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Canadian dairy case

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Soumitribhusan Nanda

The document discusses a trade dispute between Canada, the US, and New Zealand regarding Canada's dairy pricing policies. Canada allowed dairy exporters to procure milk at lower prices compared to domestic milk prices. According to the complainants, domestic milk prices in Canada were approximately C$52.92 per hectoliter, while export processors paid between C$19.06 to C$36.86 per hectoliter. WTO panels ruled that Canada's pricing system constituted an illegal export subsidy by compensating producers for the lower export prices through higher domestic prices. The panels concluded Canada needed to bring its dairy policies in line with its WTO commitments.

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THE CANADIAN DAIRY CASE GROUP -2
Total Milk Production Royal Dairy Commission In-quota Production Approx. C$52.92 Per hectoliter Domestic Processor Over Quota Production Approx. C $ 28.06 Per hectoliter Export Processor
Continued.. 1995-96 25% 1996-97 25% 19997-98 25% 1998-99 25% Market sharing Quota 1995-96 1996-97 19997-98 1998-99
INTRODUCTION ? THE ISSUE IN THIS DISPUTE WAS A GOVERNMENT POLICY THAT ENABLED CANADA’S EXPORTERS OF CHEESE AND CHEESE PRODUCTS TO PROCURE MILK AT ADVANTAGEOUS PRICES. ? THE PRICE WHICH THE EXPORTERS PAID FOR MILK WAS LOWER WHEN COMPARED TO THE MILK PRICES PREVAILING IN CANADA’S DOMESTIC MARKET. ? ACCORDING TO THE US, ONE OF THE COMPLAINING COUNTRIES, THE AVERAGE MILK PRICE IN THE DOMESTIC MARKET WAS C$ 52.92 PER HECTOLITER, WHILE CANADA ITSELF THE DOMESTIC PRICE C$ 19.06 TO C$ 36.86 PER HECTOLITER.
Continued.. Both the USA and New Zealand, another complaint argued that such a government policy was not in conformity with Canada’s subsidy commitments under the Agreement on Agriculture. The panel reporters of July 11, 2001 and December 20, 2002, found that the Canadian system ensured that producers who sold milk at a lower price to export processors were compensated by a higher domestic price. The panels concluded that Canada should bring its export subsidies in conformity with WTO Commitments.
Findings: You are giving $ 52.92 to the producer in the domestic market sale. (Subsidy??) i.e 44.7 million hectoliter * $ 52.92 (1998/99) – AS per AOA : Payments on the export of an agricultural product that are financed by virtue of govt. actions, whether or not a charge on the public account is involved, including payments that are financed from the proceeds of a levy imposed on the agricultural product concerned or an agricultural product from which the export product is derived. Canadian govt. failed to explain that domestic market was market driven.

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Canadian dairy case

  • 2. Total Milk Production Royal Dairy Commission In-quota Production Approx. C$52.92 Per hectoliter Domestic Processor Over Quota Production Approx. C $ 28.06 Per hectoliter Export Processor
  • 4. INTRODUCTION ? THE ISSUE IN THIS DISPUTE WAS A GOVERNMENT POLICY THAT ENABLED CANADA’S EXPORTERS OF CHEESE AND CHEESE PRODUCTS TO PROCURE MILK AT ADVANTAGEOUS PRICES. ? THE PRICE WHICH THE EXPORTERS PAID FOR MILK WAS LOWER WHEN COMPARED TO THE MILK PRICES PREVAILING IN CANADA’S DOMESTIC MARKET. ? ACCORDING TO THE US, ONE OF THE COMPLAINING COUNTRIES, THE AVERAGE MILK PRICE IN THE DOMESTIC MARKET WAS C$ 52.92 PER HECTOLITER, WHILE CANADA ITSELF THE DOMESTIC PRICE C$ 19.06 TO C$ 36.86 PER HECTOLITER.
  • 5. Continued.. Both the USA and New Zealand, another complaint argued that such a government policy was not in conformity with Canada’s subsidy commitments under the Agreement on Agriculture. The panel reporters of July 11, 2001 and December 20, 2002, found that the Canadian system ensured that producers who sold milk at a lower price to export processors were compensated by a higher domestic price. The panels concluded that Canada should bring its export subsidies in conformity with WTO Commitments.
  • 6. Findings: You are giving $ 52.92 to the producer in the domestic market sale. (Subsidy??) i.e 44.7 million hectoliter * $ 52.92 (1998/99) – AS per AOA : Payments on the export of an agricultural product that are financed by virtue of govt. actions, whether or not a charge on the public account is involved, including payments that are financed from the proceeds of a levy imposed on the agricultural product concerned or an agricultural product from which the export product is derived. Canadian govt. failed to explain that domestic market was market driven.