OTTAWA — Negotiations between Canada and the United States over contentious trade issues, including durum exports, have almost reached an impasse.
Although agriculture minister Ralph Goodale and U.S. agriculture secretary Mike Espy continue to keep in touch, little progress is being made, say industry and political sources.
And even though Goodale continues to insist that he will not sign a bad deal just to get a deal, Canadian farm representatives say they are increasingly worried that Ottawa is being pressured by the Americans to do just that.
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“I would say there is a lot of nervousness,” said one farm lobby official who asked not to be identified. “We are having trouble getting through to the minister. We’re not sure what he is contemplating.”
In the U.S., meanwhile, some Capitol Hill politicians and farm groups are pressuring the U.S. administration to throw its weight around even more, perhaps by imposing quotas on imports of Canadian wheat.
“Clearly, things are not going well,” Washington trade consultant William Merkin said in a Jan. 31 interview. “I am told that the two sides remain far apart on numbers. They may think they agree on principles but the basic differences in numbers is key.”
Without agreement, the U.S. International Trade Commission investigation of Canadian durum wheat imports will continue, with a public hearing planned for mid-May.
Goodale said in an interview that the issue of import quotas has been raised in “technical” discussions about what possibilities exist for the U.S. under its trade law.
“I would not say that notion has been raised as a threat in any official position that has been put forward by the United States.”
No one will compromise
In both capitals, there is growing pressure not to compromise.
In Canada, the grain lobby has told the government not to back away from an earlier offer to limit grain exports to this year’s level of 2.5 million tonnes. Even that level is considered too low by many.
Trade sources say the Americans want an import cap no higher than 1.6 or 1.8 million tonnes.
And dairy industry leaders have told Goodale in no uncertain terms that a rumored offer to reduce tariffs on ice cream and yogurt to 100 percent beginning next year is unacceptable.
“There will be industry anger if that is what is decided,” said Richard Doyle of Dairy Farmers of Canada. “We should not be negotiating lower tariffs than what we agreed to at GATT. The Americans won’t be happy until they have destroyed supply management.”
