Leading the world – the African Continental Free Trade Area (AfCFTA) sets a new high-water mark for dispute settlement under regional trade agreements

On 1 January 2021, trading began under the African Continental Free Trade Area (AfCFTA), a regional trade agreement aimed at all 55 member states of the African Union. The agreement is publicized as encompassing the world’s largest free trade area since the formation of the World Trade Organization (WTO). Once fully implemented, the AfCFTA will establish a new high-water mark for dispute settlement under regional trade agreements.

To date, most trade disputes have been resolved using the WTO dispute settlement mechanism, even when the matters concerned could have been resolved under a regional trade agreement. This is largely because the WTO was viewed as offering a better mechanism to address complex factual and legal issues. Disputes that reach the formal dispute settlement stage inevitably involve political sensitivities, particularly for the country whose measures are being challenged, but also for the challenging country.  Whatever the outcome, both disputing countries must “sell” that outcome to their constituents. To best achieve this, particularly if the outcome is negative, the constituents need to be convinced that the strongest possible case was put forward, that the decision-making body understood and considered that case, and that the decision that was issued is factually accurate and legally well-reasoned. Although it has been the subject of criticism by some WTO Members, the WTO mechanism has generally been successful at meeting these requirements. This is due to its well-developed procedures, the ability to appeal findings of dispute settlement panels, and dispute settlement support by an experienced and professional Secretariat. Until now, the ad hoc trade dispute settlement mechanisms under regional trade agreements have lacked these components.

The AfCFTA changes this by creating a dispute settlement mechanism that closely resembles the WTO mechanism, including panels, a process for appeals, a procedure governing the “suspension of concessions” (e.g., trade retaliation), and a supporting Secretariat.  Although it does not have the 165-country membership of the WTO, the AfCFTA membership of 55 countries should generate enough formal disputes to reasonably utilize the mechanism.

Tereposky & DeRose LLP regularly provides advice and acts as counsel in international trade disputes, including WTO and regional trade agreement dispute settlement proceedings.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

It’s Official – No U.S. Tariffs on Imports of Canadian Aluminum

On October 27, 2020, President Trump signed a Proclamation that formally exempted Canadian non-alloyed unwrought aluminum exports from the punitive tariffs under Section 232 of the Trade Expansion Act. This exemption formalizes USTR’s September 15th announcement of the return of tariff-free treatment of Canadian aluminum retroactively in response to Canada’s threatened countermeasures (see U.S. Blinks First – No Tariffs on Imports of Canadian Aluminum).

The Proclamation reserves the authority to reimpose the tariff on imports of non-alloyed unwrought aluminum from Canada in the event that the volume of imports from Canada in the remaining months of 2020 exceeds the quantities that the United States expects will be exported from Canada to the United States during this period. USTR has stated that it is expected that Canada would export just 70,000 to 83,000 tonnes of raw aluminum a month through December – about half the monthly rate from January to July.  The United States and Canada expect to hold further consultations in December 2020 to discuss the state of aluminum trade between the two countries in light of trade patterns in the last 4 months of 2020 and expected market conditions in 2021.

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

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

It’s Official – No U.S. Tariffs on Imports of Canadian Aluminum (28 October 2020)

 

 

Canada Expands Economic Sanctions Against Belarus

On September 29, 2020, Canada, in coordination with the UK, imposed sanctions against 11 Belarusian officials under the Special Economic Measures (Belarus) Regulations (the “Regulations”). This action was followed by controversial presidential elections on August 9, 2020, which were strongly condemned by Canada.

Further sanctions against an additional 31 Belarusian officials were introduced by Canada on October 14, 2020. These actions were taken by amending the Regulations and in coordination with the EU. Previously, Canada had imposed sanctions on Belarus under the Export and Import Permits Act, which were far less restrictive. It required any Canadian exporter to apply for a permit before the export or transfer of any goods or technology to Belarus.

The current measures under the Regulations impose a dealings prohibition, an effective asset freeze, on listed persons. Consequently, the individuals listed in the Schedule to the Regulations are also inadmissible to Canada under the Immigration and Refugee Protection Act. The Regulations prohibit any person in Canada and any Canadian outside Canada from:

  • dealing in property, wherever situated, that is owned, held, or controlled by listed persons or a person acting on behalf of a listed person;
  • entering into or facilitating any transaction related to a dealing prohibited by these Regulations;
  • providing any financial or related services in respect of a dealing prohibited by these Regulations;
  • making available any goods, wherever situated, to a listed person or a person acting on behalf of a listed person; and
  • providing any financial or other related services to or for the benefit of a listed person.

