Canadian government and dairy industry officials are vowing to mount a stout defence against the latest American government challenge to Canada’s dairy export pricing.
After complaints from its dairy industry, the United States government two weeks ago announced it wants a panel from the World Trade Organization to hear a challenge against Canada’s special pricing policy for export milk.
The Americans complain that because Canada’s export prices are lower than domestic prices and because pooled revenue payouts mask the effect of lower export prices on individual producers, the milk exports are effectively subsidized.
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Agriculture Canada trade specialist Mike Gifford said in an Oct. 2 interview that Canada is confident.
“We believe what we are doing is consistent with our trade obligations,” Gifford said. “We have a disagreement with the Americans and there is no jurisprudence for this in WTO rulings so it will create some rules.”
Dairy Farmers of Canada, a farmer interest group, denounced the U.S. decision.
“This latest U.S. challenge is yet another attempt to confuse the facts in order to get what they want, our Canadian market,” said a DFC statement issued in the name of president Barron Blois. “They will not succeed.”
Gifford said Canada believes it has a strong case but he said the American challenge should not be considered an affront.
“We have a disagreement of opinion and that is why the dispute panel system is there,” he said.
Put rules in black and white
“This is the way we believe trade disagreements should be decided. This is not a declaration of war. This is an attempt to clarify the rules. A panel will determine which of us is right.”
Gifford said the earliest a panel decision could be made is next summer. An appeal to a second panel of lawyers is almost a certainty and a final decision would not be likely before late 1998.
If Canada lost, it would have until spring of 2000 to change the way it prices exports, said Gifford.
“There would be time to adjust, but that is theoretical. We believe we have a winning case.”
