NEWS RELEASES

August 17, 2004 (7:00 p.m. EDT) No. 94

CANADA WELCOMES U.S. DECISION ON LIVE SWINE

The Government of Canada today expressed its satisfaction with the United States Department of Commerce (DOC)’s preliminary countervailing decision, which found that trade in Canadian live swine is not unfairly subsidized.

“The Canadian swine industry is among the most competitive in the world, and is a fair international trader,” said Minister of International Trade Jim Peterson. “We will continue to stand behind our programs and our hog exporters.”

“We are pleased that Canada's fair trading practices are reflected in today's decision,” said Minister of Agriculture and Agri-Food Andy Mitchell. “Canada will continue to defend the interests of Canadian swine exporters, in consultation with stakeholders and the provinces, and will continue to ensure that its international trade rights are being fully respected.”

The DOC is also conducting an anti-dumping investigation. The preliminary determination in this case is not due until October 14. Final determinations for both the anti-dumping and countervailing cases are expected by the end of the year.

The U.S. International Trade Commission will make a final injury determination in mid-February 2005 if the case extends beyond the end of the year.

In 2003, hog exports from Canada were valued at $554 million, with Ontario, Manitoba, Saskatchewan and Alberta being the primary exporters. The U.S. is the principal market for Canadian live swine exports.

The DOC also found in 1999 that the Canadian swine were fairly traded.

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A backgrounder is attached.

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
Foreign Affairs Canada and International Trade Canada
(613) 995-1874
http://www.international.gc.ca

Bryan Kirk

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

Media Relations
Agriculture and Agri-Food Canada
(613) 759-7972

BACKGROUNDER

On March 5, 2004, the National Pork Producers Council (NPPC), a group representing U.S. swine producers, filed a petition with the U.S. Department of Commerce (DOC) requesting countervailing and anti-dumping duty investigations on imports of live swine from Canada. The petition alleged that Canada is unfairly subsidizing live swine exported to the U.S., and that live swine imported from Canada are being sold at less than fair value (dumped).

The U.S. DOC is responsible for determining whether the products under investigation are being subsidized and/or dumped. The U.S. International Trade Commission (ITC) is responsible for determining whether the domestic industry in the U.S. has been injured or is threatened with injury by reason of the dumped and/or subsidized imports. The two organizations perform their investigations concurrently.

On April 8, 2004, the Government of Canada was notified by the DOC that it had initiated investigations at the request of the NPPC.

Countervail investigation

On May 5, 2004, the DOC issued an initial questionnaire to the federal and provincial governments as well as to a limited number of swine producers/exporters. The DOC was looking for information on the Canadian programs that allegedly provide countervailable subsidies.

The federal government prepared its response in close consultation with industry and provincial representatives. On June 30, 2004, the Canadian government submitted its response to the countervail questionnaire.

On July 14, 2004, the DOC sent a supplemental questionnaire to the Canadian government, the governments of Alberta, Saskatchewan, and Manitoba, and certain swine producers/exporters. On August 4, 2004, the federal government submitted its response.

Anti-dumping investigation

On May 27, 2004, the DOC issued an anti-dumping questionnaire to the Canadian industry. The Canadian industry’s anti-dumping response was filed on July 6, 2004. In the event of an affirmative preliminary anti-dumping finding by the DOC, the earliest date when provisional anti-dumping duties could be collected would be October 14, 2004.

Injury investigation

On May 7, 2004, the U.S. ITC, in a preliminary determination, decided by a vote of 6-0 that imports of Canadian swine are causing material injury to the U.S. domestic live swine industry. As a result of this decision, the DOC and the ITC continued their respective investigations.

Today’s decision

Following today’s preliminary determination by the DOC, provisional countervailing duties will not be imposed on imports of live swine from Canada. However, the DOC will proceed with further investigation, including a verification exercise related to the information submitted by the federal government and other Canadian parties.

The DOC’s final determination on subsidy is not expected until the end of the year. If that determination remains negative, the investigation will end. If the DOC makes an affirmative determination of subsidy, the ITC’s final determination on injury would not be expected until mid-February 2005.

The Canadian government will continue to actively defend the interests of the Canadian exporters in close consultation with both the industry and provinces.

Definitions

A countervailing duty is a special duty imposed to protect a domestic industry from injury caused by imports that have benefited from subsidies provided by a foreign government. Subsidies that are generally available, i.e., that are not directed specifically at an enterprise, industry or group of enterprises or industries, are not countervailable.

An anti-dumping duty is a special duty imposed to protect a domestic industry from goods sold in that market at prices below those charged for comparable sales in the producer’s home market, or sold at a price less than the cost of producing the goods.