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Vaile to feel heat over wheat deals

The Age, Melbourne

Vaile to feel heat over wheat deals

By Michael Gawenda, Washington

7 March 2006

TRADE Minister Mark Vaile is expected to face questions about the Cole inquiry and the future of AWB "single desk" for wheat exports from members of Congress and Government officials during a visit to Washington.

Mr Vaile is going to the US capital for a review of the US-Australia Free Trade Agreement.

While he is expected to raise issues such as the long-term exemption of sugar from the FTA, his counterpart, US Trade Representative Rob Portman, has been urged to raise the prospect of dismantling the wheat monopoly.

This first annual review of the trade agreement comes at a tricky time for Mr Vaile, with the Government under increasing pressure at the Cole inquiry and figures showing that in the first year of the FTA, Australia’s trade deficit with the US grew by more than $12 billion.

US Wheat Associates, which represents all the American state grain boards, has mounted an extensive campaign in recent months against AWB’s single desk operation and has received the support of members of Congress, some of whom represent wheat-growing states.

As a result of Wheat Associates lobbying, seven senators, for instance, wrote to Agriculture Secretary Mike Johanns a few weeks ago urging him to bar AWB from getting access to US export credit programs.

Mr Johanns has not responded to the letter and it is understood that the Administration will take no action until the Cole inquiry is completed.

Bush Administration officials have worked behind the scenes deflecting congressional critics of AWB who have demanded that it be punished for what it was prepared to do to get wheat contracts under the UN oil-for-food program from the Saddam Hussein regime.

But Mr Vaile can expect close questioning about the Cole inquiry and the single desk issue when he visits Capitol Hill on Tuesday (Washington time) for meetings with House Agriculture Committee chairman Bob Goodlatte and, among others, the chairman of the House Ways and Means Committee, Bill Thomas.

He is not expected to meet Senator Norm Coleman, the head of the Senate Permanent Subcommittee on Investigations. This is despite the controversy over the revelation that Michael Thawley, Australia’s then ambassador to the US, asked Senator Coleman in 2004 to drop an inquiry into allegations that AWB paid kickbacks to Saddam’s regime.

Mr Vaile’s talks with Mr Portman will be held on Tuesday morning, before he does the rounds of Congress and, late in the afternoon, he will meet Vice-President Dick Cheney.

Mr Vaile and Mr Cheney are not expected to discuss the FTA or issues arising from the Cole inquiry.