GD/220
United States - Countervailing Duties on Fresh, Chilled and Frozen Pork from Canada
Other titles
US Canadian Pork (Source: GATT Analytical Index)
Products at Issue
| Products at issue |
Pork
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| Type of product |
Agricultural
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| Product sub-type |
Meat products
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Related disputes
| GATT | |
| WTO |
Key legal aspects
| Legal basis |
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| Claims raised |
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| Defences raised |
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Adjudicators
| Type | Panel |
| Chairperson | Peter Hussin (Australia) |
| Other members | Rudolf Ramsauer (Switzerland), Anthony W. Dell (United Kingdom) |
| Type | Panel |
| Legal basis at issue |
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| Claims at issue |
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| Defences at issue |
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| No of Pages (total / legal reasoning) | 21 |
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Timeline
| Request for consultations | |
| Request for establishment | |
| Establishment | |
| Composition | |
| Report | |
| Adoption of report |
Outcome
| Outcome of the proceedings |
Report adopted
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| Additional Info | DS7/R (18/09/1990) United States – Countervailing Duties on Fresh, Chilled and Frozen Pork from Canada – Report by the Panel: The Panel noted that the parties did not dispute that Canada had granted subsidies to swine producers, that swine producers and pork producers are separate industries operating at arm's length and that the subsidies granted to swine producers could have indirectly bestowed a subsidy on the production of pork. The sole issue in dispute between the parties was whether the United States acted consistently with Article VI:3 when it determined that a subsidy had been bestowed on the production of pork equal to the full amount of the subsidy granted to producers of swine based solely on the findings that the demand for swine is substantially dependent on the demand for pork and that processing of swine into pork adds only limited value. The Panel examined this issue in the light of the wording of Article VI:3, the relationship between this provision and Article XVI, and the purpose of Article VI:3. In conformity with the practice followed by the contracting parties in previous cases, the Panel found that Article VI:3, as an exception to basic principles of the General Agreement, had to be interpreted narrowly and that it was up to the United States, as the party invoking the exception, to demonstrate that it had met the requirements of Article VI:3. The Panel noted that Article VI:3 stipulates that a countervailing duty levied on any product shall not exceed an amount equal to the subsidy granted directly or indirectly on the production of "such product". The Panel found that, given the existence of separate industries for swine and pork production in Canada operating at arm's length, the subsidies granted to swine producers could be considered to be bestowed on the production of pork only if they had led to a decrease in the level of prices for Canadian swine paid by Canadian pork producers below the level they have to pay for swine from other commercially available sources of supply. For this reason, the determination that pork production had been subsidized as a result of the subsidies provided to swine producers required an examination of the impact of the subsidies on the price of swine. The Panel concluded that the determination of the United States that the Canadian government had bestowed a subsidy on the production of pork equal to the amount granted to the producers of swine could not be considered a determination based on all facts necessary to meet the requirements of Article VI:3. The Panel therefore concluded that the United States countervailing duties on fresh, chilled and frozen pork from Canada are being levied inconsistently with Article VI:3 of the General Agreement because the United States' determination that the production of pork had benefited from subsidies was not made in accordance with the requirements of that provision. The Panel recommended that the contracting parties request the United States to either reimburse the countervailing duties corresponding to the amount of the subsidies granted to producers of swine or to make a subsidy determination which meets the requirements of Article VI:3 and reimburse the duties to the extent that they exceed an amount equal to the subsidy so determined to have been granted to the production of pork. |