Canada has done the expected and formally appealed a World Trade Organization ruling that Canadian dairy export policies violate WTO rules against export subsidies.
A final decision in the long-running case is not expected until late this year.
At issue are Canadian policies that allow milk producers and companies to work outside the domestic supply management system to produce lower-cost milk for export.
New Zealand and the United States first challenged the export policy in 1997, arguing that since provincial milk marketing boards were involved, there was de facto government involvement and cheaper export milk was being subsidized by higher domestic prices.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
The WTO agreed and Canada changed its export system to try to exclude marketing boards from the arrangements.
The U.S. and New Zealand complained that the changes were not enough to put Canada into compliance with anti-export subsidy rules and in July, a WTO compliance panel agreed.
The Canadian government and the domestic dairy industry complained that the WTO panel had gone beyond the words of the international trade rules.
“They took an ideological approach in an attempt to expand the scope of WTO rules,” said Rick Phillips of Dairy Farmers of Canada.
“We agree the minister should appeal this flawed panel report.”
Agriculture minister Lyle Vanclief said Sept. 5 the government had notified the WTO of Canada’s intention to appeal.
