Duty on Canadian Wheat Continues

U.S. government reaffirms Canadian subsidization of wheat sales to U.S. Compiled by staff

Published on: Aug 18, 2005

The North Dakota Wheat Commission's continuing fight to protect the domestic U.S. wheat market from imports of subsidized Canadian wheat was vindicated last week with a U.S. Commerce Department redetermination on countervailing duties applied to Canadian hard red spring wheat. The Commerce Department found once again that the Government of Canada provides export subsidies that fuel Canadian Wheat Board sales. The finding means a value-based duty will remain on any Canadian hard red spring wheat crossing the border into the U.S.

NDWC Administrator Neal Fisher explains, "The duty rate will be adjusted slightly, but will still be high enough at 11.4% to keep undervalued imports out and allow
U.S. growers to fairly compete in their own domestic market."

The North Dakota Wheat Commission filed countervailing duty and antidumping suits against the Canadian Wheat Board in 2002 to force discipline on the government monopoly which controls the procurement and sale of all western Canadian spring wheat and durum. In this latest development, the Commerce Department was responding to a NAFTA panel order that the subsidies rendered under a comprehensive financial risk coverage program in
Canada should each be considered separately instead of as a whole.

In its remand determination, the Commerce Department divided financial guarantees provided by the Canadian government to the CWB into three component parts -- a borrowing guarantee, a lending guarantee and an initial payment guarantee -- and recalculated the subsidy rate applicable to exports of Canadian hard red spring wheat, arriving at the new total countervailing duty rate of 2.54%. This is on top of antidumping duties of 8.86%, which establishes a combined duty of 11.4%.