Our last international trade brief dealt with Global Affairs Canada seeking comments on NAFTA renegotiations, the increased enforcement of U.S. trade laws, a Trade Case Alert pertaining to anti-dumping import duties for gypsum panels shipped to Western Canada, and a Trade Case Alert dealing with a global safeguard investigation into solar panels imported into the U.S. In this brief, we discuss why Canada should forge ahead with the TPP without the U.S., U.S. retailers’ priorities for NAFTA renegotiations, the public comments on NAFTA renegotiations, NAFTA becoming a battleground for trade-related IP obligations, and a Trade Case Alert relating to a Canadian anti-dumping and countervailing investigation being initiated for certain carbon and alloy steel line pipe from Korea.

On June 8, 2017, the Canada Border Services Agency (CBSA) initiated anti-dumping and countervailing investigations, pursuant to the Special Import Measures Act (SIMA), related to allegations of dumping of certain carbon and alloy steel line pipe originating in or exported from the Republic of Korea. The investigation follows a complaint from EVRAZ NA Canada and its affiliate, Canadian National Steel Corporation.

Carbon and alloy steel line pipe is typically used by the oil and gas industry for the purposes of gathering and distributing oil and gas, or as process pipe used in steam generation facilities for SAGD, petrochemical plants, upgraders, gas transmission facilities, or fabrication of modules. The complainants have identified the subject goods as carbon and alloy steel line pipe, welded or seamless, having a nominal outside diameter from 2.375 inches (60.3 millimetres) up to and including 24 inches (610 mm), including unfinished line pipe that may not have already been tested or certified for use in the production or finishing of line pipe, and non-prime and secondary pipes.

This complaint comes on the heels of similar complaints filed by EVRAZ NA Canada in 2016 related to large diameter carbon and alloy steel line pipe from China and Japan, and carbon and alloy steel line pipe from China in 2015. In fact, the description of subject goods complained of in EVRAZ’s most recent complaint is identical to those raised in relation to its complaint against China in 2015. Both the 2015 and 2016 complaints resulted in anti-dumping and countervailing duties being applied by CBSA with some exclusions for products not available from Canadian industry.

The CBSA will release its Statement of Reasons regarding the initiation of the investigation on June 23, 2017, with its preliminary determination scheduled to be released on September 6, 2017. If the CBSA makes a preliminary determination that the domestic industry has been injured, it will immediately impose provisional duties on all carbon and alloy steel line pipe (within the diameter range complained of) imported from South Korea.

Companies in the oil and gas industry will need to evaluate their future project needs to determine their requirements for line pipe from South Korea. For companies that anticipate having a need for the subject goods, participation in the CBSA investigation will require certain information to be submitted before July 3. Companies may also choose to participate in the preliminary and final injury inquiries before the Canadian International Trade Tribunal (CITT). Osler appeared before the CITT on behalf of Trans-Canada Pipelines Limited and Inter PipeLine