Posted by Gordon LaFortune on Nov 9, 2015

Over the past year, international trade agreements have been an issue in Canadian news and politics, and particularly the benefits that would flow from the Trans Pacific Partnership Agreement (“TPP”) and from the Comprehensive Economic and Trade Agreement (“CETA”) between Canada and the European Union.  Both Agreements have been signed by the Parties and, once implemented, will result in greater preferential market access for Canadian traders.  However, neither Agreement has yet to be implemented and, once they are, the potential benefits will only be realized if Canadian companies take advantage of the market opportunities offered by the Agreements.  Which begs the questions, what are the next steps in the implementation process, how long will the process take and how can Canada benefit from these Agreements? The first questions concern implementation and the time required to implement the Agreements.  In both cases, the Agreements are not self-executing and have to be put into effect by national and sub-national legislatures.  Implementation usually takes some time, particularly as the number of Parties to an Agreement an increase.  However, implementation may take longer in the case of these two Agreements. After the CETA was completed, some European member states signalled that they would need changes to the Agreement before they would agree to implementation, which signalled delay.  Furthermore, since the CETA was signed, the E.U. has started negotiating the Transatlantic Trade and Investment Partnership (“TTIP”) with the United States.  Regardless of European intentions with respect to the CETA, they are likely now fully engaged in negotiations with the U.S. and this may slow implementation of the CETA. The TPP raises its own issues with respect to implementation.  The new government has indicated that it intends to review the Agreement before signing off, which would be prudent since the text has not yet been released.  Some Canadian industries, such as Ford Canada, have already indicated that they are seeking amendments to the Agreement.  Requests to change the Agreement will likely result in delays in implementation but given the difficulties involved in coming to an agreement among 12 parties, it is unlikely that there could be significant changes to the Agreement at this point.  It...

Posted by Gordon LaFortune on Sep 21, 2015

The Canadian International Trade Tribunal’s (“CITT”) recent decision in ContainerWest Manufacturing (CITT File Nbr. AP-2014-025) points to the possibility that the Canada Border Services Agency (“CBSA”) has taken action which may violate Canada’s WTO obligations.  While the issue before the CITT concerned the question of whether the Appellant in that case filed documents required to benefit from General Preferential Tariff (“GPT”) treatment, the admissions the CBSA made in the case point to an administrative practice that may violate the WTO’s Most Favoured Nation (“MFN”) requirement set out in GATT 1994 Article I:1. The ContainerWest appeal concerned the CBSA’s decision to reject ContainerWest’s request for GPT treatment for 22 import transactions relating to 1,678 containers purchased by ContainerWest from its Hong Kong supplier.  The issue before the CITT was whether ContainerWest’s importations complied with the “direct shipment” requirement that must be met for GPT treatment.  Pursuant to Customs Act Section 17(1), ContainerWest had to provide a through bill of lading to prove direct shipment of goods to Canada. At paragraph 26 of its Statement of Reasons, the CITT noted that the CBSA argued that the GPT Regulations and the Customs Tariff both require a through bill of lading to prove direct shipment to Canada.  At paragraph 56, the CITT noted that the CBSA agreed that the MFN Regulations also require that goods be conveyed on a through bill of lading.  Consequently, pursuant to regulatory requirements, entitlement to GPT and MFN tariff treatment could only be accorded to importers who filed the required through bill of lading. Notwithstanding these regulatory requirements, at paragraph 29 of its Statement of Reasons, the CITT noted that the CBSA indicated that it has adopted an administrative exception with respect to the MFN tariff that allows importers to be accorded MFN tariff treatment regardless of whether they have the through bill of lading required by the Regulations.  Regardless of whether this administrative practice is consistent with the regulatory requirements, the result is that, due to the CBSA’s administrative practice, importers seeking MFN tariff treatment are granted the treatment regardless of whether they met the regulatory requirement of filing a through bill of lading while importers seeking...

Posted by Gordon LaFortune on Jun 2, 2015

In case there is anyone out there who still doesn’t understand the importance of complying with every mandatory requirement in a Request for Proposals (RFP), the CITT’s recent decision in Falcon Environmental Services Inc. (CITT File Nbr. PR-2014-061) sends a very harsh message.  In all cases, bidders have to identify the mandatory requirements of an RFP, understand and address the mandatory requirements in their bid and be able to demonstrate that they met all of the mandatory requirements if PWGSC ever questions compliance. Mandatory requirements are a key element of every RFP.  To be considered compliant, a bid must meet the mandatory requirements of the RFP when it is submitted.  Government entities that create RFPs must clearly identify the mandatory requirements of the RFP.  At that point, it is up to the bidders to understand the mandatory requirements and their application so that they can submit a fully responsive bid.  As an example of best practice, one of my clients appoints a member of its bid response team to be “mandatory man” for each bid.  Mandatory man is responsible for identifying every mandatory requirement in the RFP and for ensuring that each is fully addressed in the bid.  None of this should come as a surprise to anyone involved in government procurement. The issue in Falcon Environmental was whether Falcon Environmental properly submitted its bid to PWGSC.  The RFP, which was for the provision of wildlife control services for the Department of National Defence (DND), included a mandatory requirement that bids be submitted to PWGSC`s Bid Receiving Unit in Halifax.  The RFP also noted that the wildlife control services being procured would be provided to DND at its Willow Park facility in Halifax. Falcon Environmental claimed that it used Canada Post’s courier service to send its bid to PWGSC’s Bid Receiving Unit and that the bid was submitted two days before the bid closing date stipulated in the RFP.  PWGSC claimed that it never received the bid directly from Falcon Environmental.  PWGSC claimed that it found the bid at DND’s Willow Park facility and returned the bid to Falcon Environmental on the basis that it did not comply with...

Posted by Gordon LaFortune on May 12, 2015

All credit to the Canadian negotiators who worked on the Canada – E.U. Comprehensive Economic and Trade Agreement (CETA).  The CETA was the product of years of preparation and negotiations that began in 2009.  The Canadian negotiating team identified Canadian interests and defensive positions and took those to the negotiating rounds to create the Agreement that was ultimately signed with the E.U.  Like any other agreement, the CETA was the product of “give and take” in which the concessions that Canada won from the E.U. through the negotiations were bought and paid for with concessions extended by Canada to the E.U.  And like any other agreement, the final result was a balance of concessions that was acceptable to both parties. Having concluded the negotiations, the parties should now be moving full speed toward implementation, but instead Greece is threatening to reject the CETA unless it is amended to specify that only Greece can use the term “Feta” to describe salty, white cheese.  Currently, CETA Chapter 22, Article 7.6 provides an exception from the rules providing protection for geographical indications that allows Canadian companies that produced “Feta” cheese (and “Asiago”, “Fontina”, “Gorgonzola” and “Munster” cheese) prior to October 18, 2013 to continue to use these indications for their cheeses.  Because of the E.U.’s interest in protecting geographic indicators, it is safe to assume that Canada made concessions to secure the right of its producers to continue to use “Feta” and the other terms, and that this is the only reason why they are listed as exceptions. Although it is not clear whether Greece could stop the E.U. from implementing the CETA if it presses this point, the real concern is that Greece is attempting to force a unilateral amendment to the CETA to gain a greater advantage after the negotiations were concluded.  Use of the term “Feta” was obviously considered during the negotiations and that was the proper time for Greece to raise its concerns with the E.U.  The E.U. could have sought an exclusive Greek right to use “Feta” through the negotiations and offered concessions to Canada to obtain this result.  This would have changed the balance of concessions...

Posted by Gordon LaFortune on Apr 24, 2015

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...