June 7, 2005 (4:50 p.m. EDT)
No. 102

NAFTA PANEL FINDS FAULT WITH U.S. INJURY DECISION ON WHEAT

International Trade Minister Jim Peterson today welcomed a NAFTA panel decision on Canadian hard red spring wheat. In its decision, the panel found that the U.S. International Trade Commission (ITC) failed to demonstrate that imports of hard red spring wheat from Canada were causing injury to the U.S. hard red spring wheat industry.

“We are pleased that the NAFTA panel has agreed with Canada,” said Minister Peterson. “This is good news for Canadian wheat producers. We look to the ITC to issue a no-injury finding in its remand determination.”

The panel ordered the ITC to issue a new determination within 90 days.

“We welcome the NAFTA panel decision on injury,” said Agriculture and Agri-Food Minister Andy Mitchell. “The panel’s decision supports Canada’s long-standing contention that Canadian exports of wheat to the U.S. are not injuring U.S. producers.”

“I look forward to the elimination of the duties on Canadian hard red spring wheat and the resumption of unimpeded trade with the United States in this commodity,” said Reg Alcock, Minister responsible for the Canadian Wheat Board.

On October 3, 2003, the ITC determined that imports of Canadian hard red spring wheat were injuring the U.S. wheat sector. This injury determination had followed subsidy and anti-dumping determinations by the U.S. Department of Commerce (DOC). The combination of decisions led to the application of countervailing and anti-dumping duties on Canadian hard red spring wheat totalling 14.15 percent. On November 24, 2003, the Canadian Wheat Board launched the NAFTA challenge of the ITC’s injury determination.

In a separate action, on October 3, 2003, the Government of Canada and other Canadian parties challenged the DOC’s countervail finding under NAFTA. On March 10, 2005, a NAFTA panel remanded a major component of the original finding to the DOC. That remand determination is due in August 2005.

The NAFTA panel decision is available at http://www.nafta-sec-alena.org.

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Information regarding the U.S. countervail and anti-dumping investigations of certain types of wheat from Canada is provided in the attached backgrounder.

For further information, media representatives may contact:

Andrea Lanthier
Press Secretary
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 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

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

August 3, 2004

The 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.