An anti-dumping duty levied against Canadian cattle exports stops at the end of this month.
In a 5-1 vote, the United States International Trade Commission ruled Nov. 9 that Canadian exports do not harm the American industry.
“It’s a glorious victory,” said an elated Ben Thorlakson, president of the Canadian Cattlemen’s Association.
Canadian fed cattle prices soared after the decision was released. Prices began the week at around $93 per hundredweight and rose to the high $90s by week’s end.
Government officials estimate close to $20 million was collected by the U.S. Treasury since the tariff started July 1.
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The duty of 5.57 percent went into effect after six Canadian firms were audited by the U.S. government following a petition launched by the Ranchers-Cattlemen’s Action Legal Fund.
Exporters will continue to pay the duty until at least the end of November when the ITC releases its written decision. While the duty has stopped, no one can apply for rebates until the new year, when an appeal period ends.
“If the petitioners don’t appeal, then the case is over. You’re looking at 45 days now before you can start writing them to get your money back,” said trade analyst Nithi Govindasamy of Alberta Agriculture.
The victory does not prevent other petitioners from coming forward with charges of unfair trade practices against Canada but Govindasamy said “it is highly unlikely simply because the commerce department did such a thorough investigation of all of our programs.”
This is Canada’s second victory.
In October, the U.S. Department of Commerce threw out a countervail suit that claimed Canadian cattle producers receive unfair subsidies. The department ruled none of the programs were large enough to disrupt markets.
In testimony before the ITC last month, Canada argued that the number of cattle shipped to the U.S. was a low percentage of the total American supply.
In 1996, Canadian exports accounted for 3.5 percent of the American beef supply. In 1997 imports were 3.3 percent of the total and fell to 3.1 percent in 1998. For the first six months of this year, exports contributed 1.7 percent of the American supply.
“It’s very difficult to come up with a compelling case of material injury when you’re only providing 1.7 percent of the product,” said Thorlakson.
It cost about $7 million to defend the Canadian industry, said Alberta Agriculture officials. This includes legal bills for the federal and provincial governments, as well as money spent by the cattlemen’s association. It does not include staff time.
The suits were launched by R-Calf, a group of American producers who alleged that dumped and subsidized Canadian cattle cost the U.S. industry $1 billion annually. R-Calf also lost a suit against Mexican imports last week.
In an attempt to appease the Americans, efforts are under way to allow more American feeder imports into Western Canada.
More than 50,000 calves came into Canada last year under the restricted feeder program, but industry leaders on both sides of the border want more exchange in the live animal trade.
The main obstacle is health regulations that bar American imports during summer. The industry has met with Ottawa to make the rules more reasonable without jeopardizing health status.
