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Ruling May Yield Tariffs on Wheat

November 19, 2002

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WASHINGTON (AP) _ Undervalued Canadian wheat imports may hurt American farmers by driving down the price of their goods, the U.S. International Trade Commission said Tuesday in a ruling that could lead to tariffs on Canadian wheat.

The commission’s 4-1 preliminary ruling allows the U.S. Commerce Department to go ahead with an investigation into whether tariffs should be imposed against Canadian hard red spring wheat and durum wheat.

``This was a necessary hurdle to get over,″ said Neal Fisher, administrator of the North Dakota Wheat Commission.

The state group, along with the U.S. Durum Growers Association and the Durum Growers Trade Action Committee, filed requests for the tariffs in September.

The groups contend the Canadian Wheat Board undercuts the price of U.S. wheat to gain market share in the United States and around the world.

The Winnipeg, Manitoba-based Wheat Board controls wheat and barley exports from Canada’s western prairie provinces. It denies undercutting prices.

North Dakota is the United States’ leading producer of both hard red spring wheat, which is used to make bakery flour, and durum, which is used to make pasta.

The petitions followed a decision in February by the U.S. Trade Representative, Robert Zoellick, who said the Canadian government provides unfair help to its wheat farmers by granting the Wheat Board special monopoly rights and by subsidizing the cost of shipping wheat by railroad.

Zoellick did not immediately seek tariffs and has said he is pushing for permanent changes in the Canadian Wheat Board’s operations through the World Trade Organization.

A Commerce Department preliminary ruling is due in late December.

The department could order tariffs if it and the ITC sided with the U.S. farmers in their final decisions next year.

___

On the Net:

U.S. International Trade Commission: http://www.usitc.gov/

U.S. Trade Representative: http://www.ustr.gov/

Canadian Wheat Board: http://www.cwb.ca/

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