SASKATOON – Canadian hog interests have asked for a trade panel to investigate countervailing duties on sows and boars exported to the United States.
In its latest duty ruling in March, the U.S. department of commerce rejected calls by Canada for separate duties for sows and boars, as opposed to slaughter hogs.
That decision has prompted the Canadian Pork Council and two Canadian hog export agents to request that a decision be made by a panel with representatives from both countries as outlined under the free trade agreement.
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Martin Rice of the pork council said there are two arguments to be made. First, the U.S. had for the five previous years levied a separate duty on sows and boars, so precedent is on the Canadian side. Secondly, there’s a logical reason to treat sows and boars differently.
“They are not subject to the same program coverage as are the slaughter hogs,” he said, adding that some of the support programs used by the Americans to calculate the levy specifically state that payments can only be made on indexed (slaughter) hogs.
In Canada there is essentially no market for boars and a very limited market for sows once they are no longer useful or productive. But both are in demand south of the border for processing into specialized meat products like sausages, and currently account for around 40 percent of Canadian shipments to the U.S.
No more exceptions
Rice said the U.S. decision to change the treatment of sows and boars coincided with requests from Canadian groups for different rates on weanlings and hybrid breeding stock: “The commerce department saw these requests for separate rates and they were not prepared to go down that road any further, it appears, so they said ‘no more exceptions’.”
A panel has not yet been appointed to hear the case. Once it’s in place, a decision will take about 10 months.
Ironically, the decision to appeal the ruling has delayed repayment to Canadian slaughter hog exporters of excess levies charged by the Americans in 1990-91. The March decision found that the duty that year should have been 1.34 cents per pound rather than the 2.2 cents that was collected. That money should be distributed shortly, said Rice.
The American commerce department is expected to announce soon the correct duty for 1991-92. That year, Canadian exporters were charged four different rates, including 9.3 cents a pound for the last seven months of the year.
Rice said the actual rate will probably be less than three cents, so a sizable rebate could be in store for Canadian exporters.
