Their statement, submitted to the World Trade Organization, said the EU’s approach created great uncertainty and diverged from science-based risk assessments, creating disruption that threatened to escalate significantly in coming years.

They called on the EU to re-evaluate its approach to product approvals, use internationally accepted methods of setting tolerance levels for potentially harmful ingredients, and stop “unnecessarily and inappropriately” restricting trade.

The statement was backed by Australia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Malaysia, Nicaragua, Panama, Paraguay, Peru, the U.S. and Uruguay.

They said farmers needed to be able to access the “full range of safe tools and technologies” in order to meet the challenge of producing more food.

“Yet, our farmers’ choice of safe tools is increasingly undermined by regulatory barriers that are not founded on internationally agreed risk analysis principles and do not take into account alternative approaches to meeting regulatory objectives,” they said.

“This is already having a substantial negative impact on the production, and trade of, safe food and agricultural products, an impact that is likely to increase in the future.”

The statement, sent for debate at the WTO’s Council for Trade in Goods later this month, said the EU had effectively banned some substances that other WTO members regarded as safe.

“In implementing these measures, it appears that the EU is unilaterally attempting to impose its own domestic regulatory approach onto its trading partners,” they said.

Despite repeated requests at the WTO over the past four years, the EU had not explained what level of protection it was seeking or what risks it was trying to mitigate, and it had ignored comments on draft regulations, they said.

The EU had suggested farmers could find “alternatives” to meet EU rules, but such demands rang hollow, the statement said, since many farmers had no such economically viable options, with a disproportionate effect on millions of agriculture-dependent families in developing economies and least developed countries.

— Tom Miles is Reuters’ chief correspondent in Geneva.

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The WTO has strict rules about the size and nature of payments, and member governments keep a close watch for any competitors who might be cheating. Their questions — 62 pages for the June 25-26 meeting — can range from requests for clarification to outright allegations of illegal handouts.

U.S. President Donald Trump and Indian Prime Minister Narendra Modi have both made boosting farm incomes a priority. Trump is trying to offset domestic damage from a tariff war with China; Modi faces a slowdown in India’s agriculture-dominated economy.

The European Union asked India to explain how Modi proposed to spend 25 trillion rupees (C$479.8 billion) on agriculture and rural development, doubling farmers’ incomes by 2022 as part of a 100 trillion-rupee, five-year infrastructure splurge.

“How will this be done, taking into account global market prices of produce and measures put in place to prevent excess production?” the EU asked.

The United States queried India’s five per cent export subsidy for non-Basmati rice and its growing state buying of wheat at rising prices, despite back-to-back record harvests, noting that it was on track for a record wheat stockpile.

The United States and Australia also wanted details of India’s new “transport and marketing assistance” for agriculture, which Australia said was an export subsidy that should be phased out.

The United States faced questions from Australia, Canada, China, the EU, India, New Zealand and Ukraine about Trump’s US$16 billion (C$21.45 billion) “market facilitation package,” the second payout under a program that had been described as a one-off.

China said the package appeared likely to breach the allowed “product specific” ceiling of five per cent of the value of production.

The EU also queried a US$19 billion disaster bill approved by Congress this month, saying it would let the U.S. Department of Agriculture boost “the prevented planting payment factor on crop insurance to 90 per cent instead of 55 per cent for corn and 60 per cent for soybeans.”

India criticized the U.S. 2018 Farm Bill, saying it benefited not only farmers, but also their first cousins, nieces and nephews, with children and spouses qualifying for $125,000 of payments.

Among other questions, Canada and Australia asked about the impact of Brexit, and the United States was concerned Pakistan’s wheat subsidies were creating “huge surpluses” and said China appeared to be exporting state-owned rice below cost.

— Tom Miles is Reuters’ chief correspondent in Geneva.

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Official rations are down to 300 grams (10.6 ounces) per person per day, the lowest ever for this time of year, the U.N. said following a food security assessment it carried out at Pyongyang’s request from March 29 to April 12.

It found that 10.1 million people were suffering from severe food insecurity, “meaning they do not have enough food till the next harvest,” U.N. World Food Program spokesman Herve Verhoosel said.

North Korea’s population is around 25.2 million, according to its Central Bureau of Statistics, the report said.

Verhoosel said the word “famine” was not being used in the current crisis, but it might come to that in a few months or years. “The situation is very serious today — that’s a fact.”

The country suffered a famine in the mid-1990s believed to have killed as many as three million people.

For its assessment the WFP, one of only a few aid agencies with access to the country, gained widespread entry to farms, households, nurseries and food distribution centres.

Verhoosel blamed a combination of dry spells, heat waves and flooding for the new crisis, which the U.S. State Department said was the government’s fault.

