Topics handled by WTO committees and agreements
Issues covered by the WTO’s committees and agreements

AGRICULTURE NEGOTIATIONS: BACKGROUNDER
Update Phase 2: State trading enterprises/single-desk traders

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UPDATED 10 OCTOBER 2002

Contents
> In a nutshell
Proposals received in Phase 1
Proposals received in Phase 2
Alliances table
INTRODUCTION
Phase 1
Export subsidies, competition and restrictions
Market access
Domestic support: amber, blue and green boxes
Developing countries
Transition economies
Non-trade concerns
Animal welfare and food quality
The peace clause

Phase 2
Tariffs and quotas
Domestic support: amber, blue and green boxes
Export subsidies and restrictions
> State trading
Food security
Food safety
Rural development
Geographical indications
Safeguards
Environment
Trade preferences
Food aid
Consumer information and labelling
Sectoral initiatives
Development box, single commodity producers, small island developing states, special and differential treatment
Additional issues (food aid, the Green Box, tariff quota expansion)

Modalities 2002–2003
Exports
Market access
Domestic support


Data
Statistics

This briefing document explains current agricultural issues raised before and in the current negotiations. It has been prepared by the Information and Media Relations Division of the WTO Secretariat to help public understanding about the agriculture negotiations. It is not an official record of the negotiations.


State trading enterprises/single-desk traders

See also Phase 1 (export subsidies and tariff quotas). Ideas discussed:

Symmetry: is the present agreement biased because it has tougher disciplines on importing enterprises than on exporting ones? Some countries say “yes” because exporting state enterprises supply world markets and could distort world trade more. Some exporting countries with state trading enterprises say “no” because importing enterprises have a serious impact on market access through tariff quota administration, etc, with knock-on effects on world markets.

Tackle the enterprises or specific measures? Behind this debate is the question of whether state enterprises are fundamentally different from private companies.

Some countries see little difference. They say their state companies operate on a commercial basis. They add that private companies can also enjoy monopoly power, use differential pricing, and can be bailed out with subsidies when they are in trouble. These countries therefore argue that the disciplines should not apply to state enterprises in general, but to specific measures. Some are calling for specific disciplines on multinational corporations.
Some developing countries say they need state enterprises to fill in where the private sector is too weak to trade or to compete with large foreign traders, or to serve government objectives such as food security.

The other side of the debate is the view that there really is a fundamental difference, because state enterprises or marketing boards have a monopoly when buying commodities for export, and they also enjoy government guarantees, and do not work with commercial objectives.

Papers or “non-papers” from: Japan, and the US.

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The second phase consists of detailed discussions on the many issues raised in the first phase, organized topic by topic. The meetings are largely “informal”, meaning that there is no official record except for chairperson’s summaries presented at the formal meetings. Papers presented so far have not been official WTO documents. Despite the increased complexity, developing countries continue to participate actively.