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Canada challenges United States tariff system

12 January 2018

The WTO revealed on Wednesday that Canada had filed a complaint last month accusing the United States of unfairly imposing countervailing and anti-dumping duties, not only on Canadian softwood lumber but also on goods from many other countries.

In a statement, Foreign Affairs Minister Chrystia Freeland said, "This WTO action is part of our broader litigation to defend the hundreds of thousands of good, middle class forestry jobs across our country".

"Canada's claims are unfounded and could only lower US confidence that Canada is committed to mutually beneficial trade", Lighthizer said in a statement.

This decision appears even more fraught given the USA administration's critical stance on the WTO; the Trump administration feels as if world trade rules are stacked against them.

"It's (saying), 'The entire way in which the us - you - are conducting your anti-dumping, countervailing procedures, is wrong,"' said Chad Bown, a trade expert at Washington's Peterson Institute.

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"These rates tabled lby the USA on uncoated groundwood paper represent the third action that stands to hurt hard working men and women in our mill communities across Canada", says Derek Nighbor, CEO, Forest Products Association of Canada.

NAFTA has been heavily criticized by Trump, who called it the "worst deal in USA history" and warned that he might scrap it.

Mr. Trump has repeatedly threatened to pull out of NAFTA - or at least trigger the withdrawal process to increase pressure on Canada and Mexico.

"The government is increasingly sure about is now planning for Trump to announce a withdrawal", one unnamed source reportedly told Reuters.

Trump withdrawing from NAFTA "was always a risk, but that risk is clearly more elevated now", said Brian DePratto, senior economist at Toronto-Dominion Bank.

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It also might result in a flood of imports from other countries - if the complaint successfully have American tariffs removed - and cost Canada billions of dollars in exports to the US, Lighthizer said.

Last month a USA trade panel locked in hefty subsidies on softwood lumber.

Canada's complaint with the WTO is a request for consultation, which formally initiates a dispute in the WTO. "We're about the start negotiations over NAFTA in Montreal". "But with the Trump administration being relatively new, and because of the protectionist noises we've been hearing from them, it's not at all clear what sort of reaction the USA might have".

Canadian Foreign Minister Chrystia Freeland said the legal action was in response to "unfair and unwarranted" United States duties against Canada's softwood lumber producers, and is part of a "broader litigation" to defend its forestry jobs.

Anticipating an imminent US retreat from NAFTA, the Canadian government has chose to go on the offensive in managing its trade relations with our Southern neighbor.

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"This has been a chronic problem for us", he said.

Canada challenges United States tariff system