“The DPRK regime continues to exploit, starve and neglect its own people in order to advance its unlawful nuclear and weapons program,” a department spokeswoman said, adding that it could meet its people’s needs if it redirected state funds.

After a second summit with U.S. President Donald Trump failed to produce a deal to end the program in return for sanctions relief, North Korean leader Kim Jong Un set a year-end deadline for Washington to show more flexibility.

North Korea has for years relied on regular supplies of U.N. food aid.

Its agricultural output of 4.9 million tonnes was the lowest since 2008-09, leading to a food deficit of 1.36 million tonnes in the 2018-19 marketing year, the WPF report said.

Prospects for the 2019 early season crops of wheat and barley were worrisome. “The effects of repeated climate shocks are compounded by shortages of fuel, fertilizer and spare parts crucial for farming,” Verhoosel said.

The WFP plans to make another assessment during July and August.

— Reporting for Reuters by Tom Miles; additional reporting by David Brunnstrom in Washington.

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A WTO adjudication panel agreed on Thursday with the U.S. complaint that China had paid farmers too much for wheat, Indica rice and Japonica rice in 2012-2015. A disputed corn subsidy had already expired.

“China’s excessive support limits opportunities for U.S. farmers to export their world-class products to China,” U.S. Trade Representative Robert Lighthizer said in a statement. “We expect China to quickly come into compliance with its WTO obligations.”

The trade representative’s office filed the complaint in September 2016, saying China had paid farmers nearly US$100 billion more than allowed by the WTO rules. That provided an artificial incentive for farmers to produce more, lowering prices worldwide.

China’s WTO membership agreement permits trade-distorting subsidies of up to 8.5 per cent of the total value of production.

China argued that it was not breaching that limit because only the grains procured by government should be counted as subsidized. The United States successfully argued that state buying at a guaranteed price raised the whole market.

“U.S. farmers have been hurt by China’s overproduction and protectionist measures for too long and it’s past time for China to start living up to its commitments,” Vince Peterson, president of export promotion group U.S. Wheat Associates, said of the ruling in a separate release.

The ruling, which may be appealed, could have ramifications for India, which has made similar arguments to China.

At a meeting of the WTO’s agriculture committee on Wednesday, the U.S. and Canada rejected India’s claim that its market price support for pulses was 1.5 per cent of the value of production, saying that it was actually 31 per cent to 85 per cent, far above allowed limits.

— Reporting for Reuters by Tom Miles in Geneva. Includes files from Glacier FarmMedia Network staff.

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The United States has blocked appointments of judges to the Appellate Body, throwing the WTO into crisis as it runs out of legal muscle to rule on international trade disputes.

The European Union has made proposals to reform the way the judges work, but U.S. Ambassador Dennis Shea poured cold water on several of them on Thursday, saying appeals judges had “strayed” from what was agreed when the WTO was set up in 1995.

One diplomat from a large developing country said on Friday the United States regretted setting up the appeals system and it was not putting forward any ideas to reform it.

“We have no leverage,” he said. “The other side is flexing its muscles.”

“Moral suasion is all that is left,” said a Geneva-based trade lawyer.

Another trade lawyer and former negotiator for a U.S. ally said various alternatives being put forward were “band-aids.”

“I don’t think there’s anything right now that the other (WTO) members can do. And I don’t think that any of these other band-aid solutions amount to anything,” he said.

A trade lawyer and former staffer on the Appellate Body’s secretariat said the United States was using hard leverage in many areas of trade, with its tariff war and regional trade agreements as well as at the WTO.

The trade experts were speaking at an event organized by the Cato Institute at Geneva’s Centre for Trade and Economic Integration, on condition that the names and affiliations of speakers were not reported.

Attendees included senior officials from the WTO and ambassadors from WTO missions as well as veteran trade lawyers. Organizers said that U.S. officials had been invited to take part but declined.

— Tom Miles is Reuters’ chief correspondent in Geneva.

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The questions come amid growing trade tensions between the U.S. and its top export markets. Earlier on Thursday, the Trump administration outraged allies by moving ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union.

Canada’s questions also point to more potential trouble brewing at the World Trade Organization, where the U.S. has vetoed new judges for disputes. Analysts say Canada is seeking clarity on what steps the White House might take to protect farmers whose support helped Donald Trump win the 2016 U.S. presidential election.

The U.S. Department of Agriculture, the White House and Canadian officials could not immediately be reached for comment.

Canada submitted the request to the WTO’s agriculture committee, where negotiators meet several times a year to examine each other’s farm support programs and challenge eye-catching spending by their rivals.

