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Decisions of the Appellate Body of the World Trade Organization
Canada-Measures Affecting the Importation of Milk and the Exportation of Dairy Products
2. Facts
This case related to the Canadian dairy regime, including both federal and provincial measures. One type of alleged subsidy involved the provision of reduced-price milk to processors for export of dairy products. New Zealand and the U.S. challenged this practice, among others, as an export subsidy that caused Canada to exceed its commitments regarding the volume of its subsidized exports. In addition, New Zealand and the U.S. challenged the administration of Canada's tariff-rate quota for milk. Under Canada's schedule to GATT 1994, in-quota imports of milk, up to 64,500 tonnes, are subject to a maximum duty of 17.5%, while further imports are subject to a duty equal to 283.5%. However, Canada specified in its schedule under "other terms and conditions" that "[t]his quantity [64,500 tonnes] represents the estimated annual cross-border purchases imported by Canadian consumers." 1 For some time prior to 1994, Canada had provided special tariff treatment to such cross-border purchases.
1
Panel Report, Canada-Measures Affecting the Importation of Milk and the Exportation of Dairy Products, WT/DS103/R,
WT/DS113/R, 17 May 1999, para. 7.142. The panel was comprised of Tommy Koh, Guillermo Aguilar Alvarez and Ernst-Ulrich
Petersmann.
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