United States — Subsidies and Other Domestic Support for Corn and Other Agricultural Products

Consultations

Complaint by Canada.

On 8 January 2007, Canada requested consultations with the United States concerning three different categories of measures.

First, Canada claims that the United States provides subsidies to the US corn industry that are specific to US producers of primary agricultural products and/or to the US corn industry. Canada considers that the measures at issue are inconsistent with Articles 5(c) and 6.3(c) of the SCM Agreement. Second, Canada claims that the United States makes available to its exporters premium rates and other terms more favourable than those which the market would otherwise provide through export credit guarantee programmes under the Agricultural Trade Act of 1978 and other measures such as the GSM-102 programme and SCGP as well as the programmes, legislation, regulations and statutory instruments providing the support. Canada considers that these programmes provide subsidies contingent upon export performance contrary to Article 3.1(a) and 3.2 of the SCM Agreement, and they also violate Articles 3.3, 8, 9.1 and 10.1 of the Agreement on Agriculture. Third, Canada claims that, through the improper exclusion of domestic support, the United States provides support in favour of domestic producers in excess of the commitment levels specified in Section I of Part IV of the Schedule, contrary to Article 3.2 of the Agreement on Agriculture.

On 18 January 2007, Australia requested to join the consultations. On 19 January 2007, Argentina, Brazil, the European Communities, Guatemala, Nicaragua and Thailand requested to join the consultations. On 22 January 2007, Uruguay requested to join the consultations. Subsequently, the United States informed the DSB that they had accepted the requests of Argentina, Australia, Brazil, the European Communities, Guatemala, Nicaragua, Thailand and Uruguay to join the consultations.

On 7 June 2007, Canada requested the establishment of a panel. At its meeting on 20 June 2007, the DSB deferred the establishment of a panel.

On 11 July 2007, Brazil requested consultations with the United States concerning two distinct categories of US agricultural measures: (i) domestic support for agricultural products and (ii) export credit guarantees for agricultural products.

Concerning domestic support, Brazil requests consultations on support provided, on the one hand, in the years 1999-2001 and, on the other hand, in the years 2002 and 2004-2005.

• In relation to the period from 1999-2001, Brazil's request concerns (1) all domestic support provided to agricultural producers in accordance with US notifications as part of its AMS for those years, (2) the instruments under which such support was provided and (3) additional non-notified programmes and support, including Production Flexibility Contract payments, Non-Insured Crop Disaster Assistance payments, etc. 
• In relation to the period from 2002 and 2004-2005, Brazil indicates that the United States has not made any notifications on domestic support included in its total AMS. Accordingly, in the absence of more and better information, Brazil's request concerns (1) basically all domestic support measures within the meaning of Article 6 of the Agreement on Agriculture as well as the instruments under which such support was provided, including direct payments for various commodities, cottonseed payments, cotton user marketing certifications, energy subsidies and feed assistance. Brazil's request is also directed at any domestic support not exempt from US reduction commitments.

Brazil claims that the above-mentioned measures result in possible inconsistencies with Article 3.2 of the Agreement on Agriculture, as, in Brazil's view, the United States exceeded its commitment levels in each of the years 1999-2001 as well as in 2002 and 2004-2005.

Concerning export credit guarantees, Brazil seeks consultations on various US export credit guarantee programmes, such as GSM102 and the Supplier Credit Guarantee Programme. Particularly, it is challenging guarantees provided under such programmes in respect of agricultural products for which the United States has made export subsidy reduction commitments, but also all other, unscheduled, products.

Brazil claims that the above-mentioned measures result in possible inconsistencies with Articles 3.3, 8, 9.1 and 10.1 of the Agreement on Agriculture and also Articles 3.1(a) and 3.2 of the SCM Agreement, because, in Brazil's view, the United States makes available export credit guarantees on terms more favourable than those which are otherwise available in the market.

On 20 July 2007, Canada requested to join the consultations. On 23 July 2007, Guatemala requested to join the consultations. On 24 July 2007, Costa Rica and Mexico requested to join the consultations. On 25 July 2007, the European Communities requested to join the consultations. On 26 July 2007, Argentina, Australia, India and Nicaragua requested to join the consultations. On 27 July 2007, Thailand requested to join the consultations. Subsequently, the United States informed the DSB that it had accepted the requests of Argentina, Australia, Canada, Costa Rica, the European Communities, Guatemala, India, Nicaragua, Mexico and Thailand to join the consultations. 

On 8 November 2007, Canada and Brazil each requested the establishment of a panel. On 15 November 2007, Canada withdrew its first request to establish a panel dated 7 June 2007. At its meeting on 27 November 2007, the DSB deferred the establishment of a panel.

Panel and Appellate Body proceedings

Further to a second request to establish a panel from both Canada and Brazil, the DSB established a single panel at its meeting on 17 December 2007. Argentina, Australia, Chile, China, the European Communities, India, Japan, Mexico, New Zealand, Nicaragua, South Africa, Chinese Taipei and Thailand reserved their third-party rights. Subsequently, Turkey and Uruguay reserved their third-party rights.