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Proving FTA preferential tariff eligibility: The evidentiary burden in Canada

Posted by on Jan 7, 2020

Jean-Marc Clément Counsel, Woods LaFortune Montréal, Canada As is the case with most free trade agreements, importers simply claim preferential tariff eligibility at the time of import. This claim can later be subject to verification by the customs administration in view of determining if it was valid. Proving preferential tariff entitlement requires assembling and presenting relevant facts and documents that support the claim. But just how much evidence is necessary in order to discharge that burden? In Canada there has always been a disconnect between what the Canada Border Services Agency (CBSA) deems necessary in the course of an origin verification and what the courts find satisfactory in the course of a judicial review. What follows are certain illustrations of that disconnect and how it usually gets resolved by Canadian courts. Although Canada is a signatory to many free trade agreements, the North American Free Trade Agreement (NAFTA) is by far the most popular and widely used given the amount of trade that takes place between the United States of America (USA) and Canada. For this reason, we drafted our comments with the NAFTA rules of origin in mind. That said, most of the other free trade agreements work in a similar fashion and our remarks would equally apply as concerns them. We should also mention that, at the request of the USA, the NAFTA was recently renegotiated by the parties. Although a new agreement was reached, it hasn’t gone through the ratification process by the respective legislatures at the time of writing this article and thus our comments relate to the text currently in force as of October 31, 2019. The burden of proof in NAFTA claims At the risk of sounding too simplistic, importers and exporters need only prove that which is necessary in order to demonstrate eligibility, not all that the customs administration may find interesting to collect in the context of verifications. CBSA has a habit of asking for the exact same things in every origin verification they undertake regardless of how goods are said to qualify: they always ask for producer records, costed bills of material, sources supply for the materials, etc. At times,...

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Woods, LaFortune LLP to Attend CETA Civil Society Forum

Posted by on Nov 6, 2019

Woods, LaFortune LLP has been invited  by the Trade Agreements Secretariat at Global Affairs Canada to participate in the Civil Society Forum on Trade and Sustainable Development under the Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA). Michael Woods will attend on behalf of the firm. The event is to take place in Ottawa on November 12, 2019. The Forum is facilitated jointly by the Government of Canada and the European Union and include representatives from employers, unions, labour and business organizations, environmental groups, Indigenous organizations, and other relevant civil society organizations, to exchange with one another, with members of the EU civil society, as well as officials of the Government of Canada and the European Commission, on matters related to the implementation of the CETA with regards to Trade and Sustainable Development, Trade and Labour and Trade and Environment. This will be  the second edition of the Forum – the first Civil Society Forum on Trade and Sustainable Development under CETA took place in September 2018, in Brussels,...

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Michael Woods to Speak at CANDO Annual Conference

Posted by on Sep 30, 2019

Michael Woods is scheduled to appear on an expert panel  at the Council for the Advancement of Native Development Officers (CANDO) Annual Conference in Gatineau Québec on October 30, 2019. CANDO is a Canadian Aboriginal-controlled, community-based, and membership driven organization focusing on education and professional development for economic development officers working in Aboriginal communities and organizations. Michael will be part of a panel examining “Economic Development Opportunities in Indigenous International Trade” and he will share his insights as a member if the Indigenous Working Group advising the Government of Canada with respect to the NAFTA re-negotiations and Canada’s ongoing negotiations of other modern trade agreements.  He will also discuss the concept of an Indigenous Chapter and the related elements found in the new Canada-US-Mexico Agreement. For more information on the conference session, see: ( http://www.edo.ca/conference/2019/conference-panels/indigenous-international-trade-panel ) For more details on the conference see: ( http://www.edo.ca/conference/2019...

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Michael Woods Speaks at IITIO Conference – “The Indigenous Chapter is Very Much Alive.”

Posted by on Jun 7, 2019

Michael Woods joined the head of the Government of Canada’s Trade Law Bureau, Robert Brookfield, Professor Lindsay Robertson of the University of Oklahoma and Professor James Hopkins of the University of Arizona  on a panel to discuss the Indigenous elements in the Canada United States Mexico Agreement (CUSMA) and the consultative process between the Government of Canada and Canada’s Indigenous communities during the NAFTA renegotiations which were launched in 2017.  This was the 7th International Inter-Tribal Trade and Investment Organization (IITIO) trade conference and it was held at the University of Oklahoma Faculty of Law.  Michael has served on IITIO’s executive since its founding in 2015 [https://iitio.org/ ] Michael and has colleagues on the panel discussed the details of the new agreement, “the threads of (Indigenous objectives) running through it,” as well as the future of inter- tribal trade. For more details see:...

