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U.S. to Take Dispute Over Canada Wheat to WTO by Scott A. Yates Capital Press, December 20, 2002

SPOKANE -- The North Dakota Wheat Commission's effort to tame the Canadian Wheat Board moved to the world stage this week with the Bush administration initiating dispute settlement proceedings before the World Trade Organization.

Taking the trade issue to the WTO was one prong of a four-prong approach U.S. Trade Representative Robert Zoellick said he had examined after finding the CWB guilty of monopolistic trading practices in February 2001. At the same time the administration promised to work with North Dakota growers to investigate the feasibility of filling countervailing duty and anti-dumping petitions on durum and hard red wheat from Canada.

The proceeding before the WTO will start with mediation, but inevitably will lead to formation of a dispute settlement panel. Charlie Hunnicutt, the Washington, D.C., lawyer handling North Dakota's legal efforts, said panels are usually made up of trade officials from three to five other countries.

He compared the process to an arbitration panel or a court hearing, where briefs are submitted, arguments made and judgements rendered, with appeals possible.

The USTR's primary focus will be alleged non-commercial practices use by the CWB contrary to its obligations under the WTO. This specifically refers to elements like pricing, acquisition and forward contracting of Canadian wheat. Other issues that will be addressed are the Canadian system of segregating grain, which prevents entry of U.S. production and rail transportation subsidies.

Judge Barth, marketing specialist for the North Dakota Wheat Commission, said the action is not intended as an attack against the Canadian wheat farmer. Rather, it is a condemnation of the wheat board's monopoly operation, which undercuts prices in the United States and other nations.

Although others in the wheat industry joined in praising the USTR's decision, North Dakota growers have financed the effort entirely out of their own pocket - more than $2 million has been spent since the effort began in September 2000.

Although it remains at the top of the list of issues for North Dakota growers, Barth said, CWB practices also affect growers elsewhere in terms of underpricing wheat and losing markets.