DWP 2017 IN
Certain Dry Wheat Pasta
Statement of Reasons

[6] The complainant, is CPMA of Ottawa, Ontario. The contact information of the complainant is:

Canadian Pasta Manufacturers Association
86 Armstrong Street
Ottawa, Ontario, K1Y 2V7

[7] The CPMA comprises three members who produce DWP in Canada, namely Italpasta Limited (Italpasta), Primo Foods Inc. (Primo) and Grisspasta Products Ltd. (Grisspasta). The contact information of the three producers is as follows:

Italpasta
116 Nuggett Court
Brampton, Ontario, L6T 5A9

Primo
56 Huxley Road
Toronto, Ontario, M9M 1H2

Grisspasta
805 Boulevard Guimond
Longueuil, Quebec, J4G 1M1

[8] The complainant members account for the majority of production of like goods in Canada (i.e. greater than 50%).^{Footnote 4}

[9] The complainant identified two additional Canadian producers of like goods in its complaint, namely Catelli Foods Corporation of Etobicoke, Ontario and Prairie Harvest Canada Ltd. of Edmonton, Alberta.^{Footnote 5}

[10] The CBSA also identified three additional potential Canadian producers of like goods through its own research, namely Pasta Romana Foods Inc. of Montreal, Quebec, Old Fashioned Noodle Products of Winnipeg, Manitoba, and Jared Pacific Inc. of Mississauga, Ontario.^{Footnote 6}

[11] The CBSA identified 51 potential exporters located in Turkey and three potential exporters/vendors, located outside of Turkey, of the subject goods^{Footnote 7} from CBSA import documentation and from information submitted in the complaint^{Footnote 8}. The potential exporters located in Turkey were asked to respond to the CBSA’s Exporter Dumping Request for Information (RFI) and to the CBSA’s Exporter Subsidy RFI.^{Footnote 9} All other potential exporters located outside Turkey were requested to respond to only the Exporter Dumping RFI.^{Footnote 10}

[12] The CBSA identified 34 potential importers of the subject goods^{Footnote 11} from CBSA’s Facility for Information Retrieval Management (FIRM), from import documentation and from information submitted in the complaint^{Footnote 12}. All of the potential importers were asked to respond to the CBSA’s Importer RFI.^{Footnote 13}

[13] Upon initiation of the investigations, the GOT was sent the CBSA’s Government Subsidy RFI requesting information concerning the alleged subsidy programs available to producers/exporters of subject goods located in Turkey.^{Footnote 14}

[14] For the purposes of these investigations, the GOT refers to all levels of government, i.e., federal, central, provincial/state, regional, municipal, city, township, village, local, legislative, administrative or judicial, singular, collective, elected or appointed. It also includes any person, agency, enterprise, or institution acting for, on behalf of, or under the authority of, or under the authority of any law passed by, the government of that country or that provincial, state or municipal or other local or regional government.

[15] For the purposes of these investigations, subject goods are defined as:

All dry wheat based pasta, not stuffed or otherwise prepared, and not containing more than two percent eggs, whether or not enriched, fortified, organic, whole wheat or containing milk or other ingredients, originating in or exported from the Republic of Turkey, excluding refrigerated, frozen or canned pasta.

[16] The subject goods broadly includes all white pasta, standard pasta, regular pasta, whole wheat pasta and organic pasta in the durum wheat semolina family of pasta. The subject goods can also be enriched or fortified, and may contain milk or other optional ingredients such as chopped vegetables, vegetable purees, vegetable powders, milk, gluten, diastases, vitamins, coloring and flavorings.

[17] The subject goods include long shapes (generally referred to as vermicelli and including spaghetti, spaghettini, capelli, linguini, vermicelli, angel hair, fettuccini and pasta nests), short lengths (generally referred to as macaroni and including elbow macaroni, penne, rigatoni, rotini, fusilli and ziti) and specialty shapes (including bows, shells, cannelloni, manicotti, lasagna and wagon wheels).

