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US Trade Rep Blasts Canada WTO Complaint About US Duties

12 January 2018

Canada has "thrown a grenade" at the United States as it filed a complaint with the World Trade Organization (WTO) against its southern neighbor's use of trade sanctions, which might wreck their current North American Free Trade Agreement (NAFTA) negotiations, said an worldwide trade law expert.

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

Susan Yurkovich, President of the BC Lumber Trade Council, said in a statement: "For decades, the Canadian lumber industry has been subject to unfair and unwarranted duties imposed by the U.S. Department of Commerce, and has filed appeals under the NAFTA and WTO agreements".

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

The move follows a series of similar penalties as the USA alleges unfair trade practices from Canada in the form of softwood lumber and Bombardier subsidies.

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".

The file was made public on Wednesday and cites almost 200 complaints by Canada against the US, many of which include Canada's trading partners such as China, India, Brazil, and the European Union. It also accuses the US of using a trade-panel voting system that's biased against foreigners.

Canada is the largest exporter of newsprint in the world.

He said that during the current NAFTA negotiations, which enter the sixth round in Canada later this month, the United States 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 pact. The Canadian government is preparing for the possibility that Trump will withdraw from NAFTA, senior officials say, though they aren't entirely convinced that he will.

"Canada and the USA enjoy one of the most productive trading relationships in the world".

The thinly veiled threat gives new rise to concerns for positive progress in the ongoing NAFTA renegotiations ahead of the next round of talks set for January 23 in Montreal.

Though Canada certainly has plenty of domestic interest in pushing against the trade policies of its southern neighbor, its filing is about more than its own trade disputes. Otherwise Canada, which sends 75 percent of its goods exports to the U.S., could ask the trade organization to adjudicate.

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

The complaint was filed last month but released Wednesday, with some coincidental timing: the USA has just announced duties as high as nine per cent on Canadian paper. "But with the Trump administration being relatively new, and because of the protectionist noises we've been hearing from them, it's not at all clear what sort of reaction the USA might have".

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.

US Trade Rep Blasts Canada WTO Complaint About US Duties