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. asked in Politics & GovernmentPolitics · 1 decade ago

US Dumped Goods In Canada?

I remember from socials class last year that US used to dump their goods on Canada. Where can I find more info on this? I tried searching "US Dumping Goods In Canada" on Google but the pages aren't really what I want. Anyone have a webpage with more history and stuff.

4 Answers

  • 1 decade ago
    Favorite Answer

    I suspect that you are referring to corn dumping. Although the formal case was resolved in 2006, there are complaints from Canada and Canadian farmers that Untied States is dumping corn on Canada, at less thant the fair price.

    Under NAFTA and WTO regulations, a government may not subsidize the production of product(s) for export. Canada imports much of their corn from the United States. If the corn from the United States were naturally produced at a lower price (better soil, seeds, or climate), then the fact that US corn costs less than Canadian corn would simply be an example of how international trade should work. Production of goods and services at a lower price is a function of market forces.'

    The complaint by Canadian farmers, however, is that the United States government actively subsidizes corn production. This allows the grain to be sold at a much lower price than the market would normally require. Lets take a hypothetical example: It costs $10/bushel to produce corn. The US government gives a tax credit and/or subsidy in the amount of $2/bushel. The farmer can then sell the grain for $9/bushel, which is less than the actual cost of production, and still, the farmer is making money.

    In contrast, the Canadian farmer produces his corn using the best farming methods possible -- $9.50/bushel. This is 5% less than it costs to produce American corn, and yet, it is more expensive than the price of the corn SOLD (including profit) by American companies.

    It would seem, therefore, that this would constitute dumping.

    But remember, this is not all one sided. Canada sells lumber to America at an artificially reduced price. This is because almost all timber is on government-owned land. Thus, since the land is subsidized, and timber rights are allowed at artificially low prices, Canada is able to sell its lumber to the United States at an artifically reduced price. This was a huge issue early in this decade (particularly in the upper northwest, America's timberland).

    This is a really interesting issue, particularly since the diplomats worked so hard to avoid an international trade war with such a good trading partner. In normal circumstances, one would expect that the Untied States would have put a tax (Tarrif) on the lumber equalling the government subsidy in Canada (plus a little more, to remind Canada not to cheat). One would expect that Canada would put a similar tax on corn imported from the United States.

    Neither occurred. While the timber industry was really upset with the unfair competition, the construction industry was afraid that the increased costs of materials would significantly damage their business. In Canada, while the corn farmers were concerned about the unfair competition, the ethanol suppliers and food companies warned that the increased cost of corn would result in skyrocketing prices.

    No tarrifs were employed in either case. But from the materials available, it sure looks like dumping to me.

  • Anonymous
    1 decade ago

    Your memory is playing tricks on you.

    Canadians are renown for their clean restrooms.

    Americans used to go there for good dumps.

  • Anonymous
    1 decade ago

    what kinda goods?

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