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US exports to Canada Mexico NAFTA subtotal

26 952 978

4 132 136

3 623 626

1 91 92

14 753 767

3 139 142

78 1,513 1,591

17 319 336

75 1,031 1,106

13 171 185

Total world (including NAFTA)

34,516

4,490

29,329

3,820

31,303

5,230

30,105

6,084

24,425

3,911

US imports from Canada Mexico NAFTA subtotal

1,289 0 1,289

142 0 142

2,110 0 2,110

226 0 226

1,188 0 1,188

170 0 170

1,061 0 1,061

191 0 191

1,783 0 1,783

272 0 272

Total world (including NAFTA)

1,295

143

2,141

230

1,207

172

1,064

192

1,784

273

Value

Note: Data are based on hard red spring wheat by HTS code 1001.90. Source: USDA Foreign Agricultural Service (FATUS) database, 2004.

Table 5.5

US hard red spring wheat trade with NAFTA partners, 1993–2003 (volume in thousands of metric tons and value in millions of dollars)

Country

1993

Volume

Value

1994

Volume

Value

1997

Volume

1995

1996

Volume

Value Volume

Value

rated from the commercial component (Sumner 1999). A pragmatic solu- tion is to adopt transparent pricing practices, which would enable com- petitors to make an informed guess about the public policy component.40

Nearly all Canadian farmers sell their wheat and barley for export through the CWB. Based on what little is known about CWB pricing prac- tices, the CWB initially compensates farmers about 70 to 75 percent of the expected final return for grain. The balance is paid after sales are consummated. As a “single-desk seller,” the CWB does not have to worry about competition from other Canadian grain trading firms.41 The “sin-

40. The August 2004 WTO Council Declaration agreed to put the question of disciplines on export sales of state trading enterprises like the CWB on the agenda of the Doha Round. A recent WTO ruling, however, dismissed US claims against the CWB, weakening the case for including state trading enterprises under new export subsidy disciplines. In particular, the Appellate Body rejected US claims that the CWB violates GATT Article 17.1, which requires state trading enterprises to offer other WTO member companies the opportunity to compete for purchases and sales. The Appellate Body determined that under Article 17.1, the CWB can use its “special privileges” to export wheat as long it is done “solely in accordance with commercial considerations” and “in a manner consistent with the general principles of non- discriminatory treatment.” The Appellate Body then upheld the panel ruling that Article 17 applies only to companies seeking to buy from or sell to a state trading enterprise and not to buy or sell in competition with such an enterprise, as the United States had claimed. See Pruzin, Yerkey, and Menyasz (2004); and WTO (2004b).

41. The CWB uses any surplus revenue to finance price reductions for selected customers (or markets). See Carter and Loyns (1996, 1998).

300

NAFTA REVISITED: ACHIEVEMENTS AND CHALLENGES

Institute for International Economics | www.iie.com

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