The International Politics of Agricultural Trade: Canadian-American Relations in a Global Agricultural Context

common interests. Although Canadian officials consistently criticized the U.S. program, Canada actually received some benefits from the multilateral and open-end barter agreements. Indeed, Canada was the second largest source of strategic materials under the USDA barter program, supplying exports valued at U.S.$141,797,000. ⁴⁴ When an American program reappraisal in 1957 threatened to reduce barter transactions drastically, the Financial Post ( Toronto) discussed the possibility that this would have mixed effects on Canada. The Post noted that the United States had been stockpiling Canadian lead and zinc in exchange for surplus wheat and commented wryly that "the only reason we may be able to sell more wheat in the world market is because we will soon be selling a lot less lead and zinc."⁴⁵ The possible benefits to Canada notwithstanding, the official government position was to disapprove of agricultural barter. In 1961, for example, a Canadian company (Consolidated Mining and Smelting) had an interest in bartering lead and zinc for agricultural commodities. A Department of Trade and Commerce official nevertheless maintained that such opportunities to export strategic materials could not offset the detrimental effects of American barter on Canada's grain markets. ⁴⁶

It is widely felt that international trade in exchange for money is far more efficient and desirable than countertrade. However, countertrade is currently being used in international markets for various reasons. These include the LDC debt crisis, the highly competitive situation for the export of certain products, and the substantial government involvement in the economies of some countries. The American government generally views countertrade as being contrary to an open trading system, but it will not normally oppose participation by private U.S. companies. As a result, agricultural barter could at some point re-emerge as an issue in Canadian-American relations.

There were many similarities between the tied sales and barter issues. They were both unilateral strategies adopted by the United States to maintain (or increase) its market share of agricultural exports during a period of foodgrain surpluses. While agricultural barter also fulfilled the U.S. political-security objective of adding to its strategic stockpile, there is considerable evidence that surplus disposal was the main motivation. Since the United States was not yet experiencing balance of payment problems, it was willing to provide large amounts of foodstuffs on concessional terms, and both tied sales and barter had concessional aspects.

Tied sales and barter were also both considered to be extremely objectionable by Canada. Most importantly, they were viewed as "grey-area" transactions that

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