OTTAWA – The one-year deal struck last week between Canada and the United States to manage Canadian wheat sales south has three main elements:
For this crop year, Canadian Wheat Board wheat sales will be capped at 1.5 million tonnes – 450,000 tonnes of durum and 1,050,000 tonnes of other wheat.
During the year, neither country will challenge the other on wheat trade issues.
Meanwhile, a “blue-ribbon panel” of experts appointed by the two countries will study the grain marketing, support systems and export policies of the two countries and recommend revisions to ease the tensions.
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The recommendations will not be binding.
The deal expires July 31, 1995, when new arrangements will have to be negotiated. The agreement provides for:
- Wheat quotas:
The Americans will allow the first 300,000 tonnes of Canadian durum into the country at the normal tariff rate, approximately $3 per tonne.
A $23-per-tonne tariff will apply to the next 150,000 tonnes and a prohibitive $50-per-tonne tariff will apply on shipments above 450,000 tonnes.
Other wheat, up to 1,050,000 tonnes, will cross the border at the $3-per-tonne tariff that already exists.
Above that, a prohibitive $50 tariff will be applied to the grain.
Non-CWB grain will have no limit, freeing the Ontario Wheat Producers’ Marketing Board to sell as much as it can.
Barley, flour and semolina will not be included, despite earlier American demands that it all be included in the cap.
- Peace clause:
The Americans will withdraw, at least for a year, the threat of trade restrictions on Canadian wheat, barley and products under General Agreement on Tariffs and Trade rules.
It will propose no new restrictions or threats of restrictions on Canadian wheat for a year.
Canada will not challenge the American restrictions for a year, although it retains the right to take the U.S. to a trade panel after Aug. 1, 1995 if no permanent solution is negotiated.
- Blue Ribbon Commission:
A six to 10 member commission of experts, appointed equally by Canada and the U.S., will be appointed by Sept. 1 to study the support, marketing and export practices of both countries. The members will not represent the governments.
The commission will issue a non-binding interim report by May 1 and a final report by July 31, 1995.
Its recommendations will be the basis of next summer’s negotiation between the two governments on the next step.
