Should American farm subsidies be challenged under the rules of the
World Trade Organization or the North America Free Trade Agreement?
As a first step, one would need to examine the American subsidy program
and ask if it violates either agreement. This process is no different
from what lawyers do in dealing with any other legal
problem.
You believe you have a right to renew the lease, but you hear that the
landlord has offered the land to someone else. We would first try to
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establish the facts – what did the landlord do or say – then examine
our agreement with the landlord to see if in our opinion this breached
the lease. We would then ask what the possible legal actions are and
the costs of such actions.
A trade dispute involves similar consideration. If Canada decides to
pursue a dispute with the United States, it would have to decide in
what forum to do that. Chapter 20 of the NAFTA agreement provides that
disputes between member countries can be settled by either NAFTA or WTO
“at the discretion of the complaining party.” According to University
of Windsor law professor Todd Weiler, the WTO agreements cover a wider
range of matters including services, while NAFTA is more focused on the
trade in goods.
As well, the WTO is more legalistic. “Where are you most likely to
win,” is a factor influencing whether to go to the WTO or NAFTA, Weiler
said.
Last week, I raised the scenario of the Saskatchewan implement
manufacturer who wanted to challenge American rules. As an alternative
to challenging it himself, he could lobby Ottawa to take on the
challenge under NAFTA or the WTO.
So should the American subsidy bill be challenged? Everyone has an
opinion on trade, so I’ll give mine. Yes, we should challenge the
Americans.
However, simply because we challenge them doesn’t mean the Americans
will quickly change their agricultural policies. Given the lengthy
softwood lumber
dispute, where Canada has won before a WTO panel, and the
repeated challenges that the
Americans have made against the wheat board, I expect any challenge
against American farm
subsidies will be a long battle.
A federal spokesperson for the foreign affairs and international trade
department confirmed that Canada is closely following the U.S. subsidy
legislation, that there is a good chance it will be challenged and that
the WTO might be the best forum.
There is plenty of useful
information on the web about international trade law. The text of WTO
agreements, reports from panels and information dealing with ongoing
negotiations can be found at www.wto.org, the WTO’s official website.
Canada’s foreign affairs department, www.dfait-maeci.gc.ca, is full of
trade information, including the full text of the NAFTA agreement. My
favourite is www.naftalaw.org, maintained by Weiler. It provides links
to various other sites and also lists current claims with documents
detailing them under Chapter 11 of NAFTA.
Don Purich is a former practising lawyer who is now involved in
publishing, teaching and writing about legal issues. His columns are
intended as general advice only. Individuals are encouraged to seek
other opinions and/or personal counsel when dealing with legal matters.
