EMPRESAS COMERCIALES DEL ESTADO: INFORMACIÓN TÉCNICA

Información técnica sobre las empresas comerciales del Estado

Non-discrimination   

Article XVII:1(a)-(b) of the GATT 1994 applies to "State enterprises", and to enterprises to which a member grants exclusive or special privileges and which are engaged in purchases or sales of goods.;

Article XVII:1(a) commits members to ensure that such enterprises act, in their purchases or sales involving imports or exports, in accordance with the "general principles of non-discriminatory treatment" that the GATT 1994 lays down for governmental measures. Article XVII:1(b) adds that this is "understood to require that such enterprises shall ... make any such purchases or sales solely in accordance with commercial considerations … and shall afford ... other contracting parties adequate opportunity ... to compete for participation in such purchases or sales.”

Two interpretive notes to Article XVII:1 clarify that this provision does not prevent a state enterprise from charging different prices in different markets if this is done for commercial reasons and that a member that receives a "tied loan" (whereby country “A” receives a loan from country “B” in order to buy goods from country “B”) can take that loan into account when purchasing requirements abroad.

  

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Quantitative restrictions (general prohibition and related disciplines)

An Interpretative Note to Articles XI, XII, XIII, XIV, and XVIII specifies that the disciplines on import and export restrictions contained in these provisions apply equally to "restrictions made effective through state trading operations.

This means that the general prohibition on quantitative restrictions on imports or exports as well as the rules that apply to quantitative restrictions when these are exceptionally allowed apply equally to restrictions made effective through state trading operations.

Thus, for example, if a member granted an import monopoly to an enterprise, and that enterprise refused to import, this would be equivalent to the member itself prohibiting importation.  

In a similar way, footnote 1 to the Agreement on Agriculture specifies that the measures "of the kind which have been required to be converted into ordinary customs duties", and that are therefore prohibited by the Agreement on Agriculture, include "non-tariff measures maintained through state-trading enterprises".

  

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Preservation of tariff concessions   

Article II:4 of the GATT 1994 applies to import monopolies. In essence, it requires members not to use import monopolies to diminish the value of their scheduled concessions.

Article II:4 provides that any monopoly of the importation of a product covered in a GATT schedule "shall not … operate so as to afford protection on the average in excess of the amount of protection provided for in that Schedule".

An Interpretative Note to Article II:4 clarifies that the provisions of Article II:4 are to be applied in the light of Article 31 of the Havana Charter (which never entered into force in its own right). Article 31 of the Havana Charter envisaged, in particular, that the import duty on a product covered by an import monopoly would "represent the maximum margin by which the price charged by the import monopoly for the imported product (exclusive of internal taxes conforming to the provisions [on national treatment], transportation, distribution, and other expenses incident to the purchase, sale or further processing, and a reasonable margin of profit) may exceed the landed cost.”

This can be exemplified by considering the hypothetical example of a member whose schedule of commitments indicated that its bound tariff on a product was 2%, and that maintained an import monopoly on that product. If the import monopoly, on selling the imported product domestically, charged a price that exceeded the landed cost of the imported product by a margin (exclusive of WTO-consistent internal taxes, transportation, distribution, and other expenses incident to the purchase, sale or further processing, and a reasonable margin of profit) greater than 2%, this would be inconsistent with Article II:4.

  

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Nairobi Decision on Export Competition

Under the Nairobi Decision on Export Competition, members undertook to ensure that state trading enterprises that export agricultural products do not operate in a manner that circumvents any of the disciplines contained in the Decision. Members also undertook to make their best efforts to ensure that the use of export monopoly powers by such enterprises is exercised in a manner that minimizes trade distorting effects and does not result in displacing or impeding the exports of another member.

 

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Beyond provisions specific to state trading enterprises

The provisions outlined above are specific to state trading enterprises, or to particular types of state trading enterprises (for example, import monopolies, or agricultural exporting state trading enterprises). In addition, other provisions may also apply to conduct carried out by members through state trading enterprises, even though they are not specific to state trading enterprises. In other words, the fact that the WTO agreements do not prohibit state trading enterprises does not mean that, through state trading enterprises, members can engage in behaviour otherwise prohibited by the WTO agreements.

For example, in 1992, the GATT panel in "Canada – Provincial Liquor Boards (US)" found that the fact that the liquor board of certain provinces authorized the private delivery of provincial beer but not of imported beer was inconsistent with Article III:4 of the GATT.

As a further example, in a report adopted in 2001, the WTO panel in "Korea – Various Measures on Beef" (at paras. 772-776, 778-779, and 845(h), not appealed) held that the fact that a state trading enterprise to which part of the import quota for beef was allocated had introduced a distinction between grain-fed and grass-fed beef, and had failed to call for tenders for grass-fed beef, was inconsistent with Article II:1(a) of the GATT 1994, because Korea's schedule did not contain that distinction and thus grass-fed beef was being treated less favourably than provided for in its schedule.

Another example is provided by Article XXXVII:3(a) of the GATT 1994, which requires developed country members that directly or indirectly determine the resale price of products produced in developing country members to make every effort to maintain trade margins at equitable levels. While this provision is not limited to the determination of such resale prices through state trading enterprises, the provision also applies if a member determines such resale prices through state trading enterprises.

  

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Exceptions

In the same way as the substantive obligations of the WTO also apply to member conduct effected through state trading enterprises, the applicable exceptions to those obligations are also available for member conduct effected through state trading enterprises.

Moreover, one exception refers specifically to "monopolies operated under paragraph 4 of Article II and Article XVII." This exception is Article XX(d) of the GATT 1994. Article XX(d) provides an exception to GATT obligations for measures that are necessary to secure compliance with laws or regulations that are not inconsistent with GATT 1994, including those relating to the enforcement of monopolies operated under Articles II:4 and XVII, provided that the measures at issue are not applied in a way that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade.