ALBUQUERQUE, N.M. – The United States may have a powerful ally in its latest trade challenge against the Canadian Wheat Board.
A senior official with the European Union expects the EU to intervene on the side of the U.S. in its World Trade Organization complaint against Canada’s wheat trading practices.
“The EU will probably get involved in that case against the wheat board,” said Gerard Kiely, counsellor of agriculture for the EU delegation in Washington, D.C.
While opposition to the CWB is not as heated in Europe as it is in the U.S., he said, the EU takes the position that state trading enterprises such as the wheat board, constitute an export subsidy.
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“Given our position on STEs, there is a certain logic that we will side with the U.S. in this current case,” he said, although he added no final decision has been made.
He said the EU’s main concern about state traders is their link to government and a lack of information about their internal activities.
“There is a belief they are using money from one market to subsidize sales to another,” he said.
“Cargill may do that too, but Cargill doesn’t exist under government laws, the STEs do.”
The U.S. announced in December that it was taking its long-standing wheat trade complaints with Canada to the WTO.
The complaint alleges that the CWB engages in illegal and unfair trading practices and that Canada unfairly restricts access by U.S. farmers to the Canadian grain handling system.
Canadian and U.S. government officials met Jan. 31 for initial consultations aimed at fleshing out more details about the American complaint. If, as expected, the two governments are not able to resolve their differences, the case will end up before a WTO trade dispute panel later this year.
In addition to the WTO case, the U.S. is conducting an internal investigation under domestic trade law that could result in the imposition of countervailing duties on imports of Canadian wheat and durum.
Canadian government and wheat industry officials have decried the latest round of trade challenges as harassment that costs farmers on both sides of the border money and distracts from the job of truly reforming world wheat trading rules.
They have also expressed confidence that Canadian policies and CWB trading practices will be vindicated.
In an interview, the chief agricultural negotiator for the U.S. Trade Representative rejected the idea that the U.S. is harassing Canada.
“Those who say that are simply wrong,” he said. “There is a lot of legitimate interest in the U.S. in addressing these unfair trade practices of the CWB.”
He said Canadian farmers need to recognize that reforming state trading enterprises is essential to restoring order to world wheat markets and the U.S. will pursue that goal both in the current WTO case and in the next round of world trade talks.
As for the issue of access to Canada’s handling and transportation system, Canadian officials say there is no restriction on the volume of U.S. wheat entering Canada and programs have been put in place to make it easier for U.S. farmers to deliver to Canadian elevators. They also note that more than 1.1 million tonnes of U.S. wheat, barley and other grains moved on Canadian rail system in 2001, mainly from northern border states.
Johnson maintained he has received complaints from American farmers about their ability to use the Canadian system.
But he acknowledged that the elevator and rail challenge also represents a stalking horse to getting at the CWB.
“I think U.S. producers also look at it as another way of challenging the CWB’s unique role in Canada.”
