Canada files broad WTO complaint against U.S. AD/CV duty process

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   Canada filed a broad complaint on Dec. 20, 2017, requesting World Trade Organization (WTO) consultations regarding the legality of the United States’ antidumping and countervailing duty (AD/CV) regime, the WTO announced Wednesday.
   The U.S. is not implementing adverse WTO recommendations and rulings concerning its AD/CV duty regime in compliance with its WTO obligations, the complaint alleges. Should consultations not resolve Canada’s concerns, under WTO rules, Ottawa would have to wait until Feb. 18 to request formation of a WTO dispute settlement panel.
   Among the problems endemic to the U.S. AD/CV duty process is the U.S.’s failure to retroactively apply reduced AD/CV duty rates ordered by the WTO to entries for which the U.S. has already collected cash deposits, Canada said.
   The U.S. does not lower duties for prior unliquidated entries in its official determinations implementing WTO-ordered lower duties, the complaint says.
   The U.S. process for implementing those determinations, issued under Section 129 of the Uruguay Round Agreements Act (Section 129 determinations), results in dutiable products being subject to final assessment and liquidation at “the higher WTO-inconsistent rates after the expiry of the reasonable period of time,” Canada said.
   The U.S. wrongfully keeps excess cash deposits until final duty assessment is complete and liquidation is required under U.S. law as a result of an AD/CV administrative review or at the conclusion of U.S. court or NAFTA binational AD/CV duty dispute panel proceedings, the complaint says.
   “This measure has been applied repeatedly and it is likely that it will continue to be applied in the future,” Canada said. The complaint alleges U.S.’s treatment of prior unliquidated entries involving AD/CV cash deposits violates several provisions of all of the following: The WTO’s Antidumping Agreement, Subsidies and Countervailing Measures Agreement, and Dispute Settlement Understanding.
   Further, Canada’s complaint accuses the U.S. Commerce Department of errantly, not issuing instructions to Customs and Border Protection to refund excess cash deposits immediately following implementation of Section 129 determinations charting reduced AD or CV duty rates.
   Canada’s complaint also takes issue with the U.S.’s retroactive liquidation suspensions ignited through preliminary affirmative “critical circumstances” determinations, U.S. treatment of export controls in CV duty proceedings, and U.S. “effective closure” of evidentiary records before preliminary determinations, among other things.
   U.S. Trade Representative Robert Lighthizer pushed back against Canada’s complaint, saying the allegations are “unfounded” and “ill-advised.”
   “Even if Canada succeeded on these groundless claims, other countries would primarily benefit, not Canada,” he said in a statement. “For example, if the U.S. removed the orders listed in Canada’s complaint, the flood of imports from China and other countries would negatively impact billions of dollars in Canadian exports to the United States, including nearly $9 billion in exports of steel and aluminum products and more than $2.5 billion in exports of wood and paper products. Canada’s claims threaten the ability of all countries to defend their workers against unfair trade.”

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