CANADA/USA: US pasta subsidies slammed by Canadian producers

Canadian pasta producers have slammed the subsidies given to their US counterparts, adding to the lumber trade dispute already rumbling between Ottawa and Washington The government aid given to pasta producers south of the border is giving US companies an unfair advantage, according to Joe Vitale, president of Toronto–based pasta manufacturer Italpasta, and the upshot is that US producers are selling products on the Canadian market cheaper than Canadian producers.

May 27, 2002

Canadian pasta producers have slammed the subsidies given to their US counterparts, adding to the lumber trade dispute already rumbling between Ottawa and Washington

The government aid given to pasta producers south of the border is giving US companies an unfair advantage, according to Joe Vitale, president of Toronto–based pasta manufacturer Italpasta, and the upshot is that US producers are selling products on the Canadian market cheaper than Canadian producers.

Vitale notified the federal government last month when it transpired that the US government gave out US$20m to its domestic producers in January. From Toronto, Liberal MP Roy Cullen told the Globe and Mail that Canada was now joining forces with Mexico in taking the issue to the World Trade Organisation (WTO).

“We have launched a subsidy-and-dumping challenge in the WTO,” he said: “What that means is that we’re alleging, and we’re damn sure, there’s a subsidy. If you have a subsidy, that means you’re able to dump the product easier than if you don’t have a subsidy.”

Vitale insists that US subsidies are a “double whammy” for producers already facing tough competition from cheaper Italian pasta.

The US government says that the US$20m represented the proceeds from punitive duties collected against unfairly priced Italian imports since 1998.