Regulating State Trading Enterprises in the World Trade Organization: An Urgent Need for Change? Evidence from the 2003–2004 U.S.–Canada Grain Dispute

Article XVII of the General Agreement on Tariffs and Trade is the main World Trade Organization (WTO) vehicle for regulating trade-distorting policies implemented through state trading enterprises (STEs). The effectiveness of Article XVII depends on how WTO dispute panels and the Appellate Body interpret the provisions. This study examines the 2003 WTO trade dispute case between the United States and Canada over Canadian grain imports and the practices of the Canadian Wheat Board, an export STE. We conclude that the WTO panel and Appellate Body rationales for their findings demonstrate that Article XVII needs substantial revision for the WTO to discipline STE trade-distorting practices.