Steel Safeguards: CITT Announces a Product Exclusion Process for Stainless Steel Wire and Heavy Plate

Source: Trade Law
Link: Steel Safeguards: CITT Announces a Product Exclusion Process for Stainless Steel Wire and Heavy Plate

On May 16, 2019, the Canadian International Trade Tribunal (CITT) announced that it was initiating a Product Exclusion Review to determine whether any imports of stainless steel wire or heavy plate should be excluded from safeguard measures imposed on imports of these products. Although the CITT will only grant product exclusions in extraordinary circumstances, any interested party that imports or wants to import stainless steel wire or heavy plate into Canada from countries now subject to safeguard measures should consider the possibility of requesting a product exclusion to avoid those measures.

On April 3, 2019, the CITT issued its Report in the Steel Safeguard Inquiry (CITT File Nbr. GC-2018-001). The CITT found that imports of stainless steel wire and heavy plate caused serious injury to domestic producers and recommended that the Minister of Finance impose safeguard measures on those goods. On May 9, 2019, the Minister of Finance imposed safeguard measures on those products imported from all countries except United States, Mexico, Chile, Israel, Korea, Colombia, Honduras, Panama, Peru and all countries benefitting from the General Preferential Tariff. The safeguard measures became effective on May 13, 2019 and will remain in effect until October 24, 2021.  During this period the safeguard measures will be phased out in three stages:

May 13, 2019 to May 12, 2020

• Heavy Plate 20% surtax on imports over 100,000 mt
• Stainless Steel Wire 25% surtax on imports of 2,800 mt

May 13, 2020 to May 21, 2021

• Heavy Plate 15% surtax on imports over 110,000 mt
• Stainless Steel Wire 15% surtax on imports of 3,080 mt

May 13, 2021 to October 24, 2021

• Heavy Plate 10% surtax on imports over 54,699 mt
• Stainless Steel Wire 5% surtax on imports of 1,532 mt

Details of the safeguard measures on heavy plate and stainless steel wire, including the list of countries benefitting from GPT, are set out in the Order Amending the Order Imposing a Surtax on the Importation of Certain Steel Goods (Final Safeguards), which can be found at www.cbsa-asfc.gc.ca/publications/cn-ad/cn19-08-eng.html.

The CITT may recommend that the Minister issue product exclusions so that safeguard measures only apply to imported products that cause serious injury to domestic producers. However, getting a product exclusion is not an automatic or easy process. The CITT will only grant product exclusions in extraordinary circumstances where it is convinced, by the party requesting the exclusion, that imports of the specific products will not cause injury to domestic producers. To make this finding, the CITT generally considers factors such as:

1. Whether the domestic producers manufacture the products at issue.
2. Whether the domestic producers normally produce these types of products?
3. Whether the domestic producers manufacture substitutable or competitive products?
4. Whether the domestic producers are capable of producing the product?
5. Whether the domestic producers “active” suppliers of these products?

Any interested party that imports stainless steel wire or heavy plate that could benefit from a product exclusion must move quickly. The CITT must complete its review and make recommendations to the Minister of Finance by July 15, 2019. To meet this deadline interested parties that want to participate in the review must file a Notice of Participation with the CITT by May 27, 2019 and must prepare, serve and file their Product Exclusion Request on other parties and the CITT by no later than noon June 7, 2019.  These are firm deadlines, so there is no time to waste. A copy of the CITT’s Notice of Commencement of the Exclusion Inquiry can be found at www.citt.gc.ca/en/node/8574.

Although the CITT only issues product exclusions in extraordinary cases, obtaining product exclusion generally gives importers a competitive advantage that provides a real benefit in the market. If you are interested in the CITT’s expiry review process in this case, or if you have clients who may be interested, please contact the author at (613) 424-3921 or by e-mail at lafortune@wl-tradelaw.com. I would be pleased to discuss all aspects of the CITT process, including how to best present a Product Exclusion Request to the CITT.

Gordon LaFortune
Woods, LaFortune LLP
May 17, 2019