Finding the Canadian Wheat Board guilty of unfair trading and imposing trade restrictions against Canada doesn’t go far enough, says Max Baucus.
The United States senator from Montana says the board shouldn’t be allowed to exist.
Baucus told an International Trade Commission hearing last week that it’s time for the board’s “state-sponsored monopoly” to go.
“This is a system that should not exist in a country that claims to believe in a free market and that is party to a free trade agreement with the U.S.,” the Democratic senator told the hearing in Washington, D.C.
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“This investigation presents a historic opportunity to realize this goal.”
The ITC is conducting a fact-finding investigation into a complaint by the North Dakota Wheat Commission that the board is stealing U.S. wheat markets overseas through unfair and illegal pricing and trading practices.
The commission says its investigation will involve:
- Surveying U.S. wheat buyers as to the sales practices employed by the CWB over the past five years.
- Surveying foreign wheat buyers as to the degree and manner of competition between Canadian and American wheat in the past five years.
- Studying all factors affecting wheat trade between Canada and the U.S., including prices, exchange rates, transportation, marketing practices and farm policy.
The wheat commission’s lawyer told the ITC the wheat board’s actions take money out of U.S. farmers’ pockets.
“Prices are quite possibly depressed eight percent by the activities of the CWB now under investigation, compared to freely competitive price levels that would prevail absent such practices by the largest single export supplier of wheat in the world,” said Charles Hunnicut.
He said that translates into lost revenues of at least $500 million (US) annually over the past four crop years.
The commission will file a report on its findings to the office of the U.S. Trade Representative this fall.
The North Dakota group has asked the trade representative to punish the board by imposing restrictions on Canadian wheat shipments to the U.S.
In oral testimony and written briefs, a wide range of U.S. politicians, farm groups and wheat industry groups presented the commission with a litany of American complaints about the wheat board. Most have been heard before during previous investigations. Here is a sampling of some of the charges levied against the CWB:
- The CWB is highly subsidized by the Canadian government, receiving $32 billion in cumulative government subsidies.
- The board routinely offers discounts of five percent from market prices.
- The board provides “kickbacks” to customers to convince them to overlook contract disputes and to hide true selling prices.
- The board unilaterally sets the price at which it sells wheat, with no concern for world market prices.
- The board sets transportation costs and receives preferential access to rail cars.
- The board hides its predatory and anti-competitive pricing behind bogus claims of commercial confidentiality.
