OTTAWA – The Canadian Wheat Board is supporting a bid by Canada’s pasta producers to win protection from imports of subsidized Italian pasta.
Last May, the Canadian International Trade Tribunal ruled that while imports from Italy are subsidized, they have not caused material injury to the domestic industry. It lifted anti-dumping duties that had been imposed earlier.
The Canadian Pasta Manufacturers Association goes to the Federal Court of Canada in January to try to have that judgment overturned and duties re-imposed on Italian product.
“The Canadian pasta industry has been a reliable CWB customer, buying large volumes of high-valued western Canadian durum wheat,” wheat board commissioner Richard Klassen wrote in a September letter to federal agriculture minister Ralph Goodale.
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“The CWB is concerned that the importation of dumped and subsidized pasta into Canada will continue to erode CWB sales of durum wheat to the domestic industry and result in reduced value-added activity in Canada.”
Don Jarvis, executive director of the pasta makers association, showed the letter to MPs last week when he appeared before a House of Commons committee investigating how well Canada’s anti-dumping law works.
Jarvis argued it does not work well. Otherwise, his industry would have received the protection it needs from subsidized import competition.
U.S. blocked imports
He noted while Canada was lifting its restrictions on subsidized European imports, the United States acted quickly to block such imports into its market.
“While we all strive for freer trade, unfair trade does occur,” he said. “Unfortunately, Canada’s current system has failed our industry while at the same time, the U.S. system acted promptly and efficiently to check the unfair trade of pasta into that market.”
Between 1993 and 1995, imports of Italian product doubled and Jarvis said the four Canadian companies he represents saw their potential profits reduced by $42 million during those years.
He said the industry has lost money every year since 1992.
“The committee must ensure that the Special Import Measures Act is strengthened to protect industries like ours in the same manner that the U.S. system protects its domestic industries,” he told MPs. #
The Canadian sugar industry offered a less negative view of how the system works.
Sandra Marsden, president of the Canadian Sugar Institute, noted the CITT and Revenue Canada have found that imports of low-cost sugar from subsidized U.S. producers does threaten the Canadian industry.
Effective law
Anti-dumping duties are in place. “The Canadian law is effective and well administered,” she said.
Marsden told MPs if the government ever weakens its anti-dumping laws in the interests of freer trade, it should exclude industries like sugar, which are subject to substantial foreign government intervention.
