Published: Fri, January 12, 2018
Business | By Max Garcia

Canada's WTO broadside: What's the strategy ?

Canada's WTO broadside: What's the strategy ?

USA trade remedies ensure that trade is fair by counteracting dumping or subsidies that are injuring US workers, farmers, and manufacturers.

"Canada and the USA enjoy one of the most productive trading relationships in the world". "It's nearly like Canada is fighting this on behalf of the global community ..."

"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 WTO said in a statement.

NAFTA has been heavily criticized by Trump, who called it the "worst deal in United States history" and warned that he might scrap it.

Ottawa's ramped-up efforts come amid an increasingly fragile trade relationship between the two countries.

Mr. Trump has repeatedly threatened to pull out of NAFTA - or at least trigger the withdrawal process to increase pressure on Canada and Mexico.

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.

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".

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.

Under WTO dispute resolution rules, other countries named in the complaint can decide to take part in consultations after an initial reading.

"Canada's claims threaten the ability of all countries to defend their workers against unfair trade", he said.

The highly technical 32-page complaint lists 122 trade enforcement actions undertaken by the Trump administration, dealing with imports ranging from Chinese steel to pasta made in Italy.

The U.S. used the same argument it did in imposing stiff duties against softwood lumber: that the Canadian companies received unfair subsidies from the Canadian government.

Canada's $65-billion-a-year forest products industry represents 2 per cent of the country's Gross Domestic Product and is one of Canada's largest employers, operating in over 600 communities, providing 230,000 direct jobs, and 1 million indirect jobs across the country.

Chad Bown, an economist and trade expert at the Peterson Institute in Washington, said Canada's WTO move sends a stark message to Mr. Trump amid NAFTA talks: If you kill the deal, this is how Canada will fight you in trade disputes.

"This has been a chronic problem for us", he said.

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