[18] The subject goods are imported in various types and sizes of packaging. The packaging can include fiberboard, cardboard cartons, polyethylene bags or polypropylene bags in a wide range of sizes. The most common sizes are 200g, 375g, 400g, 454g, 500g, 750g, 800g, 900g, 1kg, 10lb, 20lb, 30lb, 40lb, 50lb, “Box Specialty” and “Bulk Tote”. In Canada, it is common for DWP to be packaged by the producer.

[19] The subject goods are produced world-wide using materially similar production processes.

[20] While technology, particularly the usage of large DWP producing machines, does affect production efficiencies, all DWP is produced in the same manner: by mixing finely ground semolina flour with warm water.

[21] Semolina flour is produced from milling durum wheat. Semolina flour, and by extension durum wheat, is the ingredient that represents the single largest input cost in the production of the subject goods.

[22] After mixing semolina flour with warm water, the dough is kneaded mechanically until it becomes firm and dry. The dough is then passed into a laminator to be flattened into sheets, then compressed by a vacuum mixer machine to clear out air bubbles and excess water from the dough. Next, the dough is processed in a steamer to kill any bacteria it may contain.

[23] The dough is then ready to be shaped into different types of DWP. Depending on the type of DWP to be made, the dough can either be cut or extruded through dies. The pasta is set in a drying tank under specific conditions of heat (natural gas), moisture, and time depending on the type of pasta. The DWP is then packaged.

[24] The subject goods are normally imported under the following tariff classification numbers:

1. 1902.19.21.30
2. 1902.19.22.30
3. 1902.19.23.30
4. 1902.19.29.30
5. 1902.19.91.00
6. 1902.19.92.30
7. 1902.19.93.00
8. 1902.19.99.30

[25] The listing of HS classification numbers is for convenience of reference only. Also, subject goods may fall under HS classification numbers that are not listed. Refer to the product definition for authoritative details regarding the subject goods.

[31] Subsection 31(2) of SIMA requires that the following conditions for standing be met in order to initiate an investigation:

1. the complaint is supported by domestic producers whose production represents more than 50% of the total production of like goods by those domestic producers who express either support for or opposition to the complaint; and
2. the production of the domestic producers who support the complaint represents 25% or more of the total production of like goods by the domestic industry.

[32] Based on an analysis of information provided in the complaint, the complainant accounts for the majority of known domestic production of the like goods. Thus, the CBSA is satisfied that the standing requirements pursuant to subsection 31(2) of SIMA have been met.

Complainant’s Estimates

[41] The complainant was unable to obtain any information regarding domestic selling prices of DWP in Turkey, therefore they were unable to estimate normal values using the methodology of section 15 of SIMA.^{Footnote 25} Accordingly, the complainant estimated normal values based on paragraph 19(b) of SIMA.^{Footnote 26} Paragraph 19(b) of SIMA uses a constructed cost method of arriving at normal values based on the aggregate of (i) the cost of production of the goods, (ii) a reasonable amount for administrative, selling and all other costs, and (iii) a reasonable amount for profits.

[42] In estimating normal values to reflect the methodology in paragraph 19(b) of SIMA, the complainant relied upon the cost of durum wheat in Turkey according to the Turkish Grain Board (TMO), production costs of Canadian producers of DWP adjusted for differences in the cost of labour between Canada and Turkey, a reasonable amount for administrative, selling and all other costs from Primo and Italpasta adjusted for the differences in the cost of labour between Canada and Turkey, and a reasonable amount for profits from an average of the three members of the CPMA.

[43] The complainant estimated normal values by Canadian producer (Primo or Italpasta), by a method of allocating expenses (on sales or cost of goods sold) and by time period (2016 or January to September 2017).^{Footnote 27} The complainant’s estimates of normal value do not vary by type of DWP and are stated in Canadian dollars per kilogram.

