CANADIAN hog farmers are claiming victory after the U.S. International Trade Commission rejected charges that this country’s producers have been dumping hogs in the United States.
The trade commission’s ruling will remove a double-digit interim duty that threatened to cripple the industry. It’s also expected that Manitoba producers will get back $25 million they have already paid in duties, according to the Manitoba Pork Council.
“This is great,” said Clare Schlegel, president of the Canadian Pork Council. “We weren’t sure what to expect. It’s a fantastic day.”
Last October, the U.S. announced a 14.01 per cent duty, later reduced to 10.63 per cent, after a complaint by a coalition of hog producers led by the U.S. National Pork Producers Council. The coalition accused Canadian producers of dumping live animals in the U.S. at prices below the cost of production.
Compared to other provinces, Manitoba had the most to lose in the trade dispute. The province is Canada’s largest exporter of both weanlings and slaughter pigs. It exported about 4.5 million head in 2004.
It’s estimated the interim duty cost Manitoba producers about $25 million, according to the Manitoba Pork Council. But that money, which has been held in trust pending the ruling, will now be returned, likely within a couple of months.
“The producers of Manitoba are extremely happy today,” said Karl Kynoch, chairman of the Manitoba Pork Council.
Kynoch said he was confident the ruling would be in Canada’s favour, but was surprised it was a unanimous 5-0 decision.
“We weren’t expecting that,” Kynoch said.
Because of the unanimous ruling, it’s unlikely the American coalition will file an appeal, he said.
If the duty had remained, some producers would have been forced out of business, the Manitoba Pork Council said. It’s estimated it cost about $10 million in legal and accounting fees to fight the trade action.
Kynoch said Manitoba producers put up about $6 million, most of which had already been collected through a trade levy that was set last year.
The Doer government also provided some legal assistance to producers.
“Canadian producers have once again shown they are fair traders and should not be subject to punitive trade action in the United States,” Agriculture Minister Rosann Wowchuk said in a statement.
Earlier this year, the U.S. Department of Commerce ruled that Canadian producers do not benefit unfairly from government subsidies.
Schlegel noted that unlike some other trade disputes, such as those over beef and softwood lumber, the fight over pork wasn’t a “Canada versus the U.S.” battle.
He pointed out that many producers in the U.S need Canadian hogs to meet market demand and were supportive of the Canadian stand.
“Canadian hogs fill gaps in the U.S. system,” Schlegel said.