U.S. IMPORTS OF CANADIAN WHEAT: ESTIMATING THE EFFECT OF THE U.S. EXPORT ENHANCEMENT PROGRAM

It is hypothesized that the U.S. Export Enhancement Program (EEP) has had a role in increased U.S. imports of Canadian wheat. Using a set of world wheat models that differentiate wheat according to class and source, several conclusions concerning the role of EEP are reached. Over the period 1986-1993, EEP has been accountable for 40 to 48 percent of the yearly growth in U.S. imports of Canadian wheat. EEP subsidies in 1991/92 to China and Brazil caused significant diversion of Canadian wheat that would have been destined for those markets instead to the U.S. market. Further, it is argued that a quota on imports is not likely to have price-enhancing effects for U.S. wheat.