Agricultural Trade Disputes Between Canada and the United States: Costly but Diminishing

• Published in: Commentary - C.D. Howe Institute 2005-12 (224), p.1
• Main Authors: Sumner, Daniel A, Barichello, Richard, Josling, Timothy
• Format: Article
• Language: English
• Subjects: Agricultural commodities; Agriculture; Canada-US relations; Conflict resolution; Exports; Free trade; International trade; North American Free Trade Agreement; Trade disputes; Trade relations
• ISSN: 0824-8001; 1703-0765

Table 5 classifies the trade actions by whether they are anti-dumping or countervail cases brought by importers, or complaints about subsidies and market access brought by exporters. Eighty-five percent of all Canada-U.S. agricultural trade actions are importer-initiated disputes, charging dumping or claiming the right to countervail against subsidies in the exporting country. Ninety-three percent of all Canadian cases against the U.S. are of this nature. The U.S. complaints also were predominantly import-related (74 percent), though more complaints involved market access (13 percent) and export- or import-displacing subsidies (9 percent). Canadian complaints about imports of products from the United States dominate any concern about access into the U.S. market or U.S. behaviour in third markets, while U.S. complaints included both objections to Canadian exports into the U.S. market and into third markets, as well as import restrictions and subsidies reducing access into the Canadian market. The U.S. brought a third case to the USITC, under section 22 of the 1933 U.S. Agricultural Adjustment Act in 1994. This case focused on all wheat imports. The U.S. argued that imports materially interfered with its price support and deficiency payment program for wheat. The key issue was the magnitude of the U.S. price impact of Canadian imports and the amount of additional outlay under the support programs of the time. Canada presented economic evidence that the shipments to the United States had only modest price effects, in part because they made up a small share of the U.S. wheat market. More fundamentally, they argued that with most of Canadian and U.S. wheat exported out of North America, prices were determined in the global market. Canadian wheat would still compete with U.S. wheat in other markets if it were not shipped to the United States, so the price impact of where the competition occurred must be small. The U.S. Department of Commerce found that Canadian exporters had dumped their product on the U.S. market in 2000/2001. However, USITC determined that all fresh tomatoes were the relevant product and concluded that exports of Canadian greenhouse tomatoes had not injured U.S. greenhouse growers. The Canadian case, lodged only months after the U.S. one, was against fresh field tomato exports to Canada. The Canadian authorities found that there had been dumping, though there was no material injury, as in the U.S.-initiated case. The Canadian case took an unex