NEWS RELEASES

August 9, 2005 (10:40 a.m. EDT)
No. 144

NEW U.S. WHEAT COUNTERVAIL DETERMINATION

A revised determination was issued by the U.S. Department of Commerce (DOC) in the case of countervailing duties on Canadian hard red spring wheat. This remand determination is the DOC’s response to a NAFTA dispute settlement panel decision of March 2005. If unchallenged, it would reduce current duties from 5.29 percent to 2.54 percent.

The DOC maintained that two of the three financial guarantee programs investigated— the borrowing guarantee and the initial payment guarantee—confer countervailable subsidies, while the lending guarantee does not. The result is that U.S. countervailing duties would continue to apply to Canadian hard red spring wheat, though at the lower rate of 2.54 percent.  

“The Department of Commerce has now looked at each program individually as we had requested, which lends credence to our case. An improvement over the original duty rate is also welcome,” said International Trade Minister Jim Peterson. “However, since the United States has kept duties in place, Canada will be looking at options on how to move forward.”

On March 10, 2005, a NAFTA dispute settlement panel ruled that the DOC’s treatment of three financial guarantee programs as a single measure, which had led to all three programs being countervailed, was not in accordance with U.S. law. The panel instructed the DOC to issue a new determination.

“We welcome the Department of Commerce’s conclusion that Canada’s wheat export credit support is not countervailable and that the countervailing duty should be reduced,” said Agriculture and Agri-Food Minister Andy Mitchell.

“We will assess this decision and consult with other Canadian parties, including the Canadian Wheat Board, before deciding on next steps,” said Reg Alcock, Minister responsible for the Canadian Wheat Board.

The U.S. International Trade Commission’s (ITC’s) remand determination on a separate NAFTA panel review of the ITC’s injury determination on hard red spring wheat is due October 5, 2005.

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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

Elizabeth Whiting
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 resulted for durum and hard red spring wheat.

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 for durum and hard red spring wheat; and final anti-dumping rates of 8.26 percent for durum and 8.87 percent for 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 that imports of durum wheat from Canada were not injuring U.S. producers, but that imports of Canadian hard red spring wheat were injuring the U.S. wheat sector. As a result, countervailing and anti-dumping measures would apply to imports of hard red spring wheat from Canada, but not to imports of Canadian durum 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

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

August 3, 2004

A 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 programs re-investigated provide countervailable subsidies, and revised its calculation of the countervailing duty to yield a reduced rate of 2.54 percent.