANK
andTURKIYE TASKOMURI KURUMU didnotfitthedefinition intheUnderstanding, astheydid
notenjoy anyspecial rights orprivileges intheexercise ofwhich theyinfluenced thelevelordirection
ofimports orexports. TheTURKIYE KUMUR ISLETMELERI, which wasincharge ofmeeting
theenergy needs ofthecountry, hadtherighttoimport some equipment exempt fromcustoms duties
within thescope oftheCouncil ofMinisters decrees issued in1978, inorder tocomplete investment
projects onthermic powerhouses andcoalplants insome regions. However, thisrightwaslimited
totheinvestment projects andthetotalvolume ofimports realized under theseprojects wasnegligible.
Itwasexpected thattheinvestment project inquestion would becompleted bytheendof1996.
56. Several representatives suggested thattheagenda fortheWorking Party'snextmeeting should
include anitemunder which delegations could inscribe notifications, including questions andanswers
onthose notifications, towhich adelegation wished torevert. Thiswould provide some notice to
Members thattheirnotifications would beraised atthemeeting.
57. Therepresentative ofIndonesia saidthathisdelegation would soonsubmit written responses
totheUnited States 'questions.
58. TheChairman reiterated hisinvitation todelegations having raised questions onthenotifications
tosubmit these inwriting directly totheMember concerned, withacopy totheSecretariat for
circulation. Written responses tothose questions should besubmitted directly totheenquiring country,
withacopytotheSecretariat. Regarding notifications tobereviewed atthenextmeeting, heinvited
delegations having questions tosubmit these inwriting notlaterthanthree weeks prior tothedateof
themeeting.
59. Hestressed thatthequestion-and-answer exercise wasanimportant element inthereview of
thenotifications, andthatitwasessential thatthisexercise becarried outinatimely fashion, withG/STR/M/3
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written questions andwritten responses submitted promptly. Heasked allMembers which hadnot
yetsubmitted anewandfullnotification todosoassoonaspossible, andrecalled thatinonlyafew
months 'timearequest forupdating notifications would becirculated.
60. Regarding thesuggestion toinclude regularly anitemontheWorking Party'sagenda under
which notifications, andthequestions andanswers onthem, could bereverted to,hesuggested that
theitemcovering review ofthenotifications bebroken intotwoparts, withonedealing withnew
notifications andtheother withnotifications included inprevious airgrams.
61. TheWorking Party soagreed andtooknoteofthestatements.
62. TheChairman noted theproblem ofMembers which hadnotyetmade anotification andsaid
thatheintended towritetotheseMembers, inhiscapacity asChairman oftheWorking Party, reminding
them oftheirobligations andasking them tonotify assoonaspossible.
63. TherepresentativeofMexicosaidthathiscountrywasintheprocessofpreparingitsnotification.
64. TheWorking Party tooknoteofthestatements.
C. Review oftheadequacy ofthe1960questionnaire andthecoverage ofstatetrading enterprises
notified under paragraph 1oftheUnderstanding
and2
D. Development ofanillustrative listshowing thekinds ofrelationships between governments
andenterprises andthekinds ofactivities engaged inbythese enterprises
65. TheChairman recalled thattheWorking Party hadbegun itsreview oftheadequacy ofthe
1960 questionnaire atitsNovember meeting, atwhich timehehadencouraged delegations tosubmit
written proposals. Since March 1995 atotalof34(counting the15ECMember states asone)
notifications hadbeenreceived andcirculated. Twenty-six ofthese were substantive notifications,
i.e.describing STEs, andafurther eight were nilresponses. TheWorking Party'sreview ofthese
notifications todatehadshown thatinsome cases, theinformation provided wasnotsufficient topermit
anassessment oftheSTEs notified, evenwhere thenotification could beconsidered anadequate response
tothequestionnaire.
66. Hesaidthatonthebasis ofviews expressed ininformal consultations, itappeared thatwork
onrevision ofthequestionnaire would bemostefficiently pursued inaninformal setting rather than
informal plenary meetings oftheWorking Party. Heinvited alldelegations interested inparticipating
inthiswork tomake theirinterest known tohimortotheSecretariat, sothattheycould beinvited
tothese informal meetings. AsChairman, hewould make periodic reports totheWorking Party on
progress inthese consultations.
67. Herecalled thattheWorking Party hadagreed inNovember torevert tothequestionnaire and
totheillustrative listatthepresent meeting. However, inlightoftheviews expressed ininformal
consultations andhisproposal topursue work onthequestionnaire inaninformal setting, hedidnot
intend toconduct asubstantive discussion under thisitematthepresent meeting.
