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GTAP Resource #3813

"State Trading Enterprises as Non-Tariff Measures: Theory, Evidence and Future Research Direction"
by Mccorriston, Steve and Donald MacLaren

State trading enterprises (STEs) are widely used among the major agricultural importers and exporters including, inter alia, China, India, Japan, South Korea, Indonesia and Canada, among many others. The concerns with STEs are that, in importing markets, they inhibit market access while, in the exporter context, they provide ‘unfair’ advantages among competing exporters. If these concerns are justified, then STEs can be viewed as non-tariff barriers to achieving undistorted trade and, in principle, their effects can be measured in the form of tariff or export subsidy equivalents. The potential for STEs to distort trade has been recognised in the current OECD MAST initiative. However, the treatment of STEs in this context is inadequate, the characterisation of an STE being limited to its “monopoly status” and thus its classification as anti-competitive. This characterisation is overly-simplistic because it does not fully account for the ways in which STEs may distort trade, if at all. The determinants of this trade distortion turn out to be more complex than the monopoly characterisation, and, as such, this characterisation does not fully capture the heterogeneity of STEs as they exist across countries and commodity sectors. Therefore, STEs in the importing country context are more accurately described by the more neutral term ‘non-tariff measure’. Nevertheless, assessing the trade-distorting effects poses significant conceptual and measurement challenges which we address in this paper.

Specifically, we cover four themes in this paper. First, we provide background coverage of STEs in world agricultural trade and the treatment of STEs in the WTO. This treatment is important because the relevant GATT Articles highlight specifically that the key characterisation of STEs which matters is the role of the exclusive rights that apply to them.

Second, we review recent theoretical developments in the literature on STEs that help to identify the key determinants ...

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2012
Created: Mccorriston, S. (4/24/2012)
Updated: Mccorriston, S. (4/24/2012)
Visits: 1,631
- Agricultural policies

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