The Ottawa Citizen | Bloomberg News | December 19, 2001 | Warren Giles
GENEVA--The U.S. and New Zealand asked the World Trade Organization to take a second look at Canada's dairy exports, after a WTO panel couldn't prove that subsidies by Canadian provinces break trade rules.
It's the first time that governments have asked the WTO to re-visit an appeal to check whether another is complying. "When will this end?" Sergio Marchi, Canada's ambassador to the WTO, asked of the four-year dispute. "There has to be finality to WTO dispute settlement, it cannot be an endless situation of 'better luck next time.'"
A WTO appeals body said Dec. 3 it couldn't rule with the U.S. and New Zealand that provincial marketing boards are illegally promoting Canada's dairy exports and hurting prices.
That decision cut off claims by Washington and Wellington that they should each be allowed to impose $35 million in annual punitive duties, after winning an initial WTO complaint in July.
The WTO judges found they lacked evidence for a decision, while adding that their report "does not amount to a finding that the measure at issue is WTO-consistent."
The U.S. and New Zealand argue that Canadian dairy producers are encouraged by provincial subsidies to export milk that exceeds their domestic quotas.
The new U.S. and New Zealand claim is based on the impact of subsidies on average costs of production to the Canadian dairy industry, rather than on market prices.
"It is odd that the WTO would not consider the market as being a good indicator of the value of goods," said Linnet Deily, U.S. ambassador to the WTO. "It strikes the U.S. as a particularly unworkable standard."
Canada says that after overhauling the way it manages milk supply in August 2000, its export system for cheese, butter and other dairy products now complies with WTO subsidy regulations.
Copyright 2001 Southam Inc.The Ottawa Citizen:
