USTR Urged to Negotiate Immediately on Canadian Grain Trade Dispute

The North Dakota Wheat Commission is urging the U.S. Trade Representative to enter into immediate negotiations with the Government of Canada to settle problems identified in a recent USTR ruling.

On Feb. 15, USTR Robert Zoellick concluded a 16-month investigation into alleged unfair Canadian wheat trading practices by issuing a guilty verdict to the Government of Canada and the Canadian Wheat Board.  The USTR’s affirmative finding states that “the monopoly (Canadian Wheat Board) has taken sales from U.S. farmers, and is able to do so because it is insulated from commercial risks, benefits from subsidies, has a protected domestic market and special privileges, and has competitive advantages due to its monopoly over a guaranteed supply of wheat.”

The NDWC is requesting that the U.S. government use these findings in immediate negotiations with the Canadian government. “The initial objective of these negotiations should be to secure tariff rate quotas on imports of Canadian durum and spring wheat,” says NDWC Administrator Neal Fisher. “A tariff rate quota is the most effective and reasonable solution to provide short-term relief to American wheat growers until Canada’s grain marketing and transportation system is exposed to commercial discipline and becomes compatible with a free trade environment.”

Fisher says, “I don’t think either American or Canadian farmers relish the thought of expending additional resources on the prosecution or defense of legal complaints, but given the USTR’s finding, that is what will happen if Canada doesn’t quickly come to the negotiating table with a meaningful solution.” Fisher adds, “There is certainly remains no credibility to the Canadian Wheat Board assertion that it is a fair trader.”

The USTR has outlined several options for responding to disputed Canadian grain trading practices, including a possible complaint to the World Trade Organization. Other possibilities could be countervailing duty and antidumping actions against imports of Canadian wheat, as well as action to eliminate the non-tariff trade barriers that effectively prohibit U.S. wheat from entering Canada.