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Canada Goes Toe-to-Toe With US Trade Policy

12 January 2018

"Even if Canada succeeded on these groundless claims, other countries would primarily benefit, not Canada".

US Trade Representative Robert Lighthizer commented on the move, saying that Canada's protest against recent US trade actions in a complaint to the WTO is "a broad and ill-advised attack on the US trade remedies system".

"Canada's claims are unfounded and could only lower USA confidence that Canada is committed to mutually beneficial trade", Lighthizer said in a statement.

The wide-ranging trade dispute, which was filed with the WTO in December and released publicly on Wednesday, is mostly in response to the steep anti-dumping and countervailing duties that the United States has recently slapped on Canada's softwood lumber industry.

In a statement, Foreign Affairs Minister Chrystia Freeland said, "This WTO action is part of our broader litigation to defend the hundreds of thousands of good, middle class forestry jobs across our country".

The 32-page complaint cites dozens of examples unrelated to Canada, including 122 cases where the US imposed duties on foreign countries.

For example, if the US removed the orders listed in Canada's complaint, the flood of imports from China and other countries would negatively impact billions of dollars in Canadian exports to the United States, including almost $9 billion in exports of steel and aluminum products and more than $2.5 billion in exports of wood and paper products.

"It's (saying), 'The entire way in which the USA - you - are conducting your anti-dumping, countervailing procedures, is wrong,"' said Chad Bown, a trade expert at Washington's Peterson Institute.

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Canada is the largest exporter of newsprint in the world.

NAFTA has been heavily criticized by Trump, who called it the "worst deal in United States history" and warned that he might scrap it.

As with the softwood lumber dispute, workers on both sides of the border are harmed by the trade war. The Canadian government is preparing for the possibility that Trump will withdraw from NAFTA, senior officials say, though they aren't entirely convinced that he will.

"This isn't going to calm passions in Montreal", said Canada-U.S. trade lawyer Mark Warner.

The United States called the complaint, which includes cases that involve a variety of exports as well as other nations such as China and Brazil, an attack on how the nation goes about using its trade enforcement system.

The complaint is "certainly not typical", said Greg Kanargelidis, an worldwide trade lawyer at Blake, Cassels & Graydon LLP.

Canada's complaint with the WTO is a request for consultation, which formally initiates a dispute in the WTO. "But with the Trump administration being relatively new, and because of the protectionist noises we've been hearing from them, it's not at all clear what sort of reaction the USA might have".

Starting January 10, the US Department of Commerce imposed unwarranted countervailing duties up to 9.93 per cent on imported Canadian uncoated groundwood paper (newsprint).

Canada Goes Toe-to-Toe With US Trade Policy