Canada's decision, announced Thursday, to impose anti-dumping and countervailing duties of $1.65 per bushel on U.S. corn is unlikely to protect their corn producers and could impair other industries there.
The new duties, effective immediately, are in response to allegations by Canadian grain producers that grain corn prices have been suppressed in Canada due to dumping and subsidizing of U.S. grain corn. In fact, a recent economic analysis commissioned by the U.S. Grains Council, which evaluated the impact of U.S. corn exports on the Canadian market, found that grain corn prices were determined by the world commodity price for corn and limited by the price of competing feed grains.
The Council, as part of the U.S. Corn Coalition which also includes the National Corn Growers Association, Corn Refiners Association and American Farm Bureau Federation, is working with the U.S. Trade Representative and the Agriculture Department to demonstrate that there has been no injury to Canadian corn producers. The Coalition contends that duties on U.S. corn could potentially harm Canadian corn users by stopping or decreasing corn imports from the United States and Canada does not produce enough corn to meet the domestic demand.
"The Council is concerned about the disruption of trade due to Canada's imposition of the duties and the long term effects it will have on the growth of their industries which rely on a dependable, cost-effective supply of U.S. corn" says Ken Hobbie, USGC president and CEO. "This decision particularly threatens the livestock and poultry industries."
The Canadian Border Services Agency set the anti-dumping duty at 58 cents per bushel of unprocessed U.S. corn and the countervailing duty at $1.07 per bushel. The Coalition says that the process is not final and it will continue working with the U.S. trade officials to have the duties lifted. Canada imported more than 88 million bushels (2,236,000 metric tons) of U.S. corn during the 2004/2005 marketing year. CBSA is expected to announce a final decision in March 2006.