Canada will fight the latest round of trade "harassment'' by the United States, which took the form Friday of new preliminary duties on wheat exports, the federal government says.

Canadian Press

OTTAWA — Canada will fight the latest round of trade "harassment'' by the United States, which took the form Friday of new preliminary duties on wheat exports, the federal government says.

The latest tariffs total more than 10 per cent each on two types of Canadian wheat.

They mark the 11th time Ottawa has had to fight to defend farmers and their marketing arm, the Canadian Wheat Board, said Ralph Goodale, minister responsible for the Canadian Wheat Board.

"This policy of trade harassment...this is misguided, it is counterproductive, it is unfair and inappropriate,'' Goodale said.

"When you go through this process...have 10 of these proceedings and you win all of them -- 10 out of 10 -- and yet the harassment continues, obviously there's a very significant level of frustration here. "We're obviously going to be fighting this with everything we've got.''

He spoke after the U.S. Commerce Department announced Friday that it plans to impose preliminary tariffs on wheat which it says has been dumped -- sold at less than fair market value in the U.S.

The new anti-dumping tariffs of 8.15 per cent on durum wheat, which is used to make pasta, and 6.12 per cent on hard red spring wheat, result from a case brought last September by American wheat farmers.

Those penalties come on top of a similar ruling in March by the U.S. Commerce Department, which imposed a provisional duty of 3.94 per cent for both durum wheat and hard red spring wheat.

Taken together, the two rulings would impose new border taxes of 12 per cent on durum wheat and 10 per cent for hard red spring wheat.

Final rulings aren't expected on the duties until late summer.

Goodale acknowledged the case hasn't quite reached the crisis point.

Because not much wheat is sold in the spring, "the practical impact will be very small,'' over the next few months, said Goodale, a Saskatchewan MP.

And he added he's relieved total duties are nowhere near the 20 per cent tariff that was originally feared.

The volumes are also not huge. Last year, Canada sold about $400 million of wheat to the U.S., about 10 per cent of total sales.

The crux of the fight lies with the longstanding claim by American producers and officials that the Canadian Wheat Board has an unfair monopoly. The Winnipeg-based marketing agency controls the sale of all wheat and barley grown in Western Canada destined for human consumption in Canada, or for export.

The Commerce Department said it earlier found evidence to support allegations that Canada unfairly subsidizes its growers.

Wheat Board officials deny that allegation.

"Western Canadian farmers do not dump their grain into the U.S. market or anywhere else,'' said wheat board chair Ken Ritter, a Saskatchewan farmer.

"We don't need to. We produce some of the world's highest quality grain, for which our American customers have testified they are willing to pay a premium.''

However, the board will be required to post bonds equal to the preliminary duty, which Goodale said it will recover once Canada wins at the final determination.<

The Commerce Department will make final rulings on the dumping and subsidy issues on July 15.

The case then goes to the U.S. International Trade Commission for a final decision in August as to whether American farmers have been harmed by Canada's imports.

If the commission should uphold its preliminary finding of harm, the higher tariffs would become permanent.

Canada farmers as well as producers in other countries, including Mexico, have countered that American farmers get such high levels of subsidies from Washington that they over-produce, drive down prices and force other countries' farmers out of business.

Prices paid for Canadian wheat are determined solely by market conditions, said Agriculture Minister Lyle Vanclief.

"North American prices are determined by North American supplies...we reject in no uncertain terms the notion that Canadian wheat is responsible for low prices in the U.S.''

In addition to the cases involving U.S. tariffs, the Bush administration has brought a case against Canada before the World Trade Organization on the issue.