NEWS RELEASES

October 5, 2005 (7:15 p.m. EDT)
No. 176

CANADA WELCOMES U.S. FINDING ON WHEAT

On behalf of the Government of Canada, International Trade Minister Jim Peterson today welcomed the U.S. International Trade Commission (ITC)’s determination, on remand from a NAFTA panel, that there was no injury in the hard red spring wheat case.

“This decision is valid proof that Canadian exports of hard red spring wheat aren’t injuring producers in the U.S.,” said Minister Peterson. “It is now time for the U.S. to do the right thing and drop the duties.”

On June 7, 2005, a NAFTA panel found that the ITC had failed to demonstrate in its original determination that U.S. imports of hard red spring wheat from Canada were causing injury to the U.S. industry. The panel instructed the ITC to address the deficiencies in its findings in a remand determination.

The ITC determined in its remand decision that U.S. imports of Canadian hard red spring wheat have neither caused, nor threatened to cause, injury to U.S. wheat producers.

“This is a clear victory for Canadian wheat farmers,” said Agriculture and Agri-Food Minister Andy Mitchell. “The ITC determination on remand should put to rest the unwarranted allegations of the past decade concerning the Canadian Wheat Board.”

“I look forward to the quick resumption of unimpeded wheat trade with the United States,” said Reg Alcock, Minister responsible for the Canadian Wheat Board. “Renewed access to the U.S. market will enhance marketing opportunities for the Board, one of the foremost global marketers of wheat.”

On October 3, 2003, the ITC found that imports of Canadian hard red spring wheat were causing injury to the U.S. industry. This injury determination followed subsidy and anti-dumping determinations by the U.S. Department of Commerce (DOC). These decisions led to the application of countervailing and anti-dumping duties on Canadian hard red spring wheat totalling 14.15 percent. At the same time, the ITC determined that U.S. imports of Canadian durum were not injurious to U.S. durum producers.

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Information regarding the U.S. countervailing and anti-dumping investigations of wheat from Canada and of the associated NAFTA panel reviews is provided in the attached backgrounder.

For further information, media representatives may contact:

Jacqueline LaRocque
Director of Communications
Office of the Minister of International Trade
(613) 992-7332

Media Relations Office
International Trade Canada
(613) 995-1874
http://www.international.gc.ca

Matt Tolley
Press Secretary
Office of the Minister of Agriculture and Agri-Food
(613) 759-1059

Media Relations
Agriculture and Agri-Food Canada
Toll free: 1 866 345-7972

Lise Jolicoeur
Press Secretary
Office of the President of the Treasury Board
and Minister responsible for the Canadian
Wheat Board
(613) 957-2666

Backgrounder

KEY DATES:

CURRENT U.S. WHEAT CASES INVOLVING IMPORTS FROM CANADA

September 13, 2002

The North Dakota Wheat Commission and the U.S. Durum Growers Association filed petitions seeking anti-dumping and countervailing duties on imports of both durum and hard red spring wheat from Canada.

October 23, 2002

The U.S. Department of Commerce (DOC) initiated countervailing and anti-dumping investigations of durum and hard red spring wheat from Canada.

November 19, 2002

The U.S. International Trade Commission (ITC) made an affirmative preliminary injury determination on wheat imports from Canada.

March 4, 2003

The DOC announced its preliminary determinations in the countervail investigations. The DOC determined on a preliminary basis that two Canadian programs represented countervailable subsidies: the provision of government railcars and the government guarantee of Canadian Wheat Board borrowing. Provisional duties of 3.94 percent on durum and hard red spring wheat resulted.

May 2, 2003

The DOC announced its preliminary determinations in the anti-dumping investigations. The DOC determined on a preliminary basis that durum and hard red spring wheat from Canada were being sold in the United States at prices lower than those prevailing in Canada or below full cost. Provisional duties of 8.15 percent on durum and 6.12 percent on hard red spring wheat resulted.

August 29, 2003

The DOC announced affirmative final determinations in its countervail and anti-dumping investigations. In the countervail case, the DOC identified what it termed “comprehensive financial risk coverage” and the provision of government railcars as subsidies. The outcome was as follows: a final countervail rate of 5.29 percent on durum and hard red spring wheat; and final anti-dumping rates of 8.26 percent on durum and 8.87 percent on hard red spring wheat.

October 3, 2003

The Government of Canada filed a request for a NAFTA panel review of the DOC’s final determinations in the countervail case. Chapter 19 of NAFTA provides for a binding, binational panel review of final determinations in trade remedy cases. Panels consisting of five persons are established to review the determinations. These panels are required to ascertain whether or not the determinations are consistent with the trade laws of the country conducting the investigation.

October 3, 2003

The ITC determined unanimously that imports of durum wheat from Canada were not injuring U.S. producers, but voted 2-2 that imports of Canadian hard red spring wheat were injuring the U.S. wheat sector. (A tied vote is considered to be an affirmative decision.) As a result, countervailing and anti-dumping measures would not apply to imports of Canadian durum wheat, but would apply to imports of Canadian hard red spring wheat.

October 23, 2003

The DOC announced the countervailing and anti-dumping duty orders covering hard red spring wheat from Canada: countervail, 5.29 percent; anti-dumping, 8.86 percent.

November 24, 2003

The Canadian Wheat Board filed a request for a NAFTA panel review of the ITC’s final determination of injury with respect to hard red spring wheat.

July 9, 2004

The NAFTA panel was selected to review the DOC countervail decision.

August 3, 2004

A separate NAFTA panel was selected to review the ITC injury decision.

March 10, 2005

The NAFTA panel that reviewed the final DOC countervail determination announced its decision. It found that the DOC’s determination regarding the financial guarantee programs was not in accordance with U.S. law, and remanded the issue to the DOC. The panel upheld the DOC’s finding on the provision of government-owned and -leased railcars.

June 7, 2005

The NAFTA panel reviewing the ITC’s final determination on injury related to hard red spring wheat found that the ITC had failed to prove causation between imports of Canadian wheat and circumstances in the U.S. wheat industry. The panel remanded the determination to the ITC.

August 8, 2005

The DOC announced its remand determination in the countervail case. It concluded that only two of the three re-investigated programs provide countervailable subsidies, and revised its calculation of the countervailing duty to yield a reduced rate of 2.54 percent. The Canadian Wheat Board, the Government of Canada and the other Canadian parties have argued that the remand determination warrants review by the NAFTA panel.

October 5, 2005

The ITC announced its remand determination in the injury case. It concluded that U.S. imports of hard red spring wheat from Canada are not injurious to U.S. wheat producers. In the absence of an affirmative injury determination, the countervailing and anti-dumping duties on Canadian hard red spring wheat have no basis in U.S. law.