68. Alldelegations whospoke supported theChairman 'ssuggestion forinformal consultations.
2Items C.andD.were taken together.G/STR/M/3
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69. Therepresentative ofNorway, referring tohisearlier intervention onthescope ofnotification
requirements, saidthatNorway wished tocontribute tothework oftheWorking Party andthusto
transparency. However, thisdidnotmean thatNorway believed thatanenterprise oragency, nomatter
howperipheral toimports orexports, should benotified. Thediscussion intheWorking Party should
concentrate ontherealSTEs. InNorway 'sview, theGATT Analytical Index provided some guidance
onthispoint, buthewasnotsuggesting inthiscontext thattheinterpretation ofwhatwastobenotified
should bepushed totheextreme.
70. TherepresentativeoftheUnitedStatessupportedtheChairman'sproposaltocontinuediscussion
ofthequestionnaire inaninformal setting. Hisdelegation hadcirculated tothatinformal group anon-
paper comprising adraftnotification format thatelaborated onthe1960 questionnaire, andhoped soon
tocirculatethatpaperformally.Copiesofthepaperwerecurrentlyavailabletoanyinteresteddelegation.
Hisauthorities hadexamined the1960 questionnaire inthelightofthenotifications made overthe
years, inparticular in1995, inorder totrytodetermine where theholes wereandwhatinformation
would bemost useful indetermining whether STEs were acting inaccordance withthecountry 's
obligations. Anattempt hadbeenmade tomake thequestions more precise anddetailed, forexample
regarding thecriteria usedbyastatetrading enterprise indetermining whatquantities ofimports or
exports would beundertaken. Specific answers tosuchquestions were essential inorder toassess
whether ornottradedistortion wastaking place andwhether therewascompliance withArticle XVII.
Oneindicator would betohavemore information onprices. The1960questionnaire wasambiguous
withrespect towhatwasrequired fromcountries onprice information. Itwasnecessary toexamine
thequestionnaire carefully inorder todevelop formats thatweremore detailed andstructured andthus
toidentify theareas ofinterest inthenotifications. Thepaper wasintended tobeaworking document,
andtheUSwelcomed input from other Members.
71. Therepresentative ofArgentina expressed surprise thatChile hadincluded anenterprise in
itsnotification when, asitwasstated, itsparticipation inthemarket hadnothadasignificant effect
onthelevelordirection ofimports orexports. BothcasesintheAnalytical Index mentioned byNorway
confirmed Argentina 'sviewthatChile'snotification, ifaccurate, included enterprises thatdidnotmeet
thecriteria setoutinArticle XVII andtheUnderstanding. Thesubstantive work oftheWorking Party
wastoassess thetrade effects oftheSTEs'activities.
72. Therepresentative ofMexico, referring totheissueofthecoverage ofstatetrading enterprises
andthedraftillustrative listintheSecretariat background paper (G/STR/2), saidthatthereweresome
aspects thatshould notbeincluded, e.g.references todomestic production anddomestic distribution.
Itshould bestated more clearly whatwasnottobeconsidered anSTE, taking intoaccount Article XVII
anditsInterpretative Notes. Regarding thequestionnaire, there were details thatwould havetobe
discussed, e.g.whatthedateofentry intoforce would beforthenewformat. There wasasequence
forthework nowbeing undertaken, which began withthereview ofthenotifications.
73. Therepresentative ofNew Zealand stressed theimportance hisdelegation placed onthe
illustrative list.Thework donebytheSecretariat provided agoodbasisforcontinuing consultations,
inparticular because itsought todetermine theobjectives andpurpose oftheSTE, itsrelationship with
government andlinkages togovernment policy, andalsoincluded awide-ranging listoftheactivities
thatSTEs might undertake. Thislistwould helpMembers toshape theirideas about revisions tothe
questionnaire. Regarding thecoverage oftheterm"state trading enterprise", hesaiditseemed that
anSTEthatdominated domestic production andcould thereby haveaprofound effect onthelevelof
tradewould notbenotifiable, andyetasmall STEthatmight enjoy some privilege would benotifiable.
Intheinterests oftransparency, theSTEinvolved heavily indomestic production should benotified.G/STR/M/3
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74. Therepresentative ofPoland saidthatthenewquestionnaire format should notduplicate
information provided under other notifications, andasked whether thetypes ofSTEs described inthe
Secretariat paper would berevised infuture.
75. TheChairman saidthatthere werebasically three issues: thesubmission ofnotifications, the
clarificationofthedefinitionofwhathadtobenotified-inpartthroughthedevelopmentofanillustrative
list,andtherevision ofthequestionnaire. Eachboreontheother. Inlightofthis,heinvited delegations
wishing todosotosubmit written proposals ontheillustrative listforcirculation toMembers, and
proposed thattheWorking Party include theissue oftheillustrative listinitsinformal consultations.
76. TheWorkingPartytooknoteofthestatementsandagreedthattheChairmanwouldholdinformal
consultations, opentoanyinterested delegation, ontheissues ofrevision ofthe1960 questionnaire
anddevelopmentofanillustrativelist,andwouldmakeperiodicreportstotheWorkingPartyonprogress
inthese consultations.
E. Dateofnextmeeting
77. TheChairman proposed thatthenextmeeting beheldinthespring of1996.