AT a time when people gripped in Olympic fever are obsessed with
winners and losers, Canada boasts an impressive win record: Canada 9,
United States 0.
The Canadian Wheat Board remains free of penalties after nine trade
challenges since 1990 by the U.S.
In the latest round, U.S. trade representative Robert Zoellick did not
impose tariffs, quotas or other restrictions against Canadian wheat
shipments to the U.S.
The International Trade Commission surveyed American wheat buyers and
Read Also
Crop profitability looks grim in new outlook
With grain prices depressed, returns per acre are looking dismal on all the major crops with some significantly worse than others.
millers about CWB sales practices for the last five years. It also
surveyed foreign market wheat buyers about competition between Canada
and the U.S. and studied the trade effects of prices, exchange rates,
transportation, marketing practices and farm policy.
After 16 months of ITC investigations, Zoellick criticized the board
but said no actions will be taken because it would violate the U.S.
commitment to the World Trade Organization and the North American Free
Trade Agreement.
CWB officials say it’s proof the board is a fair trader and that the
Americans couldn’t find a strong case to support a tariff.
The ITC concluded that the price for top grade Canadian durum surpassed
that of top grade U.S. durum in 59 of the 60 months it studied.
American millers told the commission that the board was a fair and
honest trader that was dependable in supplying high quality durum.
But the U.S. government had to pacify states that are politically
strategic in upcoming congressional elections.
Wheat-growing states can now claim partial victory because Zoellick
talked tough about future actions that could include a WTO challenge,
the filing of countervailing and anti-dumping petitions and pursuit of
reforms to the wheat board in the next WTO trade round.
But in reality Zoellick has done nothing due to fears of retaliation.
As he told a U.S.Senate committee on finance in early February, the
U.S. plans this year to resolve trade disputes “in a way that best
serves America’s interests” but it must “avoid large trade retaliation
against U.S. exporters and the risks of spiraling conflict….”
The American government cares about farmers but it probably cares more
about big businesses.
The North Dakota Wheat Commission, which launched the latest petition
against the CWB, is disappointed that no tariffs were imposed but is
claiming victory because Zoellick opened the door to further trade
action.
But if there is a tenth challenge, and even if Canada successfully
defends its trade practices yet again, the ultimate losers on both
sides of the border are farmers. Time and money would be better spent
working together to raise grain prices for all farmers.
