The WTO complaint alleges the United States’ anti-dumping and countervailing-duties measures are not compliant with international law under the trade group. The action comes amid disputes between the two countries over areas such as dairy, aircraft sales, and lumber as well as efforts to renegotiate the North American Free Trade Agreement.
This latest complaint comes just a few weeks before the U.S. government agency, the International Trade Commission (ITC) meets to vote on a Boeing-pushed U.S. complaint against Canada by the Chicago aircraft manufacturer. The thing is – As the Irish Times points out – The ITC is supposed to be independent of the American government.
Bombardier Fiasco before ITC
Last month, the U.S. Commerce Department introduced a proposal to apply new trade tariffs of nearly 300 percent on sales of Bombardier CSeries jets in the U.S. after it upheld complaints made by Boeing that Bombardier had sold its CSeries jets below market value in the U.S. and had also benefited from government subsidies.
The ITC will undoubtedly not rule in Bombardier’s favor, simply because the action does involve politics at the federal level in the U.S. Richard Harrington, a minister with the UK’s Department for Business, Energy, and Industrial Strategy said, “The ITC is supposed to be independent of the American government but my expectation is that things will not be very different from what has already been determined.”
The U.S. claims Canada has unfair trade practices
Basically, according to CTV News Canada, the U.S. is imposing duties of up to nine percent on Canadian paper, following similar penalties against Bombardier and softwood lumber, over what the U.S. alleges to be unfair Canadian trade practices.
Yet, with Canada’s complaint with the WTO, Canada alleges the American process for imposing anti-dumping and countervailing duties violates global trade rules. The formal 32-page complaint by Canada to the World Trade Organization can be found HERE.
Canada cites five specific points of contention in its complaint. Canada claims the U.S. levies penalties beyond what’s allowed by the WTO. The U.S. is alleged to improperly calculates rates, unfairly declares penalties retroactive, limits evidence from outside parties, and has a tilted voting system in its domestic trade panels that, in the case of a 3-3 tie, awards the win to American companies.
Canada is referring to the U.S. federal agency, the International Trade Commission when it talks about the “domestic trade panels.” The agency has six members, and if a dispute results in the members being evenly divided, the reward always goes in favor of the U.S.
Eric Miller, president of the Rideau Potomac Strategy Group, which consults on North American trade issues, said the scope of the filing is “unprecedented. It is global, it is over many years, it is systematic and so this is something that certainly, in the realm of WTO cases, is outside the norm in terms of its reach and its ambition.”
“Ill-advised attack” against the U.S.
Canada’s complaint to the WTO is targeting a process that has been increasingly used since Donald Trump became president. It is well known that he is trying to have a “protectionist” stance when it comes to trade, energy resources, and manufacturing.
In 2017, the US Commerce Department launched more than 80 anti-dumping and countervailing duty investigations, an increase of 46 percent from 2016. And it appears that most of the complaints from private companies result in steeper tariffs. And this week, as the result of the Commerce Department’s “investigations,” Canadian newsprint producers were hit with higher tariffs.
US Trade Representative Robert Lighthizer, the top US negotiator in the talks, called Canada’s WTO filing “a broad and ill-advised attack on the US trade remedies system.” He added. “Canada’s claims are unfounded and could only lower US confidence that Canada is committed to mutually beneficial trade.”
Chad Bown, a trade expert at Washington’s Peterson Institute and host of the podcast “Trade Talks” said, “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.”
