SAN ANTONIO, Texas – The United States gave grain export monopolies a get-out-of-jail-free card during World Trade Organization talks late last year, says a former high-ranking U.S. trade policy adviser.
“That is something I think we gave up on in Hong Kong,” said Paul Drazek, former special assistant to the U.S. secretary of agriculture for international affairs.
He made the passing remark during a WTO update delivered to American wheat growers attending the North American Grain Congress.
During an interview following his presentation, Drazek expanded on his jarring comment.
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“It appears to most people in the wheat industry here that the United States has given up on the effort to have monopoly practices eliminated as part of future trade rules,” he said.
Drazek, who is now a private trade policy consultant with DTB Associates in Washington, D.C., said he came to that conclusion when American negotiators agreed to a new WTO ministerial declaration on Dec. 18 that called for “disciplines” on, rather than the elimination of, monopoly powers of state trading enterprises.
It was just one word in an 11-page document but it is a meaningful one, said Drazek, who also served as the director of government relations with the American Farm Bureau Federation and trade policy specialist with the U.S. Department of Agriculture’s Foreign Agricultural Service.
“My guess is that the Canadians were probably quite relieved that they got that language in there that said discipline rather than eliminate,” he said.
One Canadian who was relieved is Saskatchewan’s agriculture minister. Mark Wartman said the new wording in the declaration addresses the behaviour of STEs as opposed to calling for their outright elimination.
“I am pleased that the agreement does not target export monopolies such as the Canadian Wheat Board,” he said in a recent report on the Hong Kong round of the WTO.
CWB chair Ken Ritter said he was “cautiously optimistic” the new wording will allow western Canadian farmers and not the WTO to dictate the future of the board.
But Drazek’s assessment that the U.S. has given up on challenging the board’s monopoly powers is at odds with what the country’s negotiators said throughout the week-long negotiating session in Hong Kong last December.
They insisted that was not the case, as did negotiators from the European Union.
American wheat groups were caught off guard by Drazek’s comment, insisting there has not been a softening in their long-held position to neuter the power of the Canadian and Australian wheat boards through a new WTO agreement.
“We have not sent a signal to the United States Trade Representative that says go ahead and weaken that position. We have not done that,” said Daren Coppock, chief executive officer of the National Association of Wheat Growers.
He doesn’t see the subtle change in language being indicative of anything, noting that if the disciplines are strict enough, they will accomplish the stated objective of NAWG and U.S. Wheat Associates.
“What we want is the elimination of the monopoly power and if the disciplines are such that the monopoly power is no longer there, then they would meet the test.”
