The USTR and USDA this week also announced an important settlement with Canada resulting in major revisions to Canada's subsidy programs for its dairy exports. The United States recently won a WTO case that ruled that Canada was continuing to provide illegal subsidies to its dairy industry. Canada has agreed to eliminate these subsidies and no longer export subsidized dairy products to the U.S.
"This is great news for American dairy farmers and processors. The playing field has been leveled," said USTR's Robert Zoellick. "This agreement will allow our producers to more effectively compete in the marketplace," said Agriculture Secretary Ann Veneman.
Over a number of years, the U.S. has argued before the WTO that Canada's dairy programs provided export subsidies to its dairy processors and farmers above the level that Canada committed to in the WTO. In December 2002, the WTO ruled in favor of the U.S., confirming that Canada was continuing to provide illegal export subsidies with the sale of discounted milk to Canadian processors under its Commercial Export Milk (CEM) program.