Leading Investor-State Arbitration Experts Join T&D

Tereposky & DeRose LLP is excited to announce that J. Cameron Mowatt, Alejandro Barragan and Yuri Perez are joining our firm. Cam is one of the most experienced defence counsel for investor-state claims, having acted as counsel, intervenor and advisor in over 30 investment treaty arbitrations with damages claims ranging from $20 million to $2.3 billion. For 15 years, Alejandro has acted as a consulting economist in investor-state arbitrations, providing valuable expertise to analyze complex economic and financial issues. Yuri’s diverse experience in investor-state and other legal areas as well as her fluency in Spanish, French and English bring welcome skills to the firm.  Together with the firm’s complementary expertise, Cam, Alejandro and Yuri have given the firm a world class arbitration practice. They can be reached at the following coordinates:

Cam Mowatt
cmowatt@tradeisds.com
604.318.2300

Alejandro Barragan
abarragan@tradeisds.com
604.609.6199

Yuri Perez
yperez@tradeisds.com
604.609.6198

BIG WIN FOR BOMBARDIER AND THE CANADIAN AIRCRAFT INDUSTRY

In an unexpected ruling, the United States International Trade Commission (USITC) has unanimously ruled that imports of Bombardier’s 100-150 seat C-Series aircraft are not materially injuring or threatening to materially injure Boeing’s U.S. aircraft production.  This determination terminates the prohibitive 79.82% anti-dumping duty and 212.39% countervailing duty that would have been applied on imports of the Canadian aircraft.  The reasoning of the USITC will not be available until March 2nd when its report is issued.

Preliminary Determination Made for Certain Copper Pipe Fittings

On January 25, 2018, pursuant to the Special Import Measures Act (SIMA), the Canada Border Services Agency (CBSA) issued a preliminary determination that imports of certain copper pipe fittings originating in or exported from the Socialist Republic of Vietnam (Vietnam) are being sold in Canada at unfair and subsidized prices. The CBSA’s Statement of Reasons will be issued by February 9, 2018.

The copper pipe fittings at issue are usually classified under the following Harmonized System (HS) codes:
• 7412.10.00.11
• 7412.10.00.19
• 7412.10.00.90
• 7412.20.00.11
• 7412.20.00.12
• 7412.20.00.19
• 7412.20.00.90

Provisional duties are now being applied to the subject goods released from customs on or after January 25, 2018. The total provisional duties payable by Hailiang (Vietnam) Metal Products Co Ltd, the sole exporter of subject goods originating in or exported from Vietnam, are 163.7% of the export price (159% estimated margin of dumping and 4.7% amount of subsidy). The Canadian International Trade Tribunal preliminarily determined, on January 11, 2018, that the evidence adduced in the Complaint discloses a reasonable indication that imports are harming the domestic industry.

The inquiry continues and the CBSA will issue its final determination by April 25, 2018, with a Statement of Reasons to follow by May 10, 2018.

Tereposky & DeRose regularly provides advice on Canadian anti-dumping and countervailing matters.  Should you have any questions regarding this matter or anti-dumping and countervailing issues more generally, we are at your disposal.

Vincent DeRose
613.237.8862
vderose@tradeisds.com

Stephanie Desjardins
613.237.0483
sdesjardins@tradeisds.com

 

Expiry Review Decision Released for Certain Steel Piping

On January 25, 2018, the Canada Border Services Agency (CBSA) issued an expiry review decision pursuant to the Special Import Measures Act (SIMA) regarding the dumping and subsidizing of certain steel piling pipe originating in or exported from the People’s Republic of China (China).

Today’s report is the culmination of an expiry review investigation of a November 30, 2012 finding by the Canadian International Trade Tribunal (CITT) that certain steel piling pipe poses a risk to the domestic Canadian industry. The finding followed a complaint filed by Atlas Tube Canada Inc. of Harrow, Ontario. CBSA has determined that the expiry of the finding will likely result in the continuation or resumption of dumping and subsidizing of such products originating in or exported from China.

CBSA will issue a Statement of Reasons within 15 days providing further details.

