OTTAWA – The United States says it will throw up tariff barriers against imports of Canadian wheat by late July unless Canada agrees by this Friday to curtail its exports.
On April 22, it will announce tariff hikes and then begin a 90-day consultation period required before their imposition.
The threat, which came late last week after the collapse of four months of on-again, off-again Canada-U.S. trade negotiations, was met with some tough Canadian talk.
The Canadian government, with the support of the grain industry, would retaliate against selected imported American products if the U.S. carries through with the threat against wheat, said agriculture minister Ralph Goodale.
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“If the U.S. should decide to take some unilateral action against Canada, then we will respond as is permitted under international trade law,” Goodale said in an April 15 interview from Marrakesh, where he had met for several hours with U.S. agriculture secretary Mike Espy in one last effort to resolve the dispute.
“I can assure you, we will respond. We have reached the point where no deal is better than a bad deal.”
The minister left for an Asian trip April 18 and will not be available for more negotiation before the April 22 deadline.
One of the issues was a U.S. demand for a cap on Canadian wheat sales south.
Canada has been arguing that any cap should be between two and three million tonnes. The Americans, under pressure from farm-state legislators, insist it should be closer to one million tonnes.
Target list drawn up
Under international trade law, Canada could retaliate with its own set of tariffs if the U.S. imposed restrictions. Canadian officials have drawn up a list of possible targets, reportedly including California wines and rice.
Prairie Pools Inc. president Ken Edie said: “We’re very supportive of the action Mr. Goodale has taken. “We don’t want to see a trade war but we think we are on firm ground and we should stand on it.”
For their part, the Americans were equally uncompromising.
Since December, they have been trying to limit Canadian durum exports and the amount of sugar and peanut butter being shipped south while trying to win greater access to the Canadian market for dairy and poultry products.
After a series of indecisive meetings, the Americans set April 22 as the deadline for settlement.
“Talk is good but at some point, talk must end and we think we have reached the point,” U.S. agriculture secretary Mike Espy said April 15, shortly after talks ended.
Espy said the U.S. has no choice: “That is necessary to protect our wheat producers in the U.S.”
