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The risks and rewards of Canada’s new trade offensive

The risks and rewards of Canada’s new trade offensive
Calgary - Canada - China - Countervailing Duties - Italy - Japan - Protectionism - Switzerland - World Trade Organization - WTO
January 11
23:052018

Andrei Sulzenko is a former Canadian trade negotiator and is currently an Executive Fellow at the School of Public Policy, University of Calgary. Well, the gloves are off – and maybe the helmets too. Only this time it's not hockey. It's trade negotiations. Let's hope our Canadian players are good at both games. Last month, Canada launched an unprecedented complaint at the World Trade Organization (WTO), the current governing body for international trade rules started 70 years ago under the General Agreement on Tariffs and Trade (GATT), of which the U.S. and Canada were founding members. Story continues below advertisement Canada's complaint was made public on Jan. 10. It is about the United States' long-standing protectionist, and therefore illegal, interpretation of the WTO rules on the implementation of anti-dumping and countervailing duties. Those now-detailed rules have been updated periodically over the years, precisely because of each party's considerable administrative discretion in applying them. Cases have been frequently litigated in the WTO and, alternatively for Canada, under the North American free-trade agreement. Canada's complaint is unprecedented because it claims systematic, unfair application of the rules by successive U.S. Administrations in favour of domestic interests, not just against Canada, but about 35 other WTO members. The annexes to the complaint list almost 200 anti-dumping and countervailing duty cases undertaken by the U.S. over many years. About 80 of the cases cited involve products from China. After that, the number of cases drops down to about 10 each for India, Japan, South Korea, Italy, and Canada (mostly versions of the multiyear softwood lumber dispute). Mexico is involved in only five. The U.S. Administration was quick to react to Canada's complaint, with its Trade Representative, Robert Lighthizer, quoted as saying it would go against Canada's interests, even if we succeeded, because it would precipitate a flood of Chinese and other imports into the U.S. market where we also compete. Is that the best he could do? That now-typical response by the Trump administration, invoking "groundless claims" and firing back against critics, smacks of a desperate attempt at creating an alternative-facts narrative. In reality, Canada has spearheaded a multilateral attack on a protectionist American trade remedy system, shortly before President Donald Trump is scheduled to go to the annual globalist gabfest in Davos, Switzerland. They will have lots to talk about. Aside from the short-term satisfaction of poking the bully in the eye, is this move in Canada's best interests? Only time will tell, but let's look at the pros and cons. Story continues below advertisement Story continues below advertisement On the assumption that the U.S. side is looking for an excuse to pull the plug on NAFTA negotiations, (which might be precipitated now as a fit of pique rather than a fancy negotiating tactic), this initiative helps reinforce Canada's insistence on fair and impartial oversight of trade rules. It's not just Canada that's being hurt by U.S. protectionism, and we will have demonstrated the need for both NAFTA and WTO sanctioned policing. It will also remind Canadians that the real backstop for trade rules is the WTO, and we will not spare any effort to fight for our trade rights, hopefully with support from like-minded countries.

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