Single-desk state trading exporters

State trading enterprises (STEs), particularly those with single-desk status distort competition on export markets and limit market access for imports and, as such, have effects to export subsidies or import tariffs. This paper analyses the trade-distorting effects of single-desk state trading in exporting countries. It is shown that the trade-distorting effect depends on the nature of the exclusive rights bestowed by governments, on the underlying benchmark against which the effects of state trading are gauged (i.e., whether domestic and/or world markets are competitive or oligopolistic), on the interaction with other government policies, and the relative efficiency of the STE. We also show that STEs have distributional effects that appear likely to increase the welfare of domestic producers while decreasing net welfare of society at large.