'Canada's WTO complaint against United States could scuttle NAFTA'

Violet Powell
January 14, 2018

The Canadian government has launched a sweeping World Trade Organization complaint against a litany of USA trade practices, alleging almost 200 violations of WTO rules by US investigators reaching back more than 20 years, according to documents published Wednesday.

Washington was quick to respond, with U.S. Trade Representative Robert Lighthizer issuing a statement Wednesday that called the filing a "broad and ill-advised attack on the U.S. trade remedies system".

"Canada considers the measures relating to US anti-dumping or countervailing duty investigations, reviews or other proceedings are inconsistent with USA 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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If Canada is successful at the WTO, the United States may have to change the way it approaches trade remedies cases.

The United States called the complaint, which includes cases that involve a variety of exports as well as other nations such as China and Brazil, an attack on how the nation goes about using its trade enforcement system.

On Tuesday, Commerce Secretary Wilbur Ross announced that Washington would impose countervailing duties of between 6 and 10 percent on uncoated groundwood Canadian paper. "In the past Canada has filed one-off cases in relation to a specific product or dispute such as softwood lumber".

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Further to the WTO complaint, Lighthizer said, "Canada is acting against its own workers' and businesses' interests".

The 32-page filing not only accuses the USA of improperly imposing duties on Canadian products but also on those of other trading partners, including Brazil, China, EU and India.

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.

"This isn't going to calm passions in Montreal", Warner told The Canadian Press. If the Trump administration undermines the WTO and even comes to reject it, then Canada is plenty justified in insisting to keep chapter 19 in NAFTA, since there would not be an alternative independent institution to deal with national countervailing and anti-dumping duties in North America. "I wonder why would you bring this complaint now?"

Such tariffs are allowed under WTO rules, but are subject to strict conditions. It has already lost a string of WTO disputes after its calculation methodology was ruled to be out of line with the WTO rulebook.

The complaint ramps up tensions amid talks on renegotiating the North American Free Trade agreement.

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