Publication: Canada-Wheat : Discrimination, Non-Commercial Considerations, and State Trading Enterprises
Date
2007-08
ISSN
Published
2007-08
Author(s)
Abstract
Statutory marketing boards that have
exclusive authority to purchase domestic production, sell
for export, and set purchase and sales prices of commodities
are a type of state trading enterprise that is subject to
World Trade Organization disciplines. This paper assesses a
recent dispute brought by the United States against Canada,
alleging that WTO rules require state trading enterprises to
operate solely in accordance with commercial considerations
and that the Canadian government did not require the
Canadian Wheat Board to do so. The panel and Appellate Body
found that the primary discipline of the WTO regarding state
trading enterprises was nondiscrimination, and that
operating on the basis of "commercial
considerations" was not an independent obligation.
Instead, WTO disciplines regarding the pricing behavior of
state trading enterprises use a "commercial
considerations" test as a possible indicator of
discrimination. Although a significant degree of price
discrimination is observed in the case of Canadian wheat
exports, there are economic arguments why this might also be
pursued by a private, profit maximizing firm.
Citation
“Hoekman, Bernard; Trachtman, Joel. 2007. Canada-Wheat : Discrimination, Non-Commercial Considerations, and State Trading Enterprises. Policy Research Working Paper; No. 4337. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/7dca28eb-6f61-5ce4-a2f3-fc4e889d04dc License: CC BY 3.0 IGO.”
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