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U.S. decides against wheat tariffs for now

REGINA, Sask. -- A U.S. Trade Representative report contained harsh words toward the Canadian Wheat Board (CWB), bu...

REGINA, Sask. — A U.S. Trade Representative report contained harsh words toward the Canadian Wheat Board (CWB), but stopped short of imposing trade restrictions.

The report accused CWB of using its monopoly powers to gain unfair advantages in international wheat markets, but it did not agree to put restrictions on Canadian wheat sold in the U.S. which is what the North Dakota Wheat Commission originally asked for.

Despite the criticisms contained in the report, the CWB were pleased with the moral victory.

"I feel we’ve been vindicated," CWB chief executive, Greg Arason tells local media.

CWM Minister, Ralph Goodale, was also pleased with the decision, noting "There is a lot of spin, a lot of hyperbole, a lot of colorful languagebut the bottom line is no explicit finding of any violation of any trade agreement on the part of Canada or the CWB and no immediate restrictions of any kind."

Among other things, the report said "The government of Canada grants the CWB special monopoly rights and privileges which give it competitive advantages that hurt U.S. wheat farmers." However, the report acknowledged that imposing a tariff, the U.S. would be violating the government’s commitment under the World Trade Organization (WTO) and NAFTA.

However, CWB isn’t in the clear yet. The report calls for a possible dispute settlement case against CWB to the WTO, examining the possibility of imposing countervailing duties and anti-dumping petitions against the board, providing fair access to Canadian markets for U.S. wheat and using WTO negotiations to pursue reforms to state trading enterprises, such as CWB.

U.S. wheat growers are calling the report a significant step forward towards their goal of dismantling the CWB.

"This is the beginning of the end of state trading monopolies," said a confident Henry Jo Tungeln, chair of the U.S. Wheat Associates.

Arason, however, disagrees, noting that CWB isn’t concerned about the threats contained in the report since they are vaguely worded.

Goodale also insists that pursuing those threats further would be a waste of energy for the U.S.

"Surely after all these studies it would be abundantly clear they don’t have a leg to stand on," says Goodale. "But for domestic political reasons, they keep up the harassment. We are right and they are wrong. We do not intend to cave in."

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