Posted by on Oct 27, 2016

The dumping inquiry into Gypsum Board from the United States has just been complicated by a Cabinet Order directing the Canadian International Trade Tribunal (“CITT”) to consider whether anti-dumping duties will cause economic harm to Canada and Canadian gypsum board users. As a result of the Order, the CITT must now simultaneously conduct two separate inquiries into U.S. gypsum board imports. While this requirement will make the CITT process more difficult overall, it gives Canadian users and consumers an important voice at an early stage and represents a step forward for Canadian interests

The anti-dumping inquiry started with a Complaint filed by a Canadian producer who claimed that imports of gypsum board from the United States into the Western Canadian market were dumped and caused or threatened cause material injury to domestic producers. The Canada Border Services Agency (“CBSA”) accepted the Complaint as properly documented and began its dumping investigation. On September 21, 2016, the CBSA issued its Preliminary Determination which found dumping margins for cooperating exporters ranging from 105.2% to 143.6% and 276.5% for non-cooperating exporters. The Canadian International Trade Tribunal (“CITT”) conducted a Preliminary Injury Inquiry which concluded, on August 22, 2016, with a finding that the evidence disclosed a reasonable indication that U.S. gypsum has caused or threatened to cause injury to domestic producers in Canada. As a result of these findings, the CBSA is continuing its investigation and the CITT initiated an Injury Inquiry to determine whether U.S. gypsum board dumped into the Western Canadian market has actually caused or threatens to cause material injury to domestic producers.

On October 13, 2016, the Federal Cabinet issued an Order directing the CITT to conduct a separate inquiry to determine whether imposing dumping duties on U.S. gypsum board exported to the Western Canadian market is contrary to Canada’s economic, trade or commercial interests. Specifically, the CITT is directed to determine whether imposing anti-dumping duties on U.S. gypsum imports would substantially reduce competition in the Western Canadian market or would cause significant harm to consumers and businesses that use gypsum. If the Preliminary Duties found by the CBSA are maintained through the CBSA’s Final Determination, it is hard to believe that imposing anti-dumping duties that start at 105.2% would not substantially reduce competition or significantly harm consumers and businesses in the context of the current economic downturn and the need to rebuild Fort McMurray after the forest fire.

As a result of the Cabinet Order, the CITT has had to broaden its inquiry to consider the impact of anti-dumping duties on the Canadian economy and on Canadian consumers and businesses as a whole. This is a significantly different focus from an ordinary anti-dumping inquiry, which is limited to the question of whether dumped imports have caused or threatened to cause injury to domestic producers. The broader question of the impact of anti-dumping duties is not relevant at this point and could only become relevant if a Public Interest Inquiry is requested within 45 days of an Injury Finding.

While the CITT has been directed to conduct economic inquiries in the past, this is the first time that it has been required to simultaneously conduct an injury inquiry and an economic inquiry. This is a positive step because it recognizes that dumping, which is not illegal unless it results in injury, can have significant impacts on the economy, consumers and other users that go beyond the impact on domestic producers.

Interested parties have always had the right to request that the CITT consider whether imposing dumping duties are in the public interest, but these inquiries are always held after the CITT has concluded an inquiry and only if a request for a Public Interest Inquiry is made within 45 days of the CITT’s finding. Often, this does not give affected businesses enough time to gauge the impact of dumping duties or even notice that this process is available.

The CITT is conducting its inquiry under very tight timelines. Notices of Appearance must be filed by no later than October 31, 2016. The CITT will circulate the Tribunal Record to all parties on November 2, 2016. Written submissions will be due on November 10, 2016 and November 17, 2016, depending on whether or not the parties support an injury finding and the imposition of duties. The CITT will conduct a hearing starting on November 28, 2016 and will its Finding on January 4, 2017. Although this is a very tight schedule, the opportunity to have a real impact on whether anti-dumping duties are imposed on U.S. gypsum board and the quantum of those duties should not be passed up. Any business or consumer in Western Canada that uses gypsum board should take the opportunity to make their views known to the CITT.