American wheat growers are being allowed to keep more than $120,000 in tariffs that were unjustifiably collected on Canadian wheat imports between 2003 and 2006.
The United States Court of International Trade decided July 14 that the North Dakota Wheat Commission could keep the money collected from companies importing hard red wheat from Canada during that period.
The July 14 decision was made despite a ruling by the same court in April that the U.S. policy of distributing import duties to the U.S. industry involved in a trade dispute is illegal under the North American Free Trade Agreement, and the fact the tariffs were later overturned.
Read Also
Canola oil transloading facility opens
DP World just opened its new canola oil transload facility at the Port of Vancouver. It can ship one million tonnes of the commodity per year.
All told, the United States government collected more than $500,000 in duties on imports of Canadian hard red spring wheat before the tariffs were rescinded in February 2006.
The commission was allowed to keep roughly $128,000, which it had already received, but it won’t get its hands on the remaining $370,000 that had been collected. That money will be retained by the U.S. government.
Canadian Wheat Board spokesperson Maureen Fitzhenry said that since the tariffs were paid by importers, Canadian farmers won’t be out any money.
But she added the board was disappointed by the court’s ruling, which essentially rewarded the NDWC for launching a trade complaint that was eventually thrown out by U.S. authorities.
“We don’t have any argument with the legal basis for the decision,” she said.
“But in principle it’s very frustrating because there was no legitimate basis for the tariffs to be put on in the first place.”
She said the board also felt obliged to pursue the case on behalf of customers who had to pay the tariff.
The roughly $14 a tonne tariff was eventually removed in February 2006 after a NAFTA panel ruled in Canada’s favour and the U.S. International Trade Commission agreed Canadian imports caused no injury to U.S. producers.
The case before the USCIT was aimed at overturning the so-called Byrd amendment, an American law that provided for the proceeds from anti-dumping tariffs and countervailing duties to be paid directly to the U.S. industry group that initiated a trade complaint.
The CWB was one of several Canadian plaintiffs in the case, along with the softwood and magnesium industries and the federal government.
In April, the court declared the Byrd amendment to be illegal and issued an injunction against further payments.
The court then turned its attention to a request by the plaintiffs that money collected should be returned to those who paid it.
In the July 14 ruling, judge Donald Pogue ruled that the money should not be returned, citing the principle that when parties receive money from the government, they have a right to spend that money without fearing that they may have to repay it at some future date.
“If there was the constant threat of disgorgement, recipients might be loath to spend money for the purpose for which it was given,” he wrote. “This would frustrate Congressional intent in granting money.”
If the Canadian plaintiffs had challenged the initial disbursement of money, the ruling might well have gone the other way.
The judge also said the amount involved did not justify the administrative costs of recovering and returning all the money paid out.
The judge had asked the parties involved to try to reach a mutually satisfactory agreement on what to do with the money already collected, but that didn’t happen.
Fitzhenry said the board had suggested to the court that the North Dakota commission be ordered to spend the $128,000 on a project of mutual benefit to U.S. and Canadian wheat growers, such as a conference on cross-border issues, or a joint fusarium research project, but the NDWC said no.
