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Trade Case Alert: Termination of the NAFTA Chapter 19 panel review on gypsum board confirms anti-dumping import duties for Western Canada shipments

Author(s): Margaret Kim, Peter Glossop, Riyaz Dattu

June 6, 2017

Our last international trade brief dealt with NAFTA renegotiations being set in motion after Trump’s final notice to Congress, the imminent implementation of CETA, and a Trade Case Alert relating to Canadian anti-dumping duties being imposed for certain fabricated industrial steel components that can be anticipated to affect various infrastructure projects. In this brief, we discuss Global Affairs Canada seeking comments on NAFTA renegotiations, the increased enforcement of U.S. trade laws, a Trade Case Alert pertaining to anti-dumping import duties for gypsum panels shipped to Western Canada, and a Trade Case Alert dealing with a global safeguard investigation into solar panels imported into the U.S. 

On May 26, 2017, the North American Free Trade Agreement (NAFTA) Chapter 19 binational panel proceeding on certain gypsum board originating in or exported from the United States was terminated, as the complainant USG Corporation and CGC Inc. withdrew their request for panel review. Accordingly, the Canadian International Trade Tribunal (CITT)’s finding that the dumping of certain gypsum board originating in or exported from the U.S., imported into Canada for use or consumption in Western Canada has caused injury to the domestic industry, will stand, as will the final anti-dumping duties imposed by the Canada Border Services Agency (CBSA).

Particularly noteworthy in the CITT finding is its regional market analysis, which led to the conclusion that Western Canada, including British Columbia, Alberta, Saskatchewan, Manitoba, as well as the Yukon and Northwest Territories, was a regional market for the purpose of injury analysis. A regional market case, although allowed under the Special Import Measures Act (SIMA), is unusual and needs to meet certain requirements regarding isolation and concentration of the affected market.[1]

In another unusual step, the CITT recommended to the Governor in Council, that the imposition of anti-dumping duties, in the full amount, was “contrary to Canada’s economic, trade or commercial interests.” The CITT found that imposing the full amount of the duties would substantially reduce competition in those markets, or cause significant harm to consumers of those goods or to businesses who use them.[2] On this basis, the CITT recommended that the government remit duty until the CBSA reinvestigates the normal values in fall 2018. For those exporters who co-operated with the CBSA’s anti-dumping investigation, remission is granted under the Anti-dumping Duty Remission Order[3] for each gypsum board product, subject to certain conditions. For other exporters, the higher duties (324.1%) will be applied. Undoubtedly, the relief provided for a temporary period on imported gypsum board, particularly board being used for the reconstruction in the Fort McMurray region after the May 2016 wildfires, reflects the unusual circumstances and particularly difficult economic climate facing that part of Alberta. 

Osler, in particular Riyaz Dattu, Margaret Kim and Taylor Schappert, represented National Gypsum Company in this proceeding.

[1]Canadian International Trade Tribunal, “Gypsum Board”, Inquiry No. NQ-2016-002.

[2] Canadian International Trade Tribunal, “Gypsum Board – Reference No. GC-2016-001” (Report issued on January 4, 2017; Reasons issued on January 19, 2017) (Gypsum Board GC Report), at p. i.

[3] Department of Justice, “Gypsum Board Products Anti-dumping Duty Remission Order, 2017,” SOR/2017-28.