WORLD TRADE  
ORGANIZATION  WT/DS357/11 
8 June 2007 
 
 (07-2446) 
 Original:   English 
  
 
UNITED STATES – SUBSIDIES AND  OTHER DOMESTIC SUPPORT 
FOR CORN AND OTHER AGRICULTURAL PRODUCTS 
 
Request for the Establishment of a Panel by Canada
 
 
 
 The following communication, dated 7 June 2007, from the delegation of Canada to the 
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.  
_______________ 
 
  Pursuant to Articles 4 and 6 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes ("DSU"), Article XXIII of the General Agreement on Tariffs and Trade 1994 
(GATT 1994), Article 19 of the Agreement on Agriculture and Articles 4 and 30 of the Agreement on 
Subsidies and Countervailing Measures ("SCM Agreement"), Canada requests that a panel be 
established at the meeting of th e Dispute Settlement Body ("DSB") scheduled for 20 June 2007, to 
consider the following matters:  
• That the United States' Current Total Aggreg ate Measurement of Support has exceeded its 
commitment levels in each of the years
1 1999, 2000, 2001, 2002, 2004 and 2005, contrary to 
Article 3.2 of the Agreement on Agriculture ; and 
• That the United States provides, through its General Sales Manager 102 ("GSM-102") 
program, export credit guarantees in respect of ag ricultural products that are export subsidies 
inconsistent with Artic les 10.1 and 8 of the Agreement on Agriculture  and prohibited by 
Articles 3.1 and 3.2 of the SCM Agreement . 
 These violations nullify or impa ir the benefits accruing to Canada under these agreements. 
 
 Canada asks that the panel have the standard te rms of reference as set out in Article 7.1 of the 
DSU.  
I. THE UNITED STATES CURRENT TOTAL AGGREGATE MEASUREMENT OF 
SUPPORT HAS EXCEEDED ITS COMMITMENT LEVELS  
 The measures at issue in this part of Canada's request are: 
(a) for the years 1999, 2000 and 2001, all domestic support in favour of agricultural 
producers within the meaning of Article 6.1 of  the Agreement on Agriculture notified by the 
                                                     
 
 1 In this request, "year" has the meaning assigned to it in Article 1(i) of the Agreement on Agriculture .  WT/DS357/11 
Page 2  
 
  United States in the notifications of its domestic support
2 (the "Notifications") as part of its 
Aggregate Measurements of Support for those year s and the programs, legislation, regulations 
and other instruments by which that support was provided as set forth in Title 7 of the U.S. Code and Title 7 of the U.S. Code of Fede ral Regulations as well as the following programs 
and support provided thereunder:  
 
• Production Flexibility Contract payments
3 for each of wheat, corn, grain sorghum, barley, 
oats, upland cotton, and rice; 
 
• Non-insured Crop Disaster Assistance payments4, Crop Disaster payments5, Emergency 
Feed program payments6 for each of beef and veal, dairy, hogs and pigs, sheep and lamb, 
and all other livestock, Livestock Indemnity7 payments for each of beef and veal, dairy, 
hogs and pigs, sheep and lamb, and all othe r livestock, and Tree Assistance Program 
payments8 for each of apples, apri cots, peaches, pears, and all other trees, bushes and 
vines. 
 (b) for the years 2002, 2004 and 2005, all domestic support measures in favour of 
agricultural producers within the meaning of Ar ticle 6.1 of the Agreement on Agriculture and 
the programs, legislation, regulations and in struments by which that support was provided as 
set forth in Title 7 of the U.S. Code and Title  7 of the U.S. Code of Federal Regulations, 
including the measures identified in the Annex to this request;  and  (c) any other legislation, regulati ons and other instruments by which the support identified in 
(a) and (b) was provided.  
 Pursuant to Article 3.2 of the Agreement on Agriculture , the United States committed that it 
would limit its Total Aggregate Measurement of Support  to the annual levels specified in section I of 
Part IV of Schedule XX of the United States:  for the year 1999 US$19,899.264 million and for each 
subsequent year US$19,103.294 million.  Despite  these commitments, the United States' Current 
Total Aggregate Measurement of Support has exceeded  its commitment levels in each of the years 
1999, 2000, 2001, 2002, 2004 and 2005 in violation of Article 3.2. 
For the years 1999, 2000, and 2001, the Notifications of the United States purport to show 
that it did not exceed its commitment levels.  However,  in its Notifications the United States failed to 
properly include in its Aggregate Measurements of  Support, certain support that the United States 
provided.  Among other aspects of the Notifications, the United States:  
                                                     
