57 



gets worse and makes us more skeptical and nervous about what 

 might be happening in this situation where Canada and Mexico 

 want to have a separate agreement on agriculture. It really trou- 

 bles us because we used to have 75 percent of the wheat market 

 in Mexico and the Canadians had 25 percent. Now they have 75 

 percent and we have 25 percent. We are losing our milling wheat 

 and the Canadians are picking up the market in the Northeast. 



We have had the dispute panel. The Americans voted against us 

 here a couple of weeks ago. So our folks are really nervous about 

 how this thing might play out with Mexico and are frankly upset 

 that we weren't able to get some of these Canadian issues on the 

 table to be resolved while we are trying to set up this North Amer- 

 ican Free-Trade Agreement. 



I understand you weren't there when this was all going on, but 

 I would hope that somehow or another we can address some of 

 these issues. There is no way that we can include the Canadian is- 

 sues into these side agreements so there is no way we can bring 

 them into the talks at all? 



Ambassador Kantor. We talked about this earlier and I appre- 

 ciated the conversation. 



Because the Canadians refused to join in the NAFTA three-party 

 agricultural agreement, the FTA is still in effect. That doesn't 

 mean that we are without methods of going forward and dealing 

 with the problem you are raising, whether transparencies, sub- 

 sidies, or rail subsidies or other matters regarding wheat. We have 

 EEP; we have countervailing duties; we have the right to try to 

 reach a bilateral agreement; and we have the right to talk to Cana- 

 dians in open negotiations about restraints on imports into this 

 country or exports from Canada into the United States. So there 

 are a number of things we can address which we're beginning to 

 do with Minister Wilson. 



Let me say that what is interesting — and I understand this par- 

 ticular problem and all of these are important. Under the FTA, our 

 trade deficit with Canada has substantially declined. We have done 

 quite well. Frankly, if you read Canadian newspapers, what is hap- 

 pening up there is that there is tremendous opposition to the FTA 

 because they have not done as well economically they believe as 

 our country has. So I guess it is which part of the elephant or the 

 donkey — to be bipartisan — you are touching as to the impression 

 that you get. [Laughter.] 



The fact is that what you are raising is serious. We mean to go 

 forward. We will continue to work with you, as I have said before, 

 because we understand it is a real problem between Canada and 

 the United States and also in third countries like Mexico. I am try- 

 ing to separate that out from the NAFTA itself because really it 

 doesn't affect it in the way that you're referring. 



Mr. Peterson. Are you folks familiar with my end-use certificate 

 bill I have introduced that would require the Canadian grain to 

 have end-use certificates when it comes into this country? 



Ambassador Kantor. That is an interesting approach. 



Mr. Peterson. Are you willing to support my bill? 



Ambassador Kantor. I am certainly willing to take a close look 

 at it, Mr. Peterson. 



