Canadian hog producers found temporary comfort in a ruling last week from the U.S. commerce department that rejected imposing duties on imports of live swine from Canada.
However, there is still a risk that duties could be levied as the American government continues investigating whether Canadian hogs are unfairly subsidized and sold into the U.S. at prices that undercut American producers.
“The Canadian industry is not breathing a sigh of relief that this thing is behind us by any means,” said Martin Rice, executive director of the Canadian Pork Council.
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A final countervail determination is expected late this year or early in 2005. The U.S. commerce department also has to decide whether anti-dumping duties are warranted, something that will be revealed in a preliminary determination expected Oct. 14.
Still, last week’s decision was welcomed by Canadian producers, who shipped 7.3 million hogs to the U.S. in 2003.
“It’s great news for our industry,” said Karl Kynoch, president of the Manitoba Pork Council. “This should pretty well put the countervail duty behind us.”
The trade action began in March when the U.S. National Pork Producers Council, along with state producer organizations and individual producers, petitioned for an investigation of Canada’s live swine exports.
American producers allege their Canadian counterparts receive a disproportionate share of farm support paid by government to farmers in Canada. They also allege Canadian producers have gained an unfair advantage by selling their hogs into the U.S. at prices below their market value in Canada, or below the cost of production.
The Canadian industry rejects those allegations, but it will still have to spend what could amount to more than $10 million by the time the U.S. investigation is complete.
This trade action and the difficulties of Canada’s cattle industry are reminders of the dangers of putting too much reliance on the American market. Because of that, hog producers in Manitoba are eager to see an increase in their province’s slaughter capacity.
“One of our big goals is to see another packer here in Manitoba,” said Kynoch, whose province is one of the lead exporters of live swine to the U.S.
He said a mechanism is needed so that Canadian commodity groups can recoup their defence costs from the American government or the party petitioning for an investigation when no wrongdoing is found.
The U.S. National Pork Producers Council declined an interview and has remained mostly close-lipped when it comes to talking with Canadian media about its actions. However, in a News release
news, the past-president of the council said it remains hopeful that duties will be imposed.
“We have not had a chance to review the commerce department’s analysis, but it is public knowledge that the Canadian producers have received large amounts of subsidies over the years,” Jon Caspers said in a statement.
“We expect that when the department reaches its final determination, there will be an affirmative determination of countervailable subsidies.”
