LONDON, U.K. – The Canadian government is opposed to taxes.
At least when it comes to export taxes on grain.
Canadian Wheat Board minister Ralph Goodale last week delivered a harsh criticism of export taxes such as those levied on wheat by the European Union during the past year.
“We strongly oppose the use of both export subsidies and export taxes,” Goodale told some 300 delegates from around the world attending an International Grains Council conference held here last week.
The European Union earlier this year imposed a tax on wheat exports in order to limit the impact of high world prices on domestic markets.
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But Goodale said it’s not fair for grain exporters to demand free trade and wide open access to import markets, and then move to cut off the flow of grain when market conditions change.
“Surely we as grain exporters have a collective responsibility to provide importers with an assurance of access to grain supplies,” he said. “Consistency and predictability are important issues.”
He said the use of export taxes raises serious issues of food security and should be addressed in the next round of World Trade Organization talks slated to begin in 1999.
Export taxes quickly became a major theme of the conference, as Goodale’s criticisms were echoed by U.S. government officials, European grain traders and representatives from importing countries.
The only defender of the tax was David Roberts, the European Commission’s deputy director for agriculture.
He downplayed the issue, saying the commission has used variable export taxes at times to moderate the impact of fluctuating world markets on domestic markets, just as the U.S. has introduced revenue insurance programs for its farmers.
“It is rather too early to reach a judgment on either of these types of measures,” he said.
But Michel RougŽ, president of France’s Continental Grain Co., was more than ready to pass judgment, describing the imposition of an export tax as a “stop and go” export policy that prevents European traders from engaging in any concerted planning for either export or domestic markets.
“European traders have to relinquish their standing as reliable suppliers,” he said.
Christopher Goldthwait, of the U.S. Department of Agriculture, said the U.S. believes both export subsidies and export taxes are equally trade-distorting.
“It’s pretty confusing to the marketplace when the EU first subsidizes for part of the season and then stops and taxes,” he said, adding the U.S. also wants the tax issue on the WTO agenda.
The U.S. and other exporters may appear to benefit when Europe taxes wheat exports, said Goldthwait, but any gains are short term and pale when compared with the distortions inflicted on world markets.
