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  January 12th, 2018 | Written by

Canada Files WTO Complaint Over US Trade Remedies

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  • Canada’s complaint alleges six categories of US laws and practices that contravene WTO rules.
  • Canadian complaint cites 188 alleged violations of WTO rules from specific US trade cases.
  • Of the 188 violations cited in WTO complaint, only two apply to Canada.

Canada has requested WTO consultations with the United States concerning certain laws, regulations and other measures maintained by the US with respect to antidumping and countervailing duty proceedings. The request was circulated to WTO members on January 10.

The complaint is a wide-ranging assault on US trade remedies and how they are applied. The complaint alleges that six categories of US laws and practices contravene World Trade Organization rules. The complaint also cites 188 alleged violations of WTO rules from specific US trade cases.

The WTO rules which Canada considers the US to be violating come under the WTO’s Anti-Dumping Agreement, the Agreement on Subsidies and Countervailing Measures, the General Agreement on Tariffs and Trade 1994, and the Understanding on Rules and Procedures Governing the Settlement of Disputes.

Interestingly, of the 188 violations cited, only two cases apply to Canada: the long-running softwood lumber dispute and another involving supercalendered paper.

The US antidumping or countervailing duty measures which Canada considers to be inconsistent with WTO obligations are as follows:

  1. The US applies antidumping and countervailing duties in excess of WTO rates and does not refund collected cash deposits that are found to be excessive.
  2. The US application of retroactive provisional antidumping and countervailing duties following a preliminary determinations of violations is inconsistent with the Anti-Dumping Agreement and the SCM Agreement.
  3. The US improperly treats export controls such as permitting processes on goods that are incorporated into a product under investigation as financial contributions and improperly imposes countervailing duties with respect to those export controls.
  4. The US improperly calculates benefit in countervailing duty proceedings where governments provide goods for less than adequate remuneration by disregarding situations where the government price is higher than the benchmark price used for comparison.
  5. The US restricts interested parties from submitting evidence that would allow them to fully defend their interests in antidumping and countervailing duty investigations by closing the evidentiary record before the preliminary determination.
  6. The US International Trade Commission determines that there has been injury to a US industry in the event of a tie vote among the six commissioners, creating an institutional bias in favor of affirmative results that is inconsistent with WTO agreements.

US Trade Representative Robert Lighthizer blasted Canada for filing the complaint calling it “a broad and ill-advised attack on the US trade remedies system.”

“Canada’s claims are unfounded and could only lower US confidence that Canada is committed to mutually beneficial trade,” he added. Lighthizer also noted that should Canada prevail, it would mostly benefit other countries, most notably, China.

The request for consultations initiates a dispute in the WTO, providing an opportunity to find a solution without further litigation. Canada may request adjudication by a WTO panel if the consultations don’t resolve the dispute within 60 days.