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Canada's WTO broadside: What's the strategy ?

Canada Launches Trade Dispute Against US in WTO, Washington Strikes Back

U.S. Trade Representative Robert Lighthizer said Canada's complaint is "broad and ill-advised".

The irony here is that Canada is making the same complaint about the United States.

Under President Donald Trump, the United States has threatened to expand the use of punitive duties against China and has angered Beijing by refusing to accede to China's demand to be treated as any other "market economy".

The 32-page filing not only accuses the US of improperly imposing duties on Canadian products but also on those of other trading partners, including Brazil, China, EU and India.

Under WTO dispute resolution rules, other countries named in the complaint can decide to take part in consultations after an initial reading.

Canada and the US are continuing to negotiate over the North American Free Trade Agreement, with the next round of talks scheduled for January 23, the Washington Examiner reported.

In the 32-page complaint, Canada detailed areas where they argue that the United States' tariff investigations and reviews have been inconsistent with its obligations under several WTO agreements.

"Canada's claims threaten the ability of all countries to defend their workers against unfair trade", he said. But he questioned the strategic logic of antagonizing the Trump administration in the midst of NAFTA talks.

Second, Canada may be more strategic than we think. Chapter 19 allows the parties to bypass the national judicial system to challenge countervailing and anti-dumping duties.

Yet while "the rest of the world is trying to keep the U.S. engaged in that dispute-settlement system", Canada's generic complaint against the United States is "counterproductive", said Warner.

With its WTO filing, Canada is forcing the United States to put its logic to the test.

Canada cited five reasons for the complaint, saying the US levies penalties beyond what's allowed by the WTO, improperly calculates rates, unfairly declares penalties retroactive, limits evidence from outside parties, and has a tilted voting system in domestic trade panels that, in the case of a 3-3 tie, awards the win to American companies. "It's nearly like Canada is fighting this on behalf of the worldwide community".

On Wednesday the country requested that the World Trade Organization step in to review certain USA trade actions and whether they're in accordance with its obligations as a member of the WTO.

The reason Canada did this, says Boscariol, is in large part because of the softwood lumber, but by taking on the entire US trade remedies system, Canada is taking the position that the USA, as our most important customer, must be held to WTO rules when it imposes these anti-dumping and countervailing measures that hamper free trade.