OTTAWA (Staff) — By early August, the door could close somewhat on yet another growing Canadian grain market.
Mexico has launched an investigation into export subsidies used by both Canada and the United States.
A Mexican government official said last week the preliminary investigation will be completed by early August.
If the government concludes either the U.S. or Canada are using subsidies that contravene international trade rules, it could apply interim duties until the final study phase finishes next February.
The official, who spoke on a background basis, said Mexican agriculture has become concerned about the influx of Canadian and American product in recent years. If it is found to be subsidized, steps will be taken to restrict it.
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Crow Benefit, EEP
The subject of the investigation is the Canadian Crow Benefit subsidy and the American Export Enhancement Program.
Since Mexico introduced more market-oriented rules to its agriculture sector, he said imports have risen from four percent of Mexican consumption in 1992 to 32 percent in 1993. The increase of Canadian imports has been the most dramatic in recent years.
According to Canadian Wheat Board figures, wheat sales to Mexico increased from 62,000 tonnes in 1990-91 to 551,000 tonnes in 1992-93.
“The preliminary decision will depend on what the proofs are,” he said. “It will depend on if there is a subsidy and if it is actionable under the GATT (General Agreement on Tariffs and Trade).”
Ironically, a Canadian trade official last week said that eliminating export subsidies to Mexico was offered by Canada during the unsuccessful trade negotiation between Canada and the United States.
Agriculture Canada trade negotiator Mike Gifford said Canada offered to drop WGTA payments on grain shipments to Mexico if the Americans stopped using EEP on similar sales. The offer wasn’t accepted.
