Trump Trades Blows with Canada

Andrew Cummings
January 12, 2018

Canada cited five reasons for the complaint, saying the us levies penalties beyond what's allowed by the WTO, improperly calculates rates, unfairly declares penalties retroactive, limits evidence from outside parties, and has a tilted voting system in domestic trade panels that, in the case of a 3-3 tie, awards the win to American companies.

A spokesman for Foreign Affairs Minister Chrystia Freeland said this challenge is tied to Canada's latest fight with the United States over softwood lumber.

As with the softwood lumber dispute, workers on both sides of the border are harmed by the trade war. 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.

If Canada is successful at the WTO, the United States may have to change the way it approaches trade remedies cases.

The complaint marks Canada's most exhaustive attempt yet to counter recent import duties imposed by the US, particularly on Canadian softwood lumber products.

"This isn't going to calm passions in Montreal", Warner said.

However, he explained that US President Donald Trump's administration "dislikes" the WTO's dispute-settlement body and believes that countries rely on it "inappropriately to achieve results they can't achieve through negotiations". "I wonder why would you bring this complaint now". It's practically goading the Trump administration to blow up the organization, Warner added. Even if Canada succeeded with their claims, other countries would primarily benefit, not Canada, Lighthizer argued.

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

The US called the claims "unfounded", with its Trade Representative Robert Lighthizer saying: "Canada's new request for consultations at the WTO is a broad and ill-advised attack on the US trade remedies system".

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. "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".

"For example, if the US 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".

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

A wide-ranging trade complaint has been filed by Canada against the United States, accusing it of breaking global trade rules.

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