Published: Fri, January 12, 2018
Money | By Armando Alvarado

Canada complains to WTO about U.S. trade duties

Canada complains to WTO about U.S. trade duties

Canada has "thrown a grenade" at the United States filing a complaint with the World Trade Organisation (WTO) against its southern neighbour's use of trade sanctions, which might wreck their current North American Free Trade Agreement (NAFTA) negotiations, said an global trade law expert.

The new complaint Canada has filed with the World Trade Organization is an unfriendly gesture between two countries that are each other's biggest trading partner and it appears intent on making the case that the United States has diverged from the rules-based worldwide order that has been built up over successive multilateral trade deals.

"Canada considers the measures relating to USA anti-dumping or countervailing duty investigations, reviews or other proceedings are inconsistent with US obligations 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", the document's preamble states.

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It's possible other countries may join this complaint as intervenors, making it a bigger and more embarrassing problem for the US government.

Lighthizer argued that a win for Canada would mainly help other countries like China, which would take any opportunity to dump their low-cost imports into the USA market.

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. "This is effectively Canada bringing a dispute on behalf of all exporters in the world - the Europeans, Japan, China - because they're making a systemic challenge".

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"Even if Canada succeeded on these groundless claims, other countries would primarily benefit, not Canada", he added, suggesting also that "Canada's complaint is bad for Canada".

NAFTA has been heavily criticized by Trump, who called it the "worst deal in United States history" and warned that he might scrap it.

The confusion over Canadian expectations comes ahead of the next round of negotiations, scheduled to be held in Montreal Jan. 23-28.

Under WTO dispute resolution rules, other countries named in the complaint can decide to take part in consultations after an initial reading. One of the United States' demands in the NAFTA renegotiation is chapter 19's elimination. "But with the Trump administration being relatively new, and because of the protectionist noises we've been hearing from them, it's not at all clear what sort of reaction the USA might have".

In almost all cases, duties were imposed after the Commerce Department and ITA investigated charges by U.S. companies or industries, which claim to have been harmed by unfair import competition.

Anticipating an imminent US retreat from NAFTA, the Canadian government has chose to go on the offensive in managing its trade relations with our Southern neighbor. "It's the same horror show over and over".

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