Agence France Presse
WASHINGTON, Feb 16 (AFP) - The United States warned Friday it was ready to slap punitive duties on Canadian products with an export value of up to 35 million dollars in a lingering row over Canada's financial support for its dairy industry.
The office of the US Trade Representative also called on the World Trade Organization to re-convene a dispute settlement panel to determine if Canada has complied with earlier WTO rulings on dairy export subsidies.
If the panel finds that Canada has not complied, the USTR said in a statement here, "the United States proposes to increase tariffs on Canadian products with an annual trade value of up to 35 million dollars, which is the approximate amount of annual harm to the US economy caused by Canada's dairy export subsidy regime."
The USTR also released a list of general product categories, including fish, vegetables, cereals, sugar, cocoa, beverages and dairy produce, that could be targeted by the duties.
The dispute arose in August 1995 when Canada replaced dairy export subsidy payments, which had been financed by a levy on producers, with a new system under which Canadian dairy processors were allowed to purchase lower priced milk for sales abroad.
Washington challenged the move at the WTO, insisting that the new procedures still amounted to an export subsidy that violated global trade rules.
A WTO appellate body in October 1999 upheld the US position, after which Canada eliminated one subsidy but introduced others that continued to violate WTO rules, according to the USTR.
"The United States does not believe that Canada has taken the necessary steps to bring its dairy export subsidy program into compliance with WTO agreements," the USTR statement said.
As a result, Washington has called on the WTO to take a fresh look at the Canadian subsidy program. The government of New Zealand is a "co-complainant" in the case, according to the USTR.:
