Trade remedies are the measures taken in response to import taxes imposed on certain goods in order to prevent dumping or counter export duties (countervailing duties), tariffs lower than the fair market value (anti-dumping), and import overflow (safeguards). The WTO agreements which deal with this issue are the Anti-dumping agreements, the subsidies agreement SCM agreement, and GATT[1].
Anti-dumping and the other trade remedies actions are the most significant policy tools that the largest importing nations of the world trade organization (WTO) use to limit international trade.
It seemed like Canada’s allegations were not just concerned about their stand but it took the entire stance of the world into its consideration as it cited almost 200 examples alleging the United States for their trade remedies loopholes. All allegations were mostly concerning other nations apart from Canada such as India, China, Brazil, and the European Union.
Canada filed 32-page long complaint United States concerning its unethical trade remedies activities. The complaint was made on the basis of technical details of the United States trade rulebook, varying from the United States treatment of export controls to the use of retroactive duties and contrasting decisions of the six-member United States international trade commission.[2]
On 20th December 2017, Canada appeals to the World Trade Organisation for consultation with the United States regarding certain laws, regulations, and other measures sustained by the United States for anti-dumping and countervailing duty proceedings. Canada accused the United States of remedial measures to be inconsistent with the Anti-dumping Agreement, Subsidies and countervailing measures Agreement (SCM), General agreements on tariffs and Trade (GATT), and dispute settlement understanding (DSU)[3].
On 19th January 2018, Argentina and Russia also requested the World Trade Organisation to join the consultation.
As per Canada’s claims, The United States pretends to execute adverse WTO advice and rulings in respect to the United States anti-dumping and countervailing measures, but the manner in which these recommendations and rulings are implemented is not in conformity with WTO standards and obligations.
The United States quite habitually publishes preliminary supportive analytical circumstances determination which in turn lead to the suspension of liquidation of entries and stockpile provisional anti-dumping and countervailing duties as cash deposits for the period of 90 days before the anti-dumping or countervailing duty determination. The customs authorities of the United States then suspend liquidation of entries retroactively and take other enforcement measures following duty determination.
The unites states also prohibit certain parties from showcasing facts and information which favor them in defending their interest in case of anti-dumping and countervailing duty proceedings and investigation by completely concealing the evidence prior to the preliminary determination.
The United States tends to export authorization procedures, export levies, export reservations, export limitation, export bans, and other related export controls on input products included or integrated into a product under investigation as financial contribution. As an outcome of this, the United States initiates investigations proceedings into or imposes countervailing duties in accordance with such export controls.
The United States practice or policy of considering export controls as financial contribution and inappropriately initiating investigations into or imposing countervailing duties in accordance to export controls that are applicable to input products that are integrated into products under investigation. This measure is specifically beneficial to the United States as it has to do with the United States Department of commerce’s discovery discussing export controls in United States countervailing duty investigations and reviews. This measure has been in practice for many years and is likely to continue in the future with same consistency. On the contrary, this measure adds up to ongoing conduct or rule or norm of general and prospective application.
When it comes to countervailing proceedings, the United States governs whether a government has supplied goods for remuneration considerably less than the desired or adequate remuneration and determines the alleged advantages by comparing the price of goods provided by the government to a standard price. The United States merit calculation partly takes no notice of comparisons where the government price is higher than the standard price by allocating a zero value to these comparisons.
These policies, regulations, and practices of the United States act as a combine attributable to the United States as it proportionally relates to United States regulation as well as the United States Department of commerce’ policy or practice of not employing, or almost never employing, its preference to avail additional factual information.
The United States International Trade Commission (ITC) controls whether the United States industry is affected or hampered with material injury in the United States. Section 771(11) of the Tariff Act of 1930 implies that where the commissioners are equally distributed as to whether a determination of International trade commission should be positive or negative, the International trade commissions have deemed to make an affirmative determination of the following:
- Material affect to the industry of the United States
- Threat of material affect to such industry
- Material retardation of establishment of an industry in the United States.
This section also restricts the United States from conducting the considerate inquiry of injury, threat of injury, or material retardation in its consideration as it creates an institutional bias in the favour of positive results which is inconsistent with the Anti-Dumping Agreement and SCM Agreement.
It can be concluded from the above discussion that section 771(11) results in the United States governing its laws, regulations, and decisions in such a manner that are inconsistent, impartial, and not uniform just because of the institutional bias it creates in support of the positive results in injury, threat of injury and material retardation decision which considered to be inconsistent with the articles of GATT 1994.
In light of all these allegations put forward by Canada, the United States trade representative issued a statement calling Canada’s case an “ill-advised attack on the United States trade remedies system.”[4]
The United States called for a rebuttal calling all claims by Canada unfounded and only aimed at lowering the United State confidence in international trade. According to the United States trade representative, Canada is just acting for its own interest and also if Canada succeeds in its claims then it will not benefit Canada but other countries.
As per the World trade organization’s guidelines, the United States has only 60 days to settle the dispute with Canada otherwise Canada which has 75% of its export to the United States may ask the World trade organization to adjudicate.[5]
Canada’s ministry of global affairs said that this petition’s sole objective is to preserve forestry jobs and it is not just a part of Canada’s petition but broader litigation from behalf of the world. The complaint was filed in November to challenge United States duties on Canadian softwood lumber producers with the World Trade Organisation.
Canada’s minister of foreign affairs issued a statement claiming that it will continue to encourage the United States to durably negotiate agreements on softwood lumber. Canada seeks to apply pressure on the United States to make a bold statement regarding the significance of international organizations and regulations.[6]
[1]The world trade organization, https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds535_e.htm (last visited March 31, 2021)
[2]Zee business, https://www.zeebiz.com/agencies/canada-takes-united-states-to-wto-in-complaint-over-trade-remedies-34784/amp (last visited March 31, 2021)
[3]The world trade organization, https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=241707,241708,241392&CurrentCatalogueIdIndex=2&FullTextHash=&HasEnglishRecord=True&HasFrenchRecord=True&HasSpanishRecord=True (last visited 31 March 2021)
[4]Capital trade incorporated, https://www.captrade.com/2018/01/canada-requests-consultations-with-the-u-s-at-the-wto/ (last visited April 1, 2021)
[5]CBC, https://www.cbc.ca/news/business/canada-united-states-trade-complaint-1.4480738 (April 2, 2021)
[6]BBC, https://www.bbc.com/news/business-42639459 (April 2, 2021)
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