REGINA (Staff) – The Canadian grain industry is backing the federal government’s refusal to renew limits on grain shipped to the United States, industry representatives said recently.
And while there was much debate at a recent Regina meeting over the imposition of the first cap introduced in 1994, which expires on Sept. 11, many agreed that American protectionists have fewer weapons in their trade arsenal today.
“We didn’t favor the cap at the time, but it did buy us some time and got us by the fact that the Americans cannot invoke section 22 of (an American trade) act against us any more,” said Western Canadian Wheat Growers president Larry Maguire.
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“If the Americans are going to do something at this point, they will do it unilaterally.”
And if the U.S. government refuses to accept the ending of the restrictions and takes some sort of hostile trade action, Canada will fight back, said federal agriculture minister Ralph Goodale.
“If they decide to act unilaterally, there would be no basis (for their action) in international law, and Canada would have to react accordingly and firmly,” said Goodale.
A deal reached between Canada and the U.S. last year allows 1.5 million tonnes of prairie wheat and durum to be exported from Canada to the U.S. at minimum tariff levels set out under the North American Free Trade Agreement. Shipments beyond that are subject to rapidly escalating tariffs designed to keep Canadian wheat out of the U.S.
Saskatchewan Wheat Pool second vice-president Barry Senft said the United States should not feel all the trade power is in its hands in the grain dispute.
“There are other trade implications that can be looked at …. Wheat is one of the things we export but in other commodities, we’re vast importers of commodities from the United States. We would have to look at those areas as well,” said Senft, adding that talk of a trade war is premature.
Goodale said he saw many reasons why Canadian grain exported to the U.S. would not be such a hot issue as it was last year.
With wheat stocks at 20-year lows, prices on the world market are good and American producers have many profitable markets to tap.
As well, the end of a protectionist provision in American trade law reduced the U.S.’s power to retaliate.
Goodale said Canada has reached the limits of its “other wheat” category of the grain cap, but the durum limitation will probably not be reached.
During the meeting, the group also discussed suggestions in the interim report of the Canada-U.S. joint commission looking into cross-border grain trade irritants.
On the issue of standard quality measuring devices, Maguire said it might be good to use the same technology and methods of measuring quality on both sides of the border, but he said Canadian quality standards must be protected.
Retain high standards
Senft agreed, saying Canadian standards are the best in the world and nothing should be done to jeopardize that.
National Farmers Union president Nettie Wiebe said Canada in no way should allow its reputation for high quality grains to be damaged by too close an association with American grain.
And she said Canadian quality is intimately tied to maintaining the Canadian Wheat Board’s monopoly on foreign sales.
“It has to have the ability to continue to keep our product separated from the U.S. product,” she said.
