Canada files WTO complaint about Chinese wood pulp duties
Canada has made a formal complaint to the World Trade Organization over China imposing what Ottawa says are unfair duties on Canadian companies that ship a certain type of wood pulp there.
Canada made a formal complaint to the global trade watchdog today, claiming that in November 2013 and April 2014, China imposed dumping duties between 13 and 23 per cent on Canadian lumber companies including Fortress Paper and Tembec.
Under international trade rules, "dumping" generally refers to the practice of selling foreign goods in a country at prices much lower that domestic producers can manage, which harms the local industry. China says that's what's happening in this case, and WTO rules do allow for imposing dumping duties in certain circumstances. But Canada says they don't apply in this case.
The type of pulp in question here is known as dissolving pulp, which is used to make rayon, cellophane, photographic film and medical surgery products.
Canada argues the duties "appear to be inconsistent with China’s obligations under various provisions of the Anti-Dumping Agreement and the [General Agreement on Tariffs and Trade]," a statement on the WTO website reads.
"The Canadian government is aware of, and shares the concerns of the Canadian companies and workers regarding the unfounded and discriminatory measures recently introduced by the Chinese government that disadvantage Canadian exports of dissolving pulp," Shannon Gutoskie, a spokesman for International Trade Minister Ed Fast said in a statement.
$300 million business
Canada produces about 750,000 tonnes a year of wood pulp, more than half of which is shipped to Asian countries. China alone imported $300 million worth of Canadian pulp in each of the last three years.
Ottawa is asking the trade body for consultations as a first step to finding a settlement. China has 30 days to respond to the request, or come up with a different timeline for both parties to agree to a settlement. If that doesn't happen within 60 days, Ottawa could escalate the issue and ask the WTO to adjudicate and rule in favour of one side or the other.
"We think a speedy resolution is better for everybody than a long protracted process,” said David Lindsay, CEO of the Forest Products Association of Canada.
Tembec CEO James Lopez said the company hopes "a dialogue between Canada and China will soon resolve the conflict."
With files from The Canadian Press