040311 NPPC Files “Dumping” Charges Against Canada

After a year of record numbers of Canadian pigs being trucked south to U.S. finishing farms and slaughter houses, U.S. pork producers have said, “Enough.” The National Pork Producers Council (NPPC) filed antidumping and countervailing duty cases against live hog imports from Canada. The NPPC is requesting that duties ranging from 5% to 20% be assessed on imports of live swine, excluding breeding stock, from Canada.

NPPC president Jon Caspers told producers gathered in Atlanta for the National Pork Industry Forum that the cases were filed for one reason: “To offset the unfair trade practices in Canada that have caused overproduction and a surge of hog imports from Canada.” Canada sent a historical high 7.3 million pigs to the U.S. in 2003. Two-thirds entered as weaned or feeder pigs, heading mainly for finishing barns in the Midwest, and one-third as market hogs headed to slaughter.

A matter of survival

“Unfairly-traded Canadian hog imports are seriously injuring the U.S. pork industry and threaten the survival of thousands of producers.” said Caspers, a pork producer from Swaledale, Iowa.

The petition filed with the U.S. Department of Commerce and International Trade Commission formally requests the U.S. government to investigate whether Canadian live swine producers are receiving illegal subsidies and selling hogs in the U.S. at prices that are lower than hog prices in Canada.

Selling in the export market at a lower price than in the home market is known as “dumping.” It is a violation of U.S. unfair trade laws and international trade rules as established by the World Trade Organization. The petition also charges that Canadian producers benefit from billions of dollars in government subsidy programs. The subsidies provide artificial price supports that allow Canadian producers to ignore market conditions and disrupt normal agribusiness cycles in the U.S., said NPPC.

The decision to file the cases against Canada was made after “careful deliber ation” by the NPPC board of directors, said Caspers. “It wasn’t a decision arrived at in haste.” Hundreds of U.S. pork producers, mainly in the Midwest, feed Canadian pigs imported as weaned or feeder pigs. “I had mixed emotions,” said Caspers. “I’ve imported hogs from Canada.” In the final analysis, the NPPC determined that subsidized Canadian hogs were costing U.S. pork producers too much money to look away.

“Subsidized and dumped Canadian hogs are destroying competitive and efficient U.S. producers,” said NPPC’s international trade counsel Nick Giordano. “If these unfair Canadian practices are left unchecked and U.S. hog producers are forced to continue to compete with Canadian producers that do not have to meet the test of profit, U.S. producers will continue to lose sales, income, and market share. Removal of the unfairly traded Canadian hogs will allow the supply and demand mechanics of the North American hog market to return to normal.”

'The right thing to do'

After the actions were announced at Pork Forum today, producers huddled to discuss what this could mean back home. One Minnesota producer, who asked to remain anonymous, told Agriculture Online it was “absolutely the right thing to do. I don’t mind competing with other producers, but it’s not possible for me to compete with another government.”

The cases will take about one year to litigate, said Giordano. Charges of excessive foreign government subsidization and dumping are investigated by the Commerce Department and the International Trade Commission. Commerce is responsible for determining the margins of dumping and amount of countervailing duties. The Trade Commission determines whether the unfairly traded imports injured an industry. NPPC will “absorb the full cost” of the litigation, said Caspers, “and it won’t be cheap.”

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