Unruly neighbor: Canada complains to WTO, says United States breached trade rules

Erika Holt
January 12, 2018

"The odds are increasing that the United States might withdraw from NAFTA, which I've been of the view that it would be unlikely to do", said Mark Warner, who runs MAAW Law, an global business and regulatory law firm in Toronto and New York City, in a recent interview.

"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".

"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 WTO said in a statement.

US Trade Representative Robert Lighthizer commented on the move, saying that Canada's protest against recent US trade actions in a complaint to the WTO is "a broad and ill-advised attack on the US trade remedies system". Canada cites 188 examples of US trade remedies in its claims, but only a handful involve USA trade action against Canada and another 33 countries are mentioned.

The complaint marks Canada's most exhaustive attempt yet to counter recent import duties imposed by the US, particularly on Canadian softwood lumber products. It also accuses the US of using a trade-panel voting system that's biased against foreigners.

It also might result in a flood of imports from other countries - if the complaint successfully have American tariffs removed - and cost Canada billions of dollars in exports to the United States, Lighthizer said.

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The disputes over paper, lumber and aerospace are occurring just as the countries prepare to meet in Montreal later this month for a potentially pivotal round of NAFTA negotiations.

After reports Wednesday that Canada now considered it inevitable that Trump would try to withdraw the USA from the treaty, one Canadian official with knowledge of the NAFTA negotiation offered a more nuanced position in an email to the Post, saying, "it's not accurate to say we're convinced", but that there was "no question we think there's a chance it could happen".

The complaint is "certainly not typical", said Greg Kanargelidis, an worldwide trade lawyer at Blake, Cassels & Graydon LLP.

"These duties are unwarranted and without merit and we 100 per cent support the federal government's WTO filing position".

"In a normal situation you wouldn't expect this to impact the long-term trading relationship that we've got under NAFTA", he said. In almost all cases, duties were imposed after the Commerce Department and ITA investigated charges by USA companies or industries, which claim to have been harmed by unfair import competition. "It's the same horror show over and over".

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