SASKATOON — Canada and the U.S. have a truce in their wheat trade war.
The deal, worked out during a hectic round of last-minute negotiations in Washington last week, was scheduled to go before the federal cabinet for approval on Aug. 2. It involves three main points:
- Canada agrees to a ceiling on wheat and durum sales to the U.S. in the coming year. No official information was available at press time on what the exact limit will be, although U.S. press reports said it will be set at 1.5 million tonnes (1993-94 shipments will be about 2.5 million). A $50-a-tonne tariff would be applied on shipments above that, according to those reports.
- A special binational panel will be set up to study the grain industries on both sides of the border and try to sort out all the charges and counter-charges about subsidies, unfair marketing practices and trade rules.
- Both countries agree not to initiate any new trade actions against each other during the year.
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Initial reaction from Canadian grain industry officials to the prospect of a cap on sales to the U.S. was negative.
Manitoba Pool Elevators president Charlie Swanson said he would have preferred that Canada make good on threats of retaliatory trade action if the U.S. imposed quotas: “We have maintained all along that we have not been doing anything illegal, that we have been living within the terms and conditions of the free trade agreement and to have anything else imposed simply breaks that agreement.”
Larry Maguire, vice-president of the Western Canadian Wheat Growers Association, said it’s discouraging to have access to a premium market reduced for political reasons.
“Canada is not at fault in this issue,” he said, adding Ottawa should have fought harder for the principle of unrestricted access under the free trade agreement.
But Goodale says the tentative deal is as good as Canada could hope for.
“In terms of what was available on the table as of today, I think the terms contained in the tentative understanding are the best terms presently available,” he told reporters in Regina Aug. 1.
South of the border, farm groups and wheat-state politicians were generally pleased with the outcome.
“It’s a credible result,” said Barry Jenkins of the U.S. National Association of Wheat Growers.
The negotiations reached a climax last weekend because the U.S. government had set a deadline of Aug. 1 to decide whether to impose trade sanctions under Article 28 of the GATT.
