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Measures Relating to Exports of Wheat and Treatment of Imported Grain

Key Facts
Short Title:
Respondent:
Dispute Status:
Complaint by the United States.

On 17 December 2002, the United States requested consultations with Canada as regards matters concerning the export of wheat by the Canadian Wheat Board and the treatment accorded by Canada to grain imported into Canada.

According to the United States, the actions of the Government of Canada and the Canadian Wheat Board (entity enjoying exclusive rights to purchase and sell Western Canadian wheat for human consumption) related to export of wheat appear to be inconsistent with paragraphs 1(a) and 1(b) of Article XVII of GATT 1994.

As regards the treatment of grain imported into Canada, the United States maintains that the following Canadian measures are inconsistent with Article III of the GATT 1994 and Article 2 of TRIMs since they discriminate against imported grain:

* Under the Canadian Grain Act and Canadian regulations, imported wheat cannot be mixed with Canadian domestic grain being received into or discharged out of grain elevators, and

* Canadian Law caps the maximum revenues that railroads may receive on the shipment of domestic grain but not revenues received on the shipment of imported grain; and Canada provides a preference for domestic grain over imported grain when allocating government-owned railcars.

On 20 December 2002, the European Communities, Japan and Mexico requested to join the consultations. On 24 December 2002, Australia requested to join the consultations. On 6 March 2003, the US requested the establishment of a panel. At its meeting on 18 March 2003, the DSB deferred the establishment of a panel. Further to a second request by the US, the DSB established a Panel at its meeting on 31 March 2003. Chile, Chinese Taipei, the EC, Japan and Mexico reserved their third-party rights. On 9 and 10 April 2003 respectively, China and Australia reserved their third-party rights. On 2 May 2003, Canada requested the Director-General to compose the panel. On 12 May 2003, the Director-General composed the panel. On 30 June 2003, the United States submitted a new request for the establishment of a panel. On 1 July 2003, the Chair of the Panel informed the DSB that it had agreed to the United States' request to suspend the Panel for three weeks from 1-21 July 2003. The DSB established a second panel at its meeting on 11 July 2003. Australia, Chile, China, the EC, Japan and Chinese Taipei reserved their third-party rights. On 25 July 2003, Mexico reserved its third-party rights. On 11 July 2003, the second Panel was composed. Further to a request by the United States, acceded to by the Panel, the preliminary ruling by the Panel was circulated to Members for their information on 21 July 2003. On 30 October 2003, the Chairman of the Panel informed the DSB that the first Panel would not be able to complete its work within six months due to the three week suspension requested by the US following the issuance of a preliminary ruling by the Panel and the harmonization of this Panel's timetable with that of the second Panel and that the Panel expected to issue its final report to the parties in February 2004.

On 6 April 2004, the Panel report was circulated to Members. The Panel found that:

* The United States had failed to establish its claim that Canada had breached its obligations under Article XVII:1 of the GATT 1994 with respect to the Canadian Wheat Board (CWB);

* Section 57(c) of the Canada Grain Act, and Section 56(1) of the Canada Grain Regulations were inconsistent with Article III:4 of the GATT 1994 and were not justified under Article XX(d) of the GATT 1994;

* Sections 150(1) and (2) of the Canada Transportation Act were inconsistent with Article III:4 of GATT 1994;

* The United States had failed to establish its claim that section 87 of the Canada Grain Act was inconsistent with Article III:4 of the GATT 1994 and Article 2 of the TRIMs Agreement.

On 1 June 2004, the United States notified its decision to appeal to the Appellate Body certain issues of law covered in the Panel Report and certain legal interpretations developed by the Panel.

On 30 August 2004, the Appellate Body Report was circulated to Members. The Appellate Body upheld the Panel's conclusion that the United States had not demonstrated that the Canadian Wheat Board (CWB) Export Regime is inconsistent with Article XVII:1 of the GATT 1994. At its meeting on 27 September 2004, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report.

Implementation Status of Adopted Reports

At the DSB meeting on 18 October 2004, Canada stated that it was the intention of Canada to implement the recommendations and rulings of the DSB in a manner that respected its WTO obligations, and that it would require a reasonable period of time to implement the recommendations and rulings of the DSB and was ready to consult with the United States in accordance with Article 21.3(b) of the DSU.

On 15 November 2004, Canada and the United States informed the DSB that they had agreed that the reasonable period of time shall be is 10 months and 5 days, that is, 27 September 2004 to 1 August 2005.

At the DSB meeting on 31 August 2005, Canada announced that amendments to the Canada Transportation Act and the Canada Grain Act and associated regulatory changes had come into force on 1 August 2005 thus bringing Canada into compliance with the DSB's recommendations and rulings.

Panel Proceedings
Brief DateBrief Description
11/04/2003U.S. Comments on Canada's Answers to the Second Set of Panel Questions (pdf)
10/31/2003Executive Summary of the Oral Statement of the United States at the Second Panel Meeting (pdf)
10/29/2003U.S. Answers to the Second Set of Panel Questions (pdf)
10/21/2003Oral Statement of the United States at the Second Panel Meeting (pdf)
10/10/2003Executive Summary of the Second Written Submission of the United States (pdf)
10/02/2003Second Written Submission to the United States (pdf)
09/24/2003U.S. Answers to the First Set of Questions (pdf)
09/19/2003Executive Summary of the Oral Statement of the United States at the First Panel Meeting (pdf)
09/08/2003Oral Statement of the United States at the First Panel Meeting
08/11/2003Executive Summary of the first Written Submission of the United States (pdf)
08/01/2003First Written Submission of the United States (pdf)
06/06/2003Oral Statement of the United States Regarding Canada's Preliminary Ruling Request (pdf)
05/28/2003Comments of the United States on Canada's Preliminary Ruling Request Regarding BCI Procedures (pdf)
05/27/2003Comments of the United States on the Preliminary Ruling Request of Canada Regarding Article 6.2 of the DSU (pdf)

Appeal Proceedings
Brief DateBrief Description
07/12/2004Oral Statement of the United States (pdf)
06/28/2004Appellee's Submission of the United States (pdf)
06/11/2004Appellant's Submission of the United States (pdf)