Trade in Goods
Antidumping, Subsidies and Countervailing Measures
U.S. Department of Commerce - Wheat Investigations
Backgrounder - March 4, 2003
Current Investigations
On 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 hard red spring wheat and durum wheat from Canada. Specifically, they alleged that the Government of Canada and the Canadian Wheat Board (CWB) subsidize both of these products; that the CWB sells these products for less than full market value in the United States; and that, as a result of these imports, U.S. domestic industries are being injured.
On October 23, 2002, the U.S. Department of Commerce initiated countervail and anti-dumping investigations on durum and hard red spring wheat from Canada.
On November 19, 2002, the U.S. International Trade Commission (ITC) made an affirmative preliminary injury determination on wheat imports from Canada. An affirmative preliminary determination means that in the view of the ITC, there are some indications that imports of Canadian wheat are causing or threatening to cause injury to U.S. domestic wheat producers.
The Government of Canada, in cooperation with the provinces and the Canadian Wheat Board, has been actively engaged in a defence of Canada's wheat policies.
The preliminary determinations in the countervail investigations were received on March X, 2003. The preliminary determinations in the anti-dumping investigations are expected by May, 2003.
The final determinations by the U.S. Commerce Department for all cases are expected in late summer.
Important Statistics (source: Statistics Canada. All figures are in Canadian dollars)
Canadian Exports of durum in 2002
Total $1,024.7 million
U.S. $ 152.3 million
Canadian Exports of non-durum wheat in 2002
Total $2,056.0 million
U.S. $ 265.5 million
Total Canadian wheat exports to the U.S. over last 3 years
2000 $360.4 million
2001 $459.3 million
2002 $417.8 million
Canadian durum exports to the U.S. over last 3 years
2000 $ 68.3 million
2001 $111.4 million
2002 $152.3 million
Canadian non-durum wheat exports to the U.S. over last 3 years
2000 $ 292.0 million
2001 $ 347.9 million
2002 $ 265.5 million
For additional information, please consult the following website:
http://www.agr.gc.ca/mad-dam/e/sd1e/2003e/feb2003_e.htm
Countervailing Duty Frequently Asked Questions
What is a countervailing duty?
A countervailing duty (CVD) is a special duty imposed to protect 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.
When can a CVD be applied?
A countervailing duty can only be applied if it has been established in an investigation that imported goods have been subsidized and that such subsidized imports are causing injury, or threatening to cause injury to the domestic industry. The duty cannot exceed the amount of subsidy found in investigation. A preliminary determination of injury is made 45 days after the petition for CVDs is made. A final countervail determination will either confirm or dismiss the preliminary finding of subsidization.
Who in the U.S. conducts a CVD investigation?
The U.S. Department of Commerce must determine whether a foreign government is directly or indirectly providing a countervailable subsidy for the manufacture, production or exportation of merchandise imported or sold into the United States. The U.S. International Trade Commission must determine whether the U.S. industry producing the like goods has been materially injured, or threatened with material injury, by reason of subsidized imports. If these two conditions are met, a countervailing duty equal to the amount of the subsidy is imposed upon the imports of the subsidized merchandise.
How long does a CVD investigation take?
An investigation takes roughly eight months to complete, though there is provision for limited extension. Final determinations of subsidy and injury will result in the imposition of countervailing duties.
Can Canada appeal the outcome of a CVD investigation?
The final determinations of subsidy and injury are subject to judicial review in the U.S. Courts or binational panel review under the North American Free Trade Agreement (NAFTA).
If a countervail investigation does not fully meet requirements set out in the World Trade Organization framework, it may be challenged at the WTO.
The Canadian Wheat Board: What is it?
The Canadian Wheat Board is a marketing agency for western wheat, durum wheat and barley. The role of the Board is to market grain in Canada and around the world, maximizing returns to the grain producers. It is governed by a board of directors, made up of a majority of elected farmers. All CWB operating cost are paid by farmers.
Information on the operations of the CWB is available to the public through its independently audited annual report.
For further information on the Canadian Wheat Board, please consult the following website:
www.cwb.ca
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