Govt launches trade complaint against U.S. over duties

  • Govt launches trade complaint against U.S. over duties

Govt launches trade complaint against U.S. over duties

Given recent musings that Ottawa expects the Trump administration is about to pull the plug on NAFTA, there is speculation that Canada is either trying to gain leverage ahead of the next round of negotiations, or signaling that, with no free trade agreement in place, it intends to use the WTO to fight its trade battles.

"Even if Canada succeeded on these groundless claims, other countries would primarily benefit, not Canada".

U.S. Trade Representative Robert Lighthizer said in a statement that Canada's complaint is a "broad and ill-advised attack on the U.S. trade remedies system".

He further called Canada's accusations "unfounded" and said that they "could only lower U.S. confidence" that its neighbor is committed to mutually beneficial trade.

The WTO revealed on Wednesday that Canada had filed a complaint last month accusing the USA of unfairly imposing countervailing and anti-dumping duties, not only on Canadian softwood lumber but also on goods from many other countries.

Canada-U.S. trade lawyer Mark Warner said the complaints might have some merit, and Canada is well within its rights to complain to the WTO.

Canadian Foreign Minister Chrystia Freeland said the legal action was in response to the "unfair and unwarranted" USA duties against Canada's softwood lumber producers and part of a "broader litigation" to defend forestry jobs.

The highly technical 32-page complaint lists 122 trade enforcement actions undertaken by the Trump administration, dealing with imports ranging from Chinese steel to pasta made in Italy. "It's nearly like Canada is fighting this on behalf of the global community ..."

Trade relations between the countries have experienced some stumbling points as the sides are deadlocked in unsuccessful negotiations over NAFTA, the trade pact signed by the US, Canada, and Mexico in 1994 and based on the fundamental principle of tariff-elimination across North America.

A Reuters exclusive released Wednesday citing two government sources, said Canada is growing more and more convinced that President Trump will pull the US out of the NAFTA deal altogether.

Trump withdrawing from NAFTA "was always a risk, but that risk is clearly more elevated now", said Brian DePratto, senior economist at Toronto-Dominion Bank.

"Canada's claims threaten the ability of all countries to defend their workers against unfair trade", he said. We know that when unbiased entities review these unfair trade practices, they have found in Canada's favour.

The complaint is "certainly not typical", said Greg Kanargelidis, an worldwide trade lawyer at Blake, Cassels & Graydon LLP. It has already lost a string of WTO disputes after its calculation methodology was ruled to be out of line with the WTO rule book.

Indeed, the Trump administration wasted no time expressing its displeasure.

Starting January 10, the US Department of Commerce imposed unwarranted countervailing duties up to 9.93 per cent on imported Canadian uncoated groundwood paper (newsprint).

"Today's preliminary decision allows US producers to receive relief from the market-distorting effects of potential government subsidies", said Ross in a statement, instructing Customs and Border Protection agents to begin collecting cash deposits from paper importers at the border.