During their meeting at the Rideau Club in Ottawa, a few days before Canada’s National Day of Truth and Reconciliation (September 30th). Wayne Garnons-Williams and Michael Woods reviewed the work of the International Inter-Tribal Trade and Investment Organization (IITIO) [https://iitio.org/] in promoting full Indigenous participation in international and inter-tribal trade. Wayne is IITIO’s Chair and the driving force behind its creation and continued vital work on the international stage. Michael has worked with IITIO since its founding in 2015. During their meeting, Michael was able to take a break and say hello to and introduce his good friend Wayne to former Prime Minister Jean Chrétien who was also at the Club. Michael had the distinct honour of working closely with Monsieur Chrétien during his years at Heenan Blaikie...
Read MoreUnderstanding and Responding to the Business Risk of Russian Sanctions
Anyone following the news knows that Russia is now the world’s most sanctioned country and that the sanctions are intended to cause Russia so much economic pain that it will withdraw from Ukraine. Canada has joined other countries in imposing sanctions on Russia and Russians under the Special Economic Measures Act, the Customs Tariff, and the Export and Import Permits Act and has indicated that it will impose more sanctions if necessary.[1] In addition to the political objective of Russian withdrawal from Ukraine, the sanctions have also affected business by either prohibiting the business outright or by increasing the cost of doing business. Thus, sanctions may affect Canadians or Canadian companies that do business with Russia or Russians depending on the nature of that business. Because some traders may try to get around the sanctions, Canadians and Canadian companies may find themselves unintentionally violating the sanctions by importing Russian goods or by unintentionally doing business with Russian companies or individuals. Regardless of their objective, the sanctions pose a business risk for Canadians and Canadian companies that should not be ignored. To reduce or eliminate that risk, any Canadian or Canadian company doing business in Russia or with Russians or intending to do business in Russia or with Russians, should take steps to understand their exposure to the sanctions. To do this, we suggest the following: i) Review the sanctions to determine whether they could affect your current or planned business with Russia or with Russians. A brief overview of Canada’s sanctions in place at the time of writing, including the penalties for violating those sanctions and potential for continuing business despite the sanctions, is discussed in the attached Annex. ii) Review your business operations to determine whether you are currently doing business in Russia or conducting business that involves Russian goods, investment, financing, banking transactions, or transportation more broadly to determine whether that business could violate the sanctions. iii) Review your operations or business in other countries to determine whether they have any connections with Russia or Russians that could trigger penalties under Canadian sanctions or sanctions that may be imposed by that other country. iv) Consider your practices...
Read MoreCanada should consider the Economic Impact of Imposing AD/CV Duties on Imports and should start with OCTG
Canadian practice has been to consider Anti-dumping/Countervailing measures (AD/CV) measures exclusively from the perspective of the domestic industry that filed the dumping complaint and ensure that any injury to this industry is offset using AD/CV duties. However, this approach does not necessarily take the best interests of the Canadian economy as a whole into consideration. That practice should stop and Oil Country Tubular Goods (OCTG) is the product that calls out for this change. The Canadian International Trade Tribunal (CITT) recently started two Expiry Reviews into AD/CV Orders against OCTG.[1] The purpose of these Reviews is to determine whether the existing Orders should be allowed to expire or be extended for a further five years. If extended, OCTG imported from China, Chinese Taipei, India, Indonesia, the Philippines, Korea, Thailand, Turkey, Ukraine and Vietnam will continue to be subject to AD/CV duties for a further five years, increasing their price in Canada. The Canadian AD/CV system favours domestic producers because the only question before the CITT in an AD/CV Inquiry is injury to the domestic industry. In an AD/CV Inquiry, the Canada Border Services Agency (CBSA) determines whether the imported goods that are the subject of an AD/CV complaint are dumped and/or subsidized and determines the margin of dumping and subsidization. The CITT separately determines whether the imported goods have caused or threaten to cause injury to the domestic producers, but the CITT does not determine the level AD/CV duties required to offset that injury or threat of injury. Instead, AD/CV duties are applied to imported goods based on the rates established by the CBSA. The same thing happens in Expiry Reviews. The amount of AD/CV duties required to offset the injury, or whether it is in Canada’s best interests to impose duties in any amount is not considered. Since AD/CV duties are set based on the margins established by the CBSA, it is possible if not likely that the AD/CV duties applied to the imported goods will exceed the amounts actually required to offset the injury or threat of injury found. In this case, the domestic producers will have more protection than required while Canadian stakeholders who purchase and...
Read MoreCanada Should Revisit Safeguard Measures on Stainless Steel Wire
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...
Read MoreSteel Safeguards: CITT Announces a Product Exclusion Process for Stainless Steel Wire and Heavy Plate
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...
Read More