The Canadian Wheat Board (CWB) welcomed today's ruling by a NAFTA panel, which found that imports of Canadian hard red spring wheat cause no injury to U.S. producers. The panel ruled in favour of the CWB's appeal of the 2003 injury determination by the U.S. International Trade Commission (ITC), which led to the imposition of a prohibitive 14.15-per-cent tariff on imports to the U.S. of Canadian hard red spring wheat.

"Today's ruling is a clear and unequivocal victory for western Canadian wheat farmers," said Ken Ritter, chair of the CWB's farmer-controlled board of directors. "We are confident that the ITC will now do the right thing and move quickly to lift the tariff so that we can resume marketing our high quality wheat to our American customers."

The NAFTA panel upheld the CWB's argument that Canadian hard red spring imports do not affect wheat prices in the U.S. "The Panel concludes that the ITC's finding that increased volumes of subject imports depressed prices is not supported by evidence." (page 40). The full text of the panel's ruling can be found on line at www.nafta.org (main index page) or click here for the panel report (PDF format).

The CWB will continue to uphold the right of western Canadian farmers to access the U.S. market, Ritter said. "We believe the existing trade agreements between Canada and the U.S. should be worth more than the paper they are written on," he said. "The U.S. market is an important one for Prairie grain farmers and we will not let some well-financed special interest groups shut us out of it."

Since the Canada-U.S. free trade agreement was signed in 1989, American special interest groups have launched a total of 14 trade challenges against the CWB. In none of these previous challenges has the CWB been found to distort trade. The challenge ruled on today was initiated by the North Dakota Wheat Commission in 2002. (see attached backgrounder).

Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. As one of Canada's biggest exporters, the Winnipeg-based organization sells grain to more than 70 countries and returns all sales revenue, less the costs of marketing, to Prairie farmers.

Chronology of events

September 13, 2002
The North Dakota Wheat Commission and the U.S. Durum Growers Association file petitions seeking anti-dumping and countervailing duties on imports of durum and hard red spring wheat from Canada.

October 23, 2002
The U.S. Department of Commerce (DOC) initiates countervailing and anti-dumping investigations.

March 4, 2003
The DOC determines on a preliminary basis that two Canadian programs represent countervailable subsidies: the provision of government railcars and the government guarantees to the Canadian Wheat Board. Provisional duties of 3.94 per cent are imposed on durum and hard red spring wheat.

May 2, 2003
The DOC makes a preliminary determination in the anti-dumping case, resulting in provisional duties of 8.15 per cent on durum and 6.12 per cent on imports of Canadian hard red spring wheat.

August 29, 2003
The DOC announces affirmative final determinations in its countervail and anti-dumping investigations. In the countervail case, the DOC identifies what it terms "comprehensive financial risk coverage", as well as the provision of government railcars, as subsidies. The outcome: a countervail rate of 5.29 per cent for durum and hard red spring wheat; final anti-dumping rates of 8.26 per cent for durum; and 8.87 per cent for hard red spring wheat.

October 3, 2003
The ITC determines that imports of durum wheat from Canada are not injuring U.S. durum producers, but is split on whether imports of Canadian hard red spring wheat are injuring the U.S. wheat sector. Under U.S. trade law, a split decision favours the plaintiff and as a result, the 14.15-per-cent tariff applies to imports of hard red spring wheat from Canada, while the tariff on durum is lifted.

July 9, 2004
The NAFTA panel is selected to review the DOC countervail decision, following appeals by the CWB and governments of Canada, Saskatchewan and Alberta.

July 30, 2004
The U.S. Court of International Trade dismisses an appeal by the North Dakota Wheat Commission of the ITC determination that Canadian durum imports are not injuring the U.S. durum industry.

August 3, 2004
The NAFTA panel is selected to review the ITC injury decision, after an appeal by the CWB.

March 10, 2005
The NAFTA panel reviewing the DOC countervail determination announces its decision. The panel orders the DOC to reconsider duties on spring wheat from Canada. This case concerns countervailing duties (related to the CWB's government guarantees), which account for 4.94 per cent of the overall 14.15-per-cent tariff on Canadian hard red spring wheat. The DOC has until August 7, 2005 to respond.

March 9, 2005
The CWB argues at the NAFTA panel hearing against the U.S. ITC ruling that imports of Canadian hard red spring wheat cause injury to U.S. wheat farmers.

June 7, 2005
The NAFTA panel rules there is no injury caused to U.S. wheat producers by imports of Canadian hard red spring wheat.