RESTRICTED
WORLD TRADE G/STR/W/20
12April 1996
ORGANIZATION(96-1300)
Original: English Working Party onState Trading Enterprises
REPLIES TOQUESTIONS FROM THE UNITED STATES1ONTHE
ARTICLE XVII NOTIFICATION OFTHE SLOVAK REPUBLIC2
Thefollowingcommunication,dated3April1996,hasbeenreceivedfromthePermanentMission
oftheSlovak Republic.
_______________
1. Weunderstand thattheState Fund forMarket Regulation (SFMR) hasbroad authority to
influence agricultural policy intheSlovak Republic. HastheSlovak Republic provided amore
elaborate description ofitsfunctions inanother notification totheWTO, suchastheoneto
theCommittee onAgriculture?
TheState forFund Market Regulation (SFMR) isoriented strictly ondomestic market
stabilizationofbasicagricultureandfoodproducts.InterventionsofSFMRareonlylimitedonsituations
when surplus ofproduction overcome thedomestic market consumption andtheprices havedecreased
under therealproduction costs.
Intervention purchases, assurpluses areexported orasintervention stock areusedforlater
domestic consumption (seasonal surpluses andseasonal consumption increases).
TheSFMR iseffecting onlysubsidized exports, while non-subsidized exports areexecuted
freely outofanyinfluence ofthatbody.
2. Could theSlovak Republic elaborate onitsfollowing statements under Description ofthe
Functioning oftheState Trading Enterprises, part3ofthe1960 Questionnaire:
"Regulation ofmarket through subsidized exports. TheSFMR Council decides onthe
commodity subject toregulation, onitsquantity, ontheguaranteed (minimum reference) price
onwhich thegoods arepurchased from theproducers andonthelevel ofsubsidy granted.
Onthebasis oftender theeconomic operators areselected toeffect purchase onguaranteed
pricesfromthedomesticproducersandexporttransactionsofsubsidizedgoods.SFMRprovides
themonitoring ofproducts subsidized forexports."
Could theSlovak Republic provide more information onthedetermination ofhowsubsidy
andexport levels aredetermined, andhowsubsidy levels relate todomestic prices?
1G/STR/W/10.
2G/STR/N/1/SVK.
./.G/STR/W/20
Page2
Theleveloftheexport subsidies isbased onthedifference between world market prices and
domestic production costs. Subsidies areprovided onlyinthatcasewhen theworld market prices
arelower thandomestic production costs. Volume ofthesubsidies perunitarecreated bythedifference
between domestic production costs andworld market prices, however, asarulereduced by10per
cent.