U.S. Corn Coalition Disappointed in Canadian Preliminary Ruling (12-16-05)

The National Corn Growers Association (NCGA) as part of the U.S. Corn Coalition expressed extreme disappointment in a ruling yesterday by the Canadian Border Services Agency (CBSA) to issue preliminary duties on U.S. corn. The decision comes in response to allegations U.S. dumping and subsidizing of grain corn harms Canadian producers.

The CBSA imposed a provisional anti-dumping duty of 58 U.S. cents a bushel on unprocessed grain corn imported from the United States, and a provisional countervailing duty of US $1.07 a bushel.

In November, the Canadian International Trade Tribunal (CITT) ruled there was sufficient evidence suggesting U.S. dumping and subsidizing. The CBSA and CITT rulings are preliminary, with final decisions expected by the CBSA in March 2006 and by the CITT in April 2006.

“These duties are temporary until the CBSA and the CITT complete their final investigations. If, at that time, the CBSA determines that U.S. dumping/subsidization did not take place, or if the CITT determines that Canadian corn growers were not injured, any provisional duties collected would be returned with interest,” the CBSA said.

The U.S. Corn Coalition, which includes NCGA, U.S. Grains Council, the Corn Refiners Association and the American Farm Bureau Federation, said it will continue working with the U.S. Trade Representative and the U.S. Department of Agriculture to demonstrate that there has been no injury to Canadian corn producers.

The coalition contends duties on U.S. corn could potentially cause harm to Canadian corn users by stopping or decreasing corn imports from the United States to a country that does not produce enough corn for domestic production.

“Clearly, we are disappointed by the Canadian ruling,” said Rick Tolman, NCGA CEO. “There are no winners at all in this preliminary ruling. While there are some losers in the United States, such as our corn growers in Michigan and North Dakota who have supplied Canadian industries for years. Perhaps the biggest losers will be the Canadian corn industry itself. It has just nearly doubled the cost of production for its key customers and has made it significantly more difficult for those value-added industries, such as livestock and ethanol operations to compete both in Canada and in to see into the United States.”

The Ontario Corn Producers’ Association, the Federation des producteurs de cultures commerciales du Quebec and the Manitoba Corn Growers Association Inc. filed the complaint Sept. 16 with the CBSA.

However, Canadian imports of U.S. corn are down over the past two years. Average corn imports from the United States between 2000 and 2003 were approximately 140 million bushels per year, dropping to 85 million bushels during the past two years. The forecast for next year is 103 million bushels.