submission by Canada to the working party on state trading enterprises

agricultural exporting state trading enterprises

The following communication, dated 2 May 2016, is being circulated at the request of the Delegation of Canada.

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1  Introduction

1.1.  At the 9^th WTO Ministerial Conference (MC9) Ministers adopted the Declaration on Export Competition (WT/MIN(13)/40). Among other things, this established an annual dedicated discussion to examine developments in the field of export competition during the June meeting of the Committee on Agriculture (CoA). These discussions are structured around a report prepared by the Secretariat which is updated annually based on Members notifications to the CoA, the Working Party on State Trading Enterprises (STEs) and responses to a questionnaire. The second revision of this report, Export Subsidies, export credits, export credit guarantees or insurance programmes, international food aid and STEs (G/AG/W/125/Rev.2), was circulated to Members on 19 May 2015.

1.2.  Addendum 4 of the report (G/AG/W/125/Rev.2/Add.4) specifically addresses agriculture exporting state trading enterprises and therefore is directly relevant to the work of the Working Party on STEs. Canada would encourage other Members to incorporate a review of this paper, and a forthcoming update, in preparation for the next meeting of the Working Party on STEs.

2  Summary of Findings

2.1.  In preparation for the second annual dedicated discussion on export competition, which took place during the June 2015 CoA, the Cairns Group prepared a short paper summarizing the key findings of the Secretariat report, Annual Export Competition Review – Submission from the Cairns Group to the 74^th Meeting of the Committee on Agriculture (CoA) in June 2014 (G/AG/W/144). The section of this paper dealing with agriculture exporting STEs is reproduced below for reference.

2.2.  As was the case during the last review period, twenty Members notified or reported agricultural exporting STEs covering a wide range of products (Table 4). These Members notified or reported a total of 67 agriculture exporting STEs, which is ten fewer than during the last review period. Four more Members also confirmed they do not have agricultural exporting STEs, bringing the total to 29 Members.^[1] A continued positive transparency development is that new and updated information was reported on agricultural exporting STEs by several Members as compared to current STE notifications. However, it is disappointing that there was no overall improvement in the response rate.

2.3.  China (25) and India (14) reported by far the most agriculture exporting STEs, accounting for 58% of the total reported number by all Members. Notably, Colombia reported only four agriculture exporting STEs, whereas it reported 14 last year.^[2]

2.4.  The distribution by product grouping shows a similar concentration with two product categories (fruits and vegetables and tobacco) accounting for 52% of the reported agriculture exporting STEs. The next most numerous product category is "wheat and wheat flour, coarse grains and rice" with five such STEs reported.

2.5.  Only nine of the 20 Members (Australia; Colombia; Costa Rica; Ecuador; Indonesia; Israel; Moldova, Republic of; New Zealand; and Ukraine) responded to the section of the questionnaire requesting information on export values, prices and destinations. This is an improvement over the last reporting period when 6 Members responded to this portion of the questionnaire. Notwithstanding this improvement and the fact the responses may have been limited by commercial confidentiality considerations, these Members account for just 14 STEs (21% of those reported), making it difficult to assess the overall influence of agriculture exporting STEs on global markets. Where such information is provided, export volumes and values generally (but not always) appear small relative to overall global trade in the products in question.

2.6.  Of the four developed countries that reported agriculture exporting STEs (one each in Australia, Canada, New Zealand and Ukraine), those in Australia, New Zealand and Ukraine appear to have export monopoly powers. Of the 63 agriculture exporting STEs reported by 16 developing countries, several appear to have export monopoly powers or other special privileges. The report does not however contain sufficiently detailed trade statistics to determine whether these STEs would meet the Rev.4 modalities general de minimis criteria (Annex K, footnote 5). Similarly, while many of the developing country STEs would likely meet the Rev.4 modalities special and differential treatment criteria (Annex K, paragraphs 4-6), in most cases more information would be required to make a complete assessment, particularly with respect to paragraph 6.

Table 1 Reported Agriculture Exporting STEs by Member

3  Conclusions

3.1.  Some aspects of the review process under the CoA are relevant to the Working Party on STEs, namely the parts of the annual dedicated discussion on export competition and associated Secretariat report that deal with agriculture exporting STEs. Taking this work into account would help to enrich the review process under the Working Party on STEs.

3.2.  The reporting of 67 agriculture exporting STEs across 20 Members, some of which appear to have export monopoly powers and/or other special privileges, suggests that these entities may have important impacts of global markets. However, the extent of the impacts is nearly impossible to assess based on current information. This is an area that may warrant further examination.

3.3.  In their responses to the Secretariat's questionnaire, several Members provided new and updated information on agricultural exporting STEs as compared to current STE notifications. While this is a positive development from an overall transparency perspective, it speaks to the need for Members to make greater efforts to comply with notification obligations within the framework of the WP on STEs.

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