[44] The normal values presented by the complainant were developed with the following components:

• Estimated cost of durum wheat in Turkey
• Estimated cost of milling semolina in Turkey
• Estimated cost of all ingredients of DWP produced in Turkey
• Estimated total cost of production of DWP in Turkey
• Adjustment for difference in the cost of labour between Canada and Turkey
• Estimated amount for administrative, selling and all other costs for producers in Turkey
• Estimated amount for profits for producers in Turkey

Estimated cost of durum wheat in Turkey

[45] DWP is produced by mixing finely ground semolina flour with warm water.^{Footnote 28} Semolina is milled from durum wheat.^{Footnote 29} According to the complainant, durum wheat is the single largest cost component in DWP production.^{Footnote 30}

[46] The price of durum wheat in Turkey is influenced by the GOT through decisions of the Council of Ministers in Turkey and through the purchases and sales of grain by the TMO.^{Footnote 31} The TMO is administered by the Ministry of Trade of Turkey. The complaint includes copies of the published wheat prices of the TMO from 2014 to March 2017, which includes the most recent information available.^{Footnote 32}

[47] According to the TMO, the rate of customs duty on the import of milled or durum wheat is 130%.^{Footnote 33} The TMO may allow imports of wheat duty free when the government of Turkey decides imports are necessary due to supply and demand conditions for wheat within Turkey.

[48] Due to the control exerted on the price of wheat in Turkey by the GOT through the Council of Ministers and the TMO, it is reasonable to use the durum wheat prices published by the TMO in estimating the cost of durum wheat of producers of DWP in Turkey.

[49] The complainant provided a table of TMO prices^{Footnote 34} for durum wheat per kilogram in Turkey that included prices in 2016 and 2017, converted to Canadian dollars using the average exchange rate^{Footnote 35} for the year for Turkish Lira to Canadian dollars. In estimating the cost of wheat to producers of DWP in Turkey, the complainant selected the lowest price published by the TMO in a given year.

Estimated cost of milling semolina in Turkey

[50] According to evidence provided by the complainant, all DWP factories in Turkey produce the semolina required for their production of DWP.^{Footnote 36}

[51] According to the complainant, Primo is the only producer of DWP in Canada that mills its own semolina.^{Footnote 37} The complainant estimated the cost of semolina in Turkey in 2016 and 2017 by dividing the estimated cost of durum wheat in Turkey for the year by Primo’s cost of durum wheat as a percent of the cost of semolina it milled in 2016.

Estimated cost of all ingredients of DWP produced in Turkey

[52] The production of DWP includes semolina and other ingredients such as vitamins.^{Footnote 38}

[53] The complainant estimated the cost of all ingredients for DWP produced in Turkey in 2016 and 2017 by dividing the estimated cost of semolina in Turkey for the year by Primo’s costs of semolina as a percent of its cost of all ingredients in 2016.

Estimated total cost of production of DWP in Turkey

[54] In addition to the cost of ingredients, there are other costs of production for DWP including labour, packaging and overhead.^{Footnote 39}

[55] Using information from Primo, the complainant estimated the cost of production in Turkey by dividing the estimated cost of all ingredients of DWP produced in Turkey by the percent that such costs represented of Primo’s cost of production for DWP in 2016.^{Footnote 40} Labour related components of production costs were adjusted to reflect wage differences between Canada and Turkey as detailed below.

Adjustment for difference in the cost of labour between Canada and Turkey

[56] The complainant made an adjustment to costs in its estimates of normal values to account for the difference between its labour costs and the cost of labour in Turkey.^{Footnote 41} To make the adjustment, the complainant used information from the Conference Board of the United States (affiliated with the Conference Board of Canada) in a report titled “International Comparisons of Hourly Compensation Costs in Manufacturing and Sub Manufacturing Industries” (the Board Report).^{Footnote 42}

[57] The Board Report includes hourly compensation costs in USD by country for the years 1996 to 2015. According to the report, hourly compensation costs in Canada in 2015 were USD$30.94 and in Turkey were USD$5.81. Using these figures, the complainant calculated that hourly compensation costs in Turkey were 81.22% lower than in Canada in 2015, and reduced the labour components for cost in its estimates of normal values by that amount.^{Footnote 43}

Estimated amount for administrative, selling and all other costs for producers in Turkey

[58] The complainant could not find public information available to support an estimate for administrative, selling and all other costs in Turkey. Instead, the complainant provided calculations for 2016 and for January to September 2017 for the administrative, selling and all other costs of Primo^{Footnote 44} and Italpasta^{Footnote 45}; calculations for such expenses were adjusted for the differences in labour costs in Turkey versus Canada by identifying the labour components of non production expenses and reducing such labour components by the factor it had identified in the information from the Conference Board when adjusting the labour component of production costs^{Footnote 46}.

[59] Administrative, selling and all other costs were allocated by the complainant to the cost of the goods with separate estimates by percent of gross sales and by percent of cost of goods sold.

Estimated amount for profits for producers in Turkey

[60] The complainant was not able to obtain financial statements for DWP producers in Turkey.^{Footnote 47} In estimating normal values, the complainant added amounts for profits using the three-year profit average of Primo, Italpasta and Grisspasta for 2014-2016. The three-year profit average for the companies was calculated by the complainant as a percent of total gross sales and applied to each normal value model on the basis of total cost per kilogram of DWP.

[61] The complaint provided publicly available financial statements for 2016 of DWP producer Barilla Holding S.p.A. (Barilla) of Italy.^{Footnote 48} However, the complainant did not use information from Barilla to estimate amounts for profits for DWP producers in Turkey. The reason provided by the complainant for not using the Barilla information is that Barilla manufacturers food products in addition to DWP and does not segregate its financial statements by product line.^{Footnote 49}

Normal value models selected by the complainant to estimate the margin of dumping

[62] Although the complainant provided different normal value estimates, the complainant submitted that the estimated normal values produced by Primo under the cost of goods sold allocation for 2016 and 2017 provide the best estimate of normal values for estimating the margin of dumping because Primo is the only fully integrated producer in Canada that mills its own semolina as do all of the producers of DWP in Turkey, according to the complainant.^{Footnote 50}

CBSA’s Estimates

[63] For the purposes of initiation, the CBSA estimated normal values for the period of October 1, 2016 to September 30, 2017 in the following manner.

[64] The CBSA conducted its own research and was unable to find domestic pricing information on like goods from producers of DWP located in Turkey.

[65] In the absence of information on domestic prices of DWP in Turkey, the CBSA accepted parts of the complainant’s methodology for estimating normal values. The CBSA made adjustments to account for its own research and analysis.

Cost of production

[66] The CBSA found the complainant’s estimates of the cost of durum wheat in Turkey to be reasonable as they used prices of durum wheat in Turkey publicly available from the TMO.

[67] The CBSA found the complainant’s estimates of milling semolina in Turkey, of all other ingredients in Turkey, and of the total cost of production of DWP in Turkey to be reasonable as the complainant based such costs on information from a fully integrated Canadian producer, Primo. According to the complainant, production processes are common within the industry across the world^{Footnote 51}, and the complainant made adjustments for differences in labour costs between Canada and Turkey^{Footnote 52}.

[68] The CBSA found the complainant’s adjustment for differences in labour costs between Canada and Turkey to be reasonable as the complainant made such adjustments to both labour in production costs and labour in corporate expenses and used a well-known information source, the Conference Board, for information on hourly compensation around the world.

[69] The CBSA accepted the complainant’s estimated cost of production of DWP in Turkey based on the information from Primo in the complaint, which included the cost of durum wheat, the cost of milling semolina, the cost of all ingredients, the total cost of production, and an adjustment to account for the difference in the cost of labour between Canada and Turkey.

