Davos (Switzerland): South America's Argentina and Brazil have joined Canada in its complaint that the US is providing illegal handouts to American corn growers.
The request for consultations, filed by the two South American countries and by Guatemala last week at the Geneva-based World Trade Organization, could lead to a major commercial dispute at a time when attempts are being made to restart the final leg of negotiations. Talks broke-off in July 2006 over disagreements on agricultural tariffs and subsidies.
The US is trying to formulate a new multibillion-dollar farm bill.
Before a country can ask the WTO to launch a formal investigation, the rules mandate a three-month consultation period. A WTO case can result in punitive sanctions being authorised, but that could take several months or even years, to happen.
Canada, in its complaint lodged on 8 January, claims that US paid out around $9 billion annually in export credit guarantees and other subsidies that unfairly and illegally deflated international corn prices.
The office of US trade representative Susan Schwab, was critical of Canada's action earlier this month.
Brazil is the world's largest ethanol producer and exporter, producing the bio fuel from corn and maize.