State and provincial political leaders from Canada, Mexico and the United States agreed at a meeting in Alberta last week that existing anti-dumping rules available in the North American Free Trade Agreement are inappropriate for the agriculture sector.
They are urging the national governments of the three countries to rewrite the NAFTA rules.
“The current trade remedy rules we have in place now simply do not work,” British Columbia agriculture minister Pat Bell told an Aug. 10 news conference after a meeting in Banff, Alta.
It was part of four days of meetings organized under the auspices of the Tri-National Agricultural Accord, designed to give provincial and state officials and ministers a chance every year to analyze how NAFTA is working for agriculture.
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Bell, who co-chaired the trade remedies session with California agriculture secretary A.G. Kawamura and Mexican state director Fermin Montes Cavazos, said rules that allow a trade challenge if products are being imported at prices below the cost of production are inappropriate to a cyclical industry like agriculture.
Prices fluctuate through the year as supplies ebb and flow due to what the meeting communiqué called the seasonal effects on the industry.
“Agriculture is significantly different from other industries and farmers are price takers so even if prices fall below production costs, you sell in order to stay in the market,” Bell said. “There are times virtually every year when producers will sell at below cost.”
Under existing rules, evidence of below-cost selling can lead to anti-dumping charges and in the 13 years of NAFTA, anti-dumping investigations have been triggered by industry interests in all three countries touching on sectors from hogs and cattle to wheat and tomatoes.
Bell said the major problem is that preliminary rulings that comfirm evidence of dumping are relatively easy to obtain and that then launches an investigation of damages that can stretch out for months. It leads to the inevitable costly battle of lawyers.
“I think there was a consensus here that the only real winners are the trade lawyers,” said Bell.
“The case law is working against producers and the original intent of NAFTA is not being carried out.”
The ministers asked trade law experts from the three countries to prepare proposals for the next meeting in Mexico next year.
Until mutually agreeable alternatives are developed, it is recognized that existing trade remedies will remain, said the final communiqué from the meetings that ended Aug. 12.
Delegates encouraged federal officials to take steps to ensure current trade remedy rules are transparent and fairly applied.
The B.C. minister said that while it was not discussed in Banff, the group might in future deal with whether there should be a restriction on the number of repeat cases that can be launched.
Some Canadian farm leaders and politicians have complained that well-funded American interest groups engage in a form of harassment by regularly launching new complaints if they lose a ruling.
