March 20, 2006

US files WTO complaint over Canada's corn duties

The US appealed to the World Trade Organization Friday to get Canada to drop duties of US$1.65 a bushel on corn imports, saying that Canadian tariffs go against international trade rules.

The filing would be followed by two months of mediation between the two countries in Geneva. If no solution is in sight by then, the US can ask the WTO to adjudicate the case.

The US argues that Canadian law is not consistent with WTO rules because  Canadian trade authorities did not have to prove its farmers were hurt by US imports to impose tariffs.

The US denies that the falling prices in Canada were caused by US imports.

Canada first imposed preliminary tariffs in December last year and then made it official last week. The high tariffs, which were about 50 percent of current corn prices, blocked most US exports to Canada.

A Canadian court ruled last week that the US subsidises its corn producers and that exporters are dumping their crop at below-market rates into Canada.

US corn sales to Canada fell 22 percent between October and January compared to the same period last year.

The Canadian International Trade Tribunal will make the final decision on the case on Apr 18. Duties would be lifted if it finds that Canadian farmers are not hurt by US imports.