RESTRICTED
WORLD TRADE G/STR/Q1/CHE/1
8July1996
ORGANIZATION(96-2646)
Original: French Working Party onState Trading Enterprises
REPLIES TOQUESTIONS FROM AUSTRALIA1,THE UNITED STATES2
AND CANADA3,ONTHE ARTICLE XVII NOTIFICATION
OFSWITZERLAND4
Thefollowing communication, dated 13June1996, hasbeenreceived from thePermanent
Mission ofSwitzerland.
________________
Australia
Question
CanSwitzerland advise what changes have been made toarrangements applying tothe
importation ofbread flour asaresult ofcommitments under theUruguay Round?
Answer
TheimportmonopolyforbreadflourwastariffiedundertheUruguayRound.Since1July1995,
thedateofentry intoforce oftheWTO Agreements forSwitzerland, imports arenotcovered byany
quantitative restrictions andaresubject onlytotheobtention ofanautomatic import licence issued
bytheFederal Office ofAgriculture andtopayment ofthebound tariff.
1G/STR/W/8.
2G/STR/W/10.
3G/STR/W/13.
4G/STR/N/1/CHE.G/STR/Q1/CHE/1
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United States
Question 1
Switzerland reported under Description oftheFunctioning oftheEnterprise, part3of
the1960 Questionnaire, that:
"Inaddition, BUTYRA holds themonopoly forimports ofbutter within atariff quota
...BUTYRA, which purchases abroad totheextent necessary tomeet domestic
requirements. BUTYRA isobligated todispose oftheimported butter atprices adapted
tothewholesale price ofdomestic butter asfixed bytheFederal Council."
Could Switzerland explain thecriteria forimporting products, theprocedures usedfor
importing butter, andhowimport prices relate todomestic prices.
Reply
BUTYRA makes itspurchases following theusual quality criteria (PH,bacteriology, etc.)and
purchases onlybrand products. BUTYRA determines thequantity ofimports onthebasisofestimated
totaldemand, butwithout prejudicing domestic butter production. Thebutter ispurchased abroad
atworld market prices. Asdescribed inSwitzerland 'snotification, theprice ofwithin-quota butter
imports isbrought intolinewiththewholesale priceofdomestic butter asfixedbytheFederal Council
when theimported butter issoldtoprivate traders.
Question 2
Switzerland reported under Description oftheFunctioning oftheEnterprise, part3of
the1960 Questionnaire, that:
"Pursuant toArticle 35,third indent oftheWheat Law, ifdomestic bread flour is
overpriced, theFederal Office ofAgriculture willensure thesupply offlour atafairprice
byimporting bread flour, onitsownaccount, orbyauthorizing theimportation ofbread
flour atareduced rateduty."
Could Switzerland explain thecriteria fordetermining ifbread flour isoverpriced in
Switzerland, andhowthedetermination ismade whether toallow private firms toengage intrade?
Reply
Theprovisions ofArticle 35,thirdindent oftheWheat Law, areaimed atensuring aregular
supply offlour onthedomestic market andpreventing market distortions duetooverpricing. The
Government hastheexclusive righttoimport, buttheimports areactually carried outbyprivate traders.
Dependingonthedomesticmarketpricesituation,customstariffsmaybepartiallyorentirelyeliminated.
Prices areconsidered tobetoohighiftheyareabove thepurchase prices determined bytheGovernment
(currently SwF170/100 kgs.). Inviewofthestructural overcapacity ofmills, thisisahighly unlikely
eventuality. Todate, tariffs havenever beenreduced oreliminated.G/STR/Q1/CHE/1
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Question 3
Wenoteinthestatistical annex thatSwitzerland didnotdifferentiate between private
trade andtrade bystate enterprises.
Could Switzerland provide thisinformation?
Reply
Theimports indicated inthestatistical annex were allcarried outbyprivate traders.
Question 4
Wenoteinthestatistical annex thatSwitzerland exported wheat flour anddurum wheat
meal.
Were these exports undertaken bytheFederal Office ofAgriculture under theauthority
oftheWheat Law?
Reply
Alltheexports ofbread flour anddurum wheat mealwerecarried outbyprivate traders. It
should benoted thatsomeexports weremade intheformoffoodaidbynon-governmental organizations.G/STR/Q1/CHE/1
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Canada
Questions
TheSwiss notification oftheadministration oftariff quotas (G/AG/N/CHE/1) indicated
theroleoftheSwiss Butter Supply Board (BUTYRA), theFederal Alcohol Administration and
theSwiss FeedGrain andFodder Cooperative (CCF) inadministering certain tariff quotas. The
firsttwoofthese arementioned inSwitzerland 'sstate trading notification, butnotthethird.
However, theCCF isgranted amonopoly bytheGovernment intheimporting ofundenatured
durum wheat, bread grains, other cereals andcereal products andcoarse grain forhuman
consumption. Could Switzerland describe thefunctioning ofthisCooperative andinparticular
howitsrolerelates toimports? Should thisCooperative benotified asastatetrading enterprise?
Ifnot,whynot?
Reply
Therighttoimport bread flour andother cereals forhuman consumption isreserved tothe
Swiss FeedGrain andFodder Cooperative (CCF). However, anyone wishing toimport theseproducts
mayapply totheCCF andobtain ageneral import licence. Commercial mills andrecognized wheat
traders mayimport wheat without anyquantitative limitation subject topayment ofthecustoms duty
which isbound fortariffquotas. Withrespect tothemanagement ofimports oftheproducts concerned,
theroleoftheCCF thusconcerns theissuing oftheimport licence. TheCCF isresponsible for
monitoring thereserve stocks system, which isthereason fortheexisting regulations concerning the
import system. Thecereals mentioned arenottheobject ofstatetrading inSwitzerland within the
meaning ofArticle XVII:4(a) ofGATT 1994orofparagraph 1oftheMemorandum ofUnderstanding
ontheInterpretation ofArticle XVII, andtherefore were notnotified totheWTO pursuant tothose
provisions.
Itshould alsobenoted that,inaccordance withadecision oftheFederal Council, theactivities
oftheCCFaretocease by30June1997atthelatest. Atpresent, theorganization isexpected already
tohaveceased itsactivities by31December 1996.