[70] The complaint included cost estimates based on information from Canadian producers Primo and Italpasta. The CBSA chose to base its estimate of the cost of production on information from Primo because it is the only fully integrated DWP producer in Canada in that it mills its own semolina. Since information from the complainant suggests that all producers in Turkey are fully integrated, Primo is a better match for estimating the cost of production, than Italpasta which purchases semolina from independent mills.

Administrative, Selling and All Other Costs of DWP Producers in Turkey

[71] The complainant provided estimates of administrative, selling and other costs that included an amount for “trade spending”. The CBSA estimated administrative, selling and other costs based on information provided by the complainant. However, due to the nature of trade spending, it is included in the price for some sales to customers in particular market segments while not being included in the price for sales to customers of other market segments. Therefore, the CBSA did not include an amount for trade spending in the estimate of administrative, selling and all other costs, but instead deducted trade spending, where appropriate from the selling prices, when estimating export prices.^{Footnote 53}

Amounts for Profits for Producers in Turkey

[72] The complainant estimated a profit on gross sales using the average of profits reported by Primo, Italpasta and Grisspasta for 2014-2016. The CBSA estimated an amount for profits using information presented by the complainant, but re-calculated the percentage to be as a percent of total cost instead of gross sales; in addition, the CBSA selected the average profit made by Primo, Italpasta and Grisspasta for 2016 instead of the three year average provided by the complainant as the information from 2016 is the most recent.

CBSA’s Estimate of Normal Values

[73] The CBSA estimated normal values on a constructed cost plus profit approach to reflect the methodology in paragraph 19(b) of SIMA by aggregating the estimated cost of production, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

Complainant’s Estimates

[74] The export prices estimated by the complainant are based on price quotations from suppliers of DWP from Turkey. The price quotations are from May and June 2016, and January, February and April 2017. The price quotations to the complainant were FOB port in Turkey and did not include ocean freight, but included inland freight in Canada. The complaint did not deduct an amount for inland freight in Canada when estimating export prices.

CBSA’s Estimates

[75] The export price of subject goods is generally determined in accordance with section 24 of SIMA as being the lesser of the importer's purchase price or the exporter's selling price less all costs, charges and expenses resulting from exporting the goods to Canada.

[76] In estimating export prices for DWP from Turkey, the CBSA used the value for duty and quantity reported in the FIRM data for each individual shipment imported during the period of October 1, 2016 to September 30, 2017. Some FIRM data was adjusted by the CBSA after reviewing the import entry documentation to account for non-subject goods and incorrect quantities reported in FIRM.

[77] In estimating export prices, the CBSA made a deduction from FIRM prices for freight and trade spending, where appropriate.

[78] The CBSA estimated the margin of dumping by comparing the weighted average estimated normal values with the weighted average estimated export prices for Turkey. Based on this analysis, it is estimated that certain DWP imported into Canada from Turkey was dumped. The estimated margin of dumping is reported in the table below.

Table 3
Estimated Margin of Dumping

Country	Estimated Margin of Dumping as % Export Price
Turkey	26.5%

[101] The complainant alleged that there has been a significant increase in the absolute volume of imports of subject goods from Turkey. The complainant stated that imports of subject goods from Turkey relative to total imports from all countries increased from 3% in 2014 to 20% in 2016.^{Footnote 60} The complainant also stated that imports from Turkey relative to the total Canadian market increased since 2014.^{Footnote 61}

[102] The complainant alleges that there is a direct causal relationship between the increasing imports of dumped and subsidized DWP from Turkey and the reduction in Canadian production of like goods. The complainant states that, from 2014 to 2016, imports of subject goods increased 681% in absolute terms. Meanwhile, the complainant states that domestic production has decreased from 2014 to 2016 and alleges that this reduction is substantial as it represents lost sales, reduced throughput, and an increase in production costs.^{Footnote 62}

[103] The CBSA’s estimates of import volumes are detailed in the Canadian Market section of this Statement of Reasons. Based on the import data found in FIRM, relative to total imports from all countries, imports of subject goods from Turkey increased from 2.2% in 2014 to 12.0% in 2016. Additionally, imports from Turkey from January 2017 to September 2017 represent 11.1% of all imports of DWP to Canada.

