The World Trade Organization rejected a U.S. appeal of an earlier ruling that found the Canadian Wheat Board does NOT violate world trade rules. The Wheat Board markets wheat and barley grown by producers in Canada's western provinces. The U.S. government, prompted by American farm groups, argued the activities of the Wheat Board amount to an unfair subsidy for Canadian producers. Opponents now say they'll seek to change WTO rules on the so-called state-trading enterprises.
The denial of the appeal was NOT the only setback for U.S. trade interests this week. In a separate ruling, the WTO undercut a U.S. law that's provided millions to American companies.
In early January of this year, trade officials with the European Community asked the WTO for permission to stop paying the fines. The EC further claimed the policy caused economic damage. They alleged the money being disbursed went to the same U.S. firms that were in direct competition with the European companies being accused of dumping.
This week, a decision was rendered in favor of the EC and seven other countries including, Brazil and Japan. The ruling authorizes the affected countries to fine the United States 72 percent of an estimated $505 million.
Officials with the United State Trade Representative's office stated the decision would not change any U.S. anti-dumping laws, only how the money would be distributed. A USTR spokesman went on to point out that the alleged "economic damage" claims were ruled to be grossly exaggerated.
It is unclear when, or even if, the wronged countries will ask for the money back. Instead, the EC may use the decision as a bargaining chip to force other trade concessions from the US.