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
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
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.
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
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.