[104] The CBSA finds the claim of lost market share and reduced production levels to be reasonable and well supported.

[105] The complainant states that the pricing pressure from dumped and subsidized imports of DWP from Turkey has caused material injury to the domestic industry by undercutting the price of DWP sold in the Canadian market, preventing price increases that otherwise would have likely occurred, and depressing the price of competing Canadian DWP.^{Footnote 63}

[106] The complainant submitted evidence showing that the average selling prices from Turkey, from 2014 to the first nine months of 2017, are substantially lower than those of the complainant members and from all other countries.^{Footnote 64} Although average selling prices from complainant members cannot be disclosed for confidentiality reasons, public information provided by the complainant shows that the average selling price per kilogram in Canada by exporters from Turkey was lower than exporters from all other countries by 40.0% in 2014, 39.0% in 2015, 51.8% in 2016, and 54.2% in Jan-Sept 2017.

[107] The complainant stated that the price effects of low-priced DWP from Turkey are cascading throughout the Canadian market.^{Footnote 65} The complainant submits that imports of DWP from Turkey have caused a substantial adverse impact on the Canadian industry for DWP sales in the retail private label sub-segment.^{Footnote 66} In addition to any lost sales, the Canadian domestic industry was forced to severely lower prices in order to maintain accounts.^{Footnote 67}

[108] The CBSA’s estimate of the average selling prices from Turkey, based on the import data found in FIRM from 2014 to the first nine months of 2017, show that prices from Turkey are lower than the complainant members and exporters from other countries.^{Footnote 68} The average selling price per kilogram in Canada by exporters from Turkey was lower than exporters from all other countries by 47.3% in 2014, 36.4% in 2015, 58.1% in 2016, and 53.9% in Jan-Sept 2017.

[109] Based on the information provided in the complaint, the CBSA finds the claim of the price depression and lost sales to be well supported and sufficiently linked to the allegedly dumped and subsidized goods.

[110] The complainant stated that one of the complainant members was forced to layoff employees due to the injurious impact of the dumped and subsidized imports of DWP from Turkey.^{Footnote 69}

[111] The CBSA finds the claim of reduced employment to be reasonable and well supported.

[112] The complainant submitted that the injurious impact of the dumped and subsidized imports of DWP from Turkey have reduced profitability for at least one of the member producers of the complainant from 2014 to September 2017.^{Footnote 70} In supporting this allegation, the complainant provided income statements for all three complainant members.^{Footnote 71}

[113] The CBSA finds the claim of reduced profitability to be reasonable and well supported.

CBSA’s Conclusion – Injury

[114] There is a reasonable indication that material injury has occurred to the DWP industry in Canada. The nature of the injury incurred by the complainant is well-documented in terms of loss of market share, reduced production levels, lost sales and price depression, reduced employment, and reduced profitability of the domestic industry. The CBSA finds that the injury can be reasonably attributed to the allegedly dumped and subsidized goods from Turkey.

[116] The complainant alleged that the rapid increase in the volume of dumped and subsidized goods at a rate of 681% from 2014 to 2016, at prices that undercut domestically produced like goods, indicate a likelihood of substantially increased imports, and pose a threat of further injury to the Canadian industry.^{Footnote 73} Absent protection, the complainant submits that it is certain that dumped and subsidized imports of low-priced DWP from Turkey will continue to exert strong downward pressure on the pricing of like goods in Canada. This will likely result in the continuation of lost sales and material price depression. This, in turn, will continue to result in material injury to the Canadian domestic industry.^{Footnote 74}

[117] As illustrated in the Canadian Market section of the Statement of Reasons, the CBSA’s import data also shows significant increases to Turkish imports, from 2014 to 2016, maintaining the upward trend in 2017.