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Canada Should Revisit Safeguard Measures on Stainless Steel Wire

Posted by on Jun 5, 2019

The Minister of Finance should reconsider the decision to impose safeguard measures on imports of stainless steel wire because the recent agreement between Canada and the U.S. to remove their respective duties on each other’s steel, calls into question the Canadian International Trade Tribunal’s (CITT) threat of injury finding against stainless steel wire imports which underpins the Minister’s decision. On May 10, 2019, the Minister imposed safeguard measures on imports of stainless steel wire from almost all sources.  The safeguard measures took the form of a tariff rate quota that set a limited volume of imported stainless steel wire that could enter Canada duty-free and a surtax on stainless steel wire entering Canada above that amount.  The Minister’s decision was based on the CITT’s finding that stainless steel wire imports threatened to cause serious injury to Canada’s domestic stainless steel wire producer. The Minister has the discretion to impose safeguard measures, but only if the CITT makes an injury or threat of injury finding and recommends that safeguard measures be taken at the conclusion of an investigation.  Without the CITT’s decision, the Minister cannot act.  Therefore, the Minister’s decision to impose safeguard measures is based on a CITT injury finding. In this case, the CITT found that imports of stainless steel wire threatened to cause injury to Canada’s domestic stainless steel wire producers; not that the domestic steel producers had actually been injured by imports.  This means that the CITT found that the evidence pointed to an imminent and foreseeable change in circumstances that would result in serious injury to the domestic producers unless safeguard measures were put in place.  In short, the CITT concluded that a change in circumstances making things worse for the domestic producer was likely.  However, the Canada – U.S. decision to eliminate their respective duties is the only significant change since the CITT issued its threat of injury finding and that change arguably benefits the Canadian producer. The decision to eliminate the U.S. 232 duties and Canada’s retaliatory duties played role in the CITT’s decision in the Steel Safeguard Case (Certain Steel Goods, CITT File Nbr GC-2018-001, April 3, 2019).  At page 116, the...

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Steel Safeguards: CITT Announces a Product Exclusion Process for Stainless Steel Wire and Heavy Plate

Posted by on May 17, 2019

On May 16, 2019, the Canadian International Trade Tribunal (CITT) announced that it was initiating a Product Exclusion Review to determine whether any imports of stainless steel wire or heavy plate should be excluded from safeguard measures imposed on imports of these products. Although the CITT will only grant product exclusions in extraordinary circumstances, any interested party that imports or wants to import stainless steel wire or heavy plate into Canada from countries now subject to safeguard measures should consider the possibility of requesting a product exclusion to avoid those measures. On April 3, 2019, the CITT issued its Report in the Steel Safeguard Inquiry (CITT File Nbr. GC-2018-001). The CITT found that imports of stainless steel wire and heavy plate caused serious injury to domestic producers and recommended that the Minister of Finance impose safeguard measures on those goods. On May 9, 2019, the Minister of Finance imposed safeguard measures on those products imported from all countries except United States, Mexico, Chile, Israel, Korea, Colombia, Honduras, Panama, Peru and all countries benefitting from the General Preferential Tariff. The safeguard measures became effective on May 13, 2019 and will remain in effect until October 24, 2021.  During this period the safeguard measures will be phased out in three stages: May 13, 2019 to May 12, 2020 Heavy Plate 20% surtax on imports over 100,000 mt Stainless Steel Wire 25% surtax on imports of 2,800 mt May 13, 2020 to May 21, 2021 Heavy Plate 15% surtax on imports over 110,000 mt Stainless Steel Wire 15% surtax on imports of 3,080 mt May 13, 2021 to October 24, 2021 Heavy Plate 10% surtax on imports over 54,699 mt Stainless Steel Wire 5% surtax on imports of 1,532 mt Details of the safeguard measures on heavy plate and stainless steel wire, including the list of countries benefitting from GPT, are set out in the Order Amending the Order Imposing a Surtax on the Importation of Certain Steel Goods (Final Safeguards), which can be found at www.cbsa-asfc.gc.ca/publications/cn-ad/cn19-08-eng.html. The CITT may recommend that the Minister issue product exclusions so that safeguard measures only apply to imported products that cause serious injury to domestic...

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