WTO and SOEs: Article XVII and Related Provisions of the GATT 1994

Abstract

AbstractBy acting as a trader, a government may influence the direction of international trade through its purchases and sales decisions without resort to other more direct means of trade regulation. The GATT recognizes that governments may choose to participate in international commerce in competition with private firms, but it does not leave them with a free hand when it comes to carrying out trading operations. The core rules regulating a State's trading activities are found in Article XVII and related provisions of the GATT. In the 70 years since their adoption, developments in both the GATT 1947 and the WTO have delineated a set of relatively limited disciplines rooted in the principle of non-discrimination, raising doubts about their effectiveness to address the kinds of problems caused by ‘State trading’ today. It remains true, however, that while State trading enterprises continue to operate across the world, and fundamental questions about the full reach and scope of the existing disciplines endure, opportunities to clarify their role in the modern trading system may well arise in the future practice of WTO Members.