Canada Takes Trade Dispute With U.S. To World Trade Organization (WTO)

Canada’s federal government in Ottawa has launched a wide-ranging trade dispute against the United States, challenging the neighbouring country’s use of anti-dumping and anti-subsidy duties, according to a World Trade Organization (WTO) filing published on Wednesday.

The WTO dispute comes as Canada and the U.S. struggle to reach a new agreement on the North American Free Trade Agreement (NAFTA), with dispute resolution mechanisms one of the sticking points in the ongoing negotiations.

Canada appears to be mounting its latest WTO challenge on behalf of the rest of the world as trade officials in Ottawa cite almost 200 examples of alleged U.S. wrongdoing, almost all of them concerning other trading partners such as China, India, Brazil and the European Union.

Canadian Foreign Affairs Minister, Chrystia Freeland, said the legal action was in response to the “unfair and unwarranted” U.S. duties against Canada's softwood lumber producers and part of a “broader litigation” to defend forestry jobs.

“We continue to engage our American counterparts to encourage them to come to a durable negotiated agreement on softwood lumber,” Minister Freeland said in a written statement.

Canada alleges that U.S. procedures broke the WTO's Anti-Dumping Agreement, the Agreement on Subsidies and Countervailing Measures, the General Agreement on Tariffs and Trade, and the Understanding on Rules and Procedures Governing the Settlement of Disputes.

U.S. trade representative Robert Lighthizer issued a written rebuttal calling Canada's case an “ill-advised attack on the U.S. trade remedies system.”

"Canada's claims are unfounded and could only lower U.S. confidence that Canada is committed to mutually beneficial trade," Mr. Lighthizer said in the statement, hinting at the NAFTA talks currently underway. “Canada is acting against its own workers' and businesses' interests. Even if Canada succeeded on these groundless claims, other countries would primarily benefit, not Canada,” he added.

Under WTO rules, the U.S. has 60 days to try to settle the complaint, or Canada, which sends 75% of its exports to the U.S., could ask the WTO to adjudicate the matter.