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Canada and US Spar Over Wheat, As Ink Dries on GATT Agreement

The US is threatening to impose high tariffs on the Canadian export

CANADA and the United States appear headed for a collision over Canadian wheat exports to the US, just a week after reaffirming their commitment to free trade by signing the latest General Agreement on Tariffs and Trade deal.

With the ink barely dry on the 26,000-page GATT document, US and Canadian negotiators meeting in Marrakesh, Morocco, appeared not to know trade cooperation was the order of the day.

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Negotiators for both countries had reportedly come to the GATT signing with plans to reach a compromise. But talks fell apart after only an hour. No new talks are scheduled.

Canadian Agriculture Minister Ralph Goodale promptly left for a trade trip to China, even though US officials had set an April 22 deadline for a deal. After that, the US may impose high tariffs on Canadian wheat. But the wheat spat could quickly widen, officials of both nations warn.

Canada is threatening to retaliate against chicken, baked goods, apples, and California rice and wine. In turn, the US is scrutinizing Canadian peanut butter, sugar, dairy products, chicken, and eggs.

The dispute centers on a growing torrent of Canadian wheat that has flooded into the US since 1989, upsetting US wheat growers already hard hit by last year's flooding and other problems.

The US imported 370,000 tons of Canadian wheat in 1989, rising sharply to 1.4 million tons in 1992-93, according to the Winnipeg, Manitoba-based Canadian Wheat Board. At the current rate, exports to the US could reach about 2.5 million tons this crop year.

Canadians say the heavy flow to the US is temporary. For the past two years, Canadian farmers have had rain and frost during harvest, causing much of the wheat crop to be sold as low-grade feed wheat.

US Trade Representative Mickey Kantor blames the Canadian Wheat Board, a government-run buyer, saying, ``It is nearly unique in the developed world in terms of providing the kinds of subsidies and non-transparency [in pricing] which leads to this kind of result'' - a stalemate.

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But Deborah Harri, a spokeswoman for the Canadian Wheat Board, told the Monitor that a slew of independent audits show the board has not broken any rules on pricing.

``The free trade treaties lay out the terms and conditions and so far we've been found in compliance,'' Ms. Harri says.

CANADA and the United States appear headed for a collision over Canadian wheat exports to the US, just a week after reaffirming their commitment to free trade by signing the latest General Agreement on Tariffs and Trade deal.

With the ink barely dry on the 26,000-page GATT document, US and Canadian negotiators meeting in Marrakesh, Morocco, appeared not to know trade cooperation was the order of the day.

Negotiators for both countries had reportedly come to the GATT signing with plans to reach a compromise. But talks fell apart after only an hour. No new talks are scheduled.

Canadian Agriculture Minister Ralph Goodale promptly left for a trade trip to China, even though US officials had set an April 22 deadline for a deal. After that, the US may impose high tariffs on Canadian wheat. But the wheat spat could quickly widen, officials of both nations warn.

Canada is threatening to retaliate against chicken, baked goods, apples, and California rice and wine. In turn, the US is scrutinizing Canadian peanut butter, sugar, dairy products, chicken, and eggs.

The dispute centers on a growing torrent of Canadian wheat that has flooded into the US since 1989, upsetting US wheat growers already hard hit by last year's flooding and other problems.

The US imported 370,000 tons of Canadian wheat in 1989, rising sharply to 1.4 million tons in 1992-93, according to the Winnipeg, Manitoba-based Canadian Wheat Board. At the current rate, exports to the US could reach about 2.5 million tons this crop year.

Canadians say the heavy flow to the US is temporary. For the past two years, Canadian farmers have had rain and frost during harvest, causing much of the wheat crop to be sold as low-grade feed wheat.

US Trade Representative Mickey Kantor blames the Canadian Wheat Board, a government-run buyer, saying, ``It is nearly unique in the developed world in terms of providing the kinds of subsidies and non-transparency [in pricing] which leads to this kind of result'' - a stalemate.

But Deborah Harri, a spokeswoman for the Canadian Wheat Board, told the Monitor that a slew of independent audits show the board has not broken any rules on pricing.

``The free trade treaties lay out the terms and conditions and so far we've been found in compliance,'' Ms. Harri says.