Canada - Injury Determination on Grain Corn from the United States
Canada Grain Corn (Source: GATT Analytical Index)
Products at Issue
|Products at issue||
|Type of product||
Key legal aspects
|Chairperson||Luzius Wasescha (Switzerland)|
|Other members||Hiroyuki Ishige (Japan), Jo Tyndall (New Zealand)|
|Legal basis at issue||
|Claims at issue||
|Defences at issue||
|No of Pages (total / legal reasoning)||29|
|Request for consultations|
|Request for conciliation|
|Request for establishment|
|Adoption of report|
|Outcome of the proceedings||
|Additional Info||Discussion under Article 16.1 of the Tokyo Round SCM Code, as reflected in document SCM/M/33.
SCM/140 (13/01/1992) Committee on Subsidies and Countervailing Measures - Panel Report - Canadian Countervailing Duties on Grain Corn from the United States: The United States requested the Panel to find that the determination of the Canadian Import Tribunal (CIT) of injury in the case of grain corn imports from the United States was inconsistent with Canada's obligations under Article 6 of the Subsidies Agreement. The Panel observed that, whereas the CIT had not found evidence of increased imports in this case, it had made reference to the "potential or likely imports" that would occur in the absence of a price response by Canadian producers and this was the basis for its finding that subsidized imports had caused injury. The Panel considered that any effort at quantification of this notion of potential imports to determine the volume of imports which would have occurred in the absence of an adequate price response by the domestic producers would be a speculative exercise and had potentially very broad implications for the countervailing duty remedy. Thus, the Panel found that the CIT had not considered positive evidence of the level or trend of United States subsidized imports of grain corn into Canada, as required by Article 6.2.
The Panel noted that the CIT equated the world market price decline with the decline and depression of the price for corn in the Canadian market and did not attempt to make a link between subsidized imports and the price decline and depression in the Canadian market. The CIT also discussed the effect of the Chicago price for grain corn on the Canadian price for the like product but did not examine the effect of subsidized imports on the Canadian price. The Panel accordingly found that the CIT did not consider the price effects of subsidized imports, as required by Article 6.2. Furthermore, the CIT did not consider positive evidence required to show that the increased burden on government support programmes was a result of subsidized imports; instead, its finding was based on the world market price decline, which the CIT attributed – at least in major part – to the 1985 Farm Bill in the United States. Thus, in the view of the Panel, the CIT determination did not properly examine the relevant evidence of the impact of subsidized imports on the domestic industry, as required by Article 6.3 and 6.4.
Finally, the Panel noted that the CIT acknowledged the existence of factors other than subsidized imports having an effect on the price of Canadian grain corn but made no effort to ensure that the injuries caused by other factors were not attributed to the subsidized imports and thus did not meet the express requirements of Article 6.4. Since no case was made by the CIT that subsidized imports from the United States were responsible for the decline in prices suffered in Canada, the Panel concluded that the CIT determination was inconsistent with the requirements of Article 6 of the Subsidies Agreement.