& Reuter News Agency
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Canadian wheat sales to processors in the United States are 70 percent higher this year than last year and American officials have taken note.
Last week, responding to pressure from midwestern grain states, U.S. agriculture secretary Dan Glickman warned that Canadian grain volumes are being watched.
“We are monitoring it. We will not tolerate market disruptions from imports of Canadian grain,” he said.
Canadian Wheat Board chief commissioner Lorne Hehn defended the shipments saying the sales were at competitive prices and did not distort markets.
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Meanwhile, a Canadian trade official expected a response.
“I expect the numbers will trigger a political response so there probably will be a call for consultations,” the official said last week. “They can call. We will talk. But we are not going to agree to any artificial cap.”
In fact, Agriculture Canada trade specialist Terry Norman said Canada’s exports south, while higher, really are returning to more normal levels.
Through the first six months of the crop year to the end of January, Canada shipped 760,700 tonnes of wheat to American buyers. Although well below the 1993-94 record, it is ahead of last year’s 445,200 tonnes during the same six months.
“We think last year’s levels were very low and this year is a pretty normal year,” said Norman.
Grain exports are just one of the Canada-U.S. trade issues simmering this spring.
Last week, an Ultra-High Temperature milk producer in Puerto Rico filed a complaint in Washington alleging that UHT milk imported from a Quebec firm is being dumped.
Washington will launch an investigation and the U.S. International Trade Commission likely will hold hearings requiring the industry to defend itself.
The Americans also are threatening trade action against Canada’s special class pricing of milk for export.
“As traders, the Americans will just keep coming at you time after time,” Canadian trade consultant Peter Clark said last week. “They lost the dairy and poultry trade panel but they will continue to confront any way they can. Canada just will have to remain vigilant and willing to defend itself.”
Meanwhile, Canadian officials last week gave the United States notice that in mid-April, it will request establishment of a trade disputes panel to hear Canadian arguments that American re-export of sugar-containing products into Canada is illegal under the North American Free Trade Agreement.
The American practice of giving imported sugar a special break from high tariffs and duties if it is being used in products that then are exported to Canada was supposed to be phased out under NAFTA.
The U.S. has ignored this requirement, shipping sugar-containing products into Canada even as access for Canadian sugar-containing products into the U.S. has been cut.
The Canadian Sugar Institute says the imports from the U.S. are taking domestic market share and costing millions of dollars in sales and thousands of jobs.
Under NAFTA rules, Canada must wait 30 days from the March 20 notice before it can request that a panel be set up to resolve the dispute.
In the meantime, a trade official said in Ottawa that Canada would be willing to talk to the Americans about a compromise if it involved Canadian exporters regaining access to the U.S.
