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Complaint by the United States.
On 17 December 2002, the United States requested
consultations with Canada as regards matters concerning the export of
wheat by the Canadian Wheat Board and the treatment accorded by Canada to
grain imported into Canada.
According to the United States, the actions of the
Government of Canada and the Canadian Wheat Board (entity enjoying
exclusive rights to purchase and sell Western Canadian wheat for human
consumption) related to export of wheat appear to be inconsistent with
paragraphs 1(a) and 1(b) of Article XVII of GATT 1994.
As regards the treatment of grain imported into Canada,
the United States maintains that the following Canadian measures are
inconsistent with Article III of the GATT 1994 and Article 2 of TRIMs
since they discriminate against imported grain:
Under the Canadian Grain Act and Canadian regulations,
imported wheat cannot be mixed with Canadian domestic grain being received
into or discharged out of grain elevators, and
Canadian Law caps the maximum revenues that railroads
may receive on the shipment of domestic grain but not revenues received on
the shipment of imported grain; and Canada provides a preference for
domestic grain over imported grain when allocating government-owned
On 20 December 2002, the European Communities, Japan
and Mexico requested to join the consultations. On 24 December 2002,
Australia requested to join the consultations. On 6 March 2003, the US
requested the establishment of a panel. At its meeting on 18 March 2003,
the DSB deferred the establishment of a panel.
Panel and Appellate Body proceedings
Further to a second request
by the US, the DSB established a Panel at its meeting on 31 March 2003.
Chile, Chinese Taipei, the EC, Japan and Mexico reserved their third-party
rights. On 9 and 10 April 2003 respectively, China and Australia reserved
their third-party rights. On 2 May 2003, Canada requested the
Director-General to compose the panel. On 12 May 2003, the
Director-General composed the panel. On 30 June 2003, the United States
submitted a new request for the establishment of a panel. On 1 July 2003,
the Chair of the Panel informed the DSB that it had agreed to the United
Statesí request to suspend the Panel for three weeks from 1-21 July 2003.
The DSB established a second panel at its meeting on 11 July 2003.
Australia, Chile, China, the EC, Japan and Chinese Taipei reserved their
third-party rights. On 25 July 2003, Mexico reserved its third-party
rights. On 11 July 2003, the second Panel was composed. Further to a
request by the United States, acceded to by the Panel, the preliminary
ruling by the Panel was circulated to Members for their information on 21
July 2003. On 30 October 2003, the Chairman of the Panel informed the DSB
that the first Panel would not be able to complete its work within six
months due to the three week suspension requested by the US following the
issuance of a preliminary ruling by the Panel and the harmonization of
this Panelís timetable with that of the second Panel and that the Panel
expected to issue its final report to the parties in February 2004.
On 6 April 2004, the Panel report was circulated to
Members. The Panel found that:
The United States had failed to establish its
claim that Canada had breached its obligations under Article XVII:1 of the
GATT 1994 with respect to the Canadian Wheat Board (CWB);
Section 57(c) of the Canada Grain Act, and
Section 56(1) of the Canada Grain Regulations were inconsistent with
Article III:4 of the GATT 1994 and were not justified under Article XX(d)
of the GATT 1994;
Sections 150(1) and (2) of the Canada
Transportation Act were inconsistent with Article III:4 of GATT 1994;
The United States had failed to establish its
claim that section 87 of the Canada Grain Act was inconsistent with
Article III:4 of the GATT 1994 and Article 2 of the TRIMs Agreement.
On 1 June 2004, the United States notified its decision
to appeal to the Appellate Body certain issues of law covered in the Panel
Report and certain legal interpretations developed by the Panel.
On 30 August 2004, the Appellate Body Report was
circulated to Members. The Appellate Body upheld the Panelís conclusion
that the United States had not demonstrated that the Canadian Wheat Board
(CWB) Export Regime is inconsistent with Article XVII:1 of the GATT 1994.
At its meeting on 27 September 2004, the DSB adopted the Appellate Body
report and the Panel report, as modified by the Appellate Body report.
Implementation of adopted reports
At the DSB meeting on
18 October 2004, Canada stated that it was the intention of Canada
to implement the recommendations and rulings of the DSB in a manner that
respected its WTO obligations, and that it would require a reasonable
period of time to implement the recommendations and rulings of the DSB and
was ready to consult with the United States in accordance with Article
21.3(b) of the DSU.
On 15 November 2004, Canada and the United States informed the DSB that
they had agreed that the reasonable period of time shall be is
10 months and 5 days, that is, 27 September 2004 to 1 August 2005.
At the DSB meeting on 31 August 2005, Canada announced that amendments to the Canada Transportation Act and the Canada Grain Act and associated regulatory changes had come into force on 1 August 2005 thus bringing Canada into compliance with the DSB’s recommendations and rulings.
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