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most agricultural cases have been brought under Chapter 20. In fact, a total of 8 out of 10 cases proceeding in the framework of Chapter 20 are ei- ther directly or indirectly related to agriculture.31 The two active agricul- ture cases under Chapter 20 panels concern US TRQs on tomato imports and sugar. A few agricultural disputes have been headed off through gov- ernment or industry negotiations (Burfisher, Norman, and Schwartz 2002). Six key agricultural commodities in US-Mexico trade—sugar, meat (pork/ beef/chicken), corn, beans, tomatoes, and avocadoes—that might eventu- ally be addressed within the NAFTA dispute settlement mechanism are analyzed below.32

US-Canada Wheat Dispute

Types of Wheat Involved

Canadian wheat exports to the United States are small compared with total US wheat production. However, wheat exports to US and world markets are very important to Canada given its limited domestic market (table 5.4). Two types of wheat dominate the US wheat import menu: hard red spring wheat, which represents 73 percent of total US wheat imports, and durum wheat, which accounts for 23 percent (USITC 2001). A key difference between hard red spring and durum wheat products is their degree of substitutability for other wheat varieties. Durum wheat, used mainly for producing pasta, has few close substitutes. Hard red spring wheat, used to make breads and other baked goods, has important close substitutes, notably hard red winter wheat. 33

Domestic US concerns are correlated with the growth of wheat imports from Canada. In 2003, Canada was the single largest supplier of hard red spring wheat, accounting for 93 percent of US imports of that type of wheat, and practically the only supplier of durum wheat to the United

Chapter 19 include apples (CDA-94-1904-01, CDA-95-1904-01), sows and boars (USA-94- 1904-01), beer (CDA-95-1904-01), sugar (CDA-95-1904-04), prepared baby food products (CDA-USA-98-1904-01), cattle (USA-CDA-99-1904-06, USA-CDA-99-1904-07), bovine car- casses (MEX-USA-2000-1904-02, MEX-USA-2002-1904-01), and tomatoes (USA-CDA-2002- 1904-04, USA-CDA-2002-1904-06). See appendix tables 4A.4 and 4A.5 in chapter 4 on NAFTA dispute settlement.

31. While only three Chapter 20 panels have been initiated, we assign several other disputes to the framework of Chapter 20, prior to the panel stage. See appendix 4A.3 in chapter 4 on NAFTA dispute settlement.

32. Trade disputes over avocadoes have partly been resolved through negotiated agree- ments. As a result, Mexican avocado exports have increased steadily under NAFTA. See “Free Trade on Trial,” The Economist, December 30, 2003. We thank Tim Josling for this observation.

33. Hard red spring wheat is also comparatively higher in protein and gluten content than durum wheat.

AGRICULTURE

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