U.S. warns Canada off heavy foray into American markets

OTTAWA – The United States government issued an election-year threat against Canadian grain exporters last week, warning it will try to limit imports which threaten damage to American farmers.

“The administration reiterates its longstanding position that it will not accept market disruption from imports of Canadian wheat,” trade ambassador Charlene Barshefsky and agriculture secretary Dan Glickman said in a Sept. 17 statement issued in Washington, D.C.

“The United States remains concerned about the non-transparent pricing practices of the Canadian Wheat Board.”

They said they would use “appropriate U.S. trade laws” if Canadian wheat exports across the border threaten to undermine domestic markets or prices.

A benchmark will be the 1.5 million tonne cap set on Canadian wheat exports in 1994-95.

In Ottawa, agriculture minister Ralph Goodale dismissed the American threat as politics.

He said it was a curious statement, since Canadian exports have not been near the 1994 levels which raised the ire of U.S. producers.

“One could be forgiven for concluding this has a bit more to do with local U.S. politics than it has to do with anything related to the grain trade,” Goodale told reporters.

He said Canada would never again agree to voluntary limits on wheat exports south and under new world trade rules, the U.S. would have a difficult time justifying a legal barrier.

“You can be sure any such action would be challenged.”

Reform trade critic Charlie Penson, a Peace River grain farmer, dismissed it as “border state politics.”

However, the Reformer said Canada should meet the U.S. threat by making it clear any new attempt to limit grain exports would be met by a complaint to a North American Free Trade Agreement trade dispute panel.

“That’s what free trade is all about,” Penson said in an interview. “Farmers deserve a resolution of this once and for all. It is what the Liberals should have done in 1994, instead of caving in.”

Although issued in the midst of the campaign for the November U.S. election, the American government statement was timed to coincide with the one-year anniversary of the expiry of the Canada-U.S. #agreement which limited exports.

Glickman and Barshefsky said if there is a surge in Canadian exports after the harvest, the U.S. government will ask for consultations with Canada at regular intervals to try to cap the wheat flow.

In fact, the 1995 report of the binational grain panel recommended creation of an industry-government two-nation panel to discuss cross-border issues before they become confrontations.

Goodale said last week the Americans have not agreed to it yet.

“Maybe they will find more favor with the idea once the election is over.”

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