 
 2 G/AG/N/USA/43 of 5 February 2003 for year 1999 and G/AG/N/USA/51 of 17 March 2004 for years 
2000 and 2001. 
 3 Subtitle B, Title I, Federal Agriculture Improvement and Reform Act of 1996 , Public Law 104-127. 
 4 Section 109, Agricultural Risk Protection Act of 2000 , Public Law 106-224 ; Federal Crop Insurance 
Reform Act of 1994 . 
 5 "Food Security Act of 1985, Disaster Assistance Acts of 1988 and 1989 and subsequently " [sic]; 
Fiscal Year 2000 Appropriations Act , Public Law 106-78, October 22, 1999. 
 6 Notification G/AG/N/USA/43 indicates no public law or other references for this program. 
Notification G/AG/N/USA/51 lists several public law references but does not indicate which ones apply specifically to this program. 
 
7 Notification G/AG/N/USA/43 indicates no public law or other references for this program. 
Notification G/AG/N/USA/51 lists several public law references but does not indicate which ones apply specifically to this program.  
 
8 Notification G/AG/N/USA/43 refers to descriptions in the "1988 and subsequent disaster assistance 
acts". Notification G/AG/N/USA/51 seems to refer to the Disaster Assistance Act of 1988 , Public Law 100-387, 
and also to "Public Law 105-174, May 1, 1998", whose name appears to be "1998 Supplementary 
Appropriations and Rescissions Act" and in which Title II identifies a "Tree assistance program".   WT/DS357/11 
 Page 3 
 
 
  • incorrectly claimed that its Production Flexibility Contract payments conformed to the 
criteria for Decoupled income support (par agraph 6 of Annex 2 of the Agreement on 
Agriculture); 
• incorrectly claimed that payments under its Non-insured Crop Disaster Assistance, Crop 
Disaster Assistance, Emergency Feed, Livestock Indemnity, and Tree Assistance programs conformed to the criteria for Payments for relief from natural disasters (paragraph 8 of 
Annex 2 of the Agreement on Agriculture); 
• incorrectly included its crop Market Loss Assistance payments
9 in its non-product-specific 
Aggregate Measurement of Support instead of  product-specific Aggregate Measurements 
of Support.   
For each of the years 1999, 2000 and 2001 the support that the United States provided and 
which constituted its Current Total Aggregate Measurement of Support exceeded its commitment 
levels, contrary to Article 3.2 of the Agreement on Agriculture .    
Although the United States has not notified its domestic support since 2001, for each of the 
years 2002, 2004 and 2005, the support that the Un ited States provided an d which constituted its 
Current Total Aggregate Measurement of Support al so exceeded its commitment levels, contrary to 
Article 3.2 of the Agreement on Agriculture .  
II. THE GSM-102 PROGRAM PROVIDES PR OHIBITED EXPORT SUBSIDIES 
The measures at issue in this part of Ca nada's request are the GSM-102 program under 
sections 202 and 211 of the Agricultural Trade Act of 1978  as amended, and the export credit 
guarantees provided under that program.10  
The United States provides, through its GSM-102 program, export credit guarantees in 
respect of agricultural products.  Pursuant to the terms and conditions of the GSM-102 program, the 
premium rates that the United States charges for gua rantees under the program are inadequate to cover 
the long-term operating costs and losses of the program.  Thus, the GSM-102 program and guarantees 
issued under it fall within item (j) of Annex I to the SCM Agreement  as export subsidies.  As well, the 
GSM-102 program offers export credit guarantees on terms that are more favourable than those 
available to recipients in the market, and these are offered solely on the expo rt of U.S. agricultural 
products.  The program and guarantees therefore are s ubsidies within the meaning of Article 1 of the 
SCM Agreement  and are contingent on exportation within the meaning of Article 3.1(a) of that 
Agreement.  Consequently, the GSM-102 prog ram and export credit guarantees provided under it 
involve "export subsidies" within the meaning of Article 1(e) of the Agreement on Agriculture . 
Export credit guarantees are issued under the GSM-102 program in respect of agricultural 
products for which the United States has not undert aken export subsidy reduction commitments in 
Section II of Part IV of Schedule XX of the United States.  These export subsidies are applied in a 
manner which results in, or which threatens to lead to, circumvention of the export subsidy 
commitments of the United States. The GSM-102 pr ogram and the subsidies under it are therefore 
inconsistent with the obligations of the United States under Articles 10.1 and 8 of the Agreement on 
                                                      
 9 Section 802, Subtitle A, Title VIII , Emergency and Disaster Assistance for Producers,  Public Law 
106-78; Agricultural Risk Protection Act of 2000,  Public Law 106-224. The Notifications refer to crop Market 
Loss Assistance payments as "Crop market loss assist ance payments", "market loss payments (MLP)", and 
"market loss payments (MLA)". 
 10  7 U.S.C. 5622, 5641.  See also 7 C.F.R. Part 1493, as amended. WT/DS357/11 
Page 4  
 
  Agriculture .  The GSM-102 program and GSM-102 export credit guarantees are also prohibited under 
Articles 3.1(a) and 3.2 of the SCM Agreement .  
 On 7 February 2007, Canada and the United States held consultations on these matters, 
pursuant to Articles 1 and 4 of the DSU, Article XXII of the GATT 1994 , Articles 4, 7 and 30 of the 
SCM Agreement  and Article 19 of the Agreement on Agriculture , but these consultations failed to 
resolve the dispute.  Accordingly, Canada makes th is request and asks that it be placed on the agenda 
of the meeting of the DSB scheduled for 20 June 2007. 
_______________ 
  
  WT/DS357/11 
 Page 5 
 
 
  ANNEX to the Letter of Canada to the DSB dated 7 June 2007 
List of Measures 
 
Measure type  Policy authority  
Availability of Recourse Loans for 
High Moisture Feed Grains and Seed 
Cotton Section 1209, Subtitle B of the Farm Security and Rural 
Investment Act of 2002 (Public Law 107-171) 
Certificate Exchange Gains Section 812, Subtitle  B, Title VIII of the Agriculture, Rural 
Development, Food and Drug Administration, and Related 
Agencies Appropriations Act, 2000 (Public Law 106-78) & 7 
CFR, Part 1401, § 1401.4 
Commodity Loan Forfeit  7 CFR, Part 1405, § 1405 (Equivalent to authorities notified 
in ST DS: 6 in G/AG/N/USA/51) 
Commodity Loan Interest Subsidy 7 CFR, Part 1401, § 1401.4 (Equivalent to authorities 
notified in ST DS:7 in G/AG/N/USA/51) 
Cotton User Marketing Certificates Section 136(a), Title 1 of the Federal Agriculture 
Improvement and Reform Act of 1996 (Public Law 104-127) 
Cottonseed Payments Section 206, Title II of the Consolidated Appropriations 
Resolution, 2003 (Public Law 108-7) 
Countercyclical Payments (for 
covered commodities) Subtitle A, Title I of the Farm Security and Rural Investment 
Act of 2002 (Public Law 107-171) 
Countercyclical Payments (for peanuts) Subtitle C, Title I of the Farm Security and Rural Investment 
Act of 2002 (Public Law 107-171) 
Crop and Revenue Insurance 
Subsidized by the Federal Crop 
Insurance Corporation Title 7 U.S.C., Chapter 36, § 1516 
Crop Disaster payments Title II, Conso lidated Appropriations Resolution, 2003 
(Public Law 108-7)   
Dairy Indemnities Title 7, Chapter 17, § 450j & § 450k  
Dairy Forward Pricing Pilot Program Title 7, Chapter 26, Subchapter III, § 627 
Direct Payments (for covered 
commodities) Subtitle A, Title I of the Farm Security and Rural Investment 
Act of 2002 (Public Law 107-171), as amended 
Direct Payments (for peanuts) Subtitle C, Titl e I of the Farm Security and Rural Investment 
Act of 2002 (Public Law 107-171), as amended 
Emergency Loans for Seed Producers Section 10103, Subtitle B, Title X of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Farm Ownership Loans Subtitle A, Title V of the Farm Security and Rural 
Investment Act of 2002 (Public Law 107-171) 
Farm Storage Facility Loan Program Commodity Cr edit Corporation Charter Act (62 Stat.1070; 15 
U.S.C. 714), as amended 
Flexible Marketing Allotments for 
Sugar Section 1403, Subtitle D, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Hard White Wheat Incentive Payments Program Section 1616, Subtitle F, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Irrigation on Bureau of Reclamation 
Projects in 17 Western States Equivalent to Authorities Notified in Supporting Table DS:9 
in G/AG/N/USA/51. 
Livestock Pilot Program Section 132, Subtitle C of the Agricultural Risk Protection 
Act of 2000 (Public Law 106-224) 
