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

Posted January 14, 2018

"Canada's new request for consultations at the WTO is a broad and ill-advised attack on the U.S. trade remedies system", U.S. Trade Representative Robert Lighthizer said in response to Canada's legal action.

He said that during the current NAFTA negotiations, which enter the sixth round in Canada later this month, the U.S. has made it clear that it wants to remove a dispute-resolution mechanism for anti-dumping and countervailing cases under Chapter 19 of the 24-year-old trilateral trade agreement.

The file was made public on Wednesday and cites almost 200 complaints by Canada against the USA, many of which include Canada's trading partners such as China, India, Brazil, and the European Union.

"Even if Canada succeeded on these groundless claims, other countries would primarily benefit, not Canada".

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The 32-page filing not only accuses the US of improperly imposing duties on Canadian products but also on those of other trading partners, including Brazil, China, EU and India. "It's nearly like Canada is fighting this on behalf of the global community".

The irony here is that Canada is making the same complaint about the United States.

The announcement of the case comes ahead of the January 23 start of the next round of trade talks on the North American Free Trade Agreement in Montreal. Missing from Lighthizer's statement, naturally, was any mention of how the administration he works for has lowered confidence in the U.S.'s commitment to mutually beneficial trade.

If the United States decides to continue recognizing the WTO's dispute-settlement mechanism to decide on the fairness of USA trade remedies, then a decision in Canada's favour would support Canada's claim that the US system is biased, making it easier to argue in favour of keeping chapter 19.

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The Trump government's re-introduction of duties on Canadian softwood and newsprint exports will cost the industry billions and job loss could be as high as 25,000. The negotiations certainly aren't unfamiliar with shows of muscle or grandstanding; think of the Trump administration's outrageous NAFTA demands, the threat to leave NAFTA, the softwood lumber dispute, the Boeing-Bombardier dispute and most recently, the newspaper dispute.

Canadian Foreign Minister Chrystia Freeland said the legal action was in response to "unfair and unwarranted" U.S. duties against Canada's softwood lumber producers, and is part of a "broader litigation" to defend its forestry jobs.

"We know that when unbiased entities review these unfair trade practices, they have found in Canada's favour", Yurkovich said in a statement. According to the US Department of Commerce, Canadian newsprint paper exports to the United States totaled about 1.6 billion Dollars in 2016.

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