Canada: NAFTA Chapter 19 Bi-National Panel Review Process Used Rarely By Canada/US; BUT Remains Needed

Last Updated: July 31 2017
Article by Cyndee Todgham Cherniak

Let's face an incontrovertible fact – in the last 10 years, there are have been very few NAFTA Chapter 19 Bi-national Panels convened in respect of Canada-US & US-Canada trade remedies.  Yes, there have been a few softwood lumber cases (prior to the last 10 years by the way). But, the reality is that, in recent years, NAFTA Chapter 19 has not been not used very often. And, when it has been used in the last 10 years, most Canadian and U.S. companies have withdrawn their complaint before a Panel decision is issued.

So, why is everyone talking about the NAFTA Chapter 19 despite settlement mechanism?  Because, in the " Summary of Objectives for the NAFTA Renegotiation", the United States Trade Representative included on page 14 "Eliminate the Chapter 19 dispute settlement mechanism".  The NAFTA Chapter 19 dispute settlement mechanism establishes a bi-national arbitral panel to review antidumping and countervailing duty determinations in the NAFTA parties, rather than using the domestic courts of the party imposing the antidumping and/or countervailing duties.  There are three panelists chosen by the governments from rosters or off-roster.  The panelists are usually trade law professors and retired judges with knowledge of trade law.  Usually, each affected Party selects a panelist and the selected panelists pick a chairman.  This process makes a lot of sense (with the exception that the rosters have not been updated in about 25 years).

In the last 10 years, U.S. companies have challenged one Canadian International Trade Tribunal (CITT) injury determination and two Canada Border Services Agency (CBSA) (or a predecessor agency) dumping/subsidy determinations against goods from the United States:

  1. Certain Gypsum Board Originating in or Exported from the United States of America (CDA-USA-2017-1904-01) – terminated July 2017
  2. Certain Copper Pipe Fittings Originating In or Exported from the United States of America (Final Determination of Dumping) (CDA-USA-2007-1904-01) – terminated April 10, 2007
  3. Unprocessed Grain Corn, Excluding Seed Corn (for productive purposes), Sweet Corn, and Popping Corn, Originating In or Exported from the United States of America (Dumping and Subsidizing) (CDA-USA-2006-1904-01) – terminated by joint consent of the parties

The United States, on the other hand, has many more antidumping and countervailing cases than Canada and more challenges of the authorities' determinations. That being said, there have been few bi-national panel cases against the United States involving Canada in the last 10 years.  Canadian companies have challenged International Trade Commission (ITC) injury determination and Department of Commerce (DOC) dumping/subsidy determinations against goods from Canada:

  1. Polyethylene Terephthalate Resin from Canada: Injury (USA-CDA-2016-1904-01) – terminated
  2. Supercalendered Paper from Canada: Affirmative Injury Determination (USA-CDA-2015-1904-02) – terminated
  3. Supercalendered Paper from Canada: Final Affirmative Countervailing Duty Determination 9USA-CDA-2015-1904-01) – The Panel remanded in part and affirmed in part ITA's determination
  4. Citric Acid and Certain Citrate Salts from Canada: Final Results of Antidumping Duty Administrative Review (USA-CDA-2011-1904-03) – terminated
  5. Carbon and Certain Alloy Steel Wire Rod from Canada: (USA-CDA-2009-1904-01) – Final Determination affirmed by Panel
  6. Carbon and Certain Alloy Steel Wire Rod from Canada: (Final Results of Antidumping Duty Review) (USA-CDA-2008-1904-02) – completed
  7. Softwood Lumber Products from Canada; Final Scope Ruling Regarding Entries Made Under HTSUS 4409.10.05 (USA-CDA-2006-1904-05) – terminated
  8. Carbon and Certain Alloy Steel Wire Rod from Canada: (Antidumping Administrative Review) (USA-CDA-2006-1904-04) – terminated
  9. Certain Softwood Lumber Products from Canada (Final Results of Countervailing Duty Administrative Review) (USA-CDA-2006-1904-02) – terminated
  10. Certain Softwood Lumber Products from Canada (Final Results of Antidumping Duty Administrative Review) (USA-CDA-2006-1904-01) – terminated
  11. Certain Softwood Lumber Products from Canada (Determination under Section 129 of the Uruguay Round Agreements Act – Antidumping Measures) (USA-CDA-2005-1904-04) – terminated
  12. Certain Softwood Lumber Products from Canada (Implementation of the new determination under Section 129(a)(4) of the Uruguay Round Agreements Act) (USA-CDA-2005-1904-03) – terminated
  13. Certain Softwood Lumber Products from Canada (Notice of Implementation Under Section 129 of the Uruguay Round Agreements Act – Countervailing Duty) (USA-CDA-2005-1904-02) – terminated
  14. Certain Softwood Lumber Products from Canada (Final Results of Countervailing Duty Administrative Review and Rescission of Certain Company-Specific Reviews) (USA-CDA-2005-1904-01) – terminated

For both Canada and the United States, I have had to go past the 10 year mark to really make a list.  If I covered 2007-2017, there would have been only 8 cases in total COMBINED.  Only 2 of those cases resulted in a panel report.

So, what does this mean in terms of the Canada-US NAFTA renegotiation? It means that the United States wants all Canadian companies to have to use the United States judicial review process rather than a bi-national panel to review dumping, subsidy and injury determinations (even though the bi-national panel must follow U.S judicial review rules).

The United States wants to give up the opportunity to use the bi-national panel process when its companies are subject to Canadian (or Mexican) antidumping/countervailing duty orders.  The United States is willing to rely on the Canadian (and Mexican) court systems when its companies might be excluded from a NAFTA Party market due to AD/CVD duties being imposed.

The United States may change its mind after the Federal Court of Appeal decision comes out in SEAH STEEL CORPORATION v. EVRAZ INC.NA CANADA ET AL, Court File No. A-178-15, which is expected very soon.  We understand that the decision will be a significant departure from previous judicial reviews of CBSA dumping determinations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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