An Examination of the U.S. Trade Remedy Laws: Asymmetric Wheat Trade Flows between the United States and Canada
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Abstract
Agricultural trade between the United States and Canada has been contentious since the inception of the Canada-U.S. Free Trade Agreement (CUSTA) since 1989, mainly because Canadian exports of wheat and barley to the United States increased significantly, while U.S. exports remain unchanged. Research conducted by many agricultural economists in both sides of the border indicates that the asymmetric trade flows of wheat and barley between the two countries have been caused by differences in trade policies, farm subsidies, and marketing institutions between the two countries, and the relative value of the Canadian dollars. Wheat producers in the United States increasingly rely on US trade remedy laws such as anti-dumping and countervailing duties, require a material injury test prior to the imposition of countermeasures, to correct the surge in wheat imports from Canada. The most recent affirmative injury determination by the USITC demonstrates that the lack of a quantitative definition of material injury makes the outcome of the injury determination virtually unpredictable. The current trend of seeking relief using trade remedy laws will continue as long as the asymmetric bilateral wheat trade flows remain unchanged.
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