USTR - USTR Chief Ag Negotiator Tells Senate the Administration Will Aggressively Pursue Reform of Canadian Wheat Board
                 
The Office of the United States Trade Representative

USTR Chief Ag Negotiator Tells Senate the Administration Will Aggressively Pursue Reform of Canadian Wheat Board
Contact: Ricardo Reyes (202) 395-3230 04/19/2002


WASHINGTON - The U.S. Trade Representative's (USTR) Chief Agriculture Negotiator, Ambassador Allen Johnson, today affirmed the Administration's commitment to aggressively pursue a multi-pronged strategy to remedy the Canadian Wheat Board's unfair trade advantages.

In testimony before the U.S. Senate Committee on Commerce, Science, and Transportation, Johnson stated, "USTR shares the goal of the North Dakota Wheat Commission and U.S. wheat farmers in seeking meaningful and permanent reform of the Canadian Wheat Board. USTR is pursuing multiple actions which mutually reinforce this goal as well as the objective to improve U.S. wheat access to the Canadian marketing system."

Responding to a petition from the North Dakota Wheat Commission (NDWC), USTR conducted a 16 month investigation. On February 15, 2002, U.S. Trade Representative Robert B. Zoellick issued an "affirmative finding" that reviewed the results of its investigation, detailed the CWB's monopolistic characteristics, and described the steps USTR would take to address this issue.

Ambassador Johnson reported to the Committee the progress made on these issues. USTR has been researching a possible dispute settlement case against the Canadian government, The Administration is working closely with the NDWC and the U.S. wheat industry to examine the necessary information for evaluating possible countervailing duty or antidumping cases. In early April, Johnson traveled to North Dakota to gain additional information on impediments to U.S. wheat moving to Canada. In addition, Johnson reported on the U.S. success in getting export competition as the first negotiating agenda item to be discussed in June at WTO agriculture negotiations.

As part of the February 15th Affirmative Finding, USTR announced it would aggressively pursue a four pronged approach to help level the playing field for American farmers:

• First, USTR is examining a possible dispute settlement case against the Canadian Wheat Board in the World Trade Organization (WTO);

• Second, the Administration is working closely with the North Dakota Wheat Commission and the U.S. wheat industry to examine the possibilities of filing U.S. countervailing duty and antidumping petitions with the U.S. Department of Commerce and U.S. International Trade Commission.

• Third, working with industry, USTR will also identify specific impediments to U.S. wheat entering Canada and present these to the Canadians so as to ensure the possibility of fair, two-way trade.

• Fourth, these short-term actions are complemented with the Administration's ongoing commitment to vigorously pursue comprehensive and meaningful reform of monopoly state trading enterprises in the WTO agriculture negotiations. Those negotiations gained new momentum with the launch in November of the Doha Development Agenda, set to conclude by 2005.

These actions are in response to a petition filed by the North Dakota Wheat Commission in September 2000 under section 301 of the Trade Act of 1974. USTR undertook an unprecedented 16-month investigation examining the practices of the monopoly Canadian Wheat Board. In addition to inviting public comment twice on the investigation, USTR requested that the U.S. International Trade Commission (ITC) examine the competitive practices of the Canadian Wheat Board in the U.S. market and overseas. As part of its investigation, the ITC held a public hearing, requested public comments, and pursued multiple avenues to obtain information on the Canadian Wheat Board.

USTR has decided not to impose a tariff rate quota (TRQ) at this time since such an action would violate our NAFTA and WTO commitments, could result in Canadian retaliation against U.S. agriculture, and would not achieve a durable solution or a permanent change to the market distortions caused by the monopoly of the Canadian Wheat Board.