A U.S. tariff wall that has barred imports of Canada's largest crop since 2003 has been fully dismantled, cementing a major NAFTA victory for western Canadian farmers.

On Friday, February 24, 2006, U.S. Customs headquarters in Washington, D.C. notified all American ports of entry that imports of Canadian hard red spring wheat are no longer subject to any duties. The notification means that Canada Western Red Spring (CWRS) wheat can enter the U.S. without any requirement for a cash deposit or bond.

"After three long years, the American market is open to our wheat again," said Canadian Wheat Board (CWB) board chair Ken Ritter, a farmer from Kindersley, Saskatchewan. "Our valued U.S. customers can once more access high-quality wheat from Canada."

The NAFTA victory resulted from a CWB appeal of the American tariff, which was imposed after the North Dakota Wheat Commission launched an anti-dumping, countervailing duty suit against Canadian wheat in 2002. The NAFTA panel ruled that there was "no substantive evidence" to support the claims that led to the 14.2-per-cent tariff, which effectively halted Canadian exports to the United States.

"This is a good example of what Prairie farmers can accomplish by working together," Ritter said. "This was an unjustified attack. We were able to stand up to the Americans and launch a highly effective defence."

Had the tariff continued to halt Canadian wheat exports into the U.S., it could have cost tens of millions of dollars each year in lost sales opportunities for Prairie farmers, depending on market conditions and grade pattern. In the year before the tariff was imposed, the CWB sold approximately one million tonnes of CWRS into the U.S., worth about $250 million.

Trade harassment from American interest groups has been ongoing since free trade began between the U.S. and Canada in the early 1990s. This last case was the 14th unsuccessful attempt to stop Canadian wheat from entering the U.S. market.

"I hope that these repeated attempts to hamper our success in the American marketplace will now stop," Ritter said. "U.S. customers buy Canadian wheat because of its high quality and consistency. As fair international traders, we have every right to compete in that market."

For more information on wheat trade challenges from the U.S., click here.

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 to over 70 countries and returns all sales revenue, less marketing costs, 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 hard red spring (HRS) wheat and durum from Canada.

March 4, 2003: The U.S. Department of Commerce (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 HRS wheat.

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

August 29, 2003: The DOC announces affirmative final determinations in its countervail and anti-dumping investigations. The outcome: tariffs totalling 14.15 per cent on HRS wheat and 13.55 per cent on durum.

October 3, 2003: The U.S. International Trade Commission (ITC) determines that imports of durum wheat from Canada are not injuring U.S. durum producers, so the durum tariff is lifted. However, the ITC is split on whether imports of Canadian HRS wheat are injuring the U.S. wheat sector. Under U.S. trade law, a split decision favours the plaintiff. As a result, the 14.15-per-cent tariff continues to apply to imports of HRS wheat from Canada.

The CWB appeals the ITC injury decision on spring wheat to the North American Free Trade Agreement (NAFTA) secretariat.

June 7, 2005: The NAFTA panel reviewing the ITC injury ruling determines there is "no substantial evidence" to support it. The panel orders the ITC to reconsider the ruling.

October 5, 2005: The ITC reverses its 2003 injury ruling, now saying that hard red spring wheat exports from Canada do not injure U.S. farmers.

December 2005: The NAFTA panel issues its final decision, which paves the way for the tariff to be removed.

January 2, 2006: Duty liability ends for Canadian wheat imports, as notified by the U.S. Department of Commerce.

February 24, 2006: U.S. Customs is advised that duties no longer apply to wheat imports from Canada.