Annual report March 31, 2020 - 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.

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 details of this major inquiry were described in the Tribunal’s annual report for the fiscal year 2018-2019, during which most of the proceeding took place.

On April 3, 2019, the Tribunal submitted a report to the Governor in Council. The Tribunal found 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 General Preferential Tariff treatment. The Tribunal’s recommendations were implemented by the Government of Canada as final safeguard measures on May 9, 2019. These measures will expire after October 24, 2021.

On May 9, 2019, the Tribunal was further directed by the Order Referring to the Canadian International Trade Tribunal, for Inquiry into and Reporting on, the Matter of the Exclusion of Certain Steel Goods from the Order Imposing a Surtax on the Importation of Certain Steel Goods (Exclusions Inquiry Order), to conduct inquiries, at specified six-month intervals, regarding exclusion requests concerning certain heavy plate and stainless steel wire which are subject to safeguard measures enacted in the Order Imposing a Surtax on the Importation of Certain Steel Goods.

The Tribunal conducted two inquiries in fiscal year 2019-2020 and submitted two reports to the Governor in Council in response to the Exclusions Inquiry Order.

The Tribunal issued its first report on July 15, 2019. In that first exclusions inquiry, the Tribunal received exclusion requests from 12 companies. Having found that there was no source of domestic supply or firm and commercially viable plan to produce such goods domestically, in accordance with the directions in the Exclusions Inquiry Order, the Tribunal made eight recommendations to the Governor in Council to exclude products from the Order Imposing a Surtax on the Importation of Certain Steel Goods. Seven of these recommended exclusions concerned heavy plate in various grades and thicknesses and certain plate for use in the manufacture of oil and gas line pipe. The remaining recommendation was an exclusion for certain copper-coated stainless steel wire.

The Tribunal issued its second exclusions inquiry report on March 13, 2020. Having received one request for a product exclusion for certain shaped stainless steel wire, the Tribunal recommended the exclusion to the Governor in Council.