Location of Repository

Canada-Wheat : discrimination, non-commercial considerations, and state trading enterprises

By Bernard Hoekman and Joel Trachtman


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

OAI identifier:

Suggested articles



  1. (2004). Anatomy of the Global Wheat Market, and the Role of the Canadian Wheat Board. Report for the Canadian Wheat Board. Winnipeg. Available at
  2. (2001). Antitrust and International Regulatory Federalism.
  3. (1998). Article XVII GATT: An Overview,
  4. (1997). Competition Policy and the Trading System: Toward International Rules in the WTO. Speech presented to the Institute for International Economics,
  5. (1998). Conclusions: The Reach of International Trade Law,
  6. (2005). Export Competition Disciplines in the Doha Round,
  7. (2003). Export Competition Issues in the Doha Round. Paper presented at the International Conference: Agricultural Policy Reform and the WTO: Where Are We Heading,
  8. (1998). GATT Law on State Trading Enterprises: Critical Evaluation of Article XVII and Proposals for Reform,
  9. (1998). GATT/WTO Constraints on National Regulation: Requiem for An Aims and Effects Test.
  10. (2006). Marketing Choice: The Way Forward,
  11. (2002). Perspectives on the State Trading Issue in the WTO Negotiations. European Review of Agricultural Economics.
  12. (2005). Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports.
  13. (2003). Robert Hudec and Domestic Regulation: The Resurrection of "Aim and Effects."
  14. (1998). State Trading and International Trade Negotiations, Agriculture and Agri-Food Canada,
  15. (2006). State Trading Enterprises in a Differentiated Product Environment: The Case of Global Malting Barley Markets.
  16. (2000). State Trading versus Export Subsidies: The Case of Canadian Wheat.
  17. (1998). State Trading: Rule Making Alternatives for Entities with Exclusive Rights,
  18. (2004). The Case for International Antitrust.
  19. (1998). The Treatment of Activities of State Trading Enterprises under the WTO Subsidies Rules,
  20. (2006). The Way Forward,
  21. (1995). the World Trade Organization.
  22. (2002). U.S. Proposal for Global Agricultural Trade Reform, Foreign Agricultural Service (FAS),

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.