Canada doesn’t illegally subsidize wheat exports, the World Trade Organization ruled in a decision last week, that gives Canada another major victory in an ongoing trade dispute with the US, according to the Canadian Press news agency.
“This is a victory for western Canadian farmers and we are very proud,” Larry Hill, a farmer and chairman of the Canadian Wheat Board’s trade committee, told a teleconference, according to the CP.
The US government asked the WTO in December 2002 to appoint a three-person panel of experts to determine whether the wheat board contravenes the trade body’s rules by receiving money from the federal government.
The trade complaint was triggered by US farm groups who have complained for years that the wheat board undercuts the price of their wheat to gain market share in the U.S. and around the world, the CP said.
The Winnipeg-based board controls and buys all the wheat and barley produced in Western Canada for human consumption. It is at a price fixed by the Canadian government, according to the report.
US farmers argue Canadian producers are being indirectly subsidized in contravention of international trade rules. The board has long rejected the US allegations and had history on its side heading into the latest investigation.
It has repeatedly come out on top despite more than 10 attempts since 1990 to restrict Canadian wheat and durum exports, according to the report.
The Canadian government has said international trade agreements give countries the right to establish and maintain a state trading enterprise such as the wheat board, the CP says.
Last fall, the US International Trade Commission voted against a permanent duty on durum imports from Canada.
A 13.35% bonding requirement had been set last August by the US Commerce Department. However, the trade commission ruled in October that the imports “have not materially injured” US durum farmers, the CP said.
The commission did vote to keep a 14.15% duty on hard red spring wheat imports. The duty will remain in place for five years with an annual review process, according to the CP.
The latest complaint to the WTO was brought on behalf of the North Dakota Wheat Commission, the US Durum Growers Association and the Durum Growers Trade Action Committee, the news agency said. (Dow Jones)