U.S. corn growers, along with other farm groups south of the border, say they’re surprised and disappointed at Canada’s decision to challenge U.S. farm subsidies through the World Trade Organization.
The Canadian government announced Jan. 8 it was challenging subsidies paid to U.S. corn growers, along with the use of export credits and the total U.S. spending on trade-distorting agricultural support programs.
The first step in the process is direct consultations between Canada and the U.S. If that fails to resolve the matter, it could go before a WTO panel.
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Ken McCauley, president of the U.S. National Corn Growers Association, said he had no inkling such a challenge was being considered.
“We’re a little shocked that this is happening,” he said.
“The Canadian International Trade Tribunal last spring ruled we weren’t harming Canadian corn prices or producers and we weren’t out of compliance with WTO.
“We thought all the questions had been answered.”
The CITT said in May that imports of subsidized U.S. corn were not causing injury to Canadian producers and ordered that import duties that have been levied against U.S. imports in December 2005 be lifted and refunded.
McCauley said he hopes the issue can be resolved through the consultation process, and a lengthy, expensive WTO panel review can be avoided.
“That’s my hope and I would really ask that everyone look at this objectively,” he said, adding he’s confident the U.S. position will prevail.
Bob Stallman, president of the American Farm Bureau Federation, said he was “dismayed” that Canada chose to go to the WTO, and added his organization will support the U.S. government throughout the process.
The farm bureau noted that the outcome of the case could affect a variety of commodities, including wheat, soybeans and sugar, all of which are subsidized.
A bureau official also said the Canadian challenge could undermine attempts by the U.S. to get WTO agriculture negotiations back on track.
Some U.S. trade analysts were quoted in news reports as suggesting the Canadian government’s actions are motivated by domestic political considerations, as well as a desire to influence U.S. discussions on a new farm bill this year.
Meanwhile, the Canadian Corn Producers welcomed the trade action, but also cautioned that it won’t address the immediate needs of growers who face a serious farm income crisis.
“This is why CCP … continues to ask the federal government for a made-in-Canada, WTO-compliant, fully funded and effective income support program to offset the injury caused by U.S. farm subsidies,” it said in a statement.
CCP has asked the Federal Court of Appeal to review the CITT decision and hopes the case will be heard this spring.
