| Since the vibrancy of America's
domestic dairy market in the post-Uruguay round will depend to a far
greater degree on our ability to export, it is important to understand
the significance of STEs and their adverse impact on the U.S. dairy
export market. The Dairy Trade Coalition (DTC) has been in the forefront
on this issue.
The GAO issued a report recently, entitled "State Trading
Enterprises",
that confirms that U.S. trade laws are impotent in the face of the
threat of STEs such as the New Zealand Dairy Board (NZDB). In addition,
the USTR specifically highlights STEs, in particular New
Zealand's marketing boards and the Canadian
Wheat Board (CWB), as barriers to trade in their 1996 National Trade
Estimate.
What is a State Trading Enterprise (STE)?
A State Trading Enterprise (STE) is generally considered to be a
government or non-government enterprise that is authorized to engage in
trade and is owned, sanctioned, or otherwise supported by a government.
Most STEs are agricultural in nature. Many of them are monopolies and
engage in unfair trading practices that hinder American exports.
Product areas currently known to be affected by STEs are: grains and
cereals, dairy products, alcohol and spirits, beef and veal, sugar, oil
and oilseeds, tobacco, pork, potatoes, wool, fruits, poultry and eggs,
and petroleum.
STEs and GATT
Although agricultural trade in some GATT member countries is directed
through STEs, this aspect of agricultural trade was left unresolved by
the recent Uruguay Round of the GATT. Some STEs are subject to GATT
discipline. However, some clearly operate in ways that bypass these
discipline; specifically, the New Zealand Dairy Board (NZDB) and the
Canadian Wheat Board (CWB).
Many of the newly emerging economies are establishing STEs. America's
ability to export its agricultural products will be hindered
considerably once China, Russia and Ukraine join the World Trade
Organization (WTO). |
| You can obtain a copy of the GAO
report, titled, State Trading Enterprises, online through
the GPO server. The
report number is GAO/GGD-95-208. You can also obtain a hard copy
by calling the GAO at (202) 512-6000.
For a snap shot of U.S. laws pertaining to the
trading practices of STEs such as the NZDB:
For specific recommendation for mitigating the of
STEs, visit the following sites:
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