April 1, 2016
At the end of last year the U.S. Department of Commerce ruled that imports of Canadian supercalendered paper receive countervailable subsidies. Then the U.S. International Trade Commission determined that a U.S. industry is materially injured by reason of imports of the "subsidized" paper from Canada
The two decisions led to the imposition of steep countervailing duties on imports of the subject Canadian paper into the United States.
On Wednesday, March 30, Minister of International Trade Chrystia Freeland announced that Canada filed a request for consultations with the World Trade Organization (WTO) to challenge the U.S. countervailing duties. Consultations are the first step in the WTO dispute settlement mechanism.
Canada had already filed a request under the North American Free Trade Agreement (NAFTA) for a panel review of the U.S. decisions, on December 30, 2015, pursuant to Article 1904 of NAFTA. NAFTA panels review whether countervailing duties are applied in accordance with the laws of the country that made the determination.
Minister Freeland said ""Our government is committed to defending the interests of Canadian companies. We are pursuing this matter in both binational and multilateral bodies to ensure trade practices are fair, allowing businesses to operate on a level playing field."
Supercalendered paper is a type of uncoated groundwood paper commonly used in newspaper inserts and flyers. Exports of supercalendered paper from Canada to the United States were valued at $959 million in 2014.