(U.S. Senate) – Following reports that despite the ratification of the U.S.-Mexico-Canada Agreement (USMCA) earlier this year, Canada has continued to downgrade American wheat imported into the country, U.S. Senator Jon Tester urged U.S. Trade Representative Ambassador Robert Lighthizer to immediately reach out to the Canadian trade representatives to resolve the issues and enforce the Agreement.
“In theory, USMCA ends the Canadian practice of automatically downgrading all imported wheat to feed wheat, which is the lowest grade and therefore the cheapest to import,” wrote Tester. “As USMCA goes into effect, the State of Montana is hearing that the Canadian government is unwilling to make changes to the [Varietal Registration System] that would bring any real equity to the grain grading system. If Canada continues to refuse to accept U.S. varieties into the VRS, then U.S. grain growers are back at square one, and will be forced to sell their high-quality product as a low-quality import.”
Tester continued, “USMCA held such promise, but if we are unable to deliver any real outcomes for Montana farmers from the deal, we are failing folks in production agriculture. Without robust enforcement, negotiated trade agreements will be unable to bring certainty and market stability to American farmers and ranchers.”
Senator Tester supported the USMCA and voted for it when it passed the Senate in January. His support was based in large part on the fix to Canada’s unfair wheat grading practices, and he has long argued that, without strict enforcement, the trade agreement cannot provide a substantial benefit to Montana producers.
USMCA addressed a critical discrepancy in U.S.-Canada wheat trade by prohibiting either country from discriminating against the other’s grain, ending the Canadian practice of automatically downgrading all imported wheat to feed wheat—the lowest grade and therefore cheapest to import. However, USMCA does not address the inherently discriminatory Canadian Varietal Registration System (VRS), a list of wheat varieties that may be sold on Canadian markets. Wheat varieties not registered in the VRS must be sold as feed wheat, regardless of USMCA, and the VRS excludes many varieties grown in Northern tier states like Montana. Canada has indicated that it is unwilling to make changes to the VRS, allowing it to continue to unfairly downgrade Montana wheat.
Office of Montana Senator Jon Tester