Seeking Common Ground: Canada-U.S. Trade Dispute Settlement Policies in the Nineties

By Andrew D. M. Anderson | Go to book overview

sibilities, it is an arduous task for producer groups in Canada to lobby for political support for their position. Canada, in essence, still tries to find a diplomatic solution rather than an administered one to the unfair acts of foreigners ( Wright 1985). This policy focus has, however, shifted the focus of the CITT and Revenue Canada from a predominantly quadrant 1 focus to a predominantly quadrant II focus. Once again this can be seen on the left- hand side of Figure 3.1.


Summary and Conclusions

In this chapter it has been demonstrated that the administrative agencies in the United States responsible for administering the GATT based "unfair" trade remedy laws have become overtly supportive of political considerations. This is the opposite of the economic criteria that the United States agreed to attempt to assess when it signed the GATT AD and Subsidies Codes. Further, because of the procedural bias for the political outcome of protectionism, there is no guarantee that a foreign firm will be accurately assessed either the correct subsidy or dumping margins if in fact they are even being subsidized or are dumping in the first place. Similarly, with the separation of the dumping or subsidy margin from the determination of material injury in an AD or CVD case or even the detrimental effects of foreign imports in a serious injury determination in a safeguard case, the foreign firm is procedurally biased in proving its innocence.

With U.S.-based firms guaranteed the right to bring "unfair" trade law actions, they can now afford to disrupt the actions of their foreign competitors with few costs to themselves since the administrative agencies carry out the actions on their behalf -- there is no penalty assessed for bringing a false "unfair" trade claim. More critically, with U.S. politicians being permitted to speak directly before the administrative agencies in defence of certain trade actions, political considerations are now directly present in a case whether the case is in fact found affirmative or negative. While the Canadian trade law administration system may be providing some administrative bias against foreign producers, there is no indication of overt political interference.

The use of AD and CVD measures as they have developed in the United States and to some degree in Canada is not consistent with a liberal trade policy; instead, it is a process which permits discrimination in favor of certain U.S. industries, whether they are in fact competitive or non-competitive. The nature of U.S.-administered protection is characterized by a quasi- legal system which can be openly abused by petitioners causing administrative decisions to become completely unrelated to the economic principles on which the GATT-based AD or CVD cases were initially to be based. The nature of these types of actions against Canada over the 1980s was particularly troublesome, given the long-standing economic and non-economic ties between Canada and the United States.

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