Sugar Industry and International Trade News

2005 | 2004 | 2002 | 2001 | 2000 | 1999 | 1998

• November 10, 2005 - Canadian Sugar Industry Supports Ambitious WTO Agreement
• November 5, 2005 - Canadian Trade Tribunal Continues Duties on EU and US Sugar
• June, 2005 - Canada Border Services Agency Re-affirms Dumping and Subsidizing of US and EU Sugar
• February, 2005 - Canadian Tribunal to Review Sugar Finding Against the US and EU

November 10, 2005

Canadian Sugar Industry Supports Ambitious WTO Agreement

With a crucial WTO Ministerial meeting in Hong Kong only weeks away, negotiations have intensified as members seek to reach a consensus in agriculture. Canadian Sugar Institute President Sandra Marsden will be in Hong Kong to support Canadian negotiators’ efforts to secure an ambitious outcome to the Doha Round.

Canada needs to push for the most ambitious outcome possible in these negotiations. With 40% of GDP and one in three jobs dependent on exports, Canada is the most trade-dependent country in the OECD. In addition, over 90% of Canada’s farmers rely on international markets. An ambitious outcome at the WTO will benefit all sectors of the Canadian economy, including agriculture.

Canada’s agri-food sector needs increased market access and a reduction in international trade distortions in order to realize the full benefits of international trade. The sugar industry is an example of a Canadian industry that stands to benefit from liberalized international trade in agriculture. The world sugar market is one of the most distorted commodity markets. Producers such as those in the US and EU benefit from subsidies in the form of generous price supports, long recognized as one of the most trade distorting forms of support, as well has high tariff protection to keep out international competition. In contrast, efficient Canadian producers derive their returns from the Canadian market, based on world prices, but are shut out of major export markets by restrictive trade barriers. With a reduction in trade distorting support and an increase in market access, Canadian producers will be able to compete on a more even footing and will benefit from increased market opportunities. The same holds true for all of Canada’s trade dependent agriculture sectors.

In order to fully benefit from a WTO agreement, Canada’s agri-food sector needs a result in this round of negotiations that eliminates export subsidies, significantly reduces trade distorting domestic support and substantially increases market access for all agriculture and food products through a combination of tariff reduction and quota expansion.

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November 5, 2005

Canadian Trade Tribunal Continues Duties on EU and US Sugar

Toronto - On November 2, 2005, the Canadian International Trade Tribunal (CITT) issued its decision to continue its 1995 finding against dumped and subsidized sugar from the United States and European Union. Antidumping and countervailing duties will, therefore, continue to be applied to imports of such sugar.

The CITT finding concludes the second review of the Tribunal’s initial 1995 finding that protects Canadian sugar producers from harm threatened by imports of unfairly priced US and EU refined sugar. Under Canadian law, a review of these findings must take place every five years.

“The Tribunal’s decision recognizes that Canadian sugar producers are vulnerable as long as the distortions created by the US and EU sugar programs continue,” stated Sandra Marsden, President of the Canadian Sugar Institute. “Thus far, global and regional trade negotiations have failed to address these protectionist sugar regimes. Until these distortions are eliminated, Canada’s open sugar market represents an attractive destination for surplus sugar produced in these countries.”

Canada is one of the few developed country markets in the world that does not subsidize and protect its sugar producers. In contrast, the US and EU sugar programs keep internal sugar prices at two to three times the world price. This stimulates production and the resulting over-supply must then been exported at artificially low prices. Without recourse from antidumping and countervailing duties, Canada’s open and developed market is an obvious destination for this unfairly priced surplus sugar.

The Tribunal’s decision will help sustain a value-added Canadian industry that continues to provide Canadian consumers and food manufacturers with a reliable and low cost supply of refined sugar.

The Tribunal issued its statement of reasons on November 17th, 2005.

More information

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June, 2005

Canada Border Services Agency Re-affirms Dumping and Subsidizing of US and EU Sugar

Toronto - On June 17, 2005 the Canada Border Services Agency (CBSA) completed its investigation regarding the likely continued dumping and subsidization of EU and US sugar into the Canadian market. The CBSA determined that the removal of current antidumping and countervailing duties would likely result in the continuation or resumption of the dumping and subsidizing of refined sugar. As a result, these duties will remain in place through the balance of the investigation to be conducted by the Canadian International Trade Tribunal.

The CBSA investigation was initiated following the February 17, 2005 Tribunal decision to initiate an expiry review of the Canadian antidumping/countervailing duty finding against the US and EU. Under Canadian law, a review of such findings must take place every five years. This is the second review of the 1995 Tribunal finding protecting Canadian sugar producers from harm threatened by unfairly priced US and EU refined sugar.

The CBSA investigation is the first phase of such investigations and its conclusion launches the Tribunal investigation as to whether the dumping and subsidizing is likely to cause injury to the Canadian industry. The US and EU sugar programs, each well known for its highly trade distorting effects, lie at the core of the Tribunal’s review. These programs were the structural causes of both the dumping and subsidization that was found in 1995 and 2000. None of their principal attributes have changed since 2000.

Dumping and subsidization is caused by the US and EU sugar regimes because they support their domestic sugar prices at two to three times higher than world prices. To compete in foreign markets, surplus production generated by these programs must be exported at unfair prices. As one of the few open markets in the world, Canada’s sugar market is an obvious target. Without duties in place, there is nothing to protect the Canadian industry from these unfair trade practices.

A positive decision by the Tribunal will help sustain a value-added Canadian industry that continues to provide Canadian consumers and food manufacturers with a reliable and low cost supply of refined sugar.

The Tribunal will issue its decision on November 2, 2005.

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February, 2005

Canadian Tribunal to Review Sugar Finding Against the US and EU

On February 17, the Canadian International Trade Tribunal announced that it will review the continuation of measures to prevent the importation of dumped and subsidized sugar from the United States and the European Union. The measures are set to expire on November 2nd, 2005.

In 1995, the CITT found that dumped and subsidized sugar from the US and EU was threatening to cause harm to the Canadian sugar industry. In November 2000, the CITT continued these findings, concluding that, without protection against these unfair trade practices, “dumping from and subsidizing by the subject countries are likely to materially injure the domestic industry”.

Since the last CITT findings were issued, there have been no changes to the US and EU sugar programs to materially reform their trade distorting sugar policies. Refined sugar surpluses and other distortions created by these programs continue to provide US and EU producers with an incentive to export at distorted prices. They can target Canada’s open market without the worry of any import competition in their markets given their strict import quota and tariff barriers.

The Canadian sugar industry is unique in the world in that it does not have a regulated sugar policy to control supply and price. Canada remains one of the most open sugar economies in the world, with no tariff on raw sugar and the lowest tariff in the world on refined sugar.

Sugar Import Tariffs

The US, EU and a number of other sugar markets remain highly protected, with large import tariffs and price supports. These practices prevent normal economic forces from operating and lead to surplus sugar production and an incentive to export at distorted prices.

With a continuation of the CITT findings, the Canadian industry can remain competitive until such time as multi-lateral trade negotiations, such as those taking place in the WTO, can eliminate the highly trade distorting practises of sugar regimes such as the those in the US and EU.

See the CITT Expiry Review Notice

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