17 September 2002

Tariff on wheat exports to U.S. likely

The following article is excerpted from the 17 September 2002 on-line edition of “globeandmail.com”.

The American government could impose a temporary tariff on Canadian wheat exports while it investigates allegations of dumping and unfair pricing activities, says a Canadian Wheat Board spokesman.

A U.S. farm lobby group has filed petitions for tariffs on Canadian wheat to the same U.S. trade bodies that imposed punishing 27 per cent duties on Canada's softwood lumber industry this spring.

If the trade authorities launch an investigation, wheat board spokesman Rheal Cenerini said there is a strong possibility they could impose a duty on Canadian wheat until the government renders a permanent judgment.

"Often they will proceed with a preliminary tariff. That is certainly a cause for concern," he said.

Mr. Cenerini said he is confident the wheat board, which has a monopoly on selling Western Canadian wheat and barley, will be exonerated in the long run. He called the petition "continuing harassment" of the board.

In February, U.S. Trade Representative Robert Zoellick ruled the Canadian wheat industry is subsidized and puts U.S. wheat exporters at a disadvantage.

Although Mr. Zoellick refused to impose any tariffs in his February ruling, he suggested pursuing anti dumping and countervailing duties.

On Sept. 13, the North Dakota Wheat Commission followed up on Mr. Zoellick's suggestion and filed the petitions with the U.S. Department of Commerce and the International Trade Commission….

Of the 18 to 20 million tonnes of wheat that Canadian farmers produce in an average year, Canada exports about 1.6 million tonnes of spring and durum wheat into the U.S. annually.

This year, however, wheat production has been devastated by a crippling drought in Saskatchewan and Alberta.

Mr. Cenerini said this could allow the wheat board to concentrate its marketing efforts on other countries if the U.S. does decide to impose any tariffs….

If the U.S. Department of Commerce and the International Trade Commission do initiate an investigation, it would be the tenth inquiry into the Canadian Wheat Board in the last 12 years. The wheat board has been cleared of any wrongdoing every time….