W.T.O. finds U.S. violations of wheat fluten quotas

by Emily Wilson
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A World Trade Organization panel in early-August ruled that a U.S. safeguard quota imposed on the import of wheat gluten violates W.T.O. rules. The panel recommended that the W.T.O. Dispute Settlement Body adopt the findings and request the United States to bring its measure into conformity with the Agreement on Safeguards.

The W.T.O. panel found several U.S. violations. The panel concluded the United States did not properly establish that increased imports, rather than any other factors, caused serious injury to the U.S. gluten industry.

The panel also said the exclusion of Canadian gluten imports from the quota was not justified, especially because those Canadian imports had been included in the analysis that led to the quota's imposition. The panel also found that the U.S. had not followed procedural requirements under the W.T.O. concerning notifications, consultations and trade compensation.

Indications are the U.S. is likely to appeal the panel's findings. The U.S. wheat gluten industry has maintained that imports of cheap wheat gluten, particularly from the European Union, have undermined the U.S. market and caused economic damage to the industry.

In 1998, U.S. President Bill Clinton ordered restrictions on wheat gluten entering the United States from the European Union, Australia and selected other countries. Canada and Mexico were exempted from the quota restrictions because of their status as members of the North American Free Trade Agreement.