WORLD TRADE
ORGANIZATIONG/STR/Q1/CAN/6
13 January 2003
(03-0144)
Working Party on
State Trading EnterprisesOriginal:  English
STATE TRADING
Questions posed by the UNITED STATES concerning the
Article XVII Notification of CANADA1
The following communication, dated 23 December 2002, has been received from the
Permanent Mission of the United States.
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Article XVII:4(c) of GATT 1994 provides that a Member that has reason to believe that its
interests are being adversely affected by the operations of a state trading enterprise may request that
the Member establishing, maintaining or authoriz ing such enterprise supply information about its
operations related to the General Agreement on Tariffs and Trade.  The United States believes that its
interests are being adversely affected by the operations of the Canadian Wheat Board (CWB), which
the Government of Canada has notified to the WTO (G/STR/N/1/CAN).  Accordingly, the
United States submits the following questions to the Government of Canada regarding the CWB.
Pricing and Contract Structure of CWB Sales2
1. Please provide details on the CWB's acquisition price basis and cost to put wheat into export
position.  Specifically, please provide the standard fees of the CWB for handling, elevation, storage
and cleaning and any other charges that it imposes.
2. Please provide the value and volume of CWB sales into the Canadian domestic market and
export market by type of wheat and by importing country.
3. The CWB makes initial payments to its producers.  These initial payments establish a
minimum market value that the CWB should cover when establishing export prices.  How does this
minimum value relate to the actual export price when competing in a market such as Brazil, whereArgentina medium grade wheat is the dominant wheat and the price setter?  How does the CWB
adjust pricing formulas to compete with a lower quality Argentine wheat exported into Brazil when
the initial CWB payment or minimum value reflects market evaluation of a higher quality product?
4. How does the CWB determine forward contract prices on wheat?  Specifically, please provide
responses to the following questions:
                                                     
1 G/STR/N/1/CAN
2 Information should be provided not only on direct sales by the CWB, but also for sales made by its
agents.G/STR/Q1/CAN/6
Page 2
(a) How does the CWB take into account the market considerations of storage cost, value
of money over time and market risk?
(b) Please provide an example for each of the processes by which the CWB determines
forward prices for both Canadian Western Amber Durum (CWAD) and CanadianWestern Red Spring (CWRS) wheat.  The example should show the basis for setting
prices relative to nearby and distant futures contract.
(c) What is the basis for the adjustments to price included in the bonification schedule?
Please provide an example of a bonification schedule that is included in a sales
contract and explain how it relates to current market valuation for each item included
in the bonification schedule.
5. Please respond to the following with respect to the protein level, assuming 13.5 per cent
moisture level, of over-quality or under-quality Canadian wheat.
6. Does the CWB ever over-deliver on protein by more than 0.1 per cent on the contract
specifications?  If the answer is "yes";
(a) On what per cent of the total contracts during the past five marketing years (1995/96-
2000/01) did the CWB over-deliver on protein?
(b) On what percentage of the amount mentioned above has the CWB delivered protein
that exceeded contracted protein specification by more than 0.3 per cent?
(c) When the protein specification was exceeded, please explain what adjustments were
made to the price.
Contract and Transportation Considerations Necessary When Establishing Sales Values
1. Please provide samples of a CWB spot contract and a forward contract.
2. What portion of CWB sales over the past five marketing years was f.o.b?  What portion was
c.i.f?
3. What portion of CWB sales over the past five marketing years was made with CWB credit
guarantees?
4. What portion of CWB sales over the past five marketing years was made with government
programmed credit guarantees?
5. Please provide the Canadian rail freight rate schedules applicable to Canadian grain
shipments for the period 1999-2001 covering shipment s of wheat from Regina, Saskatchewan, and
Saskatoon to export points (Vancouver or Thunder Bay).  Please provide detailed information on theactual rates paid by the CWB taking into account incentive payments, and other relevant charges.
Please provide examples of contracts showing separately the portion paid by the CWB or Canadian
Government and the portion paid by the producer.
6. Do these rate schedules differ from the published rates by the Canadian National or Canadian
Pacific railroads?G/STR/Q1/CAN/6
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Transaction Price and Quantity Information of CWB sales1
1. Please provide monthly price and quantity da ta for contracts negotiated between the CWB
and US customers as described below, assuming a moisture level of 13.5 per cent.  With respect to
these contracts, please provide data for MY 1995/96-2000/01, for each of the characteristics:  proteincontent, test weight, dockage and vitreous kernel count and characteristics as delivered, the date of the
contract/order, the date of shipment, and the US destination to which the wheat was shipped on a
contract by contract basis for each type of wheat below.
#1 Canadian Western Amber Durum with a protein content between 12.3 and 13.3 per
cent
#2 Canadian Western Amber Durum#1 Canadian Western Red Spring with a protein content between 13.3 and 14.3 per cent.
#2 Canadian Western Red Spring with a protein content between 12.8 and 13.5 per cent.
(Prices reported should be in Canadian dollars per metric ton, net of all discounts and allowances.
Price and value data for imported products must be landed, duty-paid (i.e., include all import dutiesand importing costs).
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