The Canadian Wheat Board has gone to court to force the U.S. government to return money collected when wheat tariffs were in place from 2003 to 2006.
The amount of money involved isn’t great, but the board wants to establish a legal precedent that Washington has no right to pocket tariffs that should never have been collected in the first place.
“We felt it was important to establish this principle for the future,” said CWB spokesperson Maureen Fitzhenry.
The legal challenge was filed in the U.S. Court of International Trade Feb. 21. It is expected to be decided later this year and will likely be followed by a lengthy appeals process.
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The U.S. collected about $500,000 US from wheat importers while the tariffs on red spring and durum were in effect.
Of that total, about $128,000 was forwarded to the North Dakota Wheat Commission, which had initiated the tariff case.
The rules allowing that have since been changed. The rest was destined for the U.S. government’s general revenues.
However, while most of that money has been transferred, a relatively small amount, described by the board as less than $100,000, remains in the hands of U.S. customs. It’s that money that the board is attempting to recover.
Fitzhenry said the board had to decide whether it was worthwhile pursuing the case, since any money that is recovered will go back to the importing company that paid the duty, not to Canadian wheat growers.
But the Washington law firm that handles trade issues for the board was anxious to pursue the case to establish a precedent and the two sides worked out an agreement.
“There are negligible costs to the CWB,” said Fitzhenry. “We wouldn’t have pursued it if it was going to cost a lot of money.”
Negotiated settlement?
An identical case had been launched last year by the Canadian softwood lumber industry as part of its lengthy battle against duties, but the case was dropped when the U.S. and Canadian governments negotiated an end to that dispute.
One key aspect of the case involves the fact that the final ruling that resulted in the lifting of the wheat tariffs was issued by a binational panel under the North American Free Trade Agreement.
The U.S. argues that NAFTA panel decisions have no bearing on duties collected before a decision is issued.
Board officials disagree, saying it’s unfair that a NAFTA country can’t recover duties after they have been overturned, while a non-NAFTA signatory can.
