U.S. Agricultural Trade:

Canadian Wheat Issues

NSIAD-99-21: Published: Oct 16, 1998. Publicly Released: Nov 17, 1998.

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Pursuant to a congressional request, GAO provided information on Canadian grain exports to the United States, focusing on the operations of the Canadian Wheat Board (CWB) and the trade remedies applicable to the activities of state trading enterprises (STE).

GAO noted that: (1) the CWB is a STE with a monopoly on certain Canadian grain sales and receives Canadian government subsidies in a number of direct and indirect ways; (2) the Canadian government also provides other assistance to its wheat and barley farmers; (3) the CWB's operating environment is undergoing changes, some of which are expected to make the United States a more attractive market for Canadian grain; (4) at the same time, there is a greater presence of U.S. grain companies operating in Canada, and the CWB is dealing more frequently with private companies in the sale of Canadian grain; (5) little information on actual CWB contracts is publicly available; (6) although U.S. Customs Service and the Department of Agriculture collect a great deal of information on imports of Canadian grain into the United States, these data cannot be used to ascertain CWB export prices; (7) the format that countries use to report on their STEs' activities to the World Trade Organization has recently been revised; (8) however, U.S. officials are concerned that it does not go far enough to increase the openness of the pricing practices of certain STEs, such as the CWB; (9) trade remedies to combat disruptive or trade-distorting imports under U.S. trade laws do not treat STEs any differently from other entities involved in international trade; (10) these U.S. trade laws can address trade issues such as dumping, actionable subsidies, and surges in imports; (11) in addition, STE activities may be subject to dispute settlement provisions under international trade agreements if the activities are inconsistent with an obligation agreed to by the government of the STE; and (12) relatively few trade remedy actions have been taken involving STEs.

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