Grand Forks Herald | By Jerry Hagstrom | October 13, 2003
North Dakota and U.S. wheat officials and politicians expressed pleasure at the U.S. International Trade Commission's Oct. 3 decision that confirmed a tariff on Canadian hard red spring wheat, but the Canadian government and the Canadian Wheat Board have announced plans to launch a North American Free Trade Agreement challenge to the Commerce Department ruling last Aug. 29 that led to the imposition of a tariff on Canadian hard red spring wheat and durum.
The Commerce Department ruled in August that Canada had subsidized its wheat exports to the United States and dumped wheat at below the cost of production. Another agency, the U.S. International Trade Commission concluded that hard red spring wheat growers had been "materially injured" but that durum growers had not. The Oct. 3 decision had the effect of continuing tariffs imposed in August by the Commerce Department but ending tariffs imposed on durum.
The Commerce Department had set a duty of 14.6 percent on Canadian hard red spring wheat imports per bushel including 5.29 percent to offset subsidies and 8.87 percent to compensate for dumping and a duty of 13.55 percent on durum per bushel including 5.29 percent to offset subsidies and 8.26 percent to compensate for dumping. The North Dakota Wheat Commission, which brought the case, said the tariffs have added about 50 cents to the cost of Canadian wheat in the United States.
Both the Canadian government and the CWB also said they are considering legal action on the ITC ruling and they left open the possibility of legal action in the World Trade Organization.
"Canada follows the established international trade rules and will contest the contrary American decisions along every legal avenue available," Ralph Goodale, the Canadian minister with responsibility for the Canadian Wheat Board, said in a statement.
A spokesman for the CWB said that NAFTA is "the first of the alternatives" the Wheat Board may use and that it is also considering action in the U.S. courts and the WTO. The CWB has until mid-November to decide how to react to the ITC decision, the spokesman said, and is waiting to see the release of the ITC ruling, which is expected in early November. Asked if the Canadian government and CWB legal actions would be coordinated, the CWB spokesman said there would be "an exchange of information."
The Canadians, the U.S. wheat industry, and North Dakota Sens. Byron Dorgan and Kent Conrad, both Democrats, all said they were puzzled by the ITC's split ruling, which said that hard spring wheat growers had been "materially injured," but that durum growers had not. Conrad said flawed the ITC split decision "tells us how flawed this process is and undermines the credibility of our laws against unfair trade.
"It is absurd to believe that the Canadian Wheat Board is not dumping wheat onto our durum market. The Canadian durum trade is exactly the same as the Canadian hard red spring wheat trade - and they just ruled against the Canadian spring wheat trade. We know our North Dakota farmers can compete against Canadian farmers - but I don't think we should expect them to compete against the Canadian government, too."
North Dakota Wheat Commission Chairman Larry Lee, a wheat grower, also raised the possibility that the issue of the Canadian Wheat Board may go all the way to the WTO. Lee said the ITC decision "is a bittersweet victory of sorts," describing himself as "elated about the spring wheat decision" but "extremely disappointed" over the ITC's "clearly wrongful decision" on durum imports. Lee added, "While we would welcome bilateral talks, issues surrounding the unfair trade of Canadian wheat need to be addressed in the World Trade Organization.
"Today's ITC action delivers much-needed relief for American hard red spring wheat growers who have suffered from the unfair pricing practices of the monopoly Canadian Wheat Board," Lee said. "Yet, these same unfair trade practices, the same subsidies, and nearly the same dumping margins apply to Canadian durum wheat, so there is no way these imports are not injurious to U.S. farmers who raise durum."
The National Grain Trade Council, which represents grain exchanges, boards of trade, national grain marketing organizations and grain companies issued an opposite reaction, that it was pleased with the ruling on durum and disappointed with the ruling on hard red spring wheat. The council said if Canadian farmers are prevented from marketing their grain in the United States U.S. farmers will have to compete with them in other markets.Grand Forks Herald:
