A U.S. trade court has sided with the Canadian Wheat Board in a nearly three-year-old dispute over wheat tariffs collected by the U.S. government in 2003-06.
The U.S. collected several hundred thousand dollars from companies that imported Canadian wheat while the roughly $14 a tonne tariff was in effect.
The U.S. government has been holding those cash deposits, but on Oct. 20 the U.S. Court of International Trade (CIT) ruled the government has no lawful right to keep the money.
The court said the money should be returned because the U.S. Department of Commerce revoked the tariffs in 2006 after a North American Free Trade panel ruled imports of Canadian wheat did not cause injury to U.S. wheat producers,.
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“Because the subject imports (Canadian spring wheat) caused no injury during any time relevant to this inquiry, CWB should owe no duties,” the court said.
The court said its decision was based on law and logic.
“The purpose of collecting anti-dumping and countervailing duties is to level the playing field so that (U.S.) producers can compete fairly in the marketplace,” it said.
“That purpose would not be advanced by allowing the U.S. to keep CWB’s deposits when it has been conclusively established that the domestic industry has suffered no material injury from the subject imports.”
CWB spokesperson Maureen Fitzhenry said the ruling is more than a victory for prairie farmers, the board and the board’s U.S. customers, who had to pay the duties. It also establishes a significant precedent for all industries trading with the United States.
“There has been a clear ruling now in the U.S. courts that the money has to be repaid,” she said.
“This will give some teeth to those fighting against unfair U.S. trade actions in the future.”
While the refund is good news, it doesn’t make up for the financial damages that resulted from the tariffs.
The board stopped making sales into the lucrative market for 2 1/2 years, other than small shipments to a few customers willing to pay the tariff.
The tariffs were implemented as a result of a complaint by the North Dakota Wheat Commission, which claimed Canada was dumping subsidized wheat into the U.S.
The U.S. International Trade Commission agreed and the tariffs came into effect in 2003.The tariff was removed in 2006 after a NAFTA panel affirmed a later decision by the ITC that U.S. producers had suffered no injury as a result of Canadian wheat imports.
The U.S. government argued unsuccessfully to the CIT that the revocation of the duties should not affect payments made before Jan. 2, 2006.
The Canadian challenge initially involved the CWB, the federal government and three western provincial governments, but the court ruled that by law the governments had no standing because they did not suffer direct injury. That left the CWB to pursue the case on its own.
The CIT set no timetable as to when the money should be returned. The decision can be appealed to the U.S. Supreme Court.
