NEWS RELEASES

March 4, 2003 (4:45 p.m. EST) No. 22

CANADA REFUTES U.S. COMMERCE DEPARTMENT'S PRELIMINARY FINDINGS OF WHEAT SUBSIDY

The Government of Canada today refuted the conclusions of U.S. Department of Commerce (DOC) in its preliminary findings, which will result in the imposition of duties of 3.94 percent on durum and hard red spring wheat from Canada.

"Canadian wheat exports are not subsidized, so we disagree with the U.S. Department of Commerce finding of subsidy, no matter how small," said International Trade Minister Pierre Pettigrew. "We mounted a strong defence of our policies and we note that the DOC has set aside most of the U.S. petitioners' requests. We will continue to defend our policies as the investigations proceed."

On October 23, 2002, the U.S. Department of Commerce initiated countervailing and anti-dumping investigations on durum and hard red spring wheat from Canada. Actions were taken following the presentation of a petition by U.S. wheat producers.

"These numbers are far less draconian than anticipated, however anything more than zero is too much," said Ralph Goodale, Public Works and Government Services Minister and Minister Responsible for the Canadian Wheat Board. "The numbers are small, but we will fight them nonetheless. There are other shoes to fall later this year and we will not let down our guard."

"This challenge by American wheat producers is disappointing," said Agriculture and Agri-Food Minister Lyle Vanclief. "I find it extraordinary that U.S. producers can complain about Canadian support while collecting increasingly large paycheques from their own government. The Canadian government will continue to work with affected provinces and the Canadian Wheat Board to ensure that our interests and trade agreement rights are forcefully defended."

As part of these investigations the Department of Commerce is examining the financial guarantees of the CWB and rail transportation programs.

"The grain handling and transportation policies of the Government of Canada are designed to produce efficiencies in the system and do not distort trade between Canada and the United States," said Transport Minister David Collenette.

Preliminary determinations in the anti-dumping investigations are expected by May 2003. The duties currently imposed on exports of Canadian durum and hard red spring wheat are provisional, pending final determinations by the U.S. Department of Commerce. Final determinations in both cases are expected in late summer.

For additional information about the countervailing duty process and the CWB, please consult the following Web site:

http://www.dev.dfait-maeci.gc.ca/tna-nac/goods-en.asp#9

- 30 -

A backgrounder is attached.

For further information, media representatives may contact:

Sébastien Théberge

Director of Communications

Office of the Minister for International Trade

(613) 992-7332

Media Relations Office

Department of Foreign Affairs and International Trade

(613) 995-1874

John Embury

Director of Communications

Office of the Minister of Public Works and Government Services

(819) 997-5421

Donald Boulanger

Press Secretary

Office of the Minister of Agriculture and Agri-Food Canada

(613) 759-1761

Anthony Polci

Director of Communications

Office of the Minister of Transport

(613) 991-0700

This document is also available on the Department of Foreign Affairs and International Trade's Internet site: http://www.dfait-maeci.gc.ca

Backgrounder

Current Investigations

On September 13, 2002, the North Dakota Wheat Commission and the U.S. Durum Growers Association filed petitions seeking anti-dumping and countervailing duties on imports of both durum and hard red spring wheat from Canada. Specifically, they alleged that the Government of Canada and the Canadian Wheat Board (CWB) subsidize both of these products; that the CWB sells these products for less than full market value in the United States; and that, as a result of these imports, U.S. domestic industries are being materially injured.

On October 23, 2002, the U.S. Department of Commerce initiated countervailing and anti-dumping investigations on durum and hard red spring wheat from Canada.

On November 19, 2002, the U.S. International Trade Commission (ITC) made an affirmative preliminary injury determination on wheat imports from Canada. An affirmative preliminary determination means that, in the view of the ITC, there are some indications that imports of Canadian wheat are causing or threatening to cause material injury to U.S. domestic wheat producers.

The Government of Canada, in cooperation with the provinces and the Canadian Wheat Board, has been actively engaged in defending Canada's wheat policies.

The preliminary determinations in the countervailing investigations were received on March 4, 2003. The preliminary determinations in the anti-dumping investigations are expected by May 2003.

The final determinations by the U.S. Commerce Department for all cases are expected in late summer.

Important Statistics (source: Statistics Canada/all figures are in Canadian dollars)

Canadian exports of durum in 2002

Total $1,024.70 million

U.S. $ 152.32 million

Canadian exports of non-durum in 2002

Total $2,056.02 million

U.S. $ 265.46 million

Total Canadian wheat exports to U.S. over last 3 years

2000 $360.4 million

2001 $459.3 million

2002 $417.8 million

Canadian durum exports to U.S. over last 3 years

2000 $ 68.3 million

2001 $111.4 million

2002 $152.3 million

Canadian non-durum exports to U.S. over last 3 years

2000 $292.0 million

2001 $347.9 million

2002 $265.5 million

For additional information, please consult the following Web site:

http://www.agr.gc.ca/mad-dam/e/sd1e/2003e/feb2003_e.htm