Posted on 05/04/2003 6:44:19 AM PDT by mikenola
WASHINGTON and OTTAWA -- The United States has ratcheted up its assault on the Canadian Wheat Board (CWB) by slapping preliminary duties as high as 8.15 per cent on $400-million worth of Canadian wheat it claims is being dumped across the border.
As with numerous other high-profile disputes with its largest trading partner, Ottawa vowed to vigorously fight yesterday's U.S. Commerce Department decision, which pushes interim duties on Canadian wheat to more than 12 per cent.
Ralph Goodale, the minister responsible for the CWB, said the duties are part of a pattern of "trade harassment" by the U.S. government, and that Canada would challenge them at the World Trade Organization if they aren't removed.
"Obviously there is a very significant level of frustration here," Mr. Goodale told reporters in Ottawa yesterday.
"At some point, the harassment should end."
The U.S. move comes less than two months after the Commerce Department hit the same products with a 3.96-per-cent duty, alleging that Canadian wheat is illegally subsidized.
The latest duties -- 8.15 per cent on durum wheat and 6.12 per cent on hard red spring wheat -- are aimed at offsetting U.S. allegations that the CWB is selling Canadian wheat in the U.S. market at less than fair value. The offence is known as dumping.
Durum wheat is widely used to make pasta, while spring wheat is used for baked goods such as bread and bagels.
If the duties are allowed to stand, Canadian wheat could be priced out of the U.S. market, and other buyers may be tough to find, Canadian officials said.
The CWB is the exclusive seller of Western Canadian wheat on world markets, and the U.S. government has vowed to dismantle it and other so-called state trading enterprises during global talks.
The CWB must immediately post bonds to cover the cost of the duties. It would not have to start paying the U.S. government in full unless they are made final by the Commerce Department in mid-July and then blessed by the U.S. International Trade Commission roughly a month later. Both outcomes are considered probable.
Canadian officials did take some comfort that the duties are much lower than the punishing 30- to 45-per-cent levies sought by U.S. wheat farmers.
"It says something about the strength of the allegations when the arithmetic keeps coming out at such a low level," Mr. Goodale said.
U.S. wheat farmers and their political allies in Congress hailed the preliminary duties as vindication of their long-standing complaints about the marketing practices of the CWB.
North Dakota Senator Byron Dorgan said wheat farmers had provided the Commerce Department with "clear, substantial and credible evidence" of dumping.
"There are rules that apply to U.S.-Canada trade and they need to be followed," Mr. Dorgan said. "When they are not observed, it is not only appropriate but required that the Commerce Department step in, call the foul, blow the whistle and stop the violations."
Officials of the North Dakota Wheat Commission, which filed the complaint that led to the duties, complained that illegal Canadian imports had already cost farmers $1.1-billion in lost sales.
"Until the government of Canada opens the procurement and trade of wheat in Canada to free-market competition and eliminates its export subsidization practices, the United States cannot let unfair trade practices destroy our hard red spring and durum wheat production industries," said Larry Lee, a wheat farmer from Velva, N.D., and commission chairman.
He warned that U.S. milling and pasta makers are already "dangerously reliant" on Canadian wheat.
Exports to the United States for about 10 per cent of the CWB's total sales, or $400-million (Canadian).
CWB chairman Ken Ritter denied that Canada dumps its wheat in anyone's market.
"We don't need to. We produce some of the world's highest-quality grain, for which our American customers have testified they are willing to pay a premium."
Canadian officials also criticized the sampling method used by the U.S. Commerce Department to calculate the dumping duties, noting that it's based on data from just 27 Canadian farmers.
"So far all we have got from the United States are the anecdotes from the coffee shop in Minot [North Dakota] and with the greatest of respect, that's no basis on which to maintain a trading relationship," Mr. Goodale said.
My BS meter is going off the chart
Abandoning your faux pleasantries when confronted with economic reality?
How characteristicly "liberal" of you!
Frankly, it is in every nation's best self-interest to be as independent and self-sufficient at food production as their own natural resources and climate permit. Those who would undermine another nation's food supply, be it for political or financial gain, are truly despicable.
That's because you're incapable of refuting economic reality as well.
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