WASHINGTON, D.C. (Staff) — The senior Republican member of the U.S. senate agriculture committee urged the U.S. government last week not to take action against imports of Canadian wheat.
Speaking to a convention of agricultural journalists, Sen. Richard Lugar said there has been a sharp increase in imports of durum wheat from Canada, but it was “perfectly natural” for U.S. pasta makers to turn to Canada when floods and other factors reduced the supply and quality of domestic durum.
Lugar said it is ironic that various U.S. interests are pressing for protectionist action against Canadian wheat at the same time the U.S. is preparing to ratify new liberalized world trading rules.
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Important relationship
Although his home state of Indiana had been involved in a dispute over imports of Canadian pork, Lugar said, he believes the trade relationship between the two countries is so important it should not be disrupted by protectionist pressure. “This is a relationship that needs to be worked very carefully and is obviously beneficial.”
Lugar’s arguments were supported by Cargill policy analyst Dan Pearson. He told the meeting that the U.S. export-subsidy program has become a “magnet” drawing in Canadian durum wheat.
Pearson said U.S. domestic production of durum is not high in any case, and half of that was exported with subsidies. He said the U.S. should either stop subsidizing durum exports or ensure that more durum is planted.
Meanwhile, he said, imports of Canadian feed wheat could well have helped U.S. grain producers. Floods last year reduced U.S. feed supplies and might have led to a reduction in livestock and poultry numbers. Instead, he said, Canadian feed supplies have helped maintain animal numbers and ensure that the demand will continue to be strong when U.S. feed supplies are replenished.
Similar arguments came from the influential Washington Post, which said in an April 28 editorial that “Canada is right in the durum case” and the U.S. should beware of restricting Canadian wheat: “The White House is on the verge of making an expensive concession to protectionism. Too many of them, and the momentum toward more open trade will be lost.”
At the White House, deputy U.S. trade negotiator Rufus Yerxa said there is “some truth” to the argument that U.S. floods led to the sharp increase in imports of Canadian feed grain. He said the U.S. government does not want to start a trade war, but “Canada has to be willing to agree to reasonable proposals.”
Putting the wheat dispute in perspective, he said U.S. wheat imports, all from Canada, total about 2.5 million tonnes, but the U.S. annually exports 25 million tonnes. With 96 percent of the world’s population being outside the U.S., he said, the United States cannot afford to be protectionist.
