USTR - United States Requests WTO Consultations with Canada Over Duties on Grain Corn
Office of the United States Trade Representative

 

United States Requests WTO Consultations with Canada Over Duties on Grain Corn
03/17/2006
 

WASHINGTON – U.S. Trade Representative Rob Portman announced today that the United States has requested WTO consultations with Canada concerning its provisional antidumping and countervailing duties on U.S. grain corn.  In particular, the United States seeks to consult with the Canadian government on the preliminary injury finding of the Canadian International Trade Tribunal (CITT) authorizing those duties.

Canada imposed provisional countervailing and antidumping duties on imports of U.S. grain corn in mid-December.  Under WTO rules, provisional antidumping and countervailing duties cannot be imposed unless there is a preliminary finding that the imports have injured domestic producers.  In its injury finding in this case, the CITT appears not to have considered a number of factors required by WTO rules.  In addition, the CITT declined to examine relevant evidence that other factors, and not U.S. imports, were injuring Canadian corn growers, such as exchange rate movements and unusually large world corn harvests.  This would not appear to be consistent with WTO rules requiring that such evidence be taken into account.

Imports of U.S. grain corn into Canada have fallen by 42 percent in the last two years.  In the marketing year that ended in August 2005, the United States exported about $210 million of grain corn to Canada.  The principal uses of grain corn are in animal feed, ethanol production, and distilled spirits.

Today's action begins a 60-day consultation period. The United States is hopeful that Canada and the United States will be able to use this time to reach a settlement.

Background

Canada initiated antidumping and countervailing duty investigations of U.S. grain corn producers in August 2005.  Provisional countervailing duties of US$1.07/bushel and provisional antidumping duties of US$0.58/bushel were imposed on December 15, 2005.

The Canadian International Trade Tribunal will hold a hearing on the injury matter in Ottawa from March 20 to March 25 and is scheduled to announce its final injury finding on April 18.  If it finds no injury, the provisional duties will be lifted and importers will receive full refunds.  If it makes a positive injury finding, final combined duties of 44% will be imposed, according to an announcement by the Canada Border Services Agency on March 15.

In 1992, a dispute settlement panel established under the predecessor to the WTO, the General Agreement on Tariffs and Trade (GATT), found that a prior Canadian countervailing duty on U.S. corn, which was largely along the same lines as the one that the United States is challenging today, was inconsistent with GATT rules.  The WTO rules are almost identical and would appear to prohibit the imposition of duties based on the analysis used by the CITT in its preliminary findings.

By not considering several factors in its preliminary injury analysis and declining to examine evidence of other causes of injury, the CITT preliminary injury determination and the provisional duties Canada imposed appear to be inconsistent with several WTO agreements, including the Agreement on Subsidies and Countervailing Measures, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “Antidumping Agreement”), and the General Agreement on Tariffs and Trade 1994.

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