Canada Opens WTO Dispute on China's Retaliatory Duties
Canada requested dispute consultations at the World Trade Organization with China regarding Chinese duties on Canadian agricultural and fishery products, the WTO announced on March 24. Canada alleged that the measures violate the WTO's Understanding on the Rules and Procedures Governing the Settlement of Disputes and the General Agreement on Tariffs and Trade 1994.
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Canada filed the dispute consultations concerning retaliatory tariffs China imposed to address Canadian surtaxes on Chinese electric vehicles and steel and aluminum, and fiscal incentives for clean energy vehicles in Canada. The Canadian government said China's "antidiscrimination investigation" into these measures is the first of its kind in China and "is not subject to any publicly available rules or procedures."
China's investigation found Canada's measures to amount to "discriminatory prohibitions" against China, leading to the imposition of additional tariffs. China imposed a 100% tariff on canola seed oil, oil residue cake and peas. A 25% tariff was also imposed on certain seafood and pork products.
Canada alleged that China's tariffs and investigation violate the WTO's dispute settlement rules, since the country failed to turn to the WTO regarding an "alleged violation of obligations under a covered agreement." Since the investigation is "tantamount to a unilateral determination that Canada's measures violate Canada's WTO obligations," China failed to bring the dispute before the trade body, Canada said. China also failed to abide by WTO rules by "unilaterally suspending concessions to Canada," the submission said.
The dispute consultation request also said China's tariffs violate the GATT, since it deprives Canada of treatment provided for in China's Schedule of Concessions that is annexed to the GATT.