Vive Le Canada

US and Canada flare up over farm subsidy
Date: Saturday, January 13 2007
Topic:


US and Canada flare up over farm subsidy
http://archive.gulfnews.com/business/General/10096487.html

01/12/2007 09:58 PM | AP

Geneva: Canada has lodged a WTO complaint against the United States over what it claims are illegal government handouts to American corn growers, and is challenging whether the billions of dollars in overall farm subsidies paid out by the US government comply with international commerce rules, officials said yesterday.

The request for consultations, filed on Monday by Ottawa at the Geneva-based World Trade Organization, threatens to open a new trade front between the two North American neighbours, which only recently resolved a long and at times bitter confrontation over softwood lumber.

Under WTO rules, a three-month consultation period is required before a country can ask the trade body to launch a formal investigation. A WTO case can result in punitive sanctions being authorised, but panels take many months, and sometimes years, to reach a decision.

"The United States has been providing subsidies to its agricultural producers that create unfair market advantages," Trade Minister David Emerson said in a statement. "We hope to see the US live up to its WTO obligations, particularly given that it has the opportunity to do so when it rewrites its Farm Bill this year."

Canada argues that the US has exceeded the permitted level of trade-distorting subsidies for a number of years on farm products including wheat, sugar and soybeans. It urged Washington to address its concerns when it soon begins to draft a new Farm Bill, which will set out American agricultural support programs for the next five years.

The US says it has offered cuts as part of the WTO's global free trade talks, but others have called the pledges largely artificial, addressing only maximum levels of government subsidies and not those actually distributed to US farmers.

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[Proofreader's note: this article was edited for spelling and typos on January 15, 2007]

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