The Regulations also require several Canadian entities to determine on a continuing basis whether they are in possession or control of property that is owned, held or controlled by or on behalf of a listed person. The Regulations also prohibit any person in Canada or any Canadian outside Canada causing, facilitating, or assisting in prohibited activities.

The imposition of economic sanctions does not mean that Canadians must cease business with Belarus. The asset freeze and dealings prohibitions do not apply to certain activities or transactions under the Regulations. Pursuant to the Regulations exceptions can also be made through an Authorization Order made by the Canadian Minister of Foreign Affairs to carry out a specified activity or transaction that is otherwise restricted or prohibited.

The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms. They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada.

If you would like to discuss any aspect of the Canadian sanctions regime, contact Vince DeRose, Jennifer Radford or Umair Azam at:

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

Canada Expands Economic Sanctions Against Belarus (27 October 2020)

Canada’s Ban of Certain Single Use Plastic Items will have to Comply with the WTO TBT Agreement and other Trade Obligations

On 7 October 2020, Canada released its preliminary list of banned single-use plastic items. The list is included in Table 3a of Environment Canada’s Discussion paper: A proposed integrated management approach to plastic products to prevent waste and pollution. The listed products are:

plastic checkout bags
stir sticks
6-pack rings
food service ware made from problematic plastics
straws
cutlery

While Canada’s trade obligations permit measures necessary to protect the lives and health of people, animals and plants, where such measures are trade restrictive or discriminatory, detailed requirements must be met.  Among other things, the measures must be the least trade restrictive means of achieving the public health and/or environmental objectives and must not be designed or applied in an arbitrary manner (i.e., a manner that is not rationally connected to the objective or does not contribute to the fulfilment of the objective). Canada’s measure, including its preliminary list of banned products, will have to be carefully scrutinized against these requirements.

Tereposky & DeRose is Canada’s most experienced law firm in advising on compliance with Canada’s international trade obligations and one of the top firms in the world on compliance with the WTO Agreement on Technical Barriers to Trade (TBT Agreement). Our lawyers were counsel before the WTO Appellate Body in the trilogy of WTO disputes that defined the interpretation and application of the provisions in the TBT Agreement and the General Agreement on Tariffs and Trade, 1994 (GATT 1994) that prohibit discriminatory treatment and trade-restrictive measures (United States – Measures Affecting the Production and Sale of Clove Cigarettes (DS406); United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (DS381); and United States – Certain Country of Origin Labelling (DS384, DS386)). These provisions will be directly applicable to Canada’s new ban on certain single-use plastics.

If you have any questions about the ban, please do not hesitate to contact us.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Canada’s Ban of Certain Single Use Plastic Items will have to Comply with The WTO TBT Agreement and other Trade Obligations (7 October 2020)

SEPTEMBER-IN-REVIEW

SEPTEMBER-IN-REVIEW

International Trade


New Anti-dumping Investigation


Tereposky & DeRose LLP_September-in-Review

New Canadian Anti-dumping Investigation on Concrete Reinforcing Bar from Algeria, Egypt, Indonesia, Italy, Malaysia, Singapore and Vietnam

On 22 September 2020, following a Complaint filed by AltaSteel Inc., ArcelorMittal Long Products Canada, G.P., and Gerdau Ameristeel Corporation, the Canada Border Services Agency (CBSA) initiated an anti-dumping investigation under the Special Import Measures Act with respect to the alleged injurious dumping of certain concrete reinforcing bar from Algeria, Egypt, Indonesia, Italy, Malaysia, Singapore, and Vietnam.

This is the third anti-dumping investigation of imported concrete reinforcing bar since 2014.

According to the CBSA’s Investigation Schedule, importers are required to file their response to the CBSA’s Request for Information by October 15th. Exporters must file their response by October 29th.

The CBSA is expected to issue its preliminary determination on or by December 21st. On that date, provisional anti-dumping duties could be imposed on imports of subject concrete reinforcing bar from the above-referenced countries.

The Notice of Initiation of Investigation provides the following information regarding the concrete reinforcing bar subject to this investigation:

Hot rolled deformed steel concrete reinforcing bar in straight lengths or coils, commonly identified as rebar, in various diameters up to and including 56.4 millimeters, in various finishes, excluding plain round bar and fabricated rebar products, originating in or exported the People’s Democratic Republic of Algeria, the Arab Republic of Egypt, the Republic of Indonesia, the Italian Republic, the Federation of Malaysia, the Republic of Singapore and the Socialist Republic of Vietnam.

