U.S. continues Canadian wheat board subsidy investigation

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WASHINGTON – U.S. imports of wheat from Canada are subsidized by the Canadian Wheat Board, a monopoly export marketing group, the U.S. Department of Commerce has ruled in a preliminary determination.

In a March 4 fact sheet, the department calculated the net subsidy rate at 3.94 percent for both durum wheat and hard red spring wheat.

Imposition of countervailing duties requires affirmative final determinations from both the Commerce Department that subsidies were paid and from the U.S. International Trade Commission that the imports injured or threatened U.S. industry.

Final answer. By July 15, the department is expected to make final determinations in both the subsidy case and a parallel dumping case. In the meantime, the U.S. Customs Service will collect a cash deposit or bond on any subject imports equal to the estimated net subsidy rate.

The money would be returned after a negative determination.

More than a year earlier, in February 2002, the Office of the U.S. Trade Representative ruled in an investigation under Section 301 of U.S. trade law that the Canadian government gives the Canadian Wheat Board special monopoly rights and privileges, including free use of rail cars and guarantees on CWB borrowing, that disadvantage U.S. farmers and undermine the integrity of the trading system.

Actions. As a result, USTR announced that the Bush administration would conduct the subsidy and dumping investigations of wheat imports from Canada.

USTR said it also would challenge the CWB in a World Trade Organization dispute-settlement panel and negotiate in the WTO to reform state trading enterprises such as the CWB.

In June 2001-May 2002, U.S. imports from Canada amounted to $219 million for hard red spring wheat and $85.7 million for durum.

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