China Launches WTO Dispute With Canada on Steel, Aluminum TRQs
China requested dispute consultations at the World Trade Organization regarding Canada's tariff rate quotas on certain steel goods from non-free trade agreement partners, including China, and Canada's surtax on certain steel and aluminum goods that contain China-origin steel or aluminum.
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In June, Canada imposed the TRQs on five categories of steel products. The annual quota amount "corresponds to all of 2024 imports from non-FTA partners," and the tariff rate is 50% for goods that exceed the quota, China said. In July, Canada said that effective Aug. 1, the annual quota amounts would amount to 50% of 2024 import levels for non-FTA partners, though Canada did also extend the TRQs to FTA partners, except for the U.S. and Mexico.
Effective July 31, Canada also imposed a 25% tariff on "certain steel goods that contain steel melted and poured in China and certain aluminum goods that contain aluminum smelted and cast in China," the dispute consultation request said.
China alleged that the TRQ measures violate numerous articles of the General Agreement on Tariffs and Trade 1994 and Article 3.2 of the Agreement on Import Licensing Procedures. The request said the TRQs violate Article I of the GATT, since Canada failed to extend products subject to the measures an "advantage, favour, privilege or immunity" granted by Canda to goods from FTA partners. The tariffs also exceed Canada's schedule of concessions, and Canda doesn't "administer the TRQs measures in a uniform, impartial, and reasonable manner," China said.
The request added that the TRQs violate the import licensing procedures deal, since "the requirement for specifying country of melt and pour of the imported goods for the shipment-specific permits does not correspond in scope and duration to the TRQs measures the permits are used to implement." China added that the requirement "is more administratively burdensome than absolutely necessary to administer the TRQs measures" and has "trade-restrictive or -distortive effects on imports additional to those caused by the TRQs measures."
China also said tariffs on China-origin steel and aluminum violate the GATT and the Agreement on Rules of Origin. "Canada uses rules of origin as instruments to pursue trade objectives directly or indirectly, creates restrictive, distorting, or disruptive effects on international trade, and discriminate between Members," China said.