UNITED STATES – SUBSIDIES AND OTHER DOMESTIC SUPPORT FOR CORN AND OTHER AGRICULTURAL PRODUCTS
Document: Request for the Establishment of a Panel by Canada
Date: 8 June 2007
Document codes: WT/DS357/11
Complainant: Canada
Respondent: U.S.
Third parties: Argentina, Australia, Chile, EU, India, Japan, Mexico, New Zealand, Nicaragua, South Africa, Taiwan, Thailand, Turkey, Uruguay
Dispute stage: Panel
Agreements cited: Art. 10.1, 8  AgricultureArt. 3.1(a), 3.2  Subsidies and Countervailing Measures (SCM)Art. 3.2  Agriculture

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.

United States in the notifications of its domestic support
2 (the "Notifications") as part of its
Aggregate Measurements of Support for those years 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 payments 4, Crop Disaster payments 5, Emergency
Feed program payments 6 for each of beef and veal, dairy, hogs and pigs, sheep and lamb,
and all other livestock, Livestock Indemnity 7 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, regulations 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".

• 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 PROHIBITED 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 guarantees 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.

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.

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)

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)