June 17, 2005

Toronto - On June 17, 2005 the Canada Border Services Agency (CBSA) completed its investigation regarding the likely continued dumping and subsidization of EU and US sugar into the Canadian market. The CBSA determined that the removal of current antidumping and countervailing duties would likely result in the continuation or resumption of the dumping and subsidizing of refined sugar. As a result, these duties will remain in place through the balance of the investigation to be conducted by the Canadian International Trade Tribunal.

The CBSA investigation was initiated following the February 17, 2005 Tribunal decision to initiate an expiry review of the Canadian antidumping/countervailing duty finding against the US and EU. Under Canadian law, a review of such findings must take place every five years. This is the second review of the 1995 Tribunal finding protecting Canadian sugar producers from harm threatened by unfairly priced US and EU refined sugar.

The CBSA investigation is the first phase of such investigations and its conclusion launches the Tribunal investigation as to whether the dumping and subsidizing is likely to cause injury to the Canadian industry. The US and EU sugar programs, each well known for its highly trade distorting effects, lie at the core of the Tribunal’s review. These programs were the structural causes of both the dumping and subsidization that was found in 1995 and 2000. None of their principal attributes have changed since 2000.

Dumping and subsidization is caused by the US and EU sugar regimes because they support their domestic sugar prices at two to three times higher than world prices. To compete in foreign markets, surplus production generated by these programs must be exported at unfair prices. As one of the few open markets in the world, Canada’s sugar market is an obvious target. Without duties in place, there is nothing to protect the Canadian industry from these unfair trade practices.

A positive decision by the Tribunal will help sustain a value-added Canadian industry that continues to provide Canadian consumers and food manufacturers with a reliable and low cost supply of refined sugar.

The Tribunal will issue its decision on November 2, 2005.