Recently, the Canada Border Services Agency (CBSA) determined that Oil Country Tubular Goods (OCTG) imported from nine subject countries was dumped and the Canadian International Trade Tribunal (CITT) found that these dumped imports threatened to cause injury to like goods produced in Canada. Although this decision will result in anti-dumping duties and normal values being applied against OCTG imported from the nine subject countries involved in the case, the domestic mills who initially brought the case forward have now filed Applications for Judicial Review of the CBSA dumping determination by Federal Court of Appeal. By taking the unusual step of challenging a determination in a case that they ostensibly won, the domestic mills have now signalled that they are not satisfied with the outcome. All of which begs the question of who, if anyone, actually won this case?
In Oil Country Tubular Goods, (CITT File Nbr. NQ-2014-002) the CITT determined that imports of Oil Country Tubular Goods (OCTG) originating in or exported from Chinese Taipei, India, Indonesia, the Philippines, Korea, Thailand, Turkey, Ukraine and Vietnam were dumped and threatened to cause injury to domestic producers of like goods in Canada. The CITT also determined that the volume of subsidized goods imported from some of these countries were negligible and so terminated its inquiry with respect to the subsidizing of OCTG from India, Indonesia and Vietnam.
In its dumping and subsidy investigations, the CBSA determined that OCTG imported from the nine subject countries were dumped and that OCTG imported from India, Indonesia and Vietnam was subsidized. The CBSA had already terminated its subsidy investigation concerning OCTG imported from the Philippines, Thailand and Ukraine.
As a result of the CITT and CBSA findings, anti-dumping duties will be assessed against imports of OCTG from the nine subject counties when they are shipped to Canada based on the dumping margins and normal values determined by the CBSA. The CBSA found dumping margins for OCTG produced by cooperating exporters ranging from 0% to 28%, with most cooperating exporter dumping margins in the range of 0% to 8%. The “All Others” rate established by the CBSA through Ministerial Specification was set at 37.4%. By any measure, the dumping margins found by the CBSA, even the “All Others” rate, are relatively low and beg the question of whether they are high enough to restrict subject imports.
The domestic producers who filed the original complaint apparently have concerns about the dumping and subsidy margins determined by the CBSA and have filed four Applications for Judicial Review of the determinations by the Federal Court of Appeal. Two of the Applications concern the CBSA’s dumping determination; the other two Applications concerning the CBSA’s subsidy determination. In each case the domestic producers are asking the Court to overturn the CBSA determination and to send it back to the CBSA for reconsideration on the basis of instructions that will direct the CBSA to establish higher dumping and subsidy margins. The clear objective is to saddle OCTG imported from the subject countries with anti-dumping and countervailing duties high enough to keep them out of the market.
Whether the domestic producers will succeed at the Federal Court of Appeal remains to be seen. Because the CBSA is a specialized administrative body established by Parliament with particular expertise in determining whether goods are dumped, the Court will grant the CBSA a degree of deference when considering its decision. As a result, the complainants must not only establish that the CBSA was wrong, but that its decision was unreasonably wrong. This is not an easy hurdle to meet and in some cases seems to require that an Applicant before the Court establish that the decision at issue was not just unreasonable but was absurd.
So who won the OCTG case? OCTG from the nine subject countries can no longer easily enter Canada. These imports will be assessed anti-dumping duties based on the dumping margins found or will enter Canada at normal values established by the CBSA. These producers will also be required to participate in period re-investigations over the course of the Injury Finding to update their normal values. There is a cost to these measures, but apparently not a cost high enough to satisfy the domestic producers, which is why they have taken the unusual step of challenging these CBSA determinations. All of which points to the conclusion that, in this case, there were no clear winners.
