Canada Requests WTO Panel on U.S. Agricultural Subsidies

News Date June 11, 2007

Canadian Minister of International Trade David Emerson and Canadian Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board Chuck Strahl announced last week in a news release that the Government of Canada has requested that a World Trade Organization (WTO) dispute settlement panel be established on the issue of U.S. agricultural subsidies. "We remain concerned that the U.S. is providing agricultural subsidies in breach of its WTO commitments," said Emerson. "Requesting a dispute settlement panel reinforces our efforts in the Doha negotiations toward reducing trade-distorting U.S. subsidies." 

"We are standing up for Canadian farmers by taking this concrete action against harmful U.S. agricultural subsidies," said Strahl. "The drafting of the next farm bill over the coming weeks and months is an opportunity for the U.S. to ensure that its subsidy programs comply with its WTO obligations." 

It is Canada's view that U.S. subsidies exceeded its WTO commitments in 1999, 2000, 2001, 2002, 2004, and 2005. Under WTO rules, the U.S. can provide up to $19.1 billion annually in trade-distorting agricultural subsidies. Most of these subsidies emanate from farm bill programs and are provided to a wide range of agricultural products, including, but not limited to, corn, wheat, soybeans, pulses and sugar. It is also Canada's view that, contrary to WTO rules, the U.S. provides export credit guarantees that subsidize the exportation of certain agricultural products. 

On January 8, 2007, Canada requested consultations with the U.S. on this matter. Eight other WTO members (the European Union, Australia, Brazil, Argentina, Nicaragua, Guatemala, Uruguay and Thailand) joined the consultations as third parties. The WTO consultations, held on February 7, 2007, did not resolve the issue. 

In its consultations, Canada raised concerns that U.S. corn subsidies were causing, or threatening to cause, serious prejudice to Canadian corn growers by significantly suppressing Canadian prices. Canada has chosen not to include this element in the current request for a WTO Panel. However, their case on Total Aggregate Measurement of Support (AMS) includes the same programs, and the subsidies paid out to U.S. corn farmers under these programs, that were at issue in the WTO consultations on serious prejudice. Canada retains the right to seek a WTO panel on serious prejudice on corn at a later date. Further information can be located at http://www.international.gc.ca/index.aspx.
 
The National Corn Growers Association (NCGA) is pleased that the Canadian government dropped its allegations of prejudice by U.S.
corn. "Corn prices increased significantly in 2006 and have continued to be well above support levels," said NCGA President Ken McCauley. NCGA's release can be located at http://www.ncga.com/. (Contact: Jennifer Yezak)