WTO Panel Issues Report in India-United States WTO Dispute Concerning Certain Measures Relating to the Renewable Energy Sector

On 27 June 2019, a World Trade Organization (WTO) Panel issued its report in the dispute United States – Certain Measures Relating to the Renewable Energy Sector (DS510). The dispute concerned a challenge by India of various measures implemented by certain U.S. States that India alleged violated the national treatment obligation in Article III:4 of the GATT 1994. Under that provision, WTO Members cannot discriminate by providing more favourable treatment to domestic products than to like imported products. India argued that the measures at issue accorded treatment less favourable to imported products than to like domestic products by incentivizing the use of domestic inputs and thereby denying effective equality of opportunity to the imported products to compete in the U.S. domestic market.  The Panel agreed with India in respect of several of the challenged measures and found that the non-discrimination obligation in Article III:4 had been violated.

In addition to its substantive rulings, the Panel addressed  procedural matters related to its terms of reference and the treatment of measures that had been repealed or amended.

Tereposky & DeRose regularly provides advice and counsel on trade disputes, including WTO disputes.

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Law to Suspend Canada’s WTO Obligations Concerning Safeguards Receives Royal Assent

On 21st June 2019, Bill C-101, An Act to amend the Customs Tariff and the Canadian International Trade Tribunal Act, received Royal Assent and became law in Canada. It sped through the legislative process in the House of Commons and the Senate in just sixteen days, having been introduced for First Reading in the House of Commons on 5th June 2019 (following a successful Ways and Means Motion to introduce the Bill on 4th June).

This legislation temporarily repeals the provisions in Canadian law that implement Canada’s obligation under Article 7.5 of the WTO Agreement on Safeguards, which requires government authorities to observe a 2-year “cooling off” period after imposing safeguard measures on imported products before they can impose another round of safeguard measures on the same products.

The Government of Canada’s purpose in suspending this WTO obligation is to allow it to initiate one or more successive rounds of safeguard measures within the next two years against imports of the same steel products that were the subject of the 2018-2019 safeguard measures — i.e., heavy steel plate, concrete reinforcing bar (rebar), energy tubular products, hot-rolled sheet, pre-painted steel, stainless steel wire, and wire rod — even though the Canadian International Trade Tribunal determined that safeguard measures were not warranted for these products.

Although this measure is inconsistent with Canada’s WTO obligations, it is designed to automatically reverse itself after two years, re-instating the repealed provisions exactly as they were before and thereby bringing Canadian law back into compliance.

Tereposky & DeRose regularly provides advice on Canadian trade matters, including safeguard actions. Should you have any questions regarding this matter, we are at your disposal.

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Vincent DeRose
613.237.8862
vderose@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

The Government of Canada Introduces Legislation to Temporarily Remove the Two-Year Prohibition Against Imposing Additional Rounds of Safeguard Measures on the Same Steel Products

On 3rd June 2019, the Department of Finance issued a news release announcing that the Government of Canada has introduced a “Notice of Ways and Means Motion that would temporarily amend the Customs Tariff to remove the two-year moratorium on the imposition of safeguard measures on imports previously subject to safeguards”.

On 10th October 2018, the Government of Canada made an Order in Council that imposed safeguard measures on seven categories of steel products (including heavy steel plate, concrete reinforcing bar (rebar), energy tubular products, hot-rolled sheet, pre-painted steel, stainless steel wire, and wire rod). The Canadian International Trade Tribunal conducted an inquiry to determine whether or not these safeguard measures were warranted and determined that they were not for five out of the seven product categories. Accordingly, the Order imposing the safeguard measures on those products expired after the 200th day — 28th April 2019 — in accordance with subsection 56(2) of the Customs Tariff.

Subsection 55(5) of the Customs Tariff currently requires a two-year “cooling off” period, prohibiting the Government of Canada from making any further orders to impose safeguard measures “with respect to goods that have already been the subject of an order … unless, after the expiry of the order and any related orders … there has elapsed a period equal to”, in this case, “two years”. This provision is consistent with Canada’s international obligations under Article 7.5 of the WTO Agreement on Safeguards.

The Minister of Finance’s ”ways and means motion” introduces an “Act to amend the Customs Tariff and the Canadian International Trade Tribunal Act”. The sole function of this proposed legislation is to temporarily remove the “cooling off” period required under subsection 55(5). It does so by repealing subsection 55(5) and certain related provisions for a period of exactly two years. On “the second anniversary” of the date on which these amendments enter into force, the repealed provisions will be re-instated exactly as they were before.

The practical effect of the proposed amendments is to permit the Government of Canada to impose one or more successive rounds of safeguard measures on the same categories of steel products within a two-year timeframe, notwithstanding the Tribunal’s previous determinations that such safeguards are not warranted.

The news release published by the Department of Finance is available online at https://www.fin.gc.ca/n19/19-055-eng.asp, and the draft of the “Act to amend the Customs Tariff and the Canadian International Trade Tribunal Act” is available online at https://www.fin.gc.ca/drleg-apl/2019/nwmm-amvm-0619-l-eng.asp (HTML) and https://www.fin.gc.ca/drleg-apl/2019/nwmm-amvm-0619-bil.pdf (PDF).

Tereposky & DeRose regularly provides advice on Canadian trade matters, including safeguard actions. Should you have any questions regarding this matter, we are at your disposal.

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Vincent DeRose
613.237.8862
vderose@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com