MercoPress. South Atlantic News Agency

Canada accuses US of breaking international trade rules; files complaint with WTO

The action comes amid disputes between the two countries over areas such as dairy, aircraft sales and lumber as well as efforts to renegotiate the NAFTA agreement

Canada has filed an expansive complaint with the World Trade Organization accusing the US of breaking international trade rules. The complaint challenges the ways that the US investigates products for subsidies and below-cost sales. As expected the US called the claims “unfounded”.

 The action comes amid disputes between the two countries over areas such as dairy, aircraft sales and lumber as well as efforts to renegotiate the North American Free Trade Agreement. Canada's 32-page complaint cites US investigations of products from countries around the world, with decisions that date back to 1996.

Among other charges, Canada says the US improperly calculates rates and restricts parties from presenting evidence to defend themselves, with a cut-off for supplying information that comes too early in the process.

It also accuses the US International Trade Commission of being biased since disputes over which the body's six commissioners are evenly divided automatically result in a finding for the US.

Eric Miller, president of the Rideau Potomac Strategy Group, which consults on North American trade issues, said the scope of the filing is “unprecedented”.

“It is global, it is over many years, it is systematic and so this is something that certainly, in the realm of WTO cases, is outside the norm in terms of its reach and its ambition,” he said.

Canada's complaint targets a process that the US has deployed frequently under President Donald Trump, who has embraced a protectionist stance on trade.

The US Commerce Department launched more than 80 anti-dumping and countervailing duty investigations last year - a 46% increase from 2016. The investigations, which are typically triggered by complaints from private companies, can lead to steep tariffs.

This week, the US Commerce Department announced results in additional investigations - including one against Canadian newsprint producers.

US Trade Representative Robert Lighthizer, the top US negotiator in the talks, called Canada's WTO filing “a broad and ill-advised attack on the US trade remedies system”.

He said: “Canada's claims are unfounded and could only lower US confidence that Canada is committed to mutually beneficial trade.”

The petition, filed with the WTO on 20 December and shared with members on Wednesday, kicks off 60 days of “consultation”. If it is not resolved in that time, it is subject to adjudication by a WTO panel.

US Commerce Department Secretary Wilbur Ross said the US has “every confidence” it will win in adjudication. “These cases were conducted in an open and transparent manner in accordance with the applicable laws, regulations, and administrative practices to ensure a full and fair review of the facts,” he said.

Canada's ministry of global affairs said the petition is part of broader litigation aimed at preserving forestry jobs. In November, it filed a complaint with the WTO contesting US duties on Canadian softwood lumber producers.

“We continue to engage our American counterparts to encourage them to come to a durable negotiated agreement on softwood lumber,” Chrystia Freeland, Canada's minister of foreign affairs, said.