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State Trading Enterprises: Top 7 concerns

Members of the World Trade Organization (WTO) raised seven concerns about state trading enterprises at the last relevant meeting.

At the May 13, 2022 meeting of the Working Group on State Trading Enterprises, trade concerns were raised about:

  1. Information described as “not available” in the recent notification on State Trading Enterprises of China (raised by the United States).
  2. Nature of the activities of Padiberas Nasional Berhad, a Malaysian state trading enterprise, in relation to rice imports (raised by the European Union).
  3. Australia‘s decision to continue to maintain a monopoly on the export of rice from the state of New South Wales (raised by the European Union).
  4. Question of whether India should also notify Vijaya Dairy, located in the state of Telangana, as a state trading enterprise (raised by the European Union).
  5. India‘s decision not to mention any State trading enterprise for pulses in its notifications submitted in 2019 (raised by Australia).
  6. Persistent non-notification of State trading enterprises by the Russian Federation (raised by the United States, the United Kingdom and the European Union).
  7. Low level of compliance with notification obligations (raised by the United States, Japan, the United Kingdom and the European Union).

Trading enterprises

The drafters of the WTO General Agreement sought to place the state trading enterprise (STE) in the same competitive position – with respect to state support or protection – as the private enterprise.

In other words, they sought to make state traders behave like competitive private traders, thus eliminating the trade distortions that could be caused by state intervention in a company’s decisions and activities.

On the other hand, at the Council for Trade in Services (CCS) meetings held on October 22, 202166 and March 11, 2022, concerns were reiterated about: (i) China and Vietnam‘s cybersecurity measures (raised by the United States and Japan); (ii) Australia’s 5G-related measures (raised by China); (iii) the United States’ measures on Chinese service providers (raised by China); (iv) India’s measures on Chinese services and service providers (raised by China); and (v) the Kingdom of Saudi Arabia‘s measures on the localization of customer services (raised by the United States).

At the October meeting, concerns were also reiterated about Russian Federation measures requiring pre-installation of software (raised by the United States) and, on that occasion, the European Union also expressed concern about a Russian Federation measure related to Russian software.

 

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