Ministry of Jobs, Tourism and Innovation

Introduction

At the World Trade Organization ministerial meeting in Doha, Qatar in November 2001, Trade Ministers agreed to seek improvements and clarifications of existing rules on the application of anti-dumping and countervailing duty measures. The Negotiations were to be concluded no later than January 1^st 2005.

The application of anti-dumping and countervailing duty measures is also likely to be a major issue in concluding Free Trade Area of the Americas (FTAA) negotiations, also scheduled to be completed by January 1^st 2005.  Many of the major South American countries have indicated that the achievement of clearer rules restricting the use of such measures is a priority. In negotiating the Canada-United States Free Trade Agreement in 1989, and the North American Free Trade Agreement of 1994, Canada had a primary objective of obtaining an exemption from United States anti-dumping and countervailing duty laws.  (This was not achieved, although Canada did obtain the right to appeal final determinations in these cases to bi-national panels.)

The purpose of this paper is to set forth the Province of British Columbia’s perspective and recommendations on Canada’s initial negotiating position in the new World Trade Organization negotiations on the Anti-Dumping (GATT Article VI) and Subsidies and Countervailing Duties Agreements and, by extension, the Free Trade Area of the Americas (FTAA) negotiations.  In our view, these negotiations provide an historic opportunity, unlikely to be seen again in this generation, to advance longstanding Canadian objectives to secure Canadian access to international markets, and advance the establishment of a strong, rules-based international trading system that is free and fair for all countries.

The application of anti-dumping and subsidy/countervailing duty measures are issues of both current and longstanding importance for British Columbia. In recent years, the number of countries using anti-dumping and countervailing duties has greatly increased.

British Columbia’s forestry and lumber industries have been significantly impacted by anti-dumping and subsidy/countervail cases brought by the United States against Canada, stretching back over two decades. Four separate cases have been pursued: Lumber I (1982-3), Lumber II (1986), Lumber III (1991-3) and Lumber IV (2001 – present). The 1996-2001 Softwood Lumber Agreement (SLA) was reached after the conclusion of Lumber III and constituted an agreement between the two parties that in return for certain export limiting measures on the part of Canada, the United States would not pursue dumping and subsidy cases against Canadian softwood lumber imports for the duration of the Agreement. Lumber IV was launched shortly after the SLA expired in 2001. The latest United States action is currently before the World Trade Organization, and we are confident that when current rules are finally applied and implemented the United States measures will be found to be unwarranted and unjustified.  For now, the bottom line is that British Columbia’s exports are currently subject to both countervailing and anti-dumping duties with significant consequences for provincial industry, employment and revenues.

British Columbia’s agriculture and food industries have also been involved in significant anti-dumping and countervailing duty actions.   In the 1980s and early 1990s, the British Columbia industry was a major user in Canada of anti-dumping measures to restrict imports from the United States. Actions were taken on a regional or national basis against imports of United States potatoes, onions, red and golden delicious apples, sugar, beer and lettuce. 

The use of anti-dumping measures by others has now become a significant challenge for the provincial agriculture sector. In 1998, United States cattle producers filed subsidy/countervailing duty and anti-dumping petitions against Canadian cattle producers, including those in British Columbia and preliminary duties were imposed. Although the United States authorities eventually determined that imports of cattle from Canada were not injuring, or threatening to injure, the United States industry, the dispute was very costly for Canadian cattle producers. 

More recently, in June 2001, six United States greenhouse tomato companies filed a petition with the United States trade authorities seeking imposition of anti-dumping duties on imports of Canadian greenhouse tomatoes.  Preliminary duties of 50.75 per cent (later corrected to 33.95 percent) were levied against British Columbia exports of greenhouse tomatoes. In April, 2002, the United States authorities found that imported greenhouse tomatoes from Canada had not materially injured or threatened the United States industry.  Although all duties are to be returned to producers, these actions caused significant industry disruption while the duties were in place.

British Columbia’s agriculture sector has also been impacted by preliminary anti-dumping actions taken in Canada.  In November 2000, Canada Customs imposed substantial temporary duties on imports of United States feed corn into western Canada, including British Columbia. This was of significant concern to British Columbia cattle, dairy and poultry producers, including the organic industry, dependent on United States feed corn for their livestock.  In March 2001, the Canadian International Trade Tribunal found that that the dumping and subsidizing of grain corn in all forms had not caused injury to the producers of like goods in western Canada, and the duties were terminated.

To read British Columbia’s assessment and recommendations, please click here.