Canada challenges USA tariff system

Canada Launches Trade Dispute Against US in WTO, Washington Strikes Back

Canada Launches Trade Dispute Against US in WTO, Washington Strikes Back

"Canada's new request for consultations at the WTO is a broad and ill-advised attack on the USA trade remedies system", Lighthizer said in a Wednesday statement.

Canada's complaint comes as its efforts continue to renegotiate the North American Free Trade Agreement (NAFTA).

In a statement, Foreign Affairs Minister Chrystia Freeland said, "This WTO action is part of our broader litigation to defend the hundreds of thousands of good, middle class forestry jobs across our country".

"For example, if the USA removed the orders listed in Canada's complaint, the flood of imports from China and other countries would negatively impact billions of dollars in Canadian exports to the United States, including almost $9 billion in exports of steel and aluminium products and more than $2.5 billion in exports of wood and paper products".

Last month a USA trade panel locked in hefty subsidies on softwood lumber.

"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.

Canada is the largest exporter of newsprint in the world.

Edward Alden of the Council on Foreign Relations called it a precarious moment for NAFTA and the global trading system, both of which are under threats and criticism from Trump: "Canada has just detonated a bomb under both".

Warner believes that the Canadian government may be playing to a domestic audience in demonstrating that it is not only being "very assertive" in addressing trade disputes, but that it is also trying to "embarrass the Americans" before the world by citing nearly 180 trade breaches over two decades against other countries listed on 24 pages of Canada's 32-page complaint before the WTO. The US, which has threatened to scrap trade deals between the two, has called the move "ill-advised".

Trump withdrawing from NAFTA "was always a risk, but that risk is clearly more elevated now", said Brian DePratto, senior economist at Toronto-Dominion Bank.

He added that Canada is against its own interests and would not benefit even if the case succeeds.

"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 worldwide business and regulatory law firm in Toronto and New York City, in a recent interview.

Starting January 10, the US Department of Commerce imposed unwarranted countervailing duties up to 9.93 per cent on imported Canadian uncoated groundwood paper (newsprint).

The complaint was filed last month but released Wednesday, with some coincidental timing: the US has just announced duties as high as nine per cent on Canadian paper.

Steep import duties leveled by the US have become a regular fixture of the industry, according to Joel Neuheimer, a vice-president at the Forest Products Association of Canada.