BISMARCK, N.D. (AP)--A trade panel ruled steep American tariffs that have almost halted Canadian Wheat imports may be unjustified, and ordered a U.S. commission to come up with stronger evidence to justify the fees.

The North American Free Trade Agreement panel gave the International Trade Commission three months to provide the information.

The Wheat Commission and the U.S. Durum Growers Association filed trade complaints in September 2002, seeking tariffs against Canadian imports of hard red spring Wheat and durum. North Dakota is the leading U.S. producer of both types.

Hard red spring Wheat is used to make bread, rolls and other baked goods. Durum is used to make pasta.

The Wheat groups argued the Canadian Wheat Board was unfairly benefiting from government subsidies, and using its monopoly power to sell Wheat below cost in export markets.

U.S. trade agencies later supported import tariffs for Canadian hard red spring wheat, but declined to support penalties for durum. The Wheat Board, the Canadian federal government and the provincial governments of Saskatchewan and Alberta appealed to the NAFTA panel.

The panel June 7 ordered the ITC to reconsider its earlier ruling. Its earlier conclusion that the Canadian Wheat Board's sales practices had driven down hard red spring Wheat prices "is not supported by substantial evidence," the NAFTA panel's report says.

Ken Ritter, chairman of the Canadian Wheat Board, on June 7 called the panel's decision a "clear and unequivocal victory" for Canadian Wheat farmers.

"We have taken a huge step toward getting an unjustified tariff removed, a tariff that was imposed two years ago on very shaky grounds, and should have never been there in the first place," Ritter said.

Jim Peterson, marketing director for the North Dakota Wheat Commission, said he believes the ITC can address the trade panel's concerns. An ITC spokeswoman could not be reached immediately for comment June 7.

"There are some very pressing questions, but they're not insurmountable," Peterson said.

The United States imported 49 million bushels of Canadian hard red spring Wheat annually as recently as four years ago. Since the tariffs were imposed, U.S. imports have dropped to less than 1 million bushels.

Ritter and the Wheat Board's president, Adrian Measner, said they were confident the 14.15 percent tariff on Canadian Wheat exports would be lifted. Peterson said the tariff equals about 50 cents a bushel.

Date: 6/23/05

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