The Honourable David Emerson, Minister of International Trade, and the Honourable Chuck Strahl, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board, today announced 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 Minister 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 Minister 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 $US19.1 billion annually in trade-distorting agricultural subsidies. Most of these subsidies emanate from Farm Bill programming 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.

On June 8, 2007, the Government of Canada announced that it has requested that a World Trade Organization (WTO) dispute settlement panel be established on the issue of U.S. agricultural subsidies. Canada continues to strive for a more level international playing field for its agricultural producers, and remains committed to working with other WTO members to achieve an ambitious outcome in the Doha Round of negotiations. One of Canada’s main objectives in the agriculture negotiations is to attain substantial reductions to, and effective disciplines on, trade-distorting agricultural subsidies. Requesting a WTO panel reflects the importance that Canada attaches to addressing the harmful effects of U.S. agricultural subsidies.

Canada’s request for a WTO panel has two main objectives. The first objective is to address the total level of U.S. trade-distorting agricultural subsidies (often called “Amber Box” subsidies). Under its Total Aggregate Measurement of Support (Total AMS) commitment, the U.S. is allowed to provide support of up to $US19.1 billion annually in agricultural trade-distorting subsidies. Canada’s position is that the U.S. has exceeded its Total AMS commitment in each of 1999, 2000, 2001, 2002, 2004 and 2005.

The U.S. Total AMS consists of subsidies to a wide range of agricultural products, including, but not limited to, corn, wheat, soybeans, pulses, and sugar. These trade-distorting subsidies are provided through dozens of U.S. programs, such as direct payments, loan deficiency payments and counter-cyclical payments, which harm the economic interests of Canadian farmers and disadvantage them in their domestic and international markets.

The second objective of Canada’s panel request is meant to address export credit guarantees to certain agricultural products (such as corn and soybeans) provided through the General Sales Manager (GSM) 102 program. Canada’s position is that the U.S. GSM 102 program provides export subsidies that are inconsistent with its WTO obligations.

The majority of U.S. agricultural subsidies derive from Farm Bill programming. It is Canada’s view that these programs are trade distorting and require reform. Canada believes that it is an opportune time to press the U.S. to comply with its WTO obligations given that it is in the process of rewriting its Farm Bill.

WTO consultations held with the United States in February 2007 did not resolve these issues. As a result, Canada is proceeding with a request for a panel, which is the next formal step in the WTO dispute settlement process. 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, our case on Total 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.