October 15, 2000
The Honorable Charlene
Barshefsky
United States Trade Representative
600 17th Street, NW
Washington, DC 20508
Dear Ambassador Barshefsky:
We are writing to express our opposition, in the strongest possible terms, to the section 301 petition filed recently by the North Dakota Wheat Commission against the international pricing practices of the Canadian Wheat Board. We do so because the petition makes or infers points about supply, demand and quality which are false, and proposes remedies that are not relevant to the alleged problem and threaten normal trade patterns upon which our industry depends.
We are firm supporters of the Administration's stated position to impose disciplines on the actions of State Trading Entities (STEs) during the next Round of WTO Agriculture Negotiations. As a strategy toward that goal, we do not think the 301 investigation is necessary or desirable. In fact, unilateral actions singling out the Board and relying on anecdotal evidence could undermine support for a more reasoned, rules based trading approach to the subject. The worst thing that could happen to the Administration's strategy on STE's would be to make the CWB a sympathetic character to the Canadian farmers who currently side with the forces of reform.
The case for imposing disciplines should remain focused on the monopsony/monopoly powers wielded by STE's and their potential for distorting trade. We feel strongly that exporting STEs cannot support monopolies in any form and must be forced to accept a progressively larger exposure to competitive market forces. Our only forum for that discussion will be the multilateral negotiations under the WTO auspices, toward a universal and permanent solution.
In summary, supply and demand considerations including quality problems in the U.S. crop, make access to the entire North American wheat crop absolutely essential to the US milling and food manufacturing industry. We also remind you that in the end, cross-border trade is legal and was a highly supported goal of this Administration when Congress was considering the NAFTA agreement.
For those reasons the North Dakota Wheat Commission's 301 petition should be rejected. To accept or favorably act on the petition could only be done for purely political reasons.
Sincerely,
North American
Millers' Association
American Bakers Association
National Grain Trade Council
Kraft Foods, Inc.
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