I

103D CONGRESS

2D SESSION H. R. 3819

To terminate the North American Free Trade Agreement as it applies to

Canada and the United States-Canada Free-Trade Agreement and to

impose additional duties on grain imported from Canada, until the United

States and Canada renegotiate the provisions of the Agreements regarding the importation of Canadian grain.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 8, 1994

Mr. POMEROY (for himself, Mr. WILLIAMS, and Mr. PETERSON of Minnesota)

introduced the following bill; which was referred to the Committee on

Ways and Means

A BILL

To terminate the North American Free Trade Agreement

as it applies to Canada and the United States-Canada

Free-Trade Agreement and to impose additional duties

on grain imported from Canada, until the United States

and Canada renegotiate the provisions of the Agreements

regarding the importation of Canadian grain.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘United States-Canada

5 Grain Trade Settlement Act of 1994’’.
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1 SEC. 2. FINDINGS.

2 The Congress makes the following findings:

3 (1) As a result of unfair and incomplete provi4 sions in the United States-Canada Free-Trade

5 Agreement (hereafter referred to as the ‘‘CFTA’’)

6 and the North American Free Trade Agreement

7 (hereafter referred to as the ‘‘NAFTA’’) affecting

8 exports of Canadian grain to the United States—

9 (A) Canadian exports of durum wheat,

10 spring wheat, and barley have increased beyond

11 the level that such exports can be absorbed into

12 the United States market;

13 (B) these exports have depressed domestic

14 grain prices, causing severe financial losses to

15 American farmers and increasing the costs and

16 difficulties of implementing domestic farmer

17 support programs; and

18 (C) Canadian grain exports continue to in19 crease without bounds, increasing the damage

20 to United States farmers each year.

21 (2) The Congress approved the CFTA subject

22 to—

23 (A) the statement in the Statement of Ad24 ministrative Action that the United States

25 would ‘‘pursue consultations with Canada re26 garding the price setting policy of the CWB
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1 (Canadian Wheat Board) as it affects goods ex2 ported to the United States . . . directed to3 ward establishing a method to determine the

4 price at which the CWB is selling agricultural

5 goods to the United States and the CWB’s ac6 quisition price for those goods’’; and

7 (B) the provision of the implementing leg8 islation requiring that ‘‘the President will enter

9 into immediate consultation with the Govern10 ment of Canada to obtain the exclusion from

11 the transport rates established under Canada’s

12 Western Grain Transportation Act of agricul13 tural goods that originate in Canada and are

14 shipped via east coast ports for consumption in

15 the United States,’’,

16 yet to date there has been no resolution of these

17 consultations.

18 (3) United States trade negotiators agreed not

19 to reexamine the CFTA while negotiating the

20 NAFTA based on the assumption that the Uruguay

21 Round talks of the General Agreement on Tariffs

22 and Trade would address the subsidy and dispute

23 resolution concerns and would be completed before

24 the enactment of the NAFTA.
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1 (4) The failure of the United States success2 fully to pursue the consultations described in para3 graph (2) led to a flawed binational panel decision

4 that renders meaningless the plain language of Arti5 cle 701(3) of the CFTA (which was incorporated by

6 reference in the NAFTA), which states that ‘‘Nei7 ther Party, including any public entity that it estab8 lishes or maintains, shall sell agricultural goods for

9 export to the territory of the other Party at a price

10 below the acquisition price of the goods plus any

11 storage, handling or other cost incurred by it with

12 respect to those goods.’’.

13 (5) Imports of wheat and barley have increased

14 significantly as a result of substantial changes in

15 Canada’s support programs. Some of the changes

16 were made with declared intent to increase imports

17 to the United States. The increases in imports con18 stitutes grounds under Article 705.5 of the CFTA

19 for use of import restrictions by the United States.

20 SEC. 3. TERMINATION OF AGREEMENTS AND IMPOSITION

21 OF ADDITIONAL DUTIES.

22 (a) IN GENERAL.—

23 (1) TERMINATION OF NAFTA AND CFTA.—Not24 withstanding any other provision of law, the Presi25 dent shall provide written notification to the Govern-
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1 ment of Canada of the intent of the United States

2 to terminate the CFTA and the NAFTA, as such

3 agreement applies to Canada, unless the President

4 provides the Congress with a certification described

5 in subsection (c). Such notification shall be given not

6 later than the date that is 6 months after the date

7 of the enactment of this Act and shall provide that

8 the agreements shall terminate not later than 1 year

9 after the date the enactment of this Act in accord10 ance with the terms and conditions of the respective

11 agreements.

12 (2) IMPOSITION OF DUTY.—Notwithstanding

13 any other provision of law, the President shall imme14 diately impose a duty at the rate of 50 percent ad

15 valorem or the specific rate equivalent to articles im16 ported from Canada described in the following head17 ings of the Harmonized Tariff Schedule of the

18 United States:

19 (A) heading 1001.10.00 (relating to durum

20 wheat),

21 (B) heading 1001.90.10 (relating to seed

22 wheat),

23 (C) heading 1001.90.20 (relating to other

24 wheat),
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1 (D) heading 1003.00.20 (relating to malt2 ing barley), and

3 (E) heading 1003.00.40 (relating to other

4 barley).

5 (b) NEGOTIATIONS.—The President shall imme6 diately pursue negotiations with the Government of

7 Canada to—

8 (1) establish a method for determining the sale

9 price of Canadian grain exports to the United States

10 and the Canadian Wheat Board’s acquisition price

11 for such grain;

12 (2) establish procedures for obtaining the data

13 necessary to implement the method described in

14 paragraph (1);

15 (3) eliminate all transportation subsidies on ag16 ricultural goods that originate in Canada and are

17 shipped for consumption in the United States; and

18 (4) clarify the meaning of the term ‘‘acquisition

19 price’’ in Article 701(3) of the CFTA (and any other

20 provision accompanying such agreement or the

21 NAFTA) so that such term includes—

22 (A) the value of any transportation subsidy

23 applied to grain entering the United States;

24 (B) all direct payments to producers made

25 by the Canadian Wheat Board or any govern-
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1 ment agency for grain entering the United

2 States; and

3 (C) any other payments or subsidy in4 curred by the Canadian Wheat Board, any gov5 ernment agency, or any private interest in the

6 acquisition, handling, storage, and transpor7 tation of the grain.

8 (c) CERTIFICATION BY THE PRESIDENT.—At such

9 time as the President certifies to the Congress that the

10 Government of Canada has entered into an agreement

11 with the United States with respect to the requirements

12 described in subsection (b), the President may terminate

13 the duties imposed under subsection (a)(1) and take ac14 tion to reinstate the CFTA and the NAFTA with respect

15 to Canada. An agreement entered into under this Act shall

16 supersede the corresponding provisions of the CFTA and

17 the NAFTA and shall be incorporated in and become part

18 of such agreements as reinstated.

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