SASKATOON – Canada’s spaghetti war with Italy could be decided in a courtroom.
Italian pasta manufacturers, along with Canadian importers and distributors, are lobbying the federal government to overturn import restrictions on European pasta imposed by the Canadian Wheat Board on April 27.
“If we don’t get results within a very short period of time, we’re going to have to take appropriate legal action,” said Montreal lawyer Richard Gottlieb.
He said the new rules will have “disastrous” consequences for his clients, the Canadian-based Italian Pasta Importers Council and the Italian Pasta Manufacturers Association.
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A wheat board spokesperson said the agency has no intention of reversing its decision and is confident its actions will withstand a legal challenge.
Deborah Harri said the restrictions were imposed to drive home the board’s displeasure with the European Community’s decision last month to re-introduce export subsidies on pasta of up to $60 a tonne.
“It certainly isn’t to indicate that we want a more restrictive trading policy,” said Harri. “It’s just to achieve the level playing field.”
Gottlieb said sending a political message to the Europeans is not a proper basis for taking “draconian” measures that will hurt small Canadian retailers and result in economic hardship and lost jobs.
Under the new regulations, European pasta can only be imported in packages of less than 2.3 kilograms and only by retailers. Bulk imports will be banned and wholesalers will not get import permits. On Aug. 1 that will be converted to a duty of 19 cents per kg on all imports.
Gottlieb said it’s unfair that the wholesalers and distributors he represents won’t be able to get import permits, while at the same time they are issued to large retail grocery chains which then distribute product across the country in retail-sized packages.
Canadian pasta makers say the imports undercut Canadian prices and constitute dumping. Gottlieb disputes that, saying Italian pasta is usually sold at a premium price. In any case, he said, the issue should have been put before a proper anti-dumping tribunal.
“We think that using an arbitrary power without a hearing or notice is extraordinary,” he said, adding the board’s decision violates principles of natural justice and came as a “complete surprise.”
Harri said it shouldn’t have, since the agency discussed the issue with pasta importers on several occasions in the past year.
“They were aware that we would be taking some action should the Europeans decide to re-impose the export subsidies, so it’s not like it came out of the blue,” she said.
Gottlieb also argues there is no evidence the imports are hurting the board’s domestic or international sales, noting the Italians buy large volumes of Canadian durum. The board’s position is that the imported pasta displaces domestic product.
