Lest there was ever any doubt, new text released by the World Trade Organization (WTO) on Dec. 6 makes it glaringly apparent that the Canadian Wheat Board (CWB) is once again being attacked by the United States for nothing but political reasons.
Let’s start with the facts. Despite 14 trade challenges and investigations launched by Americans over the past 20 years, the CWB’s single-desk marketing structure has never been shown to be trade distorting. This includes a ruling by the WTO itself.
It is obviously fair to claim, therefore, that the CWB does not distort international trade. The objective of the current Doha round of WTO negotiations is to reduce distortions in world trade, so it’s hard to understand why the CWB single desk is even on the table.
Negotiators have done well in resisting American bully tactics aimed at eliminating the CWB. But concessions unfortunately had to be made. In 2004, the Canadian government of the day agreed to the elimination of government guarantees that underwrite CWB payments to farmers and CWB borrowings.
This has serious ramifications for wheat and barley farmers and should have been more than enough to satisfy the Americans. It should have allowed everyone to move off the STE issue and on to trade issues that are actually relevant and meaningful – for example, high U. S. government agricultural subsidies.
No such luck. The Americans are after the monopoly. After all, it allows us as western Canadian farmers to effectively compete against American multinational grain companies on the international stage – sometimes even in their own marketplace, to their great chagrin.
We ended up with proposed new text that would flat out eliminate the monopoly powers of export State Trading Enterprises (STEs) by 2013. At first, this language was encased in brackets – basically meaning that it was an idea to toss around for further discussion. Last weekend, the brackets were removed. The CWB single desk is now squarely in the sights of the U. S. arsenal.
But that’s not all. A new provision in the text makes it clear that the CWB, and only the CWB, is to be attacked by this measure. A special footnote has created an exemption for the only other monopoly export STE in the developed world – New Zealand’s kiwi fruit exporter, Zespri.
There is no logical rationale on trade policy grounds for this differentiation. The Americans simply don’t feel threatened by Zespri.
It is also worth noting that monopoly STEs, which import agricultural products are not captured by these proposed rules, nor are export STEs in developing countries. The CWB has been singled out in a text that is now blatantly discriminatory. This is counter to the central GATT principle of non-discrimination and to the spirit of the Doha round.
Nothing to gain
Some argue that lack of trade policy rationale for targeting the CWB is unimportant if Canada stands to gain more than it loses through a WTO deal in agriculture. Unfortunately, the current text does not offer much at all for Canadian wheat and barley exports. There are no billions of dollars in wheat market access to be gained.
What we need is an agreement that creates a more level playing field for Canadian agricultural exports, which now compete against products that are heavily subsidized by American and European governments. We need meaningful reductions to those subsidies and real improvements in market access. Canadian farmers would truly benefit from those accomplishments. Sadly, this new draft modalities text does not accomplish what we need. Instead, Canada is simply being asked to give with no take.
We cannot let the United States dictate what marketing structures are used by western Canadian farmers. It’s not up to the Americans. In fact, it is none of their business. It’s up to us, as Prairie farmers, because it certainly is our business, our livelihood, our competitive edge.
The Canadian government has repeatedly stated that it will stand firm on the subject of STEs at the WTO. The future of the CWB’s single-desk marketing system is a domestic decision that can only be settled here at home – not by our international competitors. We are certain farmers do not want Canada to stand idly by while the U. S. dictates our domestic agriculture policy.
The Government of Canada must reject this text. A recent news release from Minister Gerry Ritz raised valid concerns about this text from the perspective of the supply-managed sector. However, it contained no mention of the government’s commitment to uphold the right of Prairie farmers to determine their grain-marketing system. We therefore urge our federal representatives to publicly state the government’s position on this issue of key importance to Canada’s wheat and barley farmers and to forcefully assert it on the international stage. Larry Hill farms 4,600 acres near
Swift Current, Saskatchewan. He has been an elected director
of the Canadian Wheat Board since farmers took control of the
organization in 1999 and currently serves as its chair.