ANNOUNCEMENT 03 Jun 2019

Parliament approved amendments that suspend for two years the existing limitations on Canada's ability to reimpose safeguard measures on imported goods, in a move that analysts believe is intended to allow the reimposition of safeguard measure on steel.

 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 21 Jun 2019 | Removal date: 21 Jun 2021
Still in force

Safeguard

On June 21, 2019 Finance Minister Bill Morneau welcomed Royal Assent of Bill C-101, An Act to amend the Customs Tariff and the Canadian International Trade Tribunal Act. This legislation temporarily removes the two-year moratorium on the imposition of safeguard measures on imports previously subject to safeguards. In the words of the Finance Ministry, "It gives the Government the flexibility needed to stabilize Canada's market and further protect Canadian workers and producers, such as those in the steel sector, from global instability and the harmful effects of substantiated surges in imports." Critics suggest that the bill may lead to violations of the WTO Agreement on Safeguards.

The process began on June 3, 2019 when the Ministry of Finance posted a “Notice of Ways and Means Motion to introduce an Act to amend the Customs Tariff and the Canadian International Trade Tribunal.” The proposed amendment would suspend for two years the existing limitations on Canada's ability to reimpose safeguard measures on imported goods. In the view of one analyst, the amendments come “in response to intensive public and private lobbying by domestic steel producers.” That same analysis characterized this as a “hit and run” measure insofar as “it likely will expire before any challenge to it by trading partners can run its course through the WTO's dispute settlement system.”

The WTO Agreement on Safeguards allows countries to impose a safeguard measure provisionally for up to two hundred days, during which time it must ask an independent investigating authority to determine whether the measure is justified. The measure must be removed if the investigating authority concludes that it is not justified. The rules also prohibit the re-imposition of a safeguard on the same products for a certain period.

The responsible agency in Canada is the Canadian International Trade Tribunal (CITT). The issue of provisional measures arose after October 25, 2018, when the government of Canada imposed them on seven categories of steel. The CITT concluded on April 3, 2019 that safeguards were not warranted on five of the categories (and not warranted for certain countries on the other two categories). The CITT decision obliged the government to remove the safeguard quotas and taxes that it had imposed on the steel categories in question. The amendments repeal the provisions of Canadian law that correspond to the WTO rules prohibiting the re-imposition of safeguards on the same goods within two years.

The amendments change the Customs Tariff and the Canadian International Trade Tribunal Act by adding the following new language:

Prohibition against further orders Interdiction

(5) Subject to subsection (6), no order may be made under subsection (1) with respect to goods that have already been the subject of an order made under that subsection or subsection 5(3) of the Export and Import Permits Act unless, after the expiry of the order and any related orders made under subsection 5(3.2) or (4.1) of that Act or section 60 or subsection 63(1), there has elapsed a period equal to the greater of two years and the total period during which the order or orders were in effect.

Exception

(6) If an order made under subsection (1) was effective with respect to goods for a period of 180 days or less, a further order may be made under that subsection with respect to those goods if

(a) at least one year has elapsed since the previous order took effect; and

(b) not more than two orders have been made with respect to the goods under subsection (1) within the period of five years before the further order takes effect.

The bill also made corresponding amendments to the Canadian International Trade Tribunal Act.

AFFECTED SECTORS