The CITT will undertake an inquiry to assess whether the expiry of its 2012 findings is likely to result in injury to the Canadian industry, with a decision set to be released no later than July 4, 2018.

Tereposky & DeRose regularly provides advice on Canadian anti-dumping and countervailing matters.  Should you have any questions regarding this matter or anti-dumping and countervailing issues more generally, we are at your disposal.

Vincent DeRose
613.237.8862
vderose@tradeisds.com

Stephanie Desjardins
613.237.0483
sdesjardins@tradeisds.com

 

 

Canada and Other TPP-11 Countries Announce Conclusion of CPTPP Agreement

On January 23rd, the eleven remaining members of the Trans-Pacific Partnership (TPP) agreement announced the conclusion of their discussions on a revised free trade agreement. Re-branded the “Comprehensive and Progressive Trans-Pacific Partnership” (CPTPP), the new deal will be signed in March at a ceremony in Chile. In concluding the agreement, Canada continues to expand and diversify its major regional trade agreements beyond the North American Free Trade Agreement (NAFTA), which is currently undergoing difficult negotiations with uncertain outcomes. The CPTPP also updates the terms of trade between Canada and Mexico.

The United States withdrew from the TPP on January 30th last year, after the agreement had been concluded with the other eleven members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Viet Nam. At that time, the legal text had been finalized, and all that remained was implementation and ratification. The TPP would have covered about 40 percent of the world’s GDP (valued at US$28.5 trillion). Without the United States, the CPTPP’s coverage is significantly less — around 13.6 percent of global GDP (US$10.2 trillion). However, notwithstanding the absence of the United States, the Agreement creates important new opportunities for Canadian exporters in the CPTPP region.

For example, Canadian agricultural and fishing industries will have preferential market access to important consumer and industrial CPTPP markets. The progressive elimination of customs tariffs will provide Canadian goods with a competitive advantage over US exports to those markets. While trade between the United States and CPTPP countries will certainly continue, the new agreement can be expected to shift the competitive landscape in favour of Canadian producers, providing them with new export and supply chain opportunities. In Japan, the single largest CPTPP economy, Canadian enterprises will also be able to trade on even footing with competitors who have been enjoying the benefits of Japan’s bilateral agreements with Mexico and Australia.

Conclusion of the CPTPP also creates a new trade dynamic between two of the three NAFTA members, Mexico and Canada, with potential implications for the current NAFTA re-negotiations. For example, commitments to implement stricter intellectual property protections were important concessions to US demands in the original TPP. They include extended copyright and patent terms, fixed market protection measures for certain pharmaceutical products (e.g., biologics), and other commitments that would have required Canada to implement new IP rules that are more stringent and less flexible. However, these provisions are “suspended” in the negotiated outcomes of the CPTPP, indicating that Canada and Mexico may no longer be interested in making such concessions. On the other hand, Canada and Mexico may find it difficult to deny US NAFTA demands that are equivalent to TPP provisions that remain part of the CPTPP. It also remains to be seen how differences will be reconciled in the CPTPP and any re-negotiated NAFTA with respect to the rules of origin for motor vehicles and automotive parts, particularly in relation to minimum regional value content thresholds.

In November, Canada expressed concerns over insufficient protection in the CPTPP for Canadian “cultural industries” (i.e., Canadian media, including print publications, films, music, and television and radio broadcasting). Its reluctance on this and other points prevented the parties from signing an agreement-in-principle at the APEC Summit. However, it appears that the parties have since agreed that this issue, among others, will be resolved through side letters rather than by re-opening and substantively amending the current text of the agreement. Until the negotiated outcomes become available in a consolidated CPTPP text, a joint Ministerial Statement sets out the roadmap for final CPTPP discussions (see http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/tpp-ptp/statement-declaration.aspx?lang=eng).

In the context of the United States’ withdrawal into protectionist and anti-globalization policies on trade, plurilateral regional agreements like the CPTPP and the Canada-EU Comprehensive Economic and Trade Agreement (CETA) are important to Canada not only because they provide new and alternative trade opportunities for Canadian stakeholders, but also because they offer unprecedented competitive advantages over US exporters in important international markets. Neither Japan nor the European Union are currently engaged in bilateral negotiations with the United States (negotiations between the United States and the European Union concerning the Trans-Atlantic Trade and Partnership (TTIP) agreement are currently suspended).

