Canada: Canada To Implement Provisional Safeguards On Certain Steel Imports

In our last international trade brief, we discussed the United States-Mexico-Canada Agreement (USMCA), including what's changed and what's new and how it will impact cross-border trade. In this international trade brief, we discuss the provisional safeguards Canada will implement next week on certain steel imports, and the possible implementation of long-term safeguard measures.

On October 11, the Government of Canada announced that it will be imposing provisional safeguards starting on October 25, 2019 on imports of seven steel products and also ordered the Canadian International Trade Tribunal (the Tribunal) to investigate whether more long-term safeguard measures are necessary.

Nature of the provisional measures

The provisional safeguards will remain in place for 200 days from October 25, expiring on May 13, 2019.

The products affected by the safeguards include:

  • heavy plate;
  • concrete reinforcing bar;
  • energy tubular products;
  • hot-rolled sheet;
  • pre-painted steel;
  • stainless steel wire; and
  • wire rod

Additional information from the Department of Finance regarding these safeguards, and further description of the products covered, can be found here.

The provisional safeguard measures will be imposed through a quota system and a tariff rate of 25% for the quantities imported beyond the quota volumes (i.e., a tariff rate quota).

The quota threshold will be based on the average volume of the goods subject to the safeguards imported over selected periods in 2015-2016, 2016-2017 and 2017-2018. An additional limit will also be imposed on the share of the total quota that may be filled by producers in a single country for each steel product category equal to the historically highest import share from that country.

To be able to import a shipment of goods that are the subject of safeguards without the application of the 25% surtax, a permit must be issued for each shipment by Global Affairs Canada, based on meeting the relevant quota threshold. This permit can only be requested beginning with the day that is five days prior to the shipment's arrival in Canada, and will expire 14 days after it is issued.

Certain countries will be excluded from the safeguard measures including the United States, Mexico, Chile, Israel and countries whose economies are considered developing. In the case of Vietnam, while it will be exempt on six of the categories of steel products due to its status as a developing country, exports from that country of rebar products will be subject to the safeguard measures.

These safeguard measures should not be confused with the tariffs imposed as  countermeasures by Canada on U.S. origin steel, aluminum and other products, which were imposed in response to the United States' imposition of tariffs on Canadian steel and aluminum based on "national security" grounds.

Requirements for imposition of safeguard measures

Safeguard measures, both provisional and long-term, are permitted under Canada's WTO's obligations. Specifically, in exceptional circumstances, members of the WTO are permitted to impose global safeguard measures to protect their domestic industry. These measures can be taken against imports that are otherwise fairly traded, and as such these proceedings are conducted even when there is no evidence of dumping or subsidization.

The imposition of safeguards under the WTO requires evidence to be produced that shows that imports of products subject to the provisional measures can be expected to continue to increase in volume such that they are causing or threaten to cause "serious injury" to domestic producers. This is a much higher threshold than in anti-dumping and countervailing duties trade cases, where the requirement is to demonstrate the existence or threat of  "material injury."

Though the imposition of provisional safeguards can be done on the basis of a preliminary determination, in order to continue to impose safeguards beyond the provisional period, the Canadian government will be required to conduct a safeguards investigation, seeking views of importers, exporters, foreign producers and domestic producers.

Review by the Tribunal for long-term safeguard measures

In the case of Canada, the task of conducting an investigation to determine if long-term safeguards are necessary is within the mandate of the Tribunal.

If, after the Tribunal conducts its investigation, it finds that long-term safeguards are necessary to protect Canadian industry, the Canadian government can then impose safeguards for up to an additional three years beyond the provisional measures. The Tribunal's investigation will result in a report recommending the level of the surtax and the quota amount, for each category of goods, as well as how long the safeguard measures will remain in place. Participants in the process will therefore be able to make submissions on whether long-term safeguard measures are necessary, for how long, and the appropriate measure of surtax and quotas for each category of goods. As such, in these proceedings, unlike in the anti-dumping and countervailing inquiries, participants in the Tribunal's investigation have much greater ability to shape the outcome of the Tribunal's report recommending remedies, including by seeking exemptions for certain products that are not available from Canadian producers.

An overview of the timeline of the Tribunal's investigation is set out below:

  • Interested parties should file a Notice of Participation with the Tribunal by October 29, 2018.
  • Companies involved in the domestic production, import or export of the products under investigation will be required to complete a questionnaire no later than October 31, 2018, which will be included in the record.
  • Written submissions will be due by December 6, 2018.
  • Public hearings will be held in January 2019.
  • The Tribunal will issue a report with its recommendations on April 3, 2019.

The full schedule of the Tribunal's investigation can be found here.

As the deadline for filing the Notice of Participation is less than two weeks away, it will be important for companies who use the seven products being investigated to consider whether their business interests will be served by participating in this investigation. In our experience, a late-filed Notice of Participation can be rejected, whereas it is not uncommon to maintain minimal involvement to monitor the proceedings, or later on withdraw from the proceedings entirely.

These safeguard measures will impact all users of these products in Canada, whether they import these products or source them from domestic producers. The imposition of the surtax can be expected to increase the price of these products in Canada, and the quota system may lead to unintended shortages (particularly for specialized products), creating financial and production difficulties for companies that rely on these products as inputs to their business.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions