USUALLY it works the way it is supposed to work. A seller makes a profit by selling cattle to the highest bidder. But when the price cycle hits a low point like that of recent months, selling to the highest bidder forced Canadian cattle producers to sell at a loss.
The United States Department of Commerce calls it dumping, a ludicrous assessment that requires a duty of up to $50 per head to be paid on every live Canadian beef animal shipped to the U.S. This duty will be levied until a final decision on the matter is made this fall.
Read Also
Agriculture needs to prepare for government spending cuts
As government makes necessary cuts to spending, what can be reduced or restructured in the budgets for agriculture?
Between now and then, cattle producers and the federal government must vigorously defend their positions in order to have the ruling reversed.
In the bigger picture, cattle organizations from the five top beef producing nations – Canada, the U.S., Mexico, Australia and New Zealand – agreed at a recent meeting that the definition of dumping should be changed. It is vital that these five nations follow through on those plans.
Dumping should be based on predatory pricing and harmful intent. It should not be possible, as it was in this case, to make a dumping accusation stick when it is based on commonly approved commerce, albeit during a trough in the cattle cycle.
Under terms of the Anti-Dumping Agreement administered by the World Trade Organization, dumping is defined as the introduction of a product into the commerce of another country at less than its normal value. Anti-dumping measures can be imposed if it is proven that a) dumping is occurring b) the domestic industry producing the like product in the importing country is suffering injury as a result and c) that there is a causal link between the two.
Now consider that U.S. producers have also been selling below the cost of production in recent months. Consider that the entire North American cattle cycle has been in a depression. Consider that imposition of this duty over the long term is likely to hurt rather than help the U.S. cattle industry.
Clearly the issue is complicated, and just as clearly, Canada has a number of avenues for defence in this case.
Each country has its own anti-dumping legislation, and all WTO members are required to bring that legislation into conformity with the WTO anti-dumping agreement. That’s why it will take action on the part of many countries to bring change to the dumping definition.
Statistics from the Canadian international trade department show Canada is a frequent user and a frequent target of anti-dumping measures and that trend is expected to continue. As the next round of trade negotiations looms, common sense must prevail over political grandstanding in changing the definition of dumping.
Various editorial staff members collaborate in the writing of Western Producer editorials.
