Canada is going to the World Trade Organization to challenge American subsidies for corn and other crops, an action aimed at getting Congress to overhaul commodity programs in the new Farm Bill. Canadian officials say the subsidies encourage overproduction and distort trade in violation of international trade rules.

"We hope to see the U.S. live up to its WTO obligations, particularly given that it has the opportunity to do so when it rewrites its farm bill this year," says David Emerson, Canada's minister of international trade.

Canada initiated the case by requesting consultations with U.S. officials at the trade organization, the first step in launching a challenge to another nation's trade practices. Canada's complaint is similar to a successful complaint that Brazil brought against U.S. cotton subsidies.

However, the Canadian International Trade Tribunal ruled last spring that the country's corn growers hadn’t been harmed by imports of subsidized U.S. grain. The tribunal is the equivalent of the U.S. International Trade Commission. Canada relies heavily on U.S. grain imports for livestock feed.

Supporters of a revised commodity program say it would shield U.S. subsidies from trade challenges and better protect farmers during years in which they have bad crops. While others favor extending the current crop subsidy programs from the 2002 Farm Bill.

Source: DM Register