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David MacNaughton, Canadian ambassador to the United States (Government of Canada photo)

Grain grading among the later issues negotiated in USMCA; Canadian officials say Cramer’s comments didn’t help

WASHINGTON — Changes to the Canadian grain grading system were a big win for U.S. agriculture in the U.S.-Mexico-Canada Agreement. But officials in Canada have said that public comments during the negotiations, including some by Rep. Kevin Cramer, R-N.D., almost derailed the inclusion of the matter in the final agreement.

The Canadian grain-grading system has long been viewed as unfair by U.S. wheat growers and wheat organizations. While Canadian farmers can haul wheat to the U.S. and be treated the same as U.S. farmers, U.S. farmers heading north of the border see their wheat treated as feed, even if the wheat is a variety approved in Canada and of milling quality.

The U.S.-Mexico-Canada Agreement, announced late Sept. 30, revises the Canadian wheat grading issue, something cheered by ag groups and politicians alike.

"It's been an issue that has been raised with me by multiple people from North Dakota," David MacNaughton, Canadian ambassador to the U.S., said in a phone conversation with Agweek on Oct. 4

MacNaughton said the change was included in the USMCA "in an effort to be constructive and neighborly."

Public negotiating draws fire

Officials with knowledge of the negotiations, however, said the grain grading issue was removed for a time from the agreement in part due to comments Cramer made to Politico Pro Canada in a Sept. 17 piece regarding the negotiations. In the Politico Pro Canada interview, Cramer criticized Canadian officials for lobbying officials in the U.S. on issues like tariffs.

"The Canadian government tried to utilize [longstanding cross-border] relationships to — I don't want to say undermine, necessarily ... but at least to leverage the relationships," Cramer said in an interview with Politico Pro Canada.

Cramer, speaking to Agweek on Oct. 5, said he stands by those comments and feels it was inappropriate for Canadian officials to lobby U.S. officials while negotiations were ongoing.

Another Politico Pro Canada story on Sept. 27 quoted MacNaughton as confirming that he confronted Cramer about the NAFTA comments. The article, by reporter Lauren Gardner, relayed the following anecdote:

"(MacNaughton) said he called Cramer because he didn't appreciate things he was saying about NAFTA, and made clear he'd discuss farm-state complaints about Canada's grain-grading regime — 'but not when he was thumbing his nose at us.'

'I keep saying to them: We are nice people, fair and generous people, but we are also hockey players,' MacNaughton said.

'Part of this is a charm offensive, and part of it is, frankly, getting them to pay attention to some of the leverage we have.'"

Cramer said he does not recall speaking to MacNaughton in at least six months but said it is possible that the ambassador's staff had reached out to his staff.

MacNaughton, in his call with Agweek, said he didn't want to get into issues regarding what had been in and out of the agreement. However, he did confirm there were tensions over people "on both sides" playing out negotiations in public.

"One of the things that was causing problems in the negotiation earlier on was people on both sides using negotiating in public or using rhetoric that caused problems," MacNaughton said. "One of the things that allowed the agreement to come together was the fact that both Minister (Chrystia) Freeland and Ambassador (Robert) Lighthizer agreed — and we stuck to it — not to negotiate in public."

MacNaughton also did not want to address his interaction with Cramer regarding his public comments.

"The congressman and I have had a good relationship in the past. I think from what I've said about public negotiations and rhetoric, you can draw your own conclusions," MacNaughton said. "He and I have gotten along well in the past, and I hope we get along well in the future, wherever he ends up."

Cramer was similarly laudatory toward MacNaughton, noting the ambassador's strong business sense.

Included grain grading in the deal

Several agricultural elements of the agreement were among the last things considered, MacNaughton said, including Canada wanting access to U.S. markets for "sugar, peanut butter and a few other things," and the U.S. wanting access to Canadian markets for dairy, poultry and eggs and wanting to clear up the grain-grading issue.

"It all came down really to the last couple of days when these matters where resolved," MacNaughton said.

Canada for several years had been contemplating doing away with, or at least loosening its wheat grading system. Bill C-48, introduced in the Canadian Parliament in December 2014, would have allowed U.S. farmers hauling across the border to sell varieties registered in Canada under the same grading system as used for grain grown in Canada. But the bill never was acted on before Prime Minister Justin Trudeau took office.

Canadian officials list North Dakota's U.S. senators — Democratic Heidi Heitkamp and Republican John Hoeven — and Montana's U.S. senators — Republican Steve Daines and Democrat Jon Tester — as having been committed to resolving the issue for months.

Cramer, in an op-ed submitted to publications on Friday, noted his advocacy on the issue:

"I spoke directly with President (Donald) Trump concerning the biased Canada grain grading issue and wrote a line he used in his Fargo rally speech. I worked closely with U.S. Trade Representative Lighthizer and Chief Agriculture Negotiator (Gregg) Doud to ensure our North Dakota grain growers were relieved of the unfair practice of grading North Dakota grain as sub-par feed."

Rep. Kevin Cramer speaks with President Donald Trump at Scheels Arena in Fargo on Wednesday, June 27. David Samson/The ForumCramer noted that he had talked to Trump about the issue on several occasions and recalled one instance where he had to explain what durum is and that it's used in pasta making to the president.

"Typical Donald Trump. He didn't know what durum was, but he knew pasta," Cramer said.

Cramer credits Doud's involvement with the negotiations and his knowledge of Northern Plains agriculture for getting the grain-grading issue included in the final product of USMCA.

"I think a big part of why we were able to put that in ... is that Gregg Doud is from Kansas," he said.

MacNaughton said the sensitivity of the issue for North Dakota and Montana farmers convinced the Canadian side to agree to the grain-grading change.

"We knew it was important to a lot of farmers in (North Dakota)," he said.

Overall, MacNaughton calls USMCA "a positive development," though he said he is hoping for resolution to the issue of steel and aluminum tariffs that continue to hinder trade between the U.S. and Canada.

"Canada and the United States have balanced trade," MacNaughton said. "As I have reminded some of the representatives from North Dakota, North Dakota sells $4.5 billion in goods to Canada and we sell $1.5 billion to you. ... It's a pretty positive relationship to North Dakota."

The negotiations have "frayed nerves and tempers," MacNaughton said. But he sees a positive relationship going forward.

"Hopefully we can get back to being what we've been for many, many years, which is good friends and neighbors and trading partners," he said.

Once the tariff issues are resolved, MacNaughton said the two countries "can start dealing with the people who are really bad actors on the international trade front rather than the people who have consistently played by the rules and have a balanced trade relationship with the U.S."

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