State trading
New and Full Notification Pursuant to Article XVII:4(a)
of the
GATT 1994 and Paragraph 1 of the Understanding on
the Interpretation of Article XVII
United Kingdom
The following notification,
dated and received on 19 June 2024, is being circulated at the request of the
delegation of the United Kingdom.
_______________
The following notification covers the reporting period
for 2022 and 2023.
Pursuant to Article XVII:4(a) of the GATT 1994 and
paragraph 1 of the Understanding on the Interpretation of Article XVII of the
GATT 1994, and in response to the call for notifications set forth in document G/STR/N/20, the United Kingdom makes the
following new and full notification of its state trading enterprises.
I.
ENUMERATION OF STATE TRADING ENTERPRISES
A._
Identification
of State Trading Enterprises
British Wool Marketing
Board (BWMB).
B._ Description of
Products Affected (Including Tarriff Item Number(s) Encompassed in Product
Description)
Fleece wool
(CN code: 5101110000).
II.
REASON AND PURPOSE
A._ Reason or
Purpose for Establishing and/or Maintaining State Trading Enterprise
The British Wool Marketing Board's
purpose is to maximise the value of wool on behalf of approximately 35,000
producers across the UK. It does this by grading (sorting) their wool and
amalgamating it by type to form commercially viable lots which are tested to
IWTO standards and sold steadily throughout the year by public auction.
B._
Summary of Legal Basis for Granting the Relevant Exclusive
or Special Rights or Privileges, Including Legal Provisions and Summary of
Statutory or Constitutional Powers
BWMB was established in 1950. Its powers
are laid down under the British Wool Marketing Scheme (Approval) Order 1950
(amended 2000) and the Agricultural Marketing Act 1958. The Order provides that
wool producers with more than four adult sheep must register with BWMB (under
paragraphs 49 and 53 of the schedule) and also puts an obligation on
BWMB to collect wool duly tendered by any registered producer (paragraph 72(2)
of the schedule). This is in effect a Universal Service Obligation. The Order
also provides for an optional monopoly on the collection and sale of producers'
wool (paragraph 71(2)-(5) of the schedule) which in practice is not utilised,
leaving producers the right to sell wool independently or outside of the scheme
via one of BWMB's competitors. Exemptions from the scheme are largely at the
discretion of BWMB (paragraph 70 of the schedule).
http://www.legislation.gov.uk/uksi/1950/1326/pdfs/uksi_19501326_en.pdf
III. DESCRIPTION OF THE
FUNCTIONING OF THE STATE TRADING ENTERPRISE
A._ Summary
Statement Providing Overview of Operations of the State Trading Enterprise
The BWMB
arranges the collection of wool from producers and sells that wool on their
behalf, via auction, organised by the Board, in free competition with wool from
other sources. British Wool receives no financial support from the government.
The 'Scheme'
exists to regulate the collection and marketing of UK fleece wool and obliges
British Wool to provide a service to any producer with 4 sheep or more.
B._ Specification of
Exclusive or Special Rights or Privileges Enjoyed by the State Trading
Enterprise
Whilst BWMB holds an optional monopoly on
the collection of fleece wool from producers under the governing legislation,
this is not used in practice. BWMB's in practice only collects 80% of UK wool,
with the remaining 20% purchased directly from farms by competitors. These
third-party buyers also purchase wool directly from British Wool through its
auctions.
C._ Type of Entities
Other than the State Trading Enterprise that are Allowed to Engage in
Importation/Exportation and Conditions for Participation
The 'Scheme' under which BWMB operates
does not extend to the import or export of wool. Merchants purchasing wool via
BWMB's auctions are entitled to retain the wool for onward production in the
UK, or export for onward processing or sale.
D._ How Import /
Export Levels are Established by the State Trading Enterprise
BWMB does not import any wool, therefore
non-UK producers (i.e. the producers of wool from non‑UK sheep) are not subject
to the Scheme. The BWMB has no role in establishing export levels – the buyers
are free to use the wool for whatever purposes they have bought it.
E._ How Export
Prices are Determined
Merchants buy wool at auction and may
export this wool in both greasy and scoured form but as the BWMB has no role in
establishing export level, it has no control over export prices.
F._ How the Resale
Prices of Imported Products are Determined
The BWMB does not import any wool/woollen
products and, therefore, has no control over the resale prices.
G._ Whether
Long-Term Contracts are Negotiated by the State Trading Enterprise. Whether the
State Trading Enterprise is Used to Fulfil Contractual Obligations Entered into
by the Government
All UK wool is sold via auction and,
therefore, the BWMB has no contractual obligations, either private or
governmental
H._
Brief Description of Market Structure
The BWMB is
required to register all producers with four or more sheep (with the exception
of Shetland, which has its own arrangement). It has an infrastructure of regional
grading Depots, and Intermediate Depots, as well as a network of collection
centres and hauliers throughout the UK. The wool is graded and stored at the
Depots until it is sold – no wool is released without payment being received.
Wool from the UK is traded as a global commodity and, therefore, subject to
global market changes.
IV.
STATISTICAL INFORMATION (SEE ATTACHED TABLES I - III)
See Appendices
V.
REASON WHY NO FOREIGN TRADE HAS TAKEN PLACE (AS APPROPRIATE)
Not applicable
VI.
ADDITIONAL INFORMATION (AS APPROPRIATE)