990524 Canada Welcomes U.S. Decision on Cattle Exports

Ottawa, - Canada claimed victory after the U.S. Commerce Department ruled in a preliminary determination that there is insufficient evidence to justify imposing a preliminary countervailing duty on imports of Canadian beef cattle.

"The Canadian government and the beef cattle industry will continue to vigorously defend Canadian interests until there is a final decision on the countervail issue late this year," Canada's Agriculture and Trade departments said in a joint statement.

The Ranchers-Cattlemen's Action Legal Fund (R-CALF) petitioned the U.S. Department of Commerce last fall asking it to impose a countervailing duty on imports of Canadian cattle, claiming beef cattle imports from Canada were depressing U.S. prices.

"The preliminary determination backs Canada's long-standing position that Canadian cattle exports are not unfairly subsidized and that the country's cattle exporters are competing fairly in the U.S. market," said Agriculture Minister Lyle Vanclief.

"We are confident that this ruling will be upheld in the final determination expected later this year," he added.

The Commerce Department could consider adjusting the Canada subsidy rate -- set at 0.38% in the ruling -- to a higher level that would warrant countervailing duties, a department spokesman said.

A final determination was expected on July 19.

R-CALF has sought to impose countervailing duties on nearly $1 billion of annual cattle shipments to the United States, claiming that Ottawa unfairly helps its producers by giving them access to cheap sources of feed.

The industry group also has accused Canadian producers of dumping cattle in the U.S. market at below the cost of production. A preliminary ruling by the Commerce Department in that case is due on June 30.

Canada shipped more than 1.3 million head of cattle valued at about $933 million to the United States in 1997. In the first half of 1998, Canada exported 731,000 head of cattle valued at about $509.7 million, according to Commerce figures.

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