WINNIPEG — With all the hoopla of a three-ring circus, the International Trade Commission (ITC) begins formal hearings this week into the impact of Canadian wheat imports to the United States.
The spotlight will shift from ongoing negotiations at the political level between the two countries to three hearings starting in Bismarck, N.D., April 7 and winding up in Washington April 28. The Canadian Wheat Board will represent the Canadian industry through a Washington-based legal firm at the April 28 hearing.
But it’s the behind-the-scenes activity — a questionnaire the ITC mailed to Canadian grain exporters and an inaccurate U.S. government publication — that has members of Canada’s grain trading community concerned.
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The ITC recently mailed a 45-page survey to individuals at most Canadian grain exporting companies seeking detailed information on the volumes of grain shipped, the quality and its destination.
Wrong people questioned
But the questionnaire was designed for importers and in many cases it was addressed to individuals who are not directly involved with U.S. trade and who didn’t understand its significance. As well, the document contains a warning it takes about 40 hours to complete properly — enough to prompt some recipients to not bother with it.
“I think a number of people were rather puzzled by it,” said Paul Earl, of United Grain Growers, and a member of an industry liaison with the Canadian Wheat Board on the dispute.
Earl said his committee is encouraging the trade to comply with the request for information: “It’s important to put Canada’s case forward, … we’ve simply pointed out it is important they fill it out.”
But Dale Adolphe, an official with XCAN Grain Pool Ltd., said if the ITC wanted export information from Canadian companies, it should have designed a questionaire for exporters. He’s filling it in, but only to a point.
“One of my concerns is if we report X number of tonnes we sold into the U.S. and the U.S. buyer reports X number of tonnes imported to the U.S., how do I get any degree of confirmation that it isn’t going to be some double accounting done,” Adolphe said.
Incorrect information
Double accounting on another front is the basis for a complaint the Canadian Wheat Board has lodged against the U.S. Department of Agriculture.
The board has asked the department to retract faulty analysis that concluded Canada sold 200,000 tonnes of feed wheat to Mexico at below cost. The analysis, which has been reprinted and circulated by the industry lobby U.S. Wheat Associates, said Canada sold the wheat for $98 (U.S.) per tonne when its break-even costs were between $99.71 and $107.35 (U.S.).
The USDA based its analysis on the estimated pool return to producers of $98 to $108 (Cdn.). It then adds a $20.14 per tonne freight subsidy, $5.58 for terminal charges and $7.79 for CWB administrative costs, to reach a break-even or cost recovery value of $130.51 to $140.51 per tonne.
In doing so, the U.S. is “double counting” CWB costs, freight and terminal charges because estimated pool returns represent the net return after all other costs are paid.
As well, the freight subsidy is paid to the railways and does not influence the board’s pricing, Brooks said.
