Decisions of the Appellate Body of the World Trade Organization Canada - Measures Affecting the Importation of Milk and the Exportation of Dairy Products (Article 21.5 DSU, first and second recourse) 2. Facts Pursuant to the Report of the Appellate Body in the original dispute, Canada revised its scheme for sales and exports of milk. Under the original scheme, an artificially high price was set for milk sales by producers to dairy processors selling in the domestic market. The system included regulation of export milk, for which prices were kept at a lower level than prices for domestic milk. Under the revised system, export milk is excluded from the scheme, by excluding it from federal licensing, quota and levy requirements. It is also excluded from the requirement to be marketed through the provincial marketing boards. Similarly, export milk is excluded from the domestic management scheme on the provincial level. Export milk must be sold to Canadian processors for export processing, on freely negotiated terms. Processors are required to export the processed dairy product, or incur financial penalties.
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