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USTR Robert Lighthizer Statement on the WTO Panel Report in Canada’s Challenge to U.S. Countervailing Duties on Supercalendered Paper

July 06, 2018

Washington, DC – U.S. Trade Representative Robert Lighthizer today issued the following statement in regard to the panel report circulated by the World Trade Organization (WTO) in the dispute by Canada concerning U.S. countervailing duties on supercalendered paper:

“The WTO agreements, as originally negotiated, clearly provided the United States with effective legal grounds to combat unfairly subsidized imports that disadvantage our workers and businesses.  The panel report represents the latest example of judicial activism at the WTO seeking to undermine those laws and make it harder for Members to address unfair trade.  The United States has long warned that the attack on our trade laws risks undermining the credibility of the WTO, and we again urge Members to consider the harm resulting from such rulings.

“I would also note the countervailing duties at issue here were terminated on July 5.  Remarkably, however, Canada has refused to drop this litigation.  In other words, Canada appears to be more interested in attacking our anti-subsidy laws than in resolving this particular dispute.  By pursuing this litigation, Canada is helping non-market countries like China that are more likely to use the type of hidden subsidies at issue in this case.  The end result of such policies will be a global trading system that encourages unfair subsidies and puts true market-oriented companies – in both Canada and the United States – at an unfair disadvantage.”

Background of the Dispute

In March 2016, Canada filed a request for WTO dispute settlement consultations with the United States concerning countervailing duties imposed on supercalendered paper from Canada.  The United States and Canada held consultations on May 4, 2016.  The Dispute Settlement Body established a panel on July 21, 2016. 

In this case, the United States discovered Canadian subsidies which the Canadian firms failed to disclose during the U.S. investigation. After the Department of Commerce implemented tariffs to account for these market distortions, the Canadian government sued the United States at the WTO.

Among other things, the panel report upheld Canada’s claims with respect to U.S. Department of Commerce treatment of subsidies that exporters refused to disclose in response to Commerce questionnaires, but which Commerce subsequently discovered during the course of the countervailing duty investigation. 

On July 5, the Department of Commerce terminated the countervailing duties.