[Congressional Record Volume 146, Number 98 (Tuesday, July 25, 2000)]
[Senate]
[Pages S7542-S7543]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CONRAD:
  S. 2913. A bill to amend the Agricultural Trade Act of 1978 to 
require the Secretary of Agriculture to use the export enhancement 
program to encourage the commercial sale of United States wheat in 
world markets at competitive prices whenever the importation of 
Canadian wheat into the United States reaches certain triggers; to the 
Committee on Agriculture, Nutrition, and Forestry.


           the export enhancement program trigger act of 2000

  Mr. CONRAD. Mr. President, today I am introducing legislation to help 
our farmers fight back against the unfair trade practices of state 
trading enterprises. As many of my colleagues know, state trading 
enterprises are government sanctioned monopolies that control commodity 
exports. Their unfair practices allow them to undercut prices of U.S. 
commodities, both in our market and in overseas markets where we 
compete for exports. My legislation, the Export Enhancement Program 
Trigger Act of 2000, would direct our government to fight back against 
these unfair practices.
  I am introducing this legislation in response to the experience of 
farmers in North Dakota, who have been forced to compete not just with 
foreign farmers, but with foreign state trading enterprises. Ever since 
the U.S.-Canada Free Trade Agreement (CFTA) took effect, North Dakota 
farmers have been flooded with a rising tide of imports of Canadian 
grains.
  These imports are coming into our country not because Canadian 
farmers are more competitive, but because of flaws in the CFTA and the 
unfair actions of the Canadian Wheat Board (CWB). As negotiated by 
then-USTR Clayton Yeutter, the CFTA allows the Canadian Wheat Board to 
sell into our market at less than the total cost of acquiring and 
selling its grain.
  The fact is that the Canadian Wheat Board is a government created and 
government supported monopoly. Because Canadian farmers are required to 
sell their grain to the Wheat Board, the Wheat Board gets its wheat at 
below market prices and can then tell its customers in this country or 
overseas that it will undercut U.S. prices. These practices amount to 
de facto subsidies, but because the Wheat Board operates in secret, 
these unfair practices are not subjected to the normal rules of 
international trade.
  This unfair competition caused imports of wheat from Canada to 
increase steadily until, in 1993-94, they reached a record 2.4 million 
tons of total wheat and 575,000 tons of durum. These levels of imports 
caused unacceptable damage to North Dakota farmers, so I convinced the 
Clinton Administration to impose limits on Canadian imports. Under the 
Memorandum of Understanding (MOU) negotiated with Canada, durum imports 
were limited to 300,000 tons and total wheat imports were limited to 
1.5 million tons in 1994-95.
  These limits worked. Imports of Canadian grain fell dramatically for 
several years. Unfortunately, however, the authority to impose these 
limits disappeared as a result of the Uruguay Round Agreements. As a 
result, our friends to the north are once again on the move, attacking 
our markets, using the monopoly power of the Canadian Wheat Board to 
undercut prices for our farmers.
  Last year, imports from Canada again approached their 1993-94 peaks 
(2.2 million tons of total wheat and 560,000 tons of durum), and this 
year they are on track to stay far above the MOU level (2 million tons 
of total wheat and 480,000 tons of durum). This is unacceptable. It is 
far past time to send a clear and unmistakable message to our friends 
in Canada that the U.S. will not tolerate these practices any longer--
that we will fight back.
  The legislation I am introducing today will do exactly that. My 
legislation would require USDA to use the Export Enhancement Program--
EEP--in either of two circumstances.

  First, if imports of durum or wheat into the U.S. from Canada exceed 
the

[[Page S7543]]

limits set in the MOU--300,000 tons for durum and 1,500,000 tons for 
total wheat imports--USDA would be required to use EEP to export wheat 
or durum into markets where we compete with Canada in a quantity equal 
to at least twice the total amount of Canadian imports into the U.S. 
for that year.
  This will clearly tell Canada that it will lose far more in its 
overseas markets than it gains in our markets if it persists in 
exporting more than the MOU levels. As a result, I expect that Canada 
will again voluntarily comply with the MOU limits as it did in 1995-96 
and 1996-97. Even if Canada does not comply, though, this legislation 
will ensure that U.S. farmers do not bear the costs of Canadian 
imports. By requiring the U.S. to export twice as much wheat as we are 
importing from Canada, this legislation will ensure that total supply 
will be reduced and prices will strengthen.
  Second, if the Secretary of Agriculture determines that a state 
trading enterprise (STE) like the Canadian Wheat Board is using unfair 
trade practices to reduce our exports of any agricultural commodity to 
overseas markets, the Secretary is required to respond by using EEP in 
an amount sufficient to ensure that prices received by U.S. farmers are 
not reduced as a result of the STE's actions. Too often, we have heard 
from our industry and our USDA officials that Canada is arbitrarily 
undercutting U.S. prices in overseas markets. My proposal would require 
USDA to respond, to ensure that we do not give up our export markets 
without a fight.
  Taken together, these two provisions will support the efforts of our 
trade negotiators to discipline STES as part of the World Trade 
Organization (WTO) negotiations on agriculture. Disciplining STEs is a 
top priority for our negotiators, and this legislation, by defining the 
marketing practices of STEs as unfair trade practices, will increase 
our negotiators' leverage to develop meaningful rules on STEs.
  Moreover, I believe these provisions will support the efforts of 
North Dakota farmers, acting through the Wheat Commission, in bringing 
a trade case against Canada. I have always believed that, ultimately, 
Canadian agricultural trade issues will have to be resolved through 
negotiation. It is my hope that, in combination, this legislation and 
the trade case will provide short term relief for our farmers and help 
build sufficient pressure on Canada to negotiate a permanent resolution 
of Canadian grain issues.
  I have no doubt that our friends to the north will not like this 
legislation. They do not like having a spotlight focused on their 
system, so they will complain about our use of EEP. I have a simple 
answer for them: If they do not want us to use EEP against them, they 
should stop dumping their grain into our market and stop using unfair 
trade practices in overseas markets.
  I am pleased that this legislation has the support of every major 
farm group in North Dakota with an interest in these issues, including 
North Dakota Farmers Union, North Dakota Farm Bureau, North Dakota 
Wheat Commission, North Dakota Grain Growers, and the North Dakota 
Barley Council.
  I hope that my colleagues will join me in supporting this important 
legislation.
                                 ______