The North Dakota Wheat Growers Commission won’t pocket any more money from tariffs collected on Canadian wheat imports over the last few years.
A U.S. court has ruled that a policy of distributing duties to the U.S. industry involved in a dispute is illegal under the North American Free Trade Agreement.
The wheat commission, which initiated the wheat trade challenge against Canada, has received $128,000 US and was in line to pocket another $370,000.
“This money is being used to subsidize trade harassment of Canadian wheat,” said Canadian Wheat Board chair Ken Ritter.
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“That’s why we have been doing everything we can to prevent these tariffs from flowing to the NDWC,” said Ritter.
The favourable ruling was handed down by the U.S. Court of International Trade on April 7.
The court also ordered the parties in the case to agree to an appropriate remedy by May 8, or failing that, to submit their own proposals to the court by that date.
The board was one of six Canadian organizations that launched the case, arguing the so-called Byrd Amendment, which provided for the proceeds from anti-dumping tariffs and countervailing duties to be paid directly to the U.S. industry, violated NAFTA.
The World Trade Organization has declared the law illegal under world trade rules and the U.S. government has made a commitment to eliminate it in October 2007.
The other Canadian plaintiffs in the court case came from the lumber and magnesium industries, which are involved in cases involving potentially billions of dollars of tariffs.
The U.S. tariffs virtually shut down Canadian exports of hard red spring wheat to the U.S. from March 2003 to February 2006. They were paid by American customers rather than by the wheat board.
While the tariffs collected by the NDWC were nowhere near enough to cover the millions of dollars in legal fees, a CWB spokesperson said it was annoying to see the commission benefiting from a tariff that should never have been implemented and that was eventually thrown out by a NAFTA panel.
“Depending on the level of the tariffs, it could be an incentive for U.S. groups to pursue a trade case,” whether or not it was well-founded, Maureen Fitzhenry said.
Whether the customers who paid the roughly $500,000 in wheat tariffs will be reimbursed will depend on the outcome of the remedy negotiations ordered by the court.
