The first round in Canada’s trade action against the U.S. corn industry is complete. The Canadian International Trade Tribunal has ruled that dumping and subsidizing of unprocessed U.S. corn is hurting Canadian producers. The Ontario Corn Producers' Association, the Federation des producteurs de cultures commerciales du Quebec and the Manitoba Corn Growers Association filed the complaint on Sept. 16, alleging that U.S. corn is pushing prices down and hurting their producers’ incomes. Canadian farmers produced 364 million bushels of grain corn last year, valued at about $1.4 billion.

The next step is for the Canada Border Services Agency to hold hearings-- which will be conducted in December. That could lead to duties on some American corn imports. More formal hearings would then follow in March.

But not all Canadians are happy with these developments. Canada’s Animal Industry Corn Users are disappointed by the trade tribunal preliminary decision. AICU is a coalition of the Canadian Cattlemen's Association, Canadian Pork Council and the Animal Nutrition Association of Canada.  "…the facts do not support continuing the investigation into trade injury," says Kathleen Sullivan, general manager of the ANAC. "U.S. subsidies do not increase corn imports; in fact, corn imports are declining. Imports are taking the blame. The evidence, over many years, is that U.S. corn imports are residual and complementary to Canadian production."

Average U.S. corn imports between 2000 and 2003 were approximately 140 million bushels annually, dropping to 85 million bushels in 2004 and 2005. The forecast for 2006 is 103 million bushels.

The reasons for the Tribunal's decision so far remain unclear, a report is expected any day. "We look forward to reading CITT's rationale, but it will not prevent our efforts to secure a commonsense solution,” says . Clare Schlegel, with CPC. “We need to work together, with government, to find solutions that won't jeopardize each other's industries."

AICU is stepping up its information campaign all levels of Canadian government. It is urging the government to delay the Preliminary Determination to Jan. 30, 2006, so not to interfere with World Trade Organization’s agricultural negotiations in Hong Kong; that the CITT be directed to consider the public interest as well as its injury examination; and recommend to the Canada Border Services Agency president to exercise his discretion to not collect provisional duties.

"Proceeding in this case will have serious adverse effects on corn users, and will backfire on corn growers," contents John Masswohl, representing AICU. The coalition represents more than 100,000 Canadian livestock producers.

Meanwhile, in the states, the National Corn Growers Association membership is naturally disappointment in CITT’s preliminary ruling.

“We believe the Canadian corn producers have no justification for taking this to court. We’re hopeful this can be settled without litigation,” says Rick Tolman, NCGA’s chief executive officer.

The U.S. corn industry also has organized a coalition, made up of NCGA, American Farm Bureau Federation, the U.S. Grains Council and the Corn Refiners Association, to fight the issue on behalf of the U.S. corn industry.

As U.S. pork producers know, this issue will drag out; and predicting the outcome is a gamble.