Canada’s written question asked the United States to explain the U.S. Bipartisan Budget Act of 2018, in which Congress lifted certain restrictions on the U.S. Agriculture Secretary’s authority to use Commodity Credit Corporation (CCC) funds.

The CCC has broad authority to make loans and direct payments to U.S. growers when prices for corn, soybeans, wheat and other agricultural goods are low. The White House is looking at ways to use CCC funds to offset farm income losses in a trade war with China or others, according to media reports.

“Canada understands that the CCC can borrow up to $30 billion from the Treasury Department at any one time to stabilize farm income such as assisting farmers through loans, purchases, payments and other operations,” Canada said.

“Could the U.S. please provide the reasoning for lifting restrictions on the USDA’s authority to use CCC funds, and name the programs that will be eligible for these new funds?”

Canada also wants to know if Washington can use CCC funds to buy domestic surpluses, such as dairy products, or corn and soybeans.

Canada’s formal request for information does not necessarily imply a dispute is brewing. But WTO committee questions are often a sign of friction. If no satisfactory answer is supplied, pressure for a negotiated solution — and the risk of a full-blown dispute — is likely to rise.

— Reporting for Reuters by P.J. Huffstutter in Chicago and Tom Miles in Geneva.

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The U.S. has thrown the WTO into crisis by blocking the appointment of new judges, undermining its dispute settlement system just as it tries to cope with seismic disagreements over whether China trades fairly.

U.S. officials have declined to discuss what would persuade them to lift their veto on judges, with no sign of a resolution before the next judge steps down in September.

“If a major power does not want to play by the rules of internationally disciplined trade, the others will have to react,” Lamy said.

“Plan A” for WTO members, the preferred option, would be to ask what the problem was and offer to fix it, he said.

Plan B would be to “make sure the system can work without them,” Lamy said, adding, “The rumour that there might be a plan B might help make sure plan A could work better.”

Lamy said the U.S. tactics were likely to lead to one of three outcomes. The mildest was reform of the WTO’s case law to meet Washington’s concerns. The middle path led back to the pre-WTO era of weaker trade disciplines and less enforcement.

“The third possible scenario is what I call the ‘lonesome cowboy’, which is either the U.S. quits or the others, in order to resist this U.S. offensive, build a WTO minus the U.S.”

Lamy said he sympathized with some of the U.S. complaints about China, though President Donald Trump and his advisers had a “medieval” view of trade, at odds with the modern reality of global value chains.

He was speaking at an event hosted by the U.N. trade agency UNCTAD, entitled “Trade in crisis: headwinds or maelstrom?”

— Tom Miles is the chief correspondent for Reuters’ bureau in Geneva.

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In October, Washington accused British Columbia of providing an unfair advantage to local vineyards by giving their wine an exclusive retail channel in grocery store shelves and cutting out U.S. competition.

Australia’s complaint, published by the WTO on Tuesday, expanded the U.S. argument, saying that not only B.C. but also Ontario, Quebec and Nova Scotia, as well as the Canadian government, had policies on wine that broke WTO rules.

“It appears that a range of distribution, licensing and sales measures such as product mark-ups, market access and listing policies, as well as duties and taxes on wine applied at the federal and provincial level may discriminate, either directly or indirectly, against imported wine,” Australia said.

The dispute is the first brought by Australia against Canada in the history of the WTO, and follows a rise in trade tension between Canada and the U.S.

The North American neighbours are tussling over the future of the NAFTA trade agreement they share with Mexico, and last week Canada launched a surprise attack on U.S. trade policy, initiating a wide-ranging WTO complaint.

Australia Trade Minister Steven Ciobo said that lodging the complaint was “unrelated” to Canada’s surprise last-minute reservations that stalled the Trans-Pacific Partnership trade negotiations in Vietnam last November.

“These are unrelated events the fact is that we have continued to see an erosion of, for lack of a better term, liberalized market access into Canada,” he said in an interview with Australian Broadcasting Corp. radio on Wednesday.

“We are aggrieved over the domestic (wine) regulations that they have in place. It sends a very clear shot across the bow to Canada.”

The Canadian federal government “works closely with all provinces and territories to ensure their liquor distribution and sales policies are consistent with our international trade commitments,” said Pierre-Olivier Herbert, spokesman for Canada’s international trade minister.

Canada will also give “careful consideration” to consultation requests from any WTO member, Herbert added.

Australia has seen exports of bottled wine to Canada almost halve between 2007 and 2016, from $224 million to $119 million, although sales to Britain and the U.S., once its top export markets, have fallen by even more (all figures US$).

Despite a growth in sales to China, now the top export destination, and to Hong Kong, Australian wine sales overall fell from $2.5 billion in 2007 to $1.7 billion in 2016.

