World Trade Organisation (WTO)

Canada takes US to WTO in dispute over duties and subsidies – which is bad news for Trump

PUBLISHED : Thursday, 11 January, 2018, 1:06am
UPDATED : Wednesday, 01 August, 2018, 4:07pm

Canada has launched a wide-ranging trade dispute against the United States, challenging Washington’s use of anti-dumping and anti-subsidy duties.

Canada made the claims in a filing at the WTO which is dated December 20, 2017, but which was only published on Wednesday.

It appeared to be mounting a case on behalf of the rest of the world, since it cited almost 200 examples of alleged US wrongdoing, almost all of them concerning other trading partners, such as China, India, Brazil and the European Union.

The 32-page complaint homed in on technical details of the US trade rule book, ranging from the US treatment of export controls to the use of retroactive duties and split decisions by the six-member US International Trade Commission.

This will be of concern to the Trump administration, which has said it may use duties to tackle Chinese manufacturing dominance.

Canada said US procedures broke the WTO’s Anti-Dumping Agreement, the Agreement on Subsidies and Countervailing Measures, the General Agreement on Tariffs and Trade and the Understanding on Rules and Procedures Governing the Settlement of Disputes.

Anti-dumping and countervailing duties – punitive tariffs to restrict imports that are unfairly priced or subsidised to beat the competition – are a core component of Washington’s trade arsenal, and frequently used to defend US interests.

EU, US lack awareness of WTO trade rules, China says

Such tariffs are allowed under WTO rules but they are subject to strict conditions.

The United States has been under fire for years about the way it calculates unfair pricing, or dumping. It has already lost a string of WTO disputes after its calculation methodology was ruled to be out of line with the WTO rule book.

US ramps up pressure on China, rejecting market economy status at WTO

Under President Donald Trump, the United States has threatened to expand the use of punitive duties against China and has angered Beijing by refusing to accede to China’s demand to be treated as any other “market economy”.

Trump has also upset Canada by slapping punitive tariffs on Canadian softwood timber exports, leading to a challenge by Ottawa at the WTO and the North American Free Trade Agreement (Nafta).