News release
WORLD TRADE ORGANIZATION REPORT ON CANADIAN WHEAT BOARD VICTORY MADE PUBLIC
OTTAWA, April 6, 2004 - The World Trade Organization (WTO) panel report clearing the practices of the Canadian Wheat Board (CWB) was made publicly available today.
The panel found that the CWB conducts its business in accordance with WTO rules. The panel was requested by the United States to examine the consistency of CWB practices in relation to Canada's WTO obligations.
"This report substantiates the Government of Canada's long-standing claim that the CWB operates squarely within WTO rules," said Reg Alcock, President of the Treasury Board and Minister responsible for the Canadian Wheat Board.
More specifically, the panel found the U.S. did not provide any evidence that the CWB- either in structure, mandate or activity- acted contrary to Canada's trade obligations. The panel further noted that there are a number of WTO rules that impose disciplines on the activities of State Trading Enterprises (STEs), just as they would on any private enterprise.
"The Government and industry succeeded in making our message clear: the CWB's practices are fully consistent with our international trade obligations," said International Trade Minister Jim Peterson. "The WTO heard us loud and clear."
"This decision supports our position on STEs in the WTO negotiations," said Minister of Agriculture and Agri-Food Bob Speller. "The panel's finding that the CWB acts commercially validates our view that there is no justification for re-writing current STE rules,"said Mr. Speller.
The Government of Canada is also examining the panel's finding on the secondary issues considered by the panel in relation to certain grain sector policies. However since the panel recognizes Canada's right to maintain its grain quality assurance system, the findings should have little practical impact on the Canadian grain industry.
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For more information, media may contact:
Media RelationsAgriculture and Agri-Food Canada
Ottawa
(613) 759-7972
Backgrounder
At the request of the U.S., a WTO panel was formed on March 31, 2003, to study the practices of the Canadian Wheat Board (CWB) and the treatment Canada accords to imported grain.
Main Findings of the Panel:
State Trading Enterprises
The panel examined U.S. allegations that the actions of the Government of Canada and the CWB are inconsistent with Canada's obligations under GATT Article XVII - State Trading Enterprises.
This article requires that the activities of state trading enterprises be carried out in a manner consistent with general principles of non-discriminatory treatment and solely in accordance with commercial considerations. In its final report, the panel dismissed the U.S. allegations on this issue.
The panel found that the CWB's organizational structure did not indicate that it makes non-commercial sales, it found that "the fact that the Government of Canada does not supervise the CWB's sales operations makes it more rather than less likely that the CWB markets wheat solely in accordance with the commercial interests of the producers whose marketing agent it is."
Similarly, the panel noted that the mandate of the CWB does not give it an incentive to act in a non-commercial manner. The panel found ,"the mere fact that the CWB does not make a profit for itself does not support the conclusion that the CWB has an incentive not to make sales solely in accordance with commercial considerations."
As for actual CWB activity, the panel found that, in addition to its findings that the structure and mandate of the CWB do not provide an incentive to make non-commercial sales, "the factual evidence adduced by the United States regarding actual CWB sales behaviour does not prove otherwise."
As for the range of WTO provisions disciplining STEs, the panel pointed out that, in addition to Article XVII, STEs are "constrained, in effect, by the provisions of, inter alia, the Agreement on Agriculture and the SCM Agreement."
National Treatment
The panel also examined U.S. allegations that certain Canadian grain sector policies are inconsistent with GATT Article III - National Treatment.
This article requires that imported products be accorded no less favourable treatment than that accorded to like domestic products.
In its final report, the panel dismissed the U.S. allegations on one policy (the producer car program) and affirmed the U.S. claim on three others (rail revenue cap, grain segregation and entry authorization requirement).
The full panel report is available on the WTO website: http://www.wto.org/index.htm
Either party has 60 days to determine whether to appeal the decision to the WTO Appellate Body. If so, an Appellate Body ruling would be expected in early summer 2004.
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