Canada, U.S. at Odds over CWB Trade Ruling
(December 23, 2003 - CP) Canada and the United States are both claiming victory in
the wake of a confidential World Trade Organization ruling on the legality
of the Canadian Wheat Board.
In a report delivered to Canada and the United States yesterday, the
Geneva-based WTO ruled that the government-controlled wheat trading agency
is legal under global trade rules, Canadian officials said.
"The WTO rules have shown that members have a right to establish
and maintain [State Trading Enterprises], and in that regard, I think
Canada's international obligations are met," a trade department
official told Reuters.
But a U.S. trade official insisted that the ruling, which won't be made
public until Feb. 6, contained "good news" for U.S. wheat and
grain farmers. Responding to media inquiries, the official said the WTO
dispute settlement panel found that the CWB "unfairly
discriminates" against U.S. wheat and grains in world markets. The
official also said the report calls for a "level playing field by
agreeing that Canadian wheat farmers should pay fair market value for
transporting Canadian wheat and stop discriminating against U.S.
wheat." Neither side would provide further details.
The interim decision won't provide relief from a 14-per-cent U.S. duty
imposed earlier this year on $274-million a year of red spring wheat --
Canada's main grain export to the United States.
In October, the U.S. International Trade Commission upheld duties on
Canadian red spring wheat while scrapping similar duties on about
$116-million a year worth of durum wheat.
Ottawa immediately challenged the duties under North American
free-trade agreement rules.
The ruling comes 10 months after the United States challenged the
legality of the CWB and its monopoly on Canadian grain exports.
At the time, U.S. Trade Representative Robert Zoellick complained that
the CWB's "special benefits and privileges put American wheat farmers
at a disadvantage and undermine the integrity of the international trading
system."
The United States complained about the CWB's monopoly on Canadian grain
exports, government financial guarantees on its borrowings, credit sales,
payments to farmers as well as rail subsidies.
CWB spokesman Rhéal Cenerini would not comment on the ruling, noting
that the final report won't be made public until February.
"We are trying to respect the confidentiality of the ruling,"
he said from Winnipeg, where the CWB has its headquarters.
Sammeer Ahmed, a spokesman for the Canadian Department of Foreign
Affairs and International Trade, also refused to confirm the interim
ruling.
"We will continue to defend our wheat sector policies and
practices before the WTO," he said.
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