NEWS
01/10/2018 06:17 EST | Updated 01/10/2018 06:21 EST

Canada launches global trade complaint vs U.S. over use of duties

WASHINGTON — Canada has launched a wide-ranging attack against U.S. trade practices in a broad international complaint over American use of punitive duties.

It has asked the World Trade Organization to examine the use of duties in the United States, alleging that they violate international law for five reasons. The complaint was filed last month but released Wednesday, with some coincidental timing: the U.S. has just announced duties as high as nine per cent on Canadian paper.

The move follows a series of similar penalties as the U.S. alleges unfair trade practices from Canada in the form of softwood lumber and Bombardier subsidies.

The Canadian complaint alleges that American use of anti-dumping and countervailing duties violates global trade rules. 

It says the U.S. levies penalties beyond what's allowed by the WTO, improperly calculates rates and unfairly declares penalties retroactive, while also limiting evidence from outside parties. It also accuses the U.S. of using a trade-panel voting system that's biased against foreigners.

The 32-page complaint cites dozens of examples unrelated to Canada, including 122 cases where the U.S. imposed duties on foreign countries.

The disputes over paper, lumber and aerospace are occurring just as the countries prepare to meet in Montreal later this month for a potentially pivotal round of NAFTA negotiations.

"This isn't going to calm passions in Montreal," said Canada-U.S. trade lawyer Mark Warner.

The Canadian complaints might have some merit, and Canada is well within its rights to complain to the WTO, Warner said. But he questioned the strategic logic of antagonizing the Trump administration in the midst of NAFTA talks.

He called it surprising that Canada is citing foreign cases in its complaint even as it engages in sensitive negotiations against an administration that already dislikes the WTO.