Under WTO rules, Canada has 60 days to settle the dispute with Australia. After that, Australia could ask the WTO to adjudicate, with a view to forcing Canada to change its laws or risk trade sanctions.

— Tom Miles is the chief correspondent for Reuters’ Geneva bureau; additional reporting by Leah Schnurr in Ottawa and Tom Westbrook in Sydney.

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Canada appeared to be mounting a case on behalf of the rest of the world, since it cited almost 200 examples of alleged U.S. wrongdoing, almost all of them concerning other trading partners, such as China, India, Brazil and the European Union.

The 32-page complaint homed in on technical details of the U.S. trade rulebook, ranging from the U.S. treatment of export controls to the use of retroactive duties and split decisions by the six-member U.S. International Trade Commission.

Canada’s Foreign Minister Chrystia Freeland said the legal action was in response to the “unfair and unwarranted” U.S. duties against Canada’s softwood lumber producers and part of a “broader litigation” to defend forestry jobs.

“We continue to engage our American counterparts to encourage them to come to a durable negotiated agreement on softwood lumber,” she said in an emailed statement.

Canada said U.S. procedures broke the WTO’s Anti-Dumping Agreement, the Agreement on Subsidies and Countervailing Measures, the General Agreement on Tariffs and Trade and the Understanding on Rules and Procedures Governing the Settlement of Disputes.

Anti-dumping and countervailing duties — punitive tariffs to restrict imports that are unfairly priced or subsidized in order to beat the competition — are a core component of Washington’s trade arsenal, and frequently used to defend U.S. interests.

Such tariffs are allowed under WTO rules but they are subject to strict conditions.

The U.S. has been under fire for years about the way it calculates unfair pricing, or dumping. It has already lost a string of WTO disputes after its calculation methodology was ruled to be out of line with the WTO rulebook.

Under President Donald Trump, the U.S. has threatened to expand the use of punitive duties against China and has angered Beijing by refusing to accede to China’s demand to be treated as any other “market economy.”

Trump has also upset Canada by slapping punitive tariffs on Canadian softwood lumber exports, leading to a challenge by Ottawa at the WTO and the North American Free Trade Agreement.

U.S. Trade Representative Robert Lighthizer on Wednesday described Canada’s new dispute as a “broad and ill-advised attack on the U.S. trade remedies system.”

Canada’s claims “are unfounded and could only lower U.S. confidence that Canada is committed to mutually beneficial trade,” he added in a statement issued in Washington.

— Reporting for Reuters by Tom Miles; additional reporting by Tim Ahmann.

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The settlement of the dispute at the WTO, which began in 1996, was facilitated by a liberalization of trade under the EU/Canada Comprehensive Economic and Free Trade Agreement (CETA) which came into force on Sept. 21, they said.

“This enhanced co-operation and deeper understanding was conducive for finding a mutually agreed solution and settling the dispute,” the joint EU-Canadian statement to the WTO said.

Under the terms of the deal, Canada gives up any right to retaliate over the decades-old complaint, which alleged the EU was breaking WTO rules by banning hormone-treated beef.

Canada’s use of hormones had effectively blocked Canadian beef exports to the EU, and during the CETA talks Ottawa argued for Brussels to accept a larger quota of hormone-free beef to make production economically viable.

The dispute over hormones was at the heart of the long-running CETA negotiations, and by 2013 sources close to the talks said the EU was offering 40,000 tonnes against Canada’s demand for 100,000 tonnes per year.

The eventual deal allowed Canada to raise its exports to the EU in stages to 50,000 tonnes of duty-free beef, as well as 80,000 tonnes of pork and 100,000 of wheat.

The European Commission has said that “CETA will not change the way the EU regulates food safety, including genetically modified products or the ban on hormone-treated beef.”

The United States had a similar WTO dispute with the EU and slapped sanctions on a list of EU goods — from truffles to chocolates to cheese — to retaliate against its rejection of U.S. hormone-treated beef.

But in 2009 the United States agreed to remove its retaliatory duties in return for a promise of 45,000 tonnes of hormone-free beef sales into the European Union.

The EU’s imports of fresh U.S. beef rose from $67 million in 2009 to $300 million in 2015, while EU beef imports from Canada have remained below $10 million per year, lower even than its imports of Canadian horsemeat (all figures US$).

Trade experts cite the EU’s defence of its stance on hormone-treated meat, and a similar battle over chlorine-washed chicken, as evidence of the trading bloc’s power to set food standards by which its smaller neighbours, such as Switzerland or post-Brexit Britain in future, are obliged to abide.

— Tom Miles is chief correspondent for Reuters’ bureau in Geneva.

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