TORONTO As if Ottawa didn't have enough on its plate in the lumber trade dispute with Washington, it's now in a food fight over U.S. pasta subsidies.
Joe Vitale, president of pasta manufacturer Italpasta Ltd. , says U.S. subsidies south of the border are hurting the Canadian industry. U.S. pasta makers, he alleges, gain an unfair advantage from their government aid and can sell their products at lower prices in Canada than Canadian producers can.
The federal government agrees. In a joint challenge with Mexico, Canada is taking the issue to the World Trade Organization, says <Roy> <Cullen>, a Liberal member of Parliament from Toronto.
"We have launched a subsidy-and-dumping challenge in the WTO," Mr. Cullen said in an interview.
"What that means is that we're alleging -- and we're damn sure -- there's a subsidy. If you have a subsidy, that means you're able to dump the product easier than if you don't have a subsidy."
Mr. Cullen became involved last month when Mr. Vitale, founder of Italpasta, told him about a $20-million (U.S.) payment from the U.S. government to domestic pasta makers.
The issue began in 1998, when Canadian and U.S. pasta producers argued that Italy was unfairly dumping cheap pasta into their local markets. While the U.S. government agreed -- and began collecting punitive duties against unfairly priced Italian imports -- Canada said there wasn't sufficient proof that pasta from Italy was subsidized.
In January, the U.S. Customs Department gave out $20-million to U.S. pasta companies from what it had collected over the years from the Italian imports. The Canadian industry is concerned that such payments will give the U.S. companies an unfair advantage against competitors such as Italpasta.

Mr. Vitale, whose Toronto-area company employs more than 300 people and sells most of its pasta in Ontario, said the U.S. move is a "double whammy" amid Italian pasta competition. Italpasta, sold under the Italpasta, Vitale and other private-label brands, does about 20 per cent of its business in the United States.
"We're not on the same level field," Mr. Vitale said. "I'm trying to make some noise. I want the Canadian government to do something about it."
Apart from Italpasta, there are just a few pasta manufacturers in Canada.
Mr. Vitale took his concerns to a number of politicians, including Mr. Cullen, who then raised the issue with International Trade Minister Pierre Pettigrew during a trade mission to India in April.
Mr. Pettigrew, although already embroiled in the trade dispute over softwood lumber, reviewed the pasta issue, discussed it with the U.S. Trade Representative and decided to proceed with the challenge.
While nowhere near as major as the lumber dispute, the pasta issue is one of many trade irritants between NAFTA partners Canada and the United States.