Canada: Canadian International Trade Tribunal Continues Anti-Dumping Order After 21 Years Of Protection

Last Updated: September 28 2005

Originally published in Blakes Bulletin on International Trade - September 2005

Article by Maria Morellato and Angela D’Elia, ©2005, Blake, Cassels & Graydon LLP

Overview

On September 12, 2005, the Canadian International Trade Tribunal (Tribunal) released its statement of reasons continuing, with amendment, an anti-dumping order concerning whole potatoes imported from the United States (U.S.) for use or consumption in British Columbia (B.C.). With the amendment, the Tribunal excluded from its order certain potato types and pack sizes.

The decision concerned the expiry review of a Tribunal order that was initially made in June of 1984, and that has continued, with some modification, since that time. The order imposed dumping duties on certain varieties of potatoes being imported from the U.S. into B.C. at prices that had been injurious to the B.C. potato industry. On September 12 of this year, the Tribunal decided that, after 21 years of anti-dumping protection, the B.C. potato sector was still at risk of being injured by low-priced U.S. potato imports.

An expiry review is a two-stage process that occurs once very five years. First, the Canada Border Services Agency (CBSA) conducts an investigation to determine whether the expiry of the order is likely to result in the continuation or resumption of dumping of the subject goods. On April 14, 2005, the CBSA determined that the expiry of the current order was likely to result in the continuation or resumption of dumping of potatoes by the U.S. into B.C. During the second stage, the Tribunal conducts its own review of the order to determine whether its expiry is likely to cause injury to the domestic industry. In continuing the order, the Tribunal in this case concluded that "the rescission of its order will likely result in injury to the growers of all or almost all of the potato production in British Columbia."

The principal parties involved in the review were the B.C. Vegetable Marketing Commission (BCVMC), representing the B.C. potato industry, and the Washington State Potato Commission (WSPC). Washington is the most important exporter of potatoes to B.C., accounting for approximately 80% of the total imports coming into that province from the U.S.

The Decision

1. Injury Analysis

The factors that the Tribunal will consider during an injury analysis are aimed at helping the Tribunal determine to what extent the domestic industry, in this case the B.C. potato industry, will be adversely affected, or injured, if the order is not continued. Injury to the industry may take a number of forms, including significant increases in dumped imports, significant price undercutting or price depression. The Tribunal will also consider the relative impacts of the imports on output, sales, market share, profits, capacity utilization, inventories and employment.

In this case, the Tribunal focused on the following factors:

Changes in the U.S. and B.C. Markets Since the Last Review

Principal among the changes since the last review was the formation of potato grower co-operatives in the U.S., the stated purpose of which was to stabilize and improve the prices of potatoes by keeping production levels in line with demand. Despite the various limitations of the co-operatives, including the fact that they were voluntary organizations and had only been in operation for a short period of time, the Tribunal noted that, since their inception, the co-operatives had been able to reduce the total potato acreage harvested in the U.S.

The Tribunal also noted a shift in the potato varieties being used in the U.S. and B.C. and commented on the improved viability of the B.C. industry, noting that sales of potatoes by one of the potato sales agencies operating in the province had increased by 50% between 2000 and 2005.

Likely Volumes of Dumped Goods

The Tribunal noted that, in recent years, the oversupply situation in the U.S. marketplace had been exacerbated, resulting in low potato prices for the last several years. The Tribunal concluded that rescinding the order would result in increased imports from the U.S. in the years to come, which would eventually cause B.C. growers to cut back on their plantings and, inevitably, lose market share. Furthermore, given the size of the Washington potato market alone, where only 10% of its fresh market production is equal to the entire annual volume of potatoes grown in B.C., a continued situation of oversupply in the U.S. would result in significant volumes of extra potatoes being exported to the B.C. market.

Likely Prices of Dumped Goods

Potatoes are a commodity. Thus, the Tribunal concluded that a decrease in U.S. potato acreage, as predicted by the U.S. potato co-operatives, would likely result in increases in U.S. prices for potatoes being imported to B.C. for the 2005-2006 crop year. However, the Tribunal further concluded that, even with the predicted price increases, U.S. potato prices, with few exceptions, would remain below the established normal values for white and russet potatoes exported to B.C. Further, the Tribunal was not convinced that U.S. potato prices would increase further in the 2006-2007 crop year.

Likely Impact of Dumped Goods on the Domestic Industry

The Tribunal concluded that, should the order be rescinded, the profitability of the B.C. potato industry would be significantly affected, as B.C. is a price taker that must set its prices at levels competitive with U.S. imports. If the order is rescinded, injury would result because U.S. import prices would remain below established normal values. The Tribunal estimated that B.C. growers would likely experience a $1.2 million decrease on their bottom line for the 2005-2006 crop year alone. The Tribunal further surmised that the magnitude of injury in 2006-2007 would be even greater. The Tribunal concluded that such a loss would affect the financial health of the entire B.C. potato industry.

After reviewing these factors, the Tribunal concluded that the U.S. was likely to continue overproducing potatoes in the near to medium term and that U.S. potato imports going into B.C. would continue to be priced low. While B.C. potato growers might be able to compete at these low prices during the short term, in the longer term the financial health of the entire potato industry would be jeopardized and injury would inevitably result.

2. Exclusions

The Tribunal excluded from its order red, yellow and exotic potato varieties, an exclusion to which the BCVMC had consented at the outset of the hearing. With respect to white potatoes, however, the Tribunal denied the exclusion request on the basis that white and russet potatoes were highly substitutable in the B.C. market and an exclusion for white potatoes would likely result in injury to the B.C. industry. The Tribunal did, however, grant an exclusion for certain count-size cartons of white and russet potatoes, reasoning that these particular count sizes had been sold at prices above normal values for most of the time during the period of review.

Conclusion

In the end result, the Tribunal continued the anti-dumping order for white and russet potatoes, with a limited exception for certain pack sizes. This decision is extremely important for other Canadian commodities being threatened by low-priced imports. The continuation of the order reinforces the importance of protecting Canadian markets from unfair international trade practices and ensuring that protective measures stay in place so long as domestic markets continue to be injured by unfair trading, like dumping. International trade relationships are important to Canadian markets. However, all parties must be able to benefit from these relationships if they are to remain profitable.

The order on whole potatoes imported from the U.S. into B.C. represents one of the longest running anti-dumping orders for any industry in Canada. Whether or not the U.S. potato industry will refrain from exporting potatoes into the B.C. market at dumped prices in the years to come will remain to be seen at the next expiry review, five years from now.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
16 Oct 2018, Seminar, Toronto, Canada

Join Blakes lawyers for our 10th annual overview of recent legal and regulatory developments and practical strategies to navigate the changing regulation of Canada’s payments industry.

26 Oct 2018, Other, Vancouver, Canada

Cybersecurity, including data privacy and security obligations, has become a critical chapter in every company’s risk management playbook.

30 Oct 2018, Other, Toronto, Canada

Please join us for discussions on recent updates and legal developments in pension and employee benefits as well as employment law issues.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions