SASKATOON – The United States is looking for allies in its wheat war with Canada.
During a trip to South America last week, U.S. agriculture secretary Mike Espy repeatedly lashed out at what he called the “predatory pricing practices” of the Canadian Wheat Board.
Espy said he wants to enlist Argentina, Mexico and other wheat exporting nations in the battle against Canada.
“We are trying to take this fight beyond the bilateral perspective and internationalize it,” the secretary said in a conference call with U.S. reporters.
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Wheat board chief commissioner Lorne Hehn rejected Espy’s charges of price-cutting. In fact, he said, the board often gets a premium price on its sales to Latin American markets.
He also said it’s disturbing to see a senior U.S. government official taking the fight with Canada to foreign capitals: “We ought to be concerned about that. It’s uncharacteristic of what Canada or the U.S. normally do.”
Argentina unhappy
Argentina has made no secret it’s unhappy with the heavy pace of Canadian wheat sales to Brazil, one of its main customers. Canada sold 1.8 million tonnes to Brazil in 1991-92 and 1.1 million tonnes in 1992-93. Sales in the first eight months of this year totalled 1.2 million.
The Argentines and Americans say Canada has made inroads into the Brazilian market by using transportation subsidies and secretive pricing practices to undercut the competition.
“That’s nonsense and we’ve said it time and time again,” said Hehn.
Canadian prices are designed to be competitive with wheat delivered to the millers’ door by other exporters, he said, adding that “if anything, in most cases we can get a bit of a premium because we can guarantee supply and forward sell.”
The recent increase in Canadian sales to Brazil is the result of a lot of market development work, Hehn said. Board officials have worked closely with Brazilian millers to ensure specific needs are being met.
“It certainly hasn’t been done on the basis of predatory pricing,” he said.
An Argentine official said his country is concerned about the use of export subsidies by its competitors, including Canada, on grain sales into South America.
“Our concern is to have markets in South America without dumping or subsidies,” said Guillermo Azrak, of the Argentinian embassy in Ottawa. “We have some worries about that and we are having conversations with Canada and others.”
Meanwhile, the U. S. National Association of Wheat Growers president Judy Olson said countries in which Canada is engaged in “predatory trade practices” should launch anti-dumping actions to protect their domestic producers from “cheaters.”
“This is no longer a problem for the United States alone,” she said in a press release, adding that the world can’t allow “one set of trading rules for Canada and another for the rest of the world.”
