The American decision to revive export subsidies on selected farm products opens a trade can of worms that could send the world sliding toward trade wars, Canadian agriculture minister Lyle Vanclief warned Friday.
“It gives me concern,” Vanclief said. “It can be a dangerous slippery slope and when you get into that game, you may get a reaction and a reaction to a reaction.”
He said he would contact United States agriculture secretary Dan Glickman quickly to warn him of the dangers of export subsidies and remind him that the current U.S. administration had disavowed the use of export subsidies.
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“The U.S. is one country that has been very clear in saying we should not go that way and I’m going to remind Mr. Glickman he said so,” Vanclief said.
The previous day, Glickman said in Washington the Export Enhancement Program would be used to sell $20 million worth of chickens. He said it was a reaction to European Union refusal to buy American chicken because it would not accept U.S. poultry inspection results.
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He also said U.S. officials are considering whether to renew export subsidies on wheat flour.
Glickman told the U.S. Senate agriculture committee that the Clinton administration has not supported use of the EEP if it would simply lower prices and transfer the benefit of U.S. tax dollars to foreign buyers.
Still, the EEP remains on the books as “a critical tool in our trade arsenal and one we should consider using in more creative ways.”
Glickman did not mention using export subsidies on grain exports.
Meanwhile, his cabinet colleague trade representative Charlene Bar-shefsky used an appearance before the same Capitol Hill committee to complain again about the Canadian Wheat Board.
She said the North American Free Trade Agreement contains a “loophole” which allows the CWB to export grain at below cost-of-production. The U.S. is collecting evidence of unfair Canadian sales and will keep up pressure on the board, including targeting state trading enterprises in upcoming world trade talks, she said.
In Ottawa, Vanclief said Canada would continue to defend the wheat board as a fair trader. It has been “cleared” in an earlier audit and despite years of complaining, the Americans have produced no evidence to the contrary, he said.