[118] Based on the CBSA’s analysis of import data, the CBSA finds the complainant’s allegation of threat of injury posed by an increase in the rate of DWP imports to be reasonable and well supported.

[119] The complainant submitted that DWP producers in Turkey have increased production by 215% from 2009 to 2015^{Footnote 75} while Turkish domestic consumption has only increased by 32% during that same period.^{Footnote 76} In 2015, the complainant submits that 58% of all DWP production in Turkey was exported^{Footnote 77} while exports grew by 24% from 2015 to 2016^{Footnote 78}. It further submitted that a member of the Board of Turkey’s Pasta Industrialists Association stated that DWP producers from Turkey have a target of exporting 2 million tons of DWP by 2023 and aim to be the “largest pasta exporter in the world”.^{Footnote 79}

[120] Based on the year after year growth of Turkish domestic DWP production at rates greater than domestic consumption, increases of DWP exports from Turkey and the stated goal of the Turkish DWP industry to increase exports by 2023, the complainant believes that Turkey will continue to export dumped and subsidized DWP into Canada.

[121] The CBSA’s analysis of the information contained in the complaint revealed market conditions which the CBSA recognizes may result in Turkish producers of DWP continuing to target certain export markets, including Canada. As such, the CBSA finds the complainant’s allegations of the threat of injury posed by market conditions in Turkey to be reasonable and well supported.

[122] The complainant stated that the United States Department of Commerce had issued anti-dumping and countervailing duties against Turkish DWP in 1996, which has also been reviewed three times by the U.S. International Trade Commission^{Footnote 80} and is still in force.^{Footnote 81}

[123] The complainant submits that the absence of anti-dumping and countervailing duty protection in Canada, coupled with the presence of such protection in the United States, creates a strong incentive for Turkish producers to continue to increase exports of the subject goods to Canada.^{Footnote 82}

[124] The CBSA acknowledges the presence of trade remedy actions in the United States which may impact the export of DWP from Turkey. Further, the CBSA recognizes that these restrictions may have a significant impact on the Canadian market. The CBSA finds the complainant’s allegations of the threat of injury posed by foreign trade remedy action to be reasonable and well supported.

[125] The complainant also submits that the European Union (EU) currently imposes a tariff quota on certain pasta imports from Turkey. There is an annual quota of 20,000 MT for certain pasta products from Turkey.^{Footnote 83}

[126] The complainant states that the existence of such EU trade restrictions creates further incentive for Turkish producers to increase exports to countries, such as Canada, that do not impose trade protection against dumped and subsidized imports of DWP from Turkey.^{Footnote 84}

[127] The CBSA acknowledges the presence of a tariff quota in the EU which may impact the export of DWP from Turkey to other countries and may have a significant impact on the Canadian market. The CBSA finds the complainant’s allegations of the threat of injury posed by foreign tariff quotas to be reasonable and well supported.

[128] The complainant states that the magnitude of alleged dumping of the subject goods is concerning and demonstrates a real threat to the domestic industry. The complainant also notes that the subsidy programs available to exporters and producers of subject goods in Turkey are contingent on exports and therefore pose a threat of injury to the domestic.

[129] The CBSA has found that sufficient evidence exists to support the fact that the subject goods are being dumped and subsidized, and that the margin of dumping and amount for subsidy are not insignificant. The CBSA recognizes that the dumping and subsidizing of subject goods could significantly impact the trade of subject goods.

[130] The complaint contained reasonable evidence that the import volume of subject goods from Turkey is likely to continue to remain significant, and likely to increase in the future, considering the market conditions in Turkey. The significant volume of imports from Turkey at prices that substantially undercut Canadian domestic producer prices will continue to depress or suppress domestic prices and threaten to capture market share from the Canadian producer. The CBSA is of the opinion that the complaint contained reasonable evidence that such imports are likely to cause material injury in the foreseeable future.