Canada’s trade remedy system – Consultation

October 7, 2021 | Satinder Bains, Daniel Kiselbach, Andrew Hefford

In the 2021 Budget, the Federal Government announced its intention to use public consultations on potential legislative and regulatory amendments to reinforce Canada’s trade remedy system, as well as to improve access for workers and small and medium-sized enterprises (“SMEs”). The public consultation period was launched on August 6th and ended on September 26th.

The five subject areas affected by proposed amendments are as follows:

1) Increased participation of unionized workers in trade remedy proceedings

Unions received full participatory rights in Canadian trade remedy proceedings. Under the current trade remedy system, investigations into trade remedy complaints are only initiated on the Canada Border Service Agency’s (the “CBSA”) own initiative, or when complainants are domestic producers or associations representing them.

The proposed amendments to the Special Import Measures Act (Canada) (“SIMA”) would include unionized workers in the meaning of complainant, in the context of filing anti-dumping and countervailing duty complaints. The government also proposes a change to the Canadian International Trade Tribunal Act to specify that unionized workers can file safeguard complaints.

2) Investigations into the circumvention of duties

Under section 72(1) of SIMA, the CBSA can initiate an investigation if, after examining prescribed anti-circumvention factors, they believe a circumvention is occurring.

The government is proposing a SIMA amendment which clarifies the standard to initiate an anti-circumvention investigation.

3) Massive importations

The government is proposing three amendments to SIMA regarding the imposition of duties for massive importations. These amendments concern:

  1. the collection of relevant data;
  2. the applicable standard; and
  3. the timeframe for notifying the government of the exporting country.

The first proposed amendment to SIMA is a requirement for the Canadian International Trade Tribunal (“CITT”) to collect data for 90 days before the initiation of an investigation regarding the volume, value, and inventory of imports.

The second proposed amendment is to section 42 of SIMA. It would change the standard for the imposition of retroactive duties from:

 “retroactive duties are necessary in order to prevent the recurrent of injury”

to

“the massive importations are likely to seriously undermine the remedial effect of the duties.”

The third proposed amendment concerns the notice given to the exporting country. Currently the government of the country of export is generally notified 30 days before the initiation of an investigation. The Canadian government in its consultation has requested for approval to amend SIMA to notify the government of the country of export that a subsidy complaint has been filed no later than 20 days before the initiation of a countervailing duty investigation and no later than 7 days before the initiation of a dumping investigation. By notifying the government of the country of export later than the current timeframe reduces the risk that exporters become aware of a potential investigation before it is initiated. This should help in preventing a surge of importations in the period preceding the CBSA’s preliminary determination.

4) Expiry reviews

According to the World Trade Organization agreements, anti-dumping and countervailing duties are valid for a maximum of five years but the CITT can initiate a review before then. According to section 76.03 of SIMA, the review can be initiated on the CITT’s own initiative or at the request of an interested party. The CITT would decide if the review is warranted.

The proposed amendment would require the CITT to initiate an automatic review of all trade remedy orders before they expired.

5) Improving access for SMEs to Canada’s trade remedy system

SMEs are less structurally organized and have fewer resources than large enterprises. Consequently, SMEs have difficulty complying with complexities of the trade remedy system.

The government is proposing the creation of a dedicated trade remedy counseling unit that would provide free assistance to SMEs affected by unfairly traded imports.

Disclaimer

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

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