Commission to Rule on Wheat-Import Dispute : Trade: The advisory opinion will say whether U.S. farmers are being hurt by Canadian sales.

The International Trade Commission will rule Friday whether imports of Canadian wheat are hurting U.S. farmers in what has become an increasingly bitter trade dispute between the United States and Canada.

The commission acts only in an advisory capacity. Any findings or recommendations it hands down are used by the White House in making decisions, which could include sanctions against Canada.

Still, industry analysts are watching the ruling for indications of what, if any, action the United States might take against Canada.

“We are interested in the ITC decision because we hope it will give show us what direction the U.S. intends to take as the battle shapes up,” a grain industry analyst said.

Most industry analysts predict a split decision when the six-member panel hands down its findings late Friday.

The wheat trade dispute has spiraled from a minor flap over the surge in imports of Canadian durum wheat into what could be the beginning of a full-fledged trade war between the world’s two largest trading partners.

The United States imported 2.5 million metric tons of Canadian durum wheat in 1993, a record high that could be attributed to a shortage of domestic supplies. (Critics of U.S. farm and export subsidy programs point out that the United States continued to export huge amounts of subsidized durum wheat even after the huge loss caused by last year’s devastating Midwest floods.) U.S. food processors were therefore forced to look elsewhere for durum wheat, which is used in pasta, and they turned to the cheaper Canadian product. U.S. farmers then demanded that Washington act to stop these imports, arguing that they would permanently lose a share of the domestic market to the cheaper Canadian wheat.

The United States accused Canada of creating an unfair trading environment by using hidden subsidies and practicing predatory pricing.

Canada asserts that the accusations of wheat dumping have not been sustained.

Trade Minister Roy MacLaren noted that U.S. trade law “allows vested interests to use the courts to compete instead of the free market.”

Meetings between Washington and Ottawa went nowhere, with both sides standing firm.

President Clinton told the ITC to investigate the matter. The findings to be released Friday are the results of that inquiry.

Analysts say the United States will probably make good on threats of import quotas of about 1 million metric tons, with tariffs on imports beyond that number. Canada has threatened to retaliate, which would bring other sectors of agriculture into the fracas and complicate the issue further.

In a separate matter, Canada Wednesday won a long-running dispute with the United States over softwood lumber imports when an international trade panel handed down a third ruling in the case.

The panel, composed of three Americans and two Canadians, found that the ITC failed to prove its assertion that imports of Canadian softwood had injured the U.S. industry. The ITC had proven there was injury to the U.S. industry, the panel said, but not that that imports of Canadian lumber were the cause. The trade panel sent the case back to the ITC, telling it that more evidence was needed to prove that there had been a violation under terms of the Free Trade Agreement.