Commerce Department sets preliminary tariff on Canadian wheat

<br>WASHINGTON (AP) _ The Commerce Department imposed a preliminary 3.9 percent tariff on Canadian wheat imports on Tuesday, deciding the measure may be needed to counter Canadian subsidies of its wheat

Tuesday, March 4th 2003, 12:00 am

By: News On 6

WASHINGTON (AP) _ The Commerce Department imposed a preliminary 3.9 percent tariff on Canadian wheat imports on Tuesday, deciding the measure may be needed to counter Canadian subsidies of its wheat farmers.

A final decision won't be made until July. But for now, the ruling requires the Canadian Wheat Board and other exporters to post bonds equal to the preliminary duty on all hard red spring wheat and durum wheat shipped to the United States.

The U.S. wheat groups that sought the tariffs imposed welcomed the decision, although some said the Canadian subsidies are being underestimated.

``Some of these subsidies are cleverly hidden in the policies regulating grain transportation and marketing in Canada, which go hand in glove with the monopoly Canadian Wheat Board,'' said Larry Lee, a Velva, N.D., wheat farmer who serves as chairman of the North Dakota Wheat Commission.

The Canadian Wheat Board and Canadian government officials have rejected the U.S. farmers' accusations, saying they trade fairly and abide by all international treaties.

The investigation was prompted by petitions filed last year by the North Dakota Wheat Commission, the U.S. Durum Growers Association and the Durum Growers Trade Action Committee.

The Commerce Department is still considering claims that Canadian wheat is dumped on the U.S. market at less than fair market value. Its preliminary ruling on those claims is expected by May 1.

If the department again sides with the wheat farmers, the complaint will go back to the U.S. International Trade Commission for a final ruling on how badly the Canadian practices hurt U.S. farmers.

The commission made a preliminary ruling on that issue in November, saying there is evidence that undervalued Canadian wheat imports drive down the price of wheat grown in the United States.