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November 1, 2010 - International Trade News

Canadian Trade Tribunal Continues Duties on Unfairly Priced US Sugar

Toronto - On November 1, 2010, the Canadian International Trade Tribunal issued its decision to continue its 1995 finding against dumped imports of sugar from the United States. Antidumping duties will, therefore, continue to be applied to such imports to prevent unfair competition and injury to the Canadian sugar industry. The Tribunal did not, however, continue its finding against the European Union.

On June 17, 2010 the Canada Border Services Agency concluded that both US and EU sugar could not be sold in Canada without high margins of dumping and/or subsidy. That decision recognized the high levels of government support in the US and EU, which result in excess sugar production and exports to Canada at unfair prices. Unfortunately, the Tribunal did not conclude that dumped and subsidized EU sugar would likely result in injury to the industry. This was despite the evidence presented by the Canadian Sugar Institute (CSI) and its members regarding the adverse effects of this unfair trade.

“The CSI is pleased that the Tribunal recognized that Canadian sugar producers are vulnerable to the trade distortions caused by US sugar regime,” stated Sandra Marsden, President of the CSI. “At the same time, we are surprised that the EU finding was not continued at a time when their sugar policy continues to result in substantial surplus production and exports at subsidized prices.” The Tribunal has yet to issue its reasons for its decision.

Canada is one of the few developed country markets in the world that does not subsidize and protect its sugar producers. In contrast, the US and EU sugar programs maintain high internal prices, other support measures and restrictive import quotas to protect producers from world market volatility. This stimulates local production and the resulting over-supply must be exported at artificially low prices.

“Thus far, US and EU sugar have been protected from global and regional trade reform as ‘sensitive’ commodities,” stated Ms. Marsden. “As long as these trade distortions continue, Canada’s open sugar market represents an attractive destination for surplus sugar produced in these countries, and Canadian sugar producers are vulnerable.”

The CSI and its members will continue to monitor the effects of dumped and subsidized EU sugar on the Canadian market and industry. Upon finding evidence of injury, the CSI will immediately initiate a new antidumping and countervailing duty investigation to eliminate the injurious dumping and subsidization.

See: CITT Dumping and Subsidizing Orders and Reasons