certain agricultural issues will have a critical impact upon 

 their vote on NAFTA. The agriculture problem most frequently 

 cited that I hear in my survey involves wheat. There are others. 

 It is edible dry beans, it is sugar. There are a good number of 

 others, but the one I hear most frequently, Mr. Chairman and 

 Ambassador Kantor and Secretary Espy, is wheat. 



Canadian transportation or crow's-nest subsidies have become 

 a very serious problem for our people, particularly in the High 

 Plains States but for other wheat-producing States as well. They 

 amount to the Canadian Government paying the cost of shipping 

 Canadian farmers' crops from field to market, sometimes resulting 

 in a $20-per-ton subsidy on wheat. 



Under the Canadian Free Trade Agreement, our trade nego- 

 tiators inexplicably agreed to a scheme which banned using 

 crow's-nest subsidies on shipments into Western States, but 

 allowed them on shipments to Eastern States. And not surpris- 

 ingly, Canadian shipments of wheat have tripled from 23 million 

 bushels to 75 million bushels in the last 5 years, with almost all 

 the shipments coming into — you guessed it — Eastern States. 



To the great credit of the President and to you, Secretary 

 Espy, and Ambassador Kantor, a working group has been ap- 

 pointed to deal with this problem of Canadian wheat-trading 

 practices. It is my understanding that the as yet unreleased re- 

 port of this working group concludes that these subsidized Cana- 

 dian shipments of wheat are distorting the United States wheat 

 market and costing the Government some $600 million over 4 

 years in additional farm program costs. There is also a con- 

 cern that some of this Canadian wheat is finding its way into 

 U.S. farm export programs and is being re-exported at taxpayer 

 expense. 



The damage doesn't end there. The Canadian Government has 

 also used these transportation subsidies in the last 3 years to in- 

 crease their share of the Mexican market from a 0-percent share 

 to over 50 percent, a market in which the United States has obvi- 

 ous geographic advantages over Canada. 



In addition to transportation subsidies, Canadian wheat 

 exports are also subsidized through a Government monopoly 

 known as the Canadian Wheat Board. All sales prices are 

 carefully guarded secrets by the Wheat Board. But those 

 familiar with wheat markets, including USDA experts, be- 

 lieve that Canada consistently undercuts market prices to 

 undersell the United States. And, further, American wheat 

 remains blocked out of the Canadian marketplace by a sys- 

 tem of restricted import licenses and export certificates. 



Mistakes made in negotiating the Canadian Free Trade Agree- 

 ment with regard to wheat were not corrected in the NAFTA. Now 

 we have a unique opportunity to remedy the inequities that 

 burden American farmers in tne context of NAFTA. The admin- 

 istration has within its grasp the opportunity to solve this problem 

 and to facilitate the passage of NAFTA. We can be certain that 

 if we miss this opportunity now, it will not return. 



The administration should work quickly to limit Canadian wheat 

 imports under Section 22. These sanctions are warranted and nec- 

 essary, and I urge their immediate adoption. A second necessary 



