On January 8th the Canadian government asked the U.S. government for consultations at the World Trade Organization (منظمة التجارة العالمية) on subsidies provided to U.S. corn growers and the total level of U.S. trade-distorting agricultural support. بعد 18 years of the U.S.-Canadian Free Trade Agreement and much economic integration, it is clearly a trade policy failure for either country to use the blunt instrument of WTO consultations on a trade issue.

That the Canadians asked for consultations just as the Congress begins work on a new farm bill is not a surprise. في شهر آب من 2005 when Canadian corn growers filed a corn trade case under Canadas Special Import Measures Act, in which the Canadian International Trade Tribunal issued a final ruling in April 2006 of no injury in their anti-dumping and countervailing investigation, they also wanted the Canadian government to ask for WTO consultations.

The Canadian arguments on corn are particularly weak. The press release on the request for consultations noted that in 2005/06 الولايات المتحدة. يحسب ل 41 percent of world corn production and 68 percent of exports. That is about the same as 25 years ago when the U.S. had 45 percent of world production and 76 في المئة من التجارة العالمية. الولايات المتحدة. has croplands uniquely suited for corn production with or without farm programs. Canada has the opposite with most of its land too far north to grow corn, even though the corn growing area is moving north some with newer hybrids.

The backgrounder attached to the press release noted that the U.S. corn crop increased from 256 مليون طن متري (mmt) في 2003/04 to a record 300 mmt in 2004/05 و 282 mmt in 05/06. After improved market prices for the 2002 و 2003 المحاصيل, الامريكى. corn farmers increased plantings for 2004 by 2.9 نسبه مئويه, but weather was ideal and per acre yields increased by 12.8 percent and resulted in a record large crop. في 2005 corn farmers responded to those higher yields by increasing acreage another 1.1 percent and were disappointed by a per acre yield decline of 7.8 نسبه مئويه. The Canadians conveniently failed to note that planted acreage was down 3.9 في المئة في 2006 and the crop was only 273 mmt, the smallest crop since 2003.

Despite whatever influences farm program payments may have, in recent years U.S. corn farmers appear to have been responding to market prices and changes in yield per acre. الامريكى. planted corn acres are expected to be up sharply in 2007 in response to higher prices for the 2006 corn crop, but weather will still determine the final size of the crop.

Arguments over acreage, yield, output, imports and consumption can go on for years, as the ongoing policy arguments over corn and other products have proven. The real issue is that the U.S. and Canada have agricultures that are competitive in some respects and complimentary in others and are joined together geographically by an international border and politically by the Canadian-U.S. Free Trade Agreement that encourages the free flow across the border of most agricultural products. Both countries have much to gain by working together to resolve policy differences.

Each country can easily produce more food products than can be consumed in the country and more than can be expected to be exported to the other country. They have a common interest in exporting to third countries. Increasing income opportunities in both countries has to be the central focus of agricultural trade policy in each country. A beggar thy neighbor policy will not help either country.

There are significant agricultural policy differences that cannot be glossed over. What is needed is a joint commitment by governments, private companies and associations to find a policy middle ground that allows each country to use its resources to improve farm and ranch income through trade. That will require four strategies.

أول, policy makers need to strengthen the complimentary trade between the two agricultures. The easiest policy issues to deal with should be those where both countries can see the advantage of working together. That is what is so disheartening about the corn disputes because the comparative production advantage is clearly on the side of the U.S., and Canadian corn users benefit.

ثانيا, where producers in the two countries are direct competitors policy makers need to recognize that neither country can expect to gain a long-term advantage over the other. Wheat and beef are two areas where their will likely always be competition. Disagreements may arise over which public policies are best, but the countries choosing different public policies should not be designed to put one country at a disadvantage to the other.

Third, sanitary and phyto-sanitary programs and other regulatory programs need to be harmonized. In a world where consumers increasingly demand a higher standard of food safety, neither country can afford to do anything other than work hard to stay ahead of the rest of the world. Failure to work together is too costly for both countries.

Fourth, what works for the U.S. and Canada must be applied first to relations with the third member of NAFTA, المكسيك, and then to bilateral agreements that the U.S., Canada and Mexico have with third countries. The proposal by former USTR Robert Zoellick for a new Association of American Free Trade Agreements (AAFTA) is a call to the reality of the future.

الولايات المتحدة. and Canada have had 18 years of not tackling tough issues. Now is the time to begin investing in solving trade policy problems with a win-win view for both countries rather than casting blame on one another.