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WTO rejects U.S. appeal on Canadian wheat

(Monday, Aug. 30, 2004 -- CropChoice news) -- Reuters: GENEVA - The World Trade Organization (news - web sites)'s (WTO) top trade court on Monday rejected a U.S. appeal against a ruling exonerating the export policies of the Canadian Wheat Board, diplomats and trade sources said.

Its Appellate Body upheld the findings of a WTO panel of trade judges in February that the Wheat Board's exclusive right to buy and sell western Canadian grain for export, and its right to set the initial price, did not break world trade rules.

In the earlier verdict, the judges backed a U.S. challenge to parts of Canada's import policy, but neither side appealed this part of the decision.

"It leaves the panel ruling unchanged," said one diplomatic source, who declined to be named.

The farmer-controlled Wheat Board has a monopoly on wheat exports from Canada's Prairie grain belt and has been a frequent target of complaints from the United States over the past decade that it subsidizes farmers.

But under the terms of the February ruling, Ottawa must change rules that prohibit the mixing of eastern and western grain for export sales and modify its rail revenue cap.