CANADA - MEASURES AFFECTING THE IMPORTATION OF MILK AND THE EXPORTATION OF DAIRY PRODUCTS
Document: Original: English CANADA - MEASURES AFFECTING THE IMPORTATION OF MILK AND THE EXPORTATION OF DAIRY PRODUCTS Request for the Establishment of a Panel by the United States
Date: 3 February 1998
Document codes: WT/DS103/4
Complainant: U.S.
Respondent: Canada
Third parties: Argentina, Australia, EU, Japan, Mexico
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 8, 9, 10  AgricultureArt. X, XI, XIII  GATT 1994Art. 1, 2, 3  Import LicensingArt. 3  Subsidies and Countervailing Measures (SCM)Art. 3, 4  AgricultureArt. II  GATT 1994

CANADA - MEASURES AFFECTING THE IMPORTATION OF MILK
AND THE EXPORTATION OF DAIRY PRODUCTS
Request for the Establishment of a Panel by the United States
The following communication, dated 2 February 1998, from the Permanent Mission of the
United States to the Dispute Settlement Body, is circulated in accordance with Article 6.2 of the DSU.
The Government of Canada is providing subsidies, and in particular export subsidies, on dairy
products through its national and provincial pricing arrangements for milk and other dairy products
without regard to the export subsidy reduction and other WTO commitments undertaken by Canada.
Specifically, the Government of Canada established and maintains a system of special milk classes
through which it maintains high domestic prices, promotes import substitution, and provides export
subsidiesfor dairyproductsgoingintoworldmarkets. These practicesdistortmarkets fordairyproducts
and adversely affect US sales of dairy products.
In addition, although Canada committed under the Marrakesh Agreement Establishing the to permit access to an in-quota quantity of 64,500 tons (product weight basis) under
a tariff-rate quota for imports of fluid milk and cream, Canada has refused to permit commercial import
shipments within the quota. Instead, Canada is administering this tariff-rate quota in a manner that
denies market access.
These measures appear to be inconsistent with the obligations of Canada under the General
Agreement on Tariffs and Trade 1994 (GATT 1994), the Agreement on Agriculture, the Agreement
on Subsidies and Countervailing Measures, and the Agreement on Import Licensing Procedures. The
measures in question are the Canadian Dairy Commission Act, agreements of the Canadian Dairy
Commission, the Interprovincial Comprehensive Agreement on Special Class Pooling (as well as the
P-4, P-6, and P-9 interprovincial pooling agreements), the National Milk Marketing Plan (and
amendments thereto), operations of the Canadian Milk Supply Management Committee, the Dairy
Products Marketing Regulations, and Canada’ s administration of its tariff-rate quota on fluid milk and
cream (as reflected in its implementation of its WTO Schedule of Concessions).
The United States considers that those measures are inconsistent with the obligations of Canada
under Articles II, X, XI, and XIII of the GATT 1994; Articles 3, 4, 8, 9, and 10 of the Agreement
on Agriculture; Article 3 of the Agreement on Subsidies and Countervailing Measures; and Articles 1,
2 and 3 of the Agreement on Import Licensing Procedures.
On 8 October 1997,the UnitedStates Government requested consultationswiththe Government
of Canada pursuantto Article 4 of the Understandingon Rules and Procedures Governingthe Settlement
of Disputes, Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994),

Article 19 of the Agreement on Agriculture (to the extent that it incorporates by reference Article XXII
of the GATT 1994), Article 30 of the Agreement on Subsidies and Countervailing Measures (to the
extent it incorporates by reference Article XXII of the GATT 1994), and Article 6 of the Agreement
on Import Licensing Procedures (to the extent that it incorporates Article XXII of the GATT 1994)
with respect to export subsidies of Canada on dairy products and the administration by Canada of the
tariff-rate quota on fluid milk and cream. The United States and Canada held consultations in Geneva
on 19 November 1997. The consultations, however, failed to settle the dispute.
Accordingly, the United States respectfully requests the establishment of a panel with standard
terms of reference as set out in Article 7 of the DSU. The United States further asks that this request
for a panel be placed on the agenda for the next meeting of the Dispute Settlement Body to be held
on 13 February 1998.