state trading enterprises

State trading enterprises

State trading enterprises can be broadly described as enterprises, whether governmental or not, to which a member has granted exclusive or special rights or privileges, and that in the exercise of those rights or privileges are able to influence the level or direction of imports or exports of goods through their purchases or sales of goods. The most obvious examples are import or export monopolies, but there are many more types of state trading enterprises.

Introduction

The WTO agreements on trade in goods contain two sets of requirements on state trading enterprises: (a) transparency, i.e. a requirement for members to notify relevant information; and (b) substantive obligations, essentially requiring members not to use state trading enterprises to circumvent other WTO obligations.

The requirement to notify is set out in Article XVII:4(a) of the General Agreement on Tariffs and Trade (GATT 1994) and the Understanding on the Interpretation of Article XVII of the GATT 1994. Members' notifications on state trading enterprises are reviewed in the Working Party on State Trading Enterprises. The substantive obligations on state trading enterprises are set out in a number of different provisions of the WTO agreements.

While members have agreed on a single definition of state trading enterprises that must be notified to the WTO, they have expressly limited this definition to notifications. Therefore, the substantive obligations on state trading enterprises have their own scope of application.

Working Party on State Trading Enterprises

The working Party on State Trading Enterprise (STEs) reviews members' STE notifications and counter notifications and counternotifications of STEs.

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State trading enterprises: notifications requirements and resources

Transparency is an important aspect of the WTO disciplines on state trading enterprises. All members must submit a notification of state trading enterprises every two years. A number of resources are available to help members comply with STE notification requirements.

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State trading enterprises: substantive obligations

The WTO agreements on trade in goods contain a number of substantive obligations referring specifically to state trading enterprises, or to particular types of state trading enterprises, such as import monopolies. These substantive obligations essentially require members not to use state trading enterprises to circumvent other WTO obligations.

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