(Washington) When it comes to victories in trade disputes in the post-NAFTA era, Canada just tied, 1-1.
Posted at 6:42 p.m.
A dispute settlement panel has agreed that tariffs on Canadian-made solar products imposed in 2018 by former President Donald Trump violated the terms of the Canada-United States-Mexico Agreement (CUSMA).
The panel’s final report, released on Tuesday, concluded that by continuing to subject Canadian exports to its so-called “safeguard measures”, the United States was in breach of its obligations under the agreement.
The agreement includes language that allows the partners to escape such unilateral measures, provided that their import levels do not represent a significant share of total imports or contribute to the “serious prejudice” that the measures are intended. prevent.
Canada was hit with tariffs even though the United States International Trade Commission (USITC) had already concluded that solar product exports to the United States averaged less than 2% during its investigation, which is not enough to be considered a substantial share of total imports or enough to harm domestic producers.
“The president’s proclamation contained no explanation of why this figure of less than 2% […] demonstrates that Canada had achieved a “substantial share” of total imports,” the decision reads.
Canada argued that the United States had violated the agreement “by not excluding imports from Canada from its safeguard measure”, which “had the effect of reducing imports of products [solaires] Canadians and not allow reasonable growth.
The United States countered by saying that because CUSMA had not entered into force when the tariffs were originally imposed, they could not be challenged under the new agreement – even if Canada’s efforts to challenge the tariffs tariffs under NAFTA rules have been essentially pushed back.
The United States also argued that Canada was consistently among the top 10 import sources prior to the USITC investigation and that imports from Canada increased significantly between 2012 and 2015.
The United States also noted that Canadian Solar, a producer based in Guelph, Ontario, ranks among the world’s largest manufacturers of solar components, “with substantial production of cells and modules [solaires] in China “.
International Trade Minister Mary Ng said the panel’s decision “confirmed unequivocally” that the tariffs were “unjustified and in breach” of the new deal.
“Canada will work towards the complete removal of these unjustified tariffs,” said Mr.me Ng in a statement. Exports of solar products to the United States have fallen 82% since the imposition of the tariffs, his office noted.
“In addition, Canada will ensure that its solar energy sector, as well as all Canadian sectors and workers, can take full advantage of CUSMA,” added the Minister.
Mme Ng also took note of U.S. President Joe Biden’s statement earlier this month that extended the measures and also authorized U.S. Trade Representative Katherine Tai to sit down with Canada and Mexico to negotiate a resolution.
Such a resolution would require confirmation that imports from either country to the United States “would not compromise the effectiveness of the action,” the statement said.
“If the U.S. Trade Representative subsequently determines […] that such agreement is not in force, it is authorized […] to end any previous suspension of action with respect to imports from Canada or Mexico,” she said.
M’s officeme Tai did not respond to questions from the media on Tuesday.
The ruling is the second final report to be released in a major CUSMA dispute between Canada and the United States since the agreement took effect in July 2020.
Last month, arbitrators sided with the United States in their complaint that Canada was denying U.S. dairy farmers fair access to the supply-managed market north of the border.
Canada also joined Mexico in a dispute resolution task force request on how the United States chooses to interpret the all-important automotive rules of origin that define what constitutes U.S., Mexican content. and Canadian.