Our last international trade brief dealt with Robert Lighthizer being sworn in as the U.S. Trade Representative, Chinese semiconductors potentially becoming the next target of a national security probe, and a Trade Case Alert involving a Canadian anti-dumping and countervailing investigation being initiated for silicon metal from various countries. In this brief, we discuss how the NAFTA renegotiations could impact Canadian businesses, the imminent implementation of the Canada-EU Comprehensive Economic and Trade Agreement, and a Trade Case Alert relating to Canadian anti-dumping duties being imposed for certain fabricated industrial steel components that can be anticipated to affect various infrastructure projects.
On May 25, 2017, the Canadian International Trade Tribunal (CITT) issued a decision, following a public hearing held earlier this month, that concluded imports of fabricated industrial steel components (FISC), from China, Korea (excluding FISC exported by Hanmaek Heavy Industries Co., Ltd.) and Spain (excluding FISC exported by Cintasa, S.A.) had injured the Canadian industry as a result of dumping and subsidization.
The CITT’s decision will finalize the duties imposed on a provisional basis as of January 25, 2017 by the Canadian Border Services Agency (CBSA). All importers of FISC originating in China, Korea and Spain (with the exception of FISC exported by Hanmaek and Cintasa) will be required to pay anti-dumping duties based on the amount by which the normal value exceeds the export price of the subject goods. Where sufficient information is not provided or is not otherwise available to determine the normal value, the normal value will be determined by advancing the export price by 45.8%.
It should be noted that this case is unique for the breadth of its coverage based on the definition of FISC, which will include structural steel and components for buildings and facilities used in a wide range of industries, including oil and gas, mining, industrial power generation, petrochemical plants, cement plants, fertilizer plants and industrial metal smelters.
Given this exceptionally wide definition of FISC and the fact that the defined products are used across multiple industries in a variety of ways, companies in these industries will need to be mindful when sourcing fabricated steel in the future to consider whether the goods meet the definition of FISC and, therefore, may be subject to anti-dumping duties if imported from China, Korea or Spain.
As with all anti-dumping and countervailing duties findings of the CITT, the duties will apply for five years, subject to reinvestigation by the CBSA (generally annually) to ensure the percentage of duties payable continues to be appropriate. Before the end of the five-year period, the CITT will undertake a “sunset review” of its previous injury finding to determine if it should be extended for another five-year period. It is not uncommon for these findings to remain in place well in excess of 10 to 15 years.