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 regard-
ing 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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘United States-Canada
Grain Trade Settlement Act of 1994’’.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) As a result of unfair and incomplete provi-
sions in the United States-Canada Free-Trade
Agreement (hereafter referred to as the ‘‘CFTA’’)
and the North American Free Trade Agreement
(hereafter referred to as the ‘‘NAFTA’’) affecting
exports of Canadian grain to the United States—
(A) Canadian exports of durum wheat,
spring wheat, and barley have increased beyond
the level that such exports can be absorbed into
the United States market;
(B) these exports have depressed domestic
grain prices, causing severe financial losses to
American farmers and increasing the costs and
difficulties of implementing domestic farmer
support programs; and
(C) Canadian grain exports continue to in-
crease without bounds, increasing the damage
to United States farmers each year.
(2) The Congress approved the CFTA subject
to—
(A) the statement in the Statement of Ad-
ministrative Action that the United States
would ‘‘pursue consultations with Canada re-
garding the price setting policy of the CWB
(Canadian Wheat Board) as it affects goods ex-
ported to the United States . . . directed to-
ward establishing a method to determine the
price at which the CWB is selling agricultural
goods to the United States and the CWB’s ac-
quisition price for those goods’’; and
(B) the provision of the implementing leg-
islation requiring that ‘‘the President will enter
into immediate consultation with the Govern-
ment of Canada to obtain the exclusion from
the transport rates established under Canada’s
Western Grain Transportation Act of agricul-
tural goods that originate in Canada and are
shipped via east coast ports for consumption in
the United States,’’,
yet to date there has been no resolution of these
consultations.
(3) United States trade negotiators agreed not
to reexamine the CFTA while negotiating the
NAFTA based on the assumption that the Uruguay
Round talks of the General Agreement on Tariffs
and Trade would address the subsidy and dispute
resolution concerns and would be completed before
the enactment of the NAFTA.
(4) The failure of the United States success-
fully to pursue the consultations described in para-
graph (2) led to a flawed binational panel decision
that renders meaningless the plain language of Arti-
cle 701(3) of the CFTA (which was incorporated by
reference in the NAFTA), which states that ‘‘Nei-
ther Party, including any public entity that it estab-
lishes or maintains, shall sell agricultural goods for
export to the territory of the other Party at a price
below the acquisition price of the goods plus any
storage, handling or other cost incurred by it with
respect to those goods.’’.
(5) Imports of wheat and barley have increased
significantly as a result of substantial changes in
Canada’s support programs. Some of the changes
were made with declared intent to increase imports
to the United States. The increases in imports con-
stitutes grounds under Article 705.5 of the CFTA
for use of import restrictions by the United States.
SEC. 3. TERMINATION OF AGREEMENTS AND IMPOSITION
OF ADDITIONAL DUTIES.
(a) IN GENERAL.—
(1) TERMINATION OF NAFTA AND CFTA.—Not-
withstanding any other provision of law, the Presi-
dent shall provide written notification to the Govern-
ment of Canada of the intent of the United States
to terminate the CFTA and the NAFTA, as such
agreement applies to Canada, unless the President
provides the Congress with a certification described
in subsection (c). Such notification shall be given not
later than the date that is 6 months after the date
of the enactment of this Act and shall provide that
the agreements shall terminate not later than 1 year
after the date the enactment of this Act in accord-
ance with the terms and conditions of the respective
agreements.
(2) IMPOSITION
OF
DUTY.—Notwithstanding
any other provision of law, the President shall imme-
diately impose a duty at the rate of 50 percent ad
valorem or the specific rate equivalent to articles im-
ported from Canada described in the following head-
ings of the Harmonized Tariff Schedule of the
United States:
(A) heading 1001.10.00 (relating to durum
wheat),
(B) heading 1001.90.10 (relating to seed
wheat),
(C) heading 1001.90.20 (relating to other
wheat),
(D) heading 1003.00.20 (relating to malt-
ing barley), and
(E) heading 1003.00.40 (relating to other
barley).
(b) NEGOTIATIONS.—The President shall imme-
diately pursue negotiations with the Government of
Canada to—
(1) establish a method for determining the sale
price of Canadian grain exports to the United States
and the Canadian Wheat Board’s acquisition price
for such grain;
(2) establish procedures for obtaining the data
necessary to implement the method described in
paragraph (1);
(3) eliminate all transportation subsidies on ag-
ricultural goods that originate in Canada and are
shipped for consumption in the United States; and
(4) clarify the meaning of the term ‘‘acquisition
price’’ in Article 701(3) of the CFTA (and any other
provision accompanying such agreement or the
NAFTA) so that such term includes—
(A) the value of any transportation subsidy
applied to grain entering the United States;
(B) all direct payments to producers made
by the Canadian Wheat Board or any govern-
ment agency for grain entering the United
States; and
(C) any other payments or subsidy in-
curred by the Canadian Wheat Board, any gov-
ernment agency, or any private interest in the
acquisition, handling, storage, and transpor-
tation of the grain.
(c) CERTIFICATION BY THE PRESIDENT.—At such
time as the President certifies to the Congress that the
Government of Canada has entered into an agreement
with the United States with respect to the requirements
described in subsection (b), the President may terminate
the duties imposed under subsection (a)(1) and take ac-
tion to reinstate the CFTA and the NAFTA with respect
to Canada. An agreement entered into under this Act shall
supersede the corresponding provisions of the CFTA and
the NAFTA and shall be incorporated in and become part
of such agreements as reinstated.
Æ