WASHINGTON, D.C. – The United States on Sept. 11 lifted its one-year limit on Canadian grain shipments south, but refused to throw the border wide open for grain trade.
The American administration says it will use U.S. trade laws in the future to restrict Canadian product if it is coming across the border in sufficient quantities to harm American farmers.
Canada quickly warned that any future attempt to restrict sales across the border will be fought as a violation of trade agreements the United States has signed.
Read Also
Federal government supports soil health strategy
Sophie Beecher, director general at Agriculture Canada, said at a soil conference in Winnipeg that the feds support the idea of a national soil health strategy.
“If this monitoring effect and the consultation effort is intended to lead inevitably toward restrictions once again, we are not interested in participating in that process,” agriculture minister Ralph Goodale warned in a toughly-worded Sept. 15 speech to American grain trade executives.
He repeated it later in a private meeting with U.S. agriculture secretary Dan Glickman.
Normal marketing
The border should now be open and the cross-border grain trade subject to normal market pressures, he said.
“We fully expect the U.S. to honor its international trade obligations and we would respond very firmly if there was some deviation from that.”
The official one-year, 1.5 million ton cap expired Sept. 11 when Canada refused to agree to an extension, despite American pressure to do so.
Glickman and trade representative Mickey Kantor said the volume cap will be replaced by close monitoring and regular consultations with Canada over the grain trade issue.
American grain lobbyists welcomed the U.S. position as an invitation to continue agitation against Canadian imports.
“As I read the announcement, I would say it is a de facto cap if the old cap (1.5 million tons) is exceeded,” said Winston Wilson, president of U.S. Wheat Associates.
Glickman earlier told the grain traders meeting that the government will be vigilant.
“We’re going to monitor it carefully and if there are significant import surges that disrupt the markets, then we will reserve our ability to apply the authority we have under the trade laws,” he said.
“I don’t expect that to happen. I don’t think that Canada wants that to happen but we reserve that right.”
More overseas sales
However, both Canadian and U.S. officials said last week they do not expect Canadian grain volumes to exceed the old cap level during the next year because market conditions have changed.
World prices are high, attracting more North American grain overseas.
And the U.S. is not making much use of its export subsidies, which last year had the effect of lowering world prices, drawing American wheat into world markets and leaving the U.S. domestic market as a high-priced, non-subsidized alternative for Canadian sellers.