The text of the original TPP and commentary on its relationship to the CPTPP is provided by the Ministry of Foreign Affairs and Trade, New Zealand, and available online at: https://www.mfat.govt.nz/en/trade/free-trade-agreements/agreements-under-negotiation/cptpp-2/tpp-and-cptpp-the-differences-explained/.

Tereposky & DeRose regularly provides advice on international trade agreements, including the NAFTA, the CETA, and the forthcoming CPTPP.  Should you have any questions regarding potential opportunities under these trade agreements or any other trade related issues, we are at your disposal.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

 

 

Canada Launches Omnibus WTO Challenge of US Trade Remedies Laws

On 10 January 2018, the World Trade Organization (WTO) circulated a request for consultations from Canada to the United States regarding laws, regulations, policies, practices and other measures with respect to US anti-dumping and countervailing duty proceedings. This is the first step in the WTO dispute settlement procedure. The request cites 188 trade remedy determinations, most which concern countries other than Canada, that are used to prove the existence of the challenged measures. Instead of challenging the application of US trade remedy measures in specific investigations concerning Canadian products, the challenge targets the US measures “as such”.  If successful, the challenge will benefit all exports to the US that have been subjected to the measures being challenged. An omnibus trade challenge of this magnitude by Canada is unprecedented.

The broadly defined challenge covers six categories of measures.

First, Canada is challenging the liquidation of final anti-dumping and countervailing duties in excess of WTO-consistent rates and the failure to refund cash deposits collected in excess of WTO-consistent rates.  Canada alleges that the United States purports to implement adverse WTO recommendations and rulings concerning US anti-dumping and countervailing measures but does so in a manner that is not compliant with its WTO obligations.

Second, Canada is challenging retroactive anti-dumping and countervailing duties following preliminary affirmative “critical circumstances” determinations.  This challenge relates to the US policy or practice of issuing preliminary affirmative critical circumstances determinations and instructions which direct US customs authorities to retroactively suspend liquidation of entries and collect provisional duties in the form of cash deposits or bonds for the 90-day period prior to the preliminary anti-dumping or countervailing duty determination.

Third, Canada is challenging the United States’ treatment of export controls as countervailable subsidies in countervailing duty proceedings.

Fourth, Canada is challenging how the United States calculates the amount of “benefit” associated with a subsidy that is conferred when a government provides goods at prices which are below a commercial benchmark. In conducting this calculation, the US methodology partially disregards comparisons where a government price is above the applicable commercial benchmark (i.e., where there is no subsidy). This is done by assigning a “zero” to these comparisons rather than a negative value when assessing the average subsidization for the transactions, thereby inflating the average.  This challenge appears to target the subsidy equivalent of “zeroing” in anti-dumping investigations, a practice which has already been declared to be WTO-inconsistent.

Fifth, Canada is challenging the United States’ effective closure of the evidentiary record before the preliminary determination.  According to Canada, the United States restricts interested parties from submitting factual information or other evidence which would allow them to fully defend their interests in anti-dumping and countervailing duty investigations by effectively closing the evidentiary record before the preliminary determination. Canada alleges that the United States purports to retain discretion to accept additional factual information after these deadlines have passed in “extraordinary circumstances” but does not exercise, or almost never exercises, this discretion.

Finally, Canada is challenging the “tie vote” provision for the United States International Trade Commission (ITC), the authority that makes injury determinations in trade remedy proceedings.  Where the Commissioners are evenly divided as to whether a determination of the ITC should be affirmative or negative, the ITC is deemed to have made an affirmative determination.

Canada’s challenges raise difficult and complex issues. Given the current caseload of the WTO dispute settlement system, if the challenge moves forward it will not be resolved for some time.  Canada and the United States now have 60 days to consult, after which Canada has the right to request the establishment of a dispute settlement panel and move the dispute to the next stage.

Tereposky & DeRose regularly provides advice on WTO dispute settlement. Should you have any questions regarding this topic, we are at your disposal.

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com