What Does the Future Hold for the Canadian Wheat Board? Trade Friction, Dispute Settlement and State Support for Agriculture in North America

Abstract

This paper examines the substance of the WTO panel decision for Canada-Wheat as it relates to the ongoing debate about the future of the Canadian Wheat Board. In this case, the WTO upheld the legality of Canada's marketing board for wheat and barley. The decision suggests that trade discipline may play less of a role in Canada's ongoing adjustment processes than other factors such as proximity to American markets and other competitive pressures that result from exposure to global markets. Furthermore, in aggregate terms, Canada and the US have been adjusting levels of support downwards over the past decade. What then is the future of the CWB? Dismantling the CWB may fit Canada's long-term industrial development pattern. However, in the immediate future the federal government must carefully consider the implications of removing programs that provide security for domestic producers - especially in light of aggressively protectionist sentiment in the American agriculture sector.

Keywords: state trading enterprise, trade liberalization, international economic law

JEL Classification: F02, F12, F15, H30, K33, O19, P16