DOHA, Qatar – The United States and the European Union have given notice that they will try to use upcoming world trade talks to rein in the Canadian Wheat Board.
In position statements tabled Nov. 14 at a ministerial meeting launching a new round of World Trade Organization talks, both said the wheat board’s performance as a monopoly state exporter will come under scrutiny when negotiations begin early next year.
“There is no doubt it will be an issue and they have signaled that,” said senior wheat board economist Brian Olesen, a member of the government’s official advisory committee at the WTO Doha meeting.
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“The wheat board wasn’t really an issue here during these last few days, that I heard, but it will no doubt be on the negotiating table.”
It was an issue during the last Uruguay Round of trade talks as well, as the U.S. and EU tried to impose greater discipline and “transparency” on the way state trading enterprises like the wheat board operate.
They argue the board gives Canadian wheat and barley producers an unfair market advantage by being secretive, underselling competitors, offering government-guaranteed credit to customers and cross-subsidizing sales, all with the federal government’s financial backing.
Olesen said Canadian negotiators will respond as they have in the past when the next questions inevitably arise.
They will demand evidence of wheat board wrongdoing and promise to deal with real evidence. They will warn against rhetorical or political attacks based on suspicion bred by the fact that the wheat board does not operate in the same way as large grain multinationals.
“The onus is really on whoever is raising the issue to prove it,” Olesen said.
“The negotiating table is a forum to deal with realities and not suspicions.”
For years, the U.S. has been suspicious of the wheat board, its market share and its ability to sell into the American market.
In Washington, D.C., a panel is nearing the end of its ninth domestic investigation of charges that the board is an unfair trader. The previous eight investigations have exonerated the board.
The EU has increasingly raised the wheat board issue in recent years as Canada and others lobby to abolish European export subsidies.
The agricultural negotiating text calls for negotiations on elimination of “all forms of export subsidies” and the EU will insist that includes some advantages held by the wheat board, as well as the American use of food aid and preferential credit terms to capture markets that would otherwise be commercial.
