MORE WTO MEMBERS LINE UP TO CHALLENGE US CORN SUBSIDIES

Governments including Argentina, Australia, Brazil, the EU, Guatemala, Thailand and Uruguay have asked to join Canada's WTO complaint against several US corn and other agricultural subsidy programmes. In requesting consultations with Washington - the first stage in WTO dispute settlement - Ottawa alleged that the US' trade-distorting farm subsidies have in recent years often exceeded legal limits. It specifically targeted the billions of dollars that Washington pays to corn farmers, charging that they have distorted world prices and hurt producers in Canada (see BRIDGES Weekly, 17 January 2007).

Brazil, which pioneered WTO challenges against US farm policy with a successful case against cotton subsidies in 2005, had been expected to join the consultations. "This is not just about corn," Brazilian WTO Ambassador Clodoaldo Hugueney Filho told the Associated Press, noting that his country was the world's largest producer of ethanol - which is produced in increasing quantities in the US from subsidised corn.

In its request to join the consultations, Brazil, a major corn exporter in its own right, noted that the export credit programmes that Canada was challenging were identical to those that it had targeted in the cotton case (the US' compliance with that ruling is now being examined by a separate panel).

Trade analysts believe that the Canadian complaint was timed to influence future farm spending by Washington, where Congress is currently working on a farm bill for the next five years. By joining Canada's request for consultations, some of the WTO's largest Members appear to warning US policymakers that even if they do not end up having to cut subsidies as part of the stalled Doha Round trade talks, they might have to do so under order from WTO dispute settlement - or else risk retaliatory sanctions.

After his country joined the complaint, Australian Trade Minister Warren Truss told Reuters that if the negotiations could not be resurrected, "the lawyers will have a field day… The negotiators will give way to the lawyers, who will take advantage of the expiry of the so-called peace clauses to exploit elements of the US and current European programmes in particular."

ICTSD reporting; "EU joins WTO complaint against U.S. corn subsidies" INTERNATIONAL HERALD TRIBUNE, 22 January 2007; "Doha round failure will set loose lawyers-Australia," REUTERS, 24 January 2007; "Global coalition joins U.S. subsidy challenge," GLOBE AND MAIL, 23 January 2007.