GENEVA: The World Trade Organization opened an investigation Monday into whether the United States is violating international commerce rules that limit subsidies to American farmers, three days after the U.S. Senate approved a new US$286 billion, or \197 billion, farm bill.

The WTO set up a panel to rule in the dispute after Brazil and Canada demanded the investigation.

“We must ensure that WTO members are meeting their WTO obligations,” Canada told the WTO dispute body.

Frustrated by U.S. resistance to cutting back on subsidies, the two countries asked the WTO to condemn Washington for exceeding permitted levels of trade-distorting handouts to American producers of crops such as corn, cotton, rice, soybean and wheat.

The panel created Monday is expected to issue a first ruling sometime in 2008. The dispute system often takes years before reaching a final decision, but can force countries to change their legislation or face billions of dollars in retaliatory sanctions.

U.S. trade official Juan Millan said Washingtons payments have always been below the limits.

“The United States has designed its farm programs to ensure compliance with the existed negotiated limits on domestic support,” he said. “We believe that a panel will agree.”

Millan criticized Brazil and Canada for including payments that “have ceased to exist Д in some cases more than five years ago.”

The dispute over farm subsidies could become a landmark dispute for the WTO because Brazils complaint includes payments for ethanol production.

The trade body has largely steered clear of energy issues in its 12-year history, but will now have to rule on the legality of U.S. tax exemptions on diesel fuel and gasoline production Д a sensitive issue as U.S. presidential candidates gear up for the January start of primary contests in Iowa, the American state that produces the most ethanol.

Critics of the subsidies say they drive down prices, making it impossible for small farms to compete in international markets and more difficult for poorer countries to develop their economies by selling agricultural produce abroad. Richer WTO members such as Australia, Canada and the 27-nation European Union also have demanded subsidy limits amid pressure from domestic producers fearful of being crowded out of their own markets.

Brazil and Canada claim that in six of the past eight years the U.S. has exceeded the US$19.1 billion it is permitted under WTO rules to spend on the most trade-distorting forms of subsidies Д those linked to distribution, export credits, marketing assistance loans and price guarantees.

“During these years the United States exceeded its WTO commitment levels by billions of dollars each year,” Canada said. Brazil added that U.S. subsidies were blocking full enjoyment of WTO agriculture rules.

The two countries brought their cases to the WTO after failing repeatedly to secure U.S. subsidy cuts as part of the WTOs Doha round of trade talks, which aims to add billions of dollars to the global economy, but has repeatedly stalled since its inception in Qatars capital in 2001.

The U.S. spent US$11 billion on trade-distorting subsidies last year, but the administration of U.S. President George W. Bush wants flexibility in case world agricultural prices fall and American farmers need greater assistance. It has offered to limit the payments to a level below US$16.4 billion as part of a new global commerce pact.

The U.S. Senate, however, joined the House of Representatives on Friday in approving a new farm bill that expands programs for wheat, barley, oat and several other crops, and creates new grants for vegetable and fruit growers. Bush has threatened to veto the legislation, saying it costs too much and should instead be cutting subsidies at a time of record-high crop prices.

Countries such as Brazil have been highly critical of the proposed expansion in U.S. farm subsidy programs.

The Latin American country already has won a series of WTO rulings over U.S. cotton programs. A compliance panel found in October that the U.S. has failed to scrap a number of illegal payments Д a decision that could open the door to higher Brazilian taxes and other penalties on American exports.

The details of three million learner drivers have gone missing, Ruth Kelly told MPs this evening.

The transport secretary said the names, addresses and phone numbers of theory test candidates were among details on a computer hard drive which went missing in the US in May.

Unlike the recent data loss scandal at HM Revenue and Customs, bank account details did not go astray.

Kelly had been expected to make a statement about the loss of more than 7,000 motorists’ details by the Northern Ireland Driver and Vehicle Agency (DVA) which emerged last week, but was forced to admit that a more serious breach had since been unearthed.

She told MPs that she regretted the lapse, but said data sharing was a necessary part of providing a good service to Britain’s drivers.

Kelly announced five new measures to improve the security of information, including a new electronic link to provide regular information to police, and merging two separate databases of registered vehicles currently held by the DVLA in Swansea and the Driver and Vehicle Agency in Northern Ireland.

“The public have a right to expect that the information they provide to government will be held securely and used appropriately,” she told the Commons.

The admission is the latest in a series of data losses since discs with details of 25 million people were lost by HMRC in October.

(11-14) 06:38 PST NEW YORK, (AP) —

Investment bank Bear Stearns Cos. will take a $1.2 billion writedown in the fourth quarter related to weakness in its credit portfolios, Chief Financial Officer Samuel Molinaro Jr. said Wednesday.

Molinaro said the writedown will lead the company to post a loss during its fiscal fourth quarter, which ends Nov. 30.

Molinaro, presenting at the Merrill Lynch Banking and Finance Conference in New York, said Bear Stearns latest round of writedowns should “suffice” in accurately valuing products such as subprime mortgages and collateralized debt obligations. The $1.2 billion writedown is net of any hedging gains, Molinaro added.

In July, two Bear Stearns-managed hedge funds worth billions of dollars, and heavily invested in subprime mortgage securities, collapsed as defaults increased and the bank could not find takers to purchase the distressed securities. That helped trigger the credit crisis that swept the markets this summer.

Bear Stearns has been “working hard” to reduce its exposure to the subprime mortgage and collateralized debt obligation markets, Molinaro said.

CDOs are complex financial instruments that combine slices of varying assets and debt. Many CDOs are backed by subprime mortgages Д loans given to customers with poor credit history. As those mortgages have increasingly defaulted, banks are being forced to write down the value of bonds and CDOs backed by the loans.

As of Nov. 9, Bear Stearns had about $884 million in exposure to CDOs remaining on its books, and negligible exposure to subprime mortgages, Molinaro said.

Bear Stearns took about $850 million in writedowns during its fiscal third quarter, as banks took more than $40 billion in total writedowns in quarter. The fourth quarter is shaping up to be as bad or worse than the previous quarter, as banks already have announced billions more in writedowns.

Britain’s HSBC Holdings PLC said Wednesday it would take a writedown of $3.4 billion for its exposure to the U.S. mortgage market.

Bear Stearns’ writedowns have been relatively smaller than its investment banking competitors. Morgan Stanley said earlier this month it would take up to a $6 billion writedown in the fourth quarter related to its exposure to the beleaguered subprime mortgage market.

Goldman Sachs Group Inc., considered the best risk manager among investment banks, said earlier this week it would not have to take further writedowns on mortgage-related losses. It took about $2.4 billion in writedowns during the third quarter.

Merrill Lynch & Co.’s nearly $9 billion in third-quarter writedowns cost its chief executive his job. One analyst predicts Merrill Lynch could have to take an additional $10 billion in writedowns during the fourth quarter.

Shares in Bear Stearns rose $6.63, or 6.6 percent in premarket trading, to $107.50.