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U.S. Blocks WTO Investigation of Subsidies

The U.S. blocks a Canadian complaint that U.S. subsidy payments exceeded WTO rules.

The United States blocked a World Trade Organization investigation of its agricultural subsidies Wednesday, delaying a Canadian complaint that U.S. payments to farmers exceeds WTO rules.

According to the Geneva-based trade body's rules, a panel's establishment can only be blocked once.

Canada alleges that the United States has exceeded in six of the last eight years the $19.1 billion it is permitted to spend on the most contentious forms of agricultural subsidies. Canada also accuses the U.S. of offering export credit guarantees in breach of WTO rules.

Ottawa accuses Washington of exceeding its WTO commitments in 1999, 2000, 2001, 2002, 2004 and 2005 by an average of $5 billion per year. It said the highest single-year payments amounted to over $27 billion.

The figures are higher than any previously estimated on U.S. payments to American farmers that fall under WTO's so-called "amber box" - the most trade-distorting form of subsidies. They include direct payments linked to distribution, export credits, marketing assistance loans and price guarantees.

U.S. trade officials have said that Canada's claims are unfounded and that some of the complaints refer to measures which have been discontinued.

Critics of the subsidies say they unfairly deflate international prices, making it impossible for poorer nations to develop their economies by selling their agriculture produce abroad.

Source: Associated Press

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