Canada-Wheat: Discrimination, Non-Commercial Considerations, and State Trading Enterprises

29 Pages Posted: 20 Apr 2016

See all articles by Joel P. Trachtman

Joel P. Trachtman

Tufts University - The Fletcher School of Law and Diplomacy

Bernard Hoekman

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); Centre for Economic Policy Research (CEPR); Economic Research Forum (ERF)

Date Written: August 1, 2007

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.

Keywords: Trade Law, Markets and Market Access, Economic Theory & Research, Access to Markets, Access to Finance

Suggested Citation

Trachtman, Joel P. and Hoekman, Bernard, Canada-Wheat: Discrimination, Non-Commercial Considerations, and State Trading Enterprises (August 1, 2007). World Bank Policy Research Working Paper No. 4337, Available at SSRN: https://ssrn.com/abstract=1011084

Joel P. Trachtman (Contact Author)

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Bernard Hoekman

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

via Boccaccio 121
Florence, Florence 50133
Italy

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Economic Research Forum (ERF) ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
174
Abstract Views
1,314
Rank
311,243
PlumX Metrics