Canadian Tribunal to Review Sugar Finding Against the US and EU
On February 17, the Canadian International Trade Tribunal announced that it will review the continuation of measures to prevent the importation of dumped and subsidized sugar from the United States and the European Union. The measures are set to expire on November 2nd, 2005.
In 1995, the CITT found that dumped and subsidized sugar from the US and EU was threatening to cause harm to the Canadian sugar industry. In November 2000, the CITT continued these findings, concluding that, without protection against these unfair trade practices, “dumping from and subsidizing by the subject countries are likely to materially injure the domestic industry”.
Since the last CITT findings were issued, there have been no changes to the US and EU sugar programs to materially reform their trade distorting sugar policies. Refined sugar surpluses and other distortions created by these programs continue to provide US and EU producers with an incentive to export at distorted prices. They can target Canada’s open market without the worry of any import competition in their markets given their strict import quota and tariff barriers.
The Canadian sugar industry is unique in the world in that it does not have a regulated sugar policy to control supply and price. Canada remains one of the most open sugar economies in the world, with no tariff on raw sugar and the lowest tariff in the world on refined sugar.
Sugar Import Tariffs
The US, EU and a number of other sugar markets remain highly protected, with large import tariffs and price supports. These practices prevent normal economic forces from operating and lead to surplus sugar production and an incentive to export at distorted prices.
With a continuation of the CITT findings, the Canadian industry can remain competitive until such time as multi-lateral trade negotiations, such as those taking place in the WTO, can eliminate the highly trade distorting practises of sugar regimes such as the those in the US and EU.