15 October 1999

US Investigation Confirms No Countervailable Subsidy on Canadian Cattle

The US Department of Commerce has ruled to uphold a 4 May 1999 preliminary decision that existing Canadian subsidies do not justify the imposition of provisional countervailing duty against imports of Canadian beef cattle. The subsidy investigation is now terminated.

In a separate decision, the Department of Commerce ruled that an anti-dumping duty imposed in July will continue at the adjusted rate of 5.63 per cent ad valorem, up slightly from the provisional rate of 5.57 per cent. That duty will only become permanent if the US International Trade Commission rules in November that imports from Canada are injuring or threatening injury to the US industry.

While both investigations were initiated at the request of the Ranchers-Cattlemen's Action Legal Fund, one examines levels of government assistance, while the other considers pricing practices in the industry. The subsidy investigation confirmed that the Canadian cattle industry did not receive subsidies from federal and provincial governments sufficient to justify imposition of countervailing duties. The dumping investigation determined that cattle were sold in the US market at prices below their cost of production. The Ministers of Agriculture and Agri-Food and International Trade have noted that the low cattle prices during the time of the investigation were an indication of a down-cycle in the industry on both sides of the border.