LexSage

Canada Initiates Anti-dumping/Countervailing

Duty Investigations Against Dry Wheat Pasta

from Turkey

Written By: Cyndee Todgham Cherniak

Date: December 28, 2017

On December 28, 2017, the Canada Border Services Agency ("CBSA") announced that it has initiated antidumping and countervailing duty investigations against dry wheat pasta from Turkey. This is not surprising - there were rumblings about a possible case in 2016. See the article in the Manitoba Co-operator entitled "Canadian pasta makers accuse Turkey of dumping".

Turkey is not the country one usually thinks of when one thinks of pasta (Italy is the country one normally thinks of). Canada does not have any existing antidumping or countervailing duty order against dry pasta.  However, in 1995, there was an antidumping case against dry pasta from Italy that ended with a no injury and no threat of injury decision.  Maybe this case will have a similar result in the Canadian International Trade Tribunal injury inquiry.

The subject goods in the current case are defined by the CBSA as:

"All dry wheat-based pasta, not stuffed or otherwise prepared, and not containing more than two percent eggs, whether or not enriched, fortified, organic, whole wheat or containing milk or other ingredients, originating in or exported from the Republic of Turkey, excluding refrigerated, frozen or canned pasta."

The "Additional Product Information" provided by the CBSA regarding the subject goods at issue is:

"The subject goods broadly include all white pasta, standard pasta, regular pasta, whole wheat pasta and organic pasta in the durum wheat semolina family of pasta. The subject goods can also be enriched or fortified, and may contain milk or other optional ingredients such as chopped vegetables, vegetable purees, vegetable powders, milk, gluten, diastases, vitamins, coloring and flavorings.

The subject goods include long shapes (generally referred to as vermicelli and including spaghetti, spaghettini, capelli, linguini, vermicelli, angel hair, fettuccini and pasta nests), short lengths (generally referred to as macaroni and including elbow macaroni, penne, rigatoni, rotini, fusilli and ziti) and specialty shapes (including bows, shells, cannelloni, manicotti, lasagna and wagon wheels).

The subject goods are imported in various types and sizes of packaging. The packaging can include fiberboard, cardboard cartons, polyethylene bags or polypropylene bags in a wide range of sizes. The most common sizes are 200g, 375g, 400g, 454g, 500g, 750g, 800g, 900g, 1kg, 10lb, 20lb, 30lb, 40lb, 50lb, “Box Specialty” and “Bulk Tote”. In Canada, it is common for dry pasta to be packaged by the producer."

Importers and exporters should consider whether to ask for product exclusions from the Canadian International Trade Tribunal.

H.S. Classifications

Subject goods are normally imported under the following H.S. classification numbers:

• 1902.19.21.30
• 1902.19.22.30
• 1902.19.23.30
• 1902.19.29.30
• 1902.19.91.00
• 1902.19.92.30
• 1902.19.93.00
• 1902.19.99.30

The listing of HS classification numbers is for convenience of reference only. The HS classification numbers include non-subject goods. Also, subject goods may fall under HS classification numbers that are not listed. Refer to the product definition for authoritative details regarding the subject goods.

Proceedings:
There are four separate proceedings in a typical Canadian antidumping or countervailing duty proceeding:

1. The CBSA conducts an antidumping investigation.  Within the first 90 days, the CBSA sends Exporter Requests for Information that must be filed on or before the specified deadline.  The CBSA may send supplemental requests for information.  The Requests for Information permit the CBSA to calculate preliminary dumping margins.  It is preferable to obtain a company-specific dumping margin – especially if an exporter has not dumped goods into Canada;
2. The CITT conducts a Preliminary Injury Inquiry within the first 60 days.  Se our post on What is the Canadian Internaional Trade Tribunal? See our post on What is a Preliminary Interest Inquiry? In the Preliminary Injury Inquiry, the CITT looks at whether the complaint discloses a reasonable indication of injury.  Normally, the CITT will consider issues on (1) scope, (2) classes of goods and (3) evidentiary issues.  Since this is a regional case, arguments about test for regional cases and whether this is an appropriate regional case will likely be very relevant.  Companies should participate early and raise relevant issues with the CITT. The CBSA conducts a Preliminary Dumping Investigation within the first 90 days (the period overlaps with the CITT Preliminary Injury Inquiry);
3. The CBSA Conducts Final Dumping and Subsidy Investigations: After 90 or 135 days have elapsed, the CBSA starts final investigations. During this period, on-site verifications take place. This process takes 90 days; and
4. After the CBSA issued Preliminary Determinations, the CITT conducts a Final Injury Inquiry.  The process takes 90 days.  On or about the 90th day, the CITT starts a hearing.

At this time, we will focus on the CBSA preliminary determinations phase. It is very important to start completing the questionnaires as quickly as possible.   Importers complete the Importers RFI. Exporters must complete (1) the Exporter Dumping RFI and (2) the Exporter Subsidy RFI. The CBSA is also distributing Industry Profit Surveys to obtain information of what amount is a reasonable profit. See our post on Common Mistakes made by Exporters in completing Exorter RFIs.

Timeline

The CBSA’s timeline of important dates is as follows:

• January 18, 2018 – CBSA: Importer responses to CBSA Requests for Information are due
• February 5, 2017 – CBSA: Exporter responses to CBSA Requests for Information are due (no extensions are granted)
• March 28, 2018 – CBSA issues preliminary dumping determination (unless the CBSA extends by up to 45 days)
• May 10, 2018, by noon – CBSA: Closing of the Record Date
• May 17, 2018, by noon – CBSA: Case arguments due from all parties
• May 24, 2018, by noon – CBSA: Reply submissions are due
• June 26, 2018 – CBSA issues final determination

It is important for exporters to participate in the CBSA investigations. We recently posted an article entitled “Exporters Who Receive De Minimis Dumping Margins in Canadian AD Cases Now Being Excluded From Final Orders” in which we highlight the benefits of participating in a Canadian antidumping case.  If an exporter can achieve a de minimis dumping margin (less than 2%), the dumping investigation will be terminated against that exporter.  This would allow that exporter to continue to sell to importers in Canada.

We achieved a 0% dumping margin for Conares in the Carbon Steel Welded Pipe 2 case and they have been excluded from the Tribunal's injury Order.  We also achieved a 0% dumping margin for Cintasa in the Fabricated Industrial Steel Components case and they too have been excluded from the Tribunal's injury Order.

If you require any assistance, please contact Cyndee Todgham Cherniak at 416-307-4168 or cyndee@lexsage.com.