WASHINGTON – The
Office of the United States Trade Representative announced today the United
States would seek formation of a World Trade Organization dispute settlement
panel to examine the wheat trading practices of the Government of Canada and the
Canadian Wheat Board (CWB).
States' panel request also challenges Canada's requirements to segregate
imported wheat in the Canadian grain handling system and Canada's discriminatory
policy that affects the access of U.S. grain to Canada's rail transportation
system. The request for a WTO panel is the next step in the U.S. case against
Canada, which was announced last December, and continues the Administration's
aggressive pursuit of ensuring a fair trading system for U.S.
procedures, the first step in the dispute settlement process is for both parties
to hold formal consultations. The United States requested those consultations
with Canada on December 17, 2002, and the consultations were held on January 31,
2003. During the consultations, Canada expressed no willingness to make any
modifications to its wheat trading practices. Accordingly, the United States is
proceeding with the next step in the process, which is the request for the
establishment of a panel of independent experts to determine whether the
defending Party is acting consistently with international trade rules.
On February 15,
2002, U.S. Trade Representative Robert B. Zoellick released an affirmative
finding after an investigation under section 301 of the Trade Act of 1974. In
the finding, Zoellick described the multiple avenues USTR would take to seek
relief for American wheat farmers from the unfair trading practices of the CWB,
a government state trading enterprise. In April 2002, U.S. Chief Agriculture
Negotiator Allen F. Johnson went to North Dakota to hear directly from wheat
farmers on the CWB's unfair competition.
There are four
prongs to the February 2002 plan, which the Administration is pursuing
First, the plan
called for the examination of a possible WTO challenge, which USTR is pursuing
with today's action.
Administration committed to work with the U.S. industry to examine the
possibility of filing antidumping and countervailing duty petitions. The North
Dakota Wheat Commission filed petitions on September 13, 2002. On March 4, 2003,
the U.S. Department of Commerce issued a preliminary determination in the
countervailing duty investigation, announcing a 3.94 percent countervailing duty
to be applied provisionally while the dumping and countervailing duty
announced that it would work with the U.S. industry to identify impediments to
U.S. wheat entering Canada. The elements of the WTO case regarding Canada's
grain segregation requirements and rail transportation rules is a direct result
of those efforts.
United States committed to seek reform of state trading enterprises through the
adoption of new rules in the WTO agriculture negotiations, which are part of the
Doha Development Agenda launched in November 2001. The United States is
aggressively pursuing this negotiating objective. In particular, the United
States has proposed eliminating export monopolies so that any producer,
distributor, or processor can export agriculture products. The United States has
also proposed ending special financial privileges which are granted to state
traders and expanding their WTO transparency obligations.
The United States
is pleased that U.S. proposals to reform export state trading enterprises, such
as the Canadian Wheat Board, have been incorporated into the initial negotiating
framework issued in February by the WTO Chairman of the agriculture negotiations
(Stuart Harbinson). This initial framework reflects the broader concerns within
the multilateral trading system regarding state trading enterprises, including
the need to eliminate monopoly powers, eliminate special government financing,
and make operations of such entities transparent. The United States is
continuing to build a coalition of other WTO member countries in the ongoing
trade negotiations who support this position.
The North Dakota
Wheat Commission and the broader U.S. wheat industry support the
Administration's decision to file a WTO case on the wheat trading practices of