OTTAWA – Agriculture minister Ralph Goodale took his campaign against American grain export subsidies to Mexico last week, trying to win an ally against the U.S. Export Enhancement Program while convincing Mexicans that Canada is not equally guilty of export subsidies.
He says the success of the mission is uncertain.
“I wouldn’t want to put words into the mouths of the Mexicans but I can say they understand our point of view better,” he said in an interview after returning. “There will be further chances to make our points.”
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Goodale and four other Canadian ministers travelled to Mexico City last week to meet with their Mexican energy, foreign affairs, trade and agriculture counterparts.
He said he argued that entry of subsidized American grain into the Mexican market depresses local prices, hurts Mexican farmers and costs the government money. “I don’t think this helps them at all.”
Goodale said he also found a Mexican view that Canada is not blameless in the export trade war, since it subsidizes exports through the Western Grain Transportation Act in the same way the Americans do through the EEP.
He adamantly denied any suggestion the two programs are comparable, Goodale said. The Crow Benefit subsidy affects Canadian grain farmer income while the EEP affects and depresses the selling price.
He said Canada would like Mexico to become an ally in opposing American use of the EEP into the Mexican market in competition with Canadian grain.
Not against Canada
Use of EEP is allowed under the free trade deal but it is supposed to be used against competition from the European Union, not Canada.
Increasingly, the Americans are justifying the use of EEP against Canadian competition by equating Canadian and American subsidies.
Goodale said progress was made on several bilateral agricultural trade issues. He said he tried to convince the Mexicans to allow imports of eastern apples and seed potatoes into the country. Mexican officials will travel to Canada soon to lay to rest concerns that Canadian storage and production standards are not high enough.
He also tried to convince Mexico that under the North American Free Trade Agreement, Canadian feed wheat and barley should be treated the same as American corn and sorghum. Now, the American product enters Mexico duty-free while Canadian wheat and barley face duties.
“We think there is a real market potential there,” said Goodale. “They will consider our point.”
He said he offered to have the wheat board dye the wheat if it would help ease Mexican concerns that Canadian feed could make it into their milling stream.
