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CBSA Issues Statement of Reasons re Alleged Dumping of Wheat Gluten

Posted August 31, 2020

The Canada Border Services Agency last week issued a Statement of Reasons providing more details concerning an investigation into the alleged dumping of certain wheat gluten (classified under 1109.00.10.00 & 1109.00.20.00) originating in or exported from Australia, Austria, Belgium, France, Germany, and Lithuania.
Wheat and flour

The CSCB launched its probe earlier this month in response to a complaint filed by ADM Agri-Industries Co. of Candiac, Quebec (supported by Red Deer based Permolex Ltd., the only other Canadian producer).

According to the CSCB, there are more than 50 exporters of the subject goods and nearly as many Canadian importers. Wheat gluten is commonly used to enhance whole-grain baked goods, noodles and pastas, pizza crusts and vegetarian products. It can also be used in the production of animal feed, pet food and as a meat filler and binder.

Nature of the Complaint

Citing a “drastic increase” in the volume of imports since tariffs were relaxed with the coming into force of the Comprehensive Economic Trade Agreement for imports from Europe, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership for imports from Australia, ADM alleges the gluten exporters in question have been dumping in the Canadian market at prices “both substantially below the cost to produce wheat gluten and substantially below what these exporters charge in their domestic markets.”

In its statement, CBSA found that evidence provided by ADM “discloses a reasonable indication that imports of allegedly dumped subject goods from the named countries pose a threat of injury to the wheat gluten industry in Canada.” Additionally, the agency found the complainant’s assertion that continued dumping was likely to cause further harm in the future to be “reasonably supported.”

Future Actions

Earlier this month, the Canadian International Trade Tribunal also launched a preliminary inquiry to determine whether imports of the subject goods are harming Canadian producers and will issue a decision by October 13, 2020.

Concurrently, the CBSA will continue investigating whether the goods are being sold in Canada at unfair prices, and will make a preliminary decision by November 12, 2020.

Need More Information?

If you have any questions or concerns about this investigation under the Special Import Measures Act, don’t hesitate to contact one of our trade experts today.

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