WORLD TRADE WT/DS103/4
3February 1998
ORGANIZATION(98-0429)
Original: English
CANADA -MEASURES AFFECTING THE IMPORTATION OFMILK
AND THE EXPORTATION OFDAIRY PRODUCTS
Request fortheEstablishment ofaPanel bytheUnited States
Thefollowing communication, dated 2February 1998, from thePermanent Mission ofthe
United States totheDispute Settlement Body, iscirculated inaccordance withArticle 6.2oftheDSU.
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TheGovernment ofCanada isproviding subsidies, andinparticular export subsidies, ondairy
products through itsnational andprovincial pricing arrangements formilkandother dairy products
without regard totheexport subsidy reduction andother WTO commitments undertaken byCanada.
Specifically, theGovernment ofCanada established andmaintains asystem ofspecial milkclasses
through which itmaintains highdomestic prices, promotes import substitution, andprovides export
subsidies fordairyproducts going intoworld markets. These practices distort markets fordairyproducts
andadversely affect USsalesofdairy products.
Inaddition,althoughCanadacommittedundertheMarrakeshAgreementEstablishingtheWorld
Trade Organization topermit access toanin-quota quantity of64,500 tons(product weight basis) under
atariff-rate quota forimports offluidmilkandcream, Canada hasrefused topermit commercial import
shipments within thequota. Instead, Canada isadministering thistariff-rate quota inamanner that
denies market access.
These measures appear tobeinconsistent withtheobligations ofCanada under theGeneral
Agreement onTariffs andTrade 1994 (GATT 1994), theAgreement onAgriculture, theAgreement
onSubsidies andCountervailing Measures, andtheAgreement onImport Licensing Procedures. The
measures inquestion aretheCanadian Dairy Commission Act,agreements oftheCanadian Dairy
Commission, theInterprovincial Comprehensive Agreement onSpecial Class Pooling (aswellasthe
P-4,P-6,andP-9interprovincial pooling agreements), theNational Milk Marketing Plan (and
amendments thereto), operations oftheCanadian Milk Supply Management Committee, theDairy
Products Marketing Regulations, andCanada ’sadministration ofitstariff-rate quota onfluidmilkand
cream (asreflected initsimplementation ofitsWTO Schedule ofConcessions).
TheUnited States considers thatthose measures areinconsistent withtheobligations ofCanada
under Articles II,X,XI,andXIIIoftheGATT 1994; Articles 3,4,8,9,and10oftheAgreement
onAgriculture; Article 3oftheAgreement onSubsidies andCountervailing Measures; andArticles 1,
2and3oftheAgreement onImport Licensing Procedures.
On8October 1997, theUnited States Government requested consultations withtheGovernment
ofCanada pursuant toArticle 4oftheUnderstanding onRules andProcedures Governing theSettlement
ofDisputes, Article XXII:1 oftheGeneral Agreement onTariffs andTrade 1994 (GATT 1994),
./.WT/DS103/4
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Article 19oftheAgreement onAgriculture (totheextent thatitincorporates byreference Article XXII
oftheGATT 1994), Article 30oftheAgreement onSubsidies andCountervailing Measures (tothe
extent itincorporates byreference Article XXII oftheGATT 1994), andArticle 6oftheAgreement
onImport Licensing Procedures (totheextent thatitincorporates Article XXII oftheGATT 1994)
withrespect toexport subsidies ofCanada ondairy products andtheadministration byCanada ofthe
tariff-rate quota onfluidmilkandcream. TheUnited States andCanada heldconsultations inGeneva
on19November 1997. Theconsultations, however, failed tosettle thedispute.
Accordingly, theUnited States respectfully requests theestablishment ofapanel withstandard
terms ofreference assetoutinArticle 7oftheDSU. TheUnited States further asksthatthisrequest
forapanel beplaced ontheagenda forthenextmeeting oftheDispute Settlement Body tobeheld
on13February 1998.
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