HEADLINE: U.S. Farm Bill Adds to a Rising
Canadian Anger Over Trade
BYLINE: By
BERNARD SIMON
DATELINE: TORONTO, May 22
BODY: When Canadian politicians talk
about trade with the United States, the message is invariably more of
frustration than friendship.
Angered by American moves
against some of Canada's biggest exports, like softwood lumber, wheat and
energy, many Canadians see the farm bill approved by Congress
this month as yet another slap in the face.
Lyle
Vanclief, the minister of agriculture, said he was "very disappointed." John
Reynolds, a member of the Canadian Alliance, the main opposition party, told
Parliament: "The Americans have forgotten who their friends are." The Globe and
Mail of Toronto, in a critical editorial, said President Bush "would be well
advised to think carefully before he leads the world any further down the
protectionist road."
Beneath the hostility however, is
a sense of helplessness. "The Americans can hurt us a lot more than we can hurt
them," said Jon Johnson, a trade specialist at Goodmans, a Toronto law firm.
Canada and the United States are each other's biggest
trading partner.
According to data from the United
States Department of Commerce, two-way trade totaled $380.7 billion in 2001,
with Canada accounting for 22.7 percent of American exports and 18.9 percent of
imports. Canada sends 85 percent of its exports south of the border.
Under a 1988 trade deal, reinforced six years later by the
North American Free Trade Agreement, customs duties have been virtually
eliminated. But that has not ended disputes over subsidies.
This month, the United States imposed a 27 percent duty on softwood
lumber from Canada. About two-thirds of the tariff is designed to offset the
benefits of what Americans believe are subsidies to Canadian sawmills --
especially low fees paid to harvest trees in government forests. Efforts to
negotiate a compromise have failed so far, and Canada has said it will lodge a
complaint with the World Trade Organization and invoke dispute-settlement
procedures under Nafta.
Canada is one of several
countries that have attacked the new farm bill, and is among a
group of nations considering a complaint to the World Trade Organization over
the $70 billion increase in subsidies, which includes an additional $40 billion
for large grain and cotton farmers in the United States.
According to the Canadian Federation of Agriculture, subsidies and
other support programs amount to 11 percent of the value of farm production in
Canada, compared with 34 percent in the United States and over 40 percent in the
European Union.
Robert Friesen, the federation's
president, cited the case of an American farmer near the border, who benefits
from generous subsidies as well as guaranteed floor prices. "He's competing with
a Canadian farmer five or six miles away who doesn't have any of this," he
said.
Mr. Friesen said that some Canadian cattle and
hog farmers were already taking advantage of higher American subsidies by moving
their animals across the border, where feed prices are lower. By extending
subsidies to crops like lentils, Mr. Friesen said the farm
bill threatened to undercut Canadian farmers who have diversified into these
crops precisely to avoid head-on competition with subsidized American
produce.
Canadian farm groups are asking their
government for an extra $1.3 billion Canadian dollars, or around $848 million,
in support. It is not clear if they will be successful.
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