Annual report March 31, 2019 - Chapter 4

Chapter 4 - Safeguard Reference

International trade rules allow Canada to temporarily restrict imports to allow Canadian producers to adapt to increased imports which cause or threaten to cause serious injury. These temporary measures are called safeguards. The Tribunal has the authority to inquire into safeguard complaints from Canadian producers, as well as safeguard references from the Government of Canada. Complaints from Canadian producers can cover imports from all countries (global safeguards) or just imports from countries with which Canada has signed a free trade agreement (bilateral safeguards). When directed by the Government, the Tribunal may also recommend appropriate remedies to offset the harmful effects of import surges, as is the case with the recently concluded safeguard reference on certain steel goods.

On October 10, 2018, the Tribunal was directed by the Order Referring to the Canadian International Trade Tribunal, for Inquiry into and Reporting on, the Matter of the Importation of Certain Steel Goods, P.C. 2018-1275 (Order), to conduct a safeguard inquiry concerning the importation into Canada of certain steel goods. The classes of goods subject to the inquiry were: (1) heavy plate, (2) concrete reinforcing bar, (3) energy tubular products; (4) hot-rolled sheet, (5) pre-painted steel, (6) stainless steel wire, and (7) wire rod. On October 12, 2018, the Tribunal initiated the safeguard inquiry.

The purpose of the inquiry was to determine whether any of these goods were imported into Canada in such increased quantities and under such conditions as to be a principal cause of serious injury or threat thereof to domestic producers of such goods.

The Order referred to the Tribunal:

  • Directed the Tribunal to have regard to Canada’s international trade rights and obligations.
  • Provided that certain imports were to be excluded from the Tribunal’s inquiry—namely, imports from the United States, Israel and other Canada-Israel Free Trade Agreement (CIFTA) beneficiaries, Chile and Mexico (with the exception of energy tubular products and wire rod from Mexico).
  • Required the Tribunal, in the event it determined that there was an increase in imports, and serious injury or threat thereof, to make separate determinations regarding subject goods originating in and imported from certain free trade agreement partners. Specifically, the Tribunal had to determine if subject goods from Panama, Peru, Colombia, Honduras and Korea were a principal cause of serious injury or threat thereof.
  • Required the Tribunal to determine if energy tubular products or wire rod originating in and imported from Mexico did not account for a substantial share of total imports of energy tubular products or wire rod, or did not contribute importantly to serious injury or threat thereof.
  • Outlined specific treatment for imports from countries benefiting from the General Preferential Tariff (GPT).
  • Instructed the Tribunal not to hear any motion to exclude any good from a class or that would otherwise limit the scope of the inquiry, determination or recommendations.
  • Directed the Tribunal to provide recommendations on the most appropriate remedy to address the injury if ultimately, the inquiry showed that imports of a class of goods caused or threatened to cause serious injury.

The Tribunal’s fact-finding was based primarily on a questionnaire survey of 959 domestic producers, importers, and foreign producers of the steel goods subject to the inquiry. In addition, the Tribunal sent 215 letters to embassies requesting that they forward the Notice to any firms who produce and/or export any of the steel goods and complete the foreign producers’ questionnaire. The Tribunal received 327 responses.

There were 119 participants in the inquiry, including domestic producers, trade unions, importers, foreign producers and users of the goods. Several foreign governments also participated. The Tribunal held 13 days of public hearings in January 2019 and considered evidence from 44 witnesses. Parties filed written submissions and presented oral argument.

ATSSC staff involved in the inquiry included the Executive Director and General Counsel, the Director and Chief Economist, the Registrar, four core team members, twelve analysts, two data service advisors, six students, five legal counsel, six communications and editorial services staff, six registry officers, three mailroom and registry services staff for a total of 47 employees who contributed to the inquiry.

The Tribunal submitted a report to the Governor in Council on April 3, 2019. The Tribunal found that there were no significant increases in the importation of certain subject goods from the subject countries, or that these increases had not caused serious injury and were not threatening to cause serious injury, to the domestic industry. The Tribunal therefore did not recommend a remedy in respect of the following goods:

  • concrete reinforcing bar
  • energy tubular products
  • hot-rolled sheet
  • pre-painted steel and
  • wire rod.

The Tribunal did find that heavy plate and stainless steel wire from the subject countries (other than goods originating in Korea, Panama, Peru, Colombia and Honduras) were being imported in such increased quantities and under such conditions as to be a principal cause of a threat of serious injury to the domestic industry. The Tribunal therefore recommended a remedy in the form of a tariff rate quota on imports of heavy plate and stainless steel wire from subject countries, other than goods originating in Korea, Panama, Peru, Colombia, Honduras, or countries whose goods are eligible for GPT treatment.