Also excluded is 10 mm diameter (10M) rebar produced to meet the requirements of CSA G30 18.09 (or equivalent standards) and coated to meet the requirements of epoxy standard ASTM A775/A 775M 04a (or equivalent standards) in lengths from 1 foot (30.48 cm) up to and including 8 feet (243.84 cm).

For further clarity, the subject goods include all hot rolled deformed bar, rolled from billet steel, rail steel, axle steel, low alloy‑steel and other alloy steel that does not comply with the definition of stainless steel.

Uncoated rebar, sometimes referred to as black rebar, is generally used for projects in non corrosive environments where anti‑corrosion coatings are not required. On the other hand, anti corrosion coated rebar is used in concrete projects that are subjected to corrosive environments, such as road salt. Examples of anti corrosion coated rebar are epoxy or hot dip galvanized rebar. The subject goods include uncoated rebar and rebar that has a coating or finish applied.

Fabricated rebar products are generally engineered using Computer Automated Design programs, and are made to the customer’s unique project requirements. The fabricated rebar products are normally finished with either a protective or corrosion resistant coating. Rebar that is simply cut to length is not considered to be a fabricated rebar product excluded from the definition of subject goods.

Tereposky & DeRose has extensive experience in anti-dumping investigations. Should you have any questions regarding this investigation, we are at your disposal.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Stephanie Desjardins
613.237.8680
sdesjardins@tradeisds.com

New Canadian Anti-dumping Investigation on Concrete Reinforcing Bar (22 September 2020)

WTO Panel Rules that U.S. Section 301 Tariffs on Imports from China are WTO-Inconsistent

On 15 September 2020, the report of the World Trade Organization (WTO) Panel in United States – Tariff Measures on Certain Goods from China (DS543) was released. This dispute concerned China’s challenge of US “Section 301” tariff measures that impose additional ad valorem customs duties on certain products imported into the United States from China. This was the first WTO ruling related to the current US administration’s practice of applying additional import tariffs to further US trade policy objectives.

The tariff measures at issue were implemented in June and September 2018, further to an investigation conducted by the United States Trade Representative (USTR) under Section 301 of the Trade Act of 1974 (see USTR, China–Section 301) which concluded that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation amounted to “state-sanctioned theft and misappropriation of U.S. technology, intellectual property, and commercial secrets”.

China claimed that these measures, which impose additional customs duties at a rate of 25 percent on certain products, are inconsistent with the United States’ obligations under Articles I:1 and II:1(a) and (b) of the General Agreement on Tariffs and Trade 1994 (GATT 1994). In response, the United States asserted that any inconsistency was justified as necessary to protect US public morals pursuant to Article XX(a) of the GATT 1994. The United States argued that the Section 301 tariff measures were adopted to “‘obtain the elimination’ of conduct that violates U.S. standards of rights and wrong, namely China’s unfair trade acts, policies, and practices”.

The Panel ruled that the Section 301 tariffs are inconsistent with the United States’ GATT 1994 obligations and that this inconsistency was not justified under the general exception in Article XX(a) for “measures necessary to protect public morals”.

The Panel acknowledged that the public morals objective invoked by the United States in its Article XX(a) defence “reflects societal interests and values that appear to be highly important in the United States”. However, the Panel considered that the United States had not provided an explanation demonstrating how the section 301 tariff measures contribute to this objective. More specifically, the Panel found that the United States had failed to demonstrate that a genuine relationship of ends and means exists between the section 301 tariff measures and the public morals objective pursued by the United States. On this basis, the Panel concluded that the measures could not be provisionally justified as necessary to protect US public morals under subparagraph (a) of Article XX. Having arrived at this conclusion, the Panel determined that it would not be necessary to further consider whether the measures satisfy the requirements of the chapeau of Article XX (i.e., whether they are being applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade).

In rare “concluding comments” after the rulings and recommendations, the Panel explained that, although it was “very much aware of the wider context in which the WTO system currently operates, which is one reflecting a range of unprecedented global trade tensions”, the Panel’s role was not to draw any legal conclusions or make recommendations on any matters other than those it had been specifically tasked to deal with in this dispute. The Panel emphasized that it had “sought to perform diligently its adjudicatory role” in relation to the matters falling within its terms of reference and expressed encouragement to the United States and China to “pursue further efforts to achieve a mutually satisfactory solution” (i.e., a negotiated settlement).

Tereposky & DeRose LLP regularly provides advice and acts as counsel in international trade disputes, including WTO dispute settlement proceedings.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

WTO Panel Rules that U.S. Section 301 Tariffs from China are WTO-Inconsistent (18 September 2020)

The U.S. Blinks First – No Tariffs on Imports of Canadian Aluminum

Facing imminent Canadian countermeasures against the United States’ Section 232 tariffs  on Canadian articles of aluminum (see What goes around comes around… Canada Issues List of Proposed Countermeasures against U.S. Aluminum Duties), on September 15, 2020, the United States withdrew its duties, retroactive to September 1, 2020.

Harking back to the days of Voluntary Restraint Agreements (VRAs), the United States issued a list of “expected” monthly import volumes for Canadian imports over the September-December 2020 period:

September: 83,000 tonnes

October: 70,000 tonnes

November: 83,000 tonnes

December: 70,000 tonnes

If shipments in any month exceed the expected volume, the United States expects that shipments in the next month will decline by a corresponding amount.  If imports exceed 105 percent of the expected volume in any month, the United States may re-impose the 10 percent tariff going forward.

At the end of the year, Canada and the United States will review the state of aluminum trade and expected market conditions in 2021.

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

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

The U.S. Blinks First – No Tariffs on Imports of Canadian Aluminum (15 September 2020)

AUGUST-IN-REVIEW

AUGUST-IN-REVIEW

International Trade


Tereposky & DeRose LLP_August-in-Review

Canada Publishes Its Interpretation of the CUSMA (USMCA)

On 22 August 2020, the Canadian Statement on Implementation of the Canada-United States-Mexico Agreement was published in the Canada Gazette, Part 1.

The Statement sets out Canada’s interpretation of the CUSMA (which is called the USMCA by the United States and the T-MEC by Mexico). Its objective is to explain the basic rights and obligations in the CUSMA from Canada’s perspective, including how Canada intends to exercise its rights while observing its commitments.

On a chapter-by-chapter basis, the Statement provides a summary of Canada’s interpretation of each provision and outlines how Canada has implemented the Agreement into domestic law. The Statement also sets out additional actions that the Government will undertake to maximize the benefits of the negotiated outcomes of the new Agreement.

Tereposky & DeRose regularly provides advice on the interpretation, application, and implementation of international trade agreements. Should you have any questions regarding the CUSMA or any other trade matter, we are at your disposal.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Canada Publishes Its Interpretation of The CUSMA (USMCA) (21 August 2020)

Wheat Gluten Imports from Australia, Austria, Belgium, France, Germany and Lithuania Targeted by Canadian Anti-dumping Investigation

On 14 August 2020 the Canada Border Services Agency (CBSA) initiated an anti-dumping investigation respecting the alleged injurious dumping of certain wheat gluten from Australia, Austria, Belgium, France, Germany and Lithuania. The investigation was prompted by a complaint filed by ADM Agri‑Industries.  Wheat gluten consists of natural protein found in wheat. It is used as an ingredient in a broad range of food products.

Together with the Notice of the Initiation of Investigation, the CBSA has published the Investigation Schedule. Responses to the CBSA’s request for information (RFI) questionnaires are due September 7th for importers and September 21st for exporters. Publication of the CBSA’s preliminary determination is expected on or about November 12th. On that date, provisional anti-dumping duties could be imposed on imports of wheat gluten from the above-referenced countries.

Product definition

The subject goods are defined as follows:

Wheat gluten, whether or not blended with wheat flour, salt or any other substance, with a minimum wheat protein content of 40% by weight on a dry basis calculated using a Jones Factor of 5.7, originating in or exported from Australia, Austria, Belgium, France, Germany and Lithuania, but excluding (i) devitalized wheat gluten; (ii) hydrolyzed wheat gluten; (iii) wheat protein isolates; and (iv) organic wheat gluten that is certified organic in accordance with and otherwise meets the requirements of the Food and Drugs Act, R.S.C., 1985, c. F‑27, and regulations made thereunder, and the Safe Food for Canadians Act, S.C. 2012, c. 24, and regulations made thereunder including the Safe Food for Canadians Regulations, S.O.R./2018‑108, all of which as may be amended or replaced from time to time.

For greater certainty, the subject goods include but are not limited to vital wheat gluten as defined by the World Health Organization’s Codex Standard 163‑1987, Rev. 1‑2001 (“Standard for Wheat Protein Products Including Wheat Gluten”).

Tereposky & DeRose has extensive experience in anti-dumping investigations. Should you have any questions regarding this investigation, we are at your disposal.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Wheat Gluten Imports Targeted by Canadian Anti-Dumping Investigation (14 August 2020)