The U.S. government is getting cozy with many of Canada’s overseas grain and oilseed buyers, threatening to slip away with them.
Exporters such as the Canola Council of Canada and the Canadian Wheat Board are worried, seeing threats to their best markets.
“We can’t get left out,” said canola council president Barb Isman. “Bilaterals are not good things … They entrench disadvantage for Canada.”
The U.S. government has been making bilateral, one-on-one deals with several countries in recent years, including one with Morocco this year.
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The Canadian government has been pushing for a global trade deal, but the canola council and wheat board say the government needs to make bilateral deals of its own in the meantime.
“We have to make sure Canada does not fall behind its competitors in bilateral agreements,” said wheat board spokesperson Louise Waldman.
Many countries place tariffs on imported crops. However, canola exporters have been frustrated in recent years that duties on canola are higher than on soybeans in countries such as China and India.
Recent U.S. attempts to get further preferential rates in Canada’s prized export markets are making the situation worse. The Morocco deal has given the U.S. a preferential tariff on 245,000 tonnes of durum per year, which will rise to 400,000 tonnes per year after 10 years.
That market is a prime one for prairie durum, and the lower tariff for U.S. durum means Canadian durum exports will have to be discounted to compete.
“Because of that preferential tariff access to the U.S., prices attainable for Canadian durum in that market will be lower,” Waldman said. “These are serious concerns.”
Canada exports little canola to Morocco, but Isman said the canola council has targeted North Africa for eventual consumption of 100,000 to 500,000 tonnes per year and a U.S. sweetheart deal on soybean duties threatens that market unless it can be matched.
“The agreement institutionalizes a tariff on canola relative to soybeans,” she said.
“It’s one more market that’s potentially good for us in the future, but which we have no hope of accessing if we have to climb over tariff walls that won’t exist for soybeans.”
