WTO and SOEs : overview of article XVII and related provisions of the GATT 1994

Abstract

By acting as a trader, a State may influence the direction of international trade through its purchases and sales decisions without resort to other more direct means of intervention such as the application of tariffs and quotas. The GATT recognizes that States 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 their trading activities. The core rules regulating a State's trading operations are found in Article XVII and related provisions of the GATT 1994. In the 70 years since their adoption, developments in both the GATT 1947 and the WTO have uncovered a set of seldom employed and relatively shallow disciplines rooted in the principle of non-discrimination, raising doubts about their relevance to the kinds "State trading" activities undertaken 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 rules endure, it cannot be excluded that the limits of Article XVII and related provisions of the GATT 1994 may well be explored in the future practice of WTO Members, thereby clarifying their regulatory function in the modern trading system.