Discriminatory Practices in the U.S.
and Canadian "Unfair" Trade
This chapter compares and contrasts the administration and implementation of the U.S. and Canadian trade law systems with particular emphasis on identifying any discriminatory practices and biases in their implementation against foreign producers, including each other. It is found that the U.S. system has been much more susceptible to politicization than the Canadian system to date, but there is the potential for Canada to go the same route, since U.S. trade law procedures have often provided the "guiding light" for many of the trade law procedures adopted under the GATT and by other nations in their own domestic trade legislation. It is also concluded that given the situation with the perceived growth in U.S. administered protection, the only viable alternative for Canada at that time was to try to negotiate freer trade concessions with the United States in order to maintain access to the U.S. market. Any attempt to attack U.S. producers through Canada's own trade law system would probably have resulted in the loss of further market access to the United States. For Canada, a middle-sized industrial economy dependent on trade with just one other economy for a large percentage of its national income, this recipe could have proved disastrous.
The trade effects of government assistance to help domestic industries has been a concern of the GATT since its inception. There are, however, problems in arriving at a workable definition of what constitute allowable and non-allowable "domestic" subsidies. Since it is impractical to attempt to offset all subsidies, the general rule of thumb has been to allow CVDs to be applied against those subsidies which have some form of negative trade impact, i.e., which cause "material injury" to the other nation's domestic producer(s).
Most of the international rules on subsidies were extended during the 1973-79 GATT Tokyo Round and are found in the Code on Subsidies and