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International Trade Commission Report Supports Continued Free Trade in Wheat between the U.S. and Canada

January 2, 2002

WASHINGTON, D.C. – January 2, 2002 – The North American Millers' Association (NAMA) is encouraged by the report released by the U.S. International Trade Commission (ITC) – Wheat Trading Practices: Competitive Conditions between U.S. and Canadian Wheat. The report was requested by the U.S. Trade Representative (USTR) in response to a petition filed by the North Dakota Wheat Commission alleging Canadian Wheat Board (CWB) prices unfairly undercut the market. As a remedy the petitioners have asked the U.S. government to restrict shipments of Canadian wheat to the U.S.

“If the petitioners are alleging predatory pricing in overseas markets, they should challenge the monopoly powers of the CWB through the World Trade Organization negotiations, and we would support them. However, since U.S. millers have no knowledge of, nor stake in, those sales it makes no sense to damage them as a response to a problem in which they had no role,” said NAMA chairman Bernard J. Rothwell III.

“On the other hand” Rothwell continued “if the petitioners are alleging predatory pricing in the U.S., the ITC report clearly states the price of Canadian durum sold in the U.S. was actually higher than the price of U.S. durum in 59 of the last 60 months. If U.S. millers have to pay a higher price to get Canadian wheat, that surely can't be considered predatory pricing.”

NAMA encourages the U.S. Trade Representative to decide the case on its merits and not impose restrictions on free trade in wheat and wheat products between the U.S. and Canada.

U.S. millers occasionally buy Canadian wheat for specific milling or baking properties and to supplement the U.S. crop. The durum crop was insufficient to meet demand in 15 out of the last 15 years. The hard red spring wheat crop was insufficient in 12 of the last 15 years.

NAMA has 44 member companies operating 166 wheat, corn, oat and rye mills in 38 states and 150 cities. The aggregate production capacity of NAMA's membership is more than 160 million pounds of product daily, which is about 90% of the total U.S. capacity.

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