WASHINGTON, D.C. – Senior United States government officials this week put the world, Canada included, on notice that it plans to throw its trade weight around during the next year, using export subsidies if necessary to win markets.
At the opening of the U.S. agriculture outlook forum Feb. 24, agriculture secretary Dan Glickman and trade ambassador Charlene Barshefsky offered an aggressive view of America’s trade strategy for 1997.
Glickman said the U.S. will risk a trade war if necessary to fight European Union export subsidies.
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He called potential renewal of the Export Enhancement Program “my big stick” and threatened to use it.
“We held our fire, we still are, but we can’t hold out unilaterally forever,” he said. “In our budget, I’ve asked for full funding of our EEP – an increase of $400 million. That’s my big stick and I’m prepared to use it if that’s necessary to protect our producers from unfair competition.”
Barshefsky followed Glickman to the microphone and in a broad description of how the U.S. plans to use world trade rules and U.S. law to keep the rest of the world honest, she took a couple of direct swipes at Canada.
She said the U.S. will put a priority on watching Canadian wheat exports south to make sure they are not increasing too drastically.
Supply management a target
And she told a U.S. industry questioner that the Americans will not easily accept continued Canadian protection of dairy, poultry and egg sectors, even though the protective tariffs for supply management recently were upheld by a North American Free Trade Agreement panel.
“We were very disappointed by the panel report,” she said. “We thought we had a good case and we were surprised we didn’t win it.”
She said the government is still talking to the U.S. dairy industry about how it might strike back. Already, there are some strategies.
The government will investigate Canadian exports of protected products into the U.S. market in search of any evidence that they are depressing prices.
The other plan is to investigate Canada’s special class pricing for dairy exports “to see if it has the same effect as using an export subsidy.”
Barshefsky said if there is any evidence that Canadian exports are unfair competition, “we will make a case on that. We obviously want to see and will continue to work for, open trade in those commodities.”
As part of the U.S. strategy for the year, the trade ambassador said China, Ukraine and other communist or formerly communist states will not be allowed into the World Trade Organization until they open their markets to more American goods and reform their use of state trading enterprises.
Glickman, who has complained consistently that the Canadian Wheat Board is a secretive unfair state trader, added: “Of course, we have some problems with STEs operating in some democratic countries as well.”