Loan Deficiency Payments (for loan commodities) Subtitle B, Title I of the Farm Security and Rural Investment 
Act of 2002 (Public Law 107-171) 
Loan Deficiency Payments (for 
peanuts) Section 1307, Subtitle C, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Marketing Loan Repayment 
provision  Section 1204, Subtitle B, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Market Loss Assistance payments Section 1617, Subtitle F, Title I of the Farm security and 
Rural Investment Act of 2002 (Public Law 107-171) WT/DS357/11 
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  Measure type  Policy authority  
National Dairy Market Loss 
Payments (Milk Income Loss Contract, i.e., MILC) Section 1502, Subtitle E, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
National Dairy Market Loss 
Payments (the authorized extended 
period of the MILC program, i.e., 
MILCX) Section 1101, Subtitle A, Title 1 of the Deficit Reduction Act 
of 2005 (Public Law 109-171) 
Net Federal Budget Outlays for 
Grazing Livestock on Federal Land Equivalent to authorities notified in Supporting Table DS:9 
in G/AG/N/USA/51 
Noninsured Crop Disaster Assistance Program  Section 109, Subtitle A, Title I of the Agricultural Risk 
Protection Act of 2000 (Public Law 106-224) 
Nonrecourse Marketing Assistance 
Loans (for loan commodities) Subtitle B, Title I of the Farm Security and Rural Investment 
Act of 2002 (Public Law 107-171) 
Nonrecourse Marketing Assistance 
Loans (for peanuts) Section 1307, Subtitle C, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Payments in lieu of Loan Deficiency Payments for Grazed Acreage Section 1206, Subtitle B, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Payment to Processor (Sugar) Section 1401, Su btitle D, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Price support/quota: Milk Price 
Support Program Section 1501, Subtitle E, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Price support/quota: Sugar program Section 1401, Subtitle D, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Producer Retention of Erroneously 
Paid Loan Deficiency Payments and 
Marketing Loan Gains Section 1618, Subtitle F, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Production Flexibility Contract payments Subtitle B, Title I of the Federal Agriculture Improvement 
and Reform Act of 1996  
Recourse loans available for seed 
cotton  Section 1209(b), Subtitle B, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Sheep and Lamb Adjustment Assistance Program Clause 3 of Section 32 of the Agricultural Adjustment Act of 
August 24, 1935, (Public Law 74-320), as amended  
(See also Lamb Meat Adjust ment Assistance Program FSA 
Fact Sheets, August 14, 2000 and April 2002) 
Special Competitive Provisions for Extra Long Staple Cotton Section 1208, Subtitle B, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Special Marketing Loan Provisions 
for Upland Cotton Section 1207, Subtitle B, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
State Credit Programs Equivalent to authorities notified in Supporting Table DS:9 
of G/AG/N/USA/51 
Storage Payments Equivalent to authorities notified in Supporting Table DS:7 
in G/AG/N/USA/51 under Cotton 
Sugar Storage Facility Loan Section 1402, Sub title D, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Supplemental Loan (Sugar) Section 1401, Subtitle D, Title I of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171) 
Support Under Assistance for 
Livestock Producers 
(includes Livestock Indemnity, Livestock Compensation and 
Livestock Assistance payments) Section 10104, Subtitle B, Title X of the Farm Security and 
Rural Investment Act of 2002 (Public Law 107-171),  
as amended & Section 203(d) of  the Agricultural Assistance 
Act of 2003 (Public Law 108-7), as amended 
Tree Assistance Program Subtitle C, Title X of the Farm Security and Rural 
Investment Act of 2002 (Public Law 107-171) 
 
__________