Corn dumping claims 'fundamentally flawed'

The National Corn Growers Association (NCGA), US Grains Council (USGC) and Corn Refiners Association (CRA) claim that the Canada Border Services Agency's (CBSA) investigation is not justified.

"The reality is this will end up hurting the Canadian agricultural industry as much as it hurts the US agricultural industry,"​ said Rick Tolman, NCGA chief executive.

"Canada has expanding livestock, ethanol and corn processing industries that rely on US corn. Our countries have similar trade philosophies and as NAFTA partners, we should be working close together, especially going into the WTO talks."​

The complaint was filed by the Ontario Corn Producers' Association, the Federation des producteurs de cultures commerciales du Quebec and the Manitoba Corn Growers Association. The associations allege dumping and subsidizing of grain corn in all forms from the United States is harming the Canadian corn industry.

Canadian Corn Producers (CCP) spokesperson Brian Doidge welcomed theinvestigation, claiming that the Canadian corn industry has suffered long enough.

"We are confident that this investigation will lead to the imposition of substantial anti-dumping and countervailing duties by year's end,"​he said.

CCP believes that without adequate government support, such duties are necessary to counter illegal US farm subsidies that are driving down prices. The elimination of such disruptive subsidies would create a level playing field.

However US producers remain unhappy about the development.

"The argument that Canada's corn growers are being injured by imports at low prices is flawed,"​ said Kenneth Hobbie, USGC president.

"If Canadian producers are unable to compete with US grain corn, we would expect to see significant and steady increases in imports over the past several years while Canadian corn production would post declines. However, this has not been the case."​

The case marks another low point in US-Canada trade relations, which have suffered a series of setbacks recently. According to a joint statement made by US department of agriculture Secretary Mike Johanns and US trade representative Rob Portman, the United States is disappointed by Canada's decision to proceed with a formal investigation and does not believe the investigation is justified.

The government said it will defend the interest of the US corn producers and exports during the investigation.

"We are understandably concerned about the plight of Canada's corn growers,"​ said Sam Scott, chairman of US-based Corn Products International. "However, we believe that a duty would severely reduce the market for Canadian corn farmers and have a negative impact on Canada's agricultural industry."​

Canadian imports of US corn are down over the past two years. Average corn imports from the United States between 2000 and 2003 were approximately 140 million bushels per year, dropping to 85 million bushels during the past two years.

The forecast for next year is 103 million bushels. While Canada's corn production has increased, its domestic corn demand still cannot be met through domestic production alone, according to Portman and Johanns.

The CBSA initiated the investigation under the Special Import Measures Act on 16 September. It is expected to take several months to complete.