OTTAWA — The cost of summer cooking in Canada could rise after Ottawa yesterday slapped temporary duties averaging 50.6 per cent on barbecues from China. Many of the barbecues are sold through big-box retailers across Canada.
Chinese barbecues have proven to be an aggressive import that has gobbled up one-fifth of Canada's retail barbecue business in three years, a market worth more than $100-million in annual sales.
Ottawa levied the new penalties following a preliminary probe into complaints that Chinese companies are dumping barbecues at discount prices in this country and that the People's Republic of China is subsidizing the products.
Trade watchers say it is the first time in Canada or the United States that a government has taken anti-subsidy action against China.
The case is a sign that fast-growing communist China, which only recently joined the World Trade Organization, is now being held to higher standards for international commercial behaviour.
Ottawa is slapping anti-dumping tariffs averaging 34.6 per cent on barbecues from China -- levies vary by manufacturer -- as well as a countervailing duty of 16 per cent.
The Canadian Border Services Agency announced the duties yesterday to "prevent injury to Canadian production" while Ottawa probes the matter further.
Jayson Myers, senior vice-president of Canadian Manufacturers & Exporters, welcomed the move.
"What we're seeing here is China being held to account to the rules it signed on to under the WTO," he said. "It's a concern for a lot of North American companies that China abide by the same rules as everybody else."
About 580,000 barbecues are sold in Canada each year. The Chinese sold about 5,800 barbecues here in 2000. That jumped to 121,000 in 2003.
"This is [a] vibrant Canadian industry being pushed up against the wall by unfair trading practices," said Lawrence Herman, a Toronto lawyer acting for the Canadian company that lodged the barbecue trade complaint.
Fiesta Barbeques Ltd. of Brampton, Ont., a major Canadian barbecue maker, alleges that the subsidies and dumping are unfairly eroding prices in Canada, killing jobs and costing Canadian companies sales and profit. The domestic barbecue-manufacturing sector employs several hundred Canadians but is being buffeted by waves of Chinese products.
"This indicates a strategy that appears to have a pattern: you occupy the entry points in the consumer market with low-priced products and you move up the value chain -- and once you have market share, you force the domestic industry out of that market," Mr. Herman said.
The prices of Chinese-made barbecues in Canadian stores will likely rise as a result of the duties.
The levies will stay in place while the CBSA probes Fiesta's allegations further. The agency will issue a final decision this fall.
The Canadian International Trade Tribunal is separately probing whether the imports are causing serious injury to domestic industry. The CITT's preliminary determination June 11 was that they are harming Canadian companies, but it must confirm those findings through more scrutiny or the duties will be repealed. Chinese barbecue makers will be assessed the duties starting immediately. Companies are typically required to post a bond guaranteeing their liability and will be required to pay the duties owed if the levies are finalized this fall.
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