Grain Corn: Canadian International Trade Tribunal Inquiry No. NQ-2005-001

CITT finds no injury in U.S. corn case On April 17, 2006, the Canadian International Trade Tribunal (CITT) found that the importation of grain corn from the US had not caused and is not threatening to cause material injury to domestic Canadian corn producers, despite a determined legal and public relations effort by Canadian corn producers to persuade the CITT that US subsidies, together with alleged dumping by US producers of corn in Canadian markets were indeed causing such injury. The case was initiated by a complaint from the Canadian Corn Producers to the Canadian Border Services Agency (CBSA) in September 2005. The CBSA made preliminary and final determinations that US government programs had subsidized American corn growers and that US corn had been dumped – or sold at a cost below the US sale price or cost of production – in Canada. Following the CBSA's determination, as well as the accompanying high interim duties imposed on the importation of corn into Canada, the case made its way to the CITT, where the CITT ruled on April 17 that the complainants had failed to prove that US subsidies or alleged dumping were in fact causing injury to Canadian producers. This case is a very significant for the Canadian food-processing industry and indeed for the Canadian economy as a whole. The imposition of dumping and countervailing duties on US corn would have driven up the Canadian price of corn-derived products, including corn chips, soda pop, beer, pork and beef. More seriously, the artificial increase in input costs of imported corn would have very seriously disadvantaged the downstream corn processing industry, which must compete on a duty-free basis with US producers of processed corn products who would face no such duties on their inputs. If the dumping and countervailing duties had become permanent, it is likely that a number of Canadian corn processors would have had to close down or move their operations to the US. Two teams of Fasken Martineau lawyers participated in the victory. Commercial Alcohols Inc., the largest producer of ethanol in Canada, with a number of new plants under construction and others in the planning stage, was successfully represented by Mark N. Sills, John Morin Q.C. and Jennifer Egsgard of the Toronto office., as well as Anthony Eyton and Ron Erdmann of Trade Commissioner Consulting Services Inc. The Canadian Snack Food Association (including members such as Frito Lay Canada and Old Dutch Foods Ltd), along with Pepsi Cola Canada Ltd. were successfully represented by Peter Kirby, Vincent Routhier and Catherine Piché of the Montreal office. The corn case was one of the largest and most hotly contested trade cases in recent years and a total of 15 parties appeared in opposition to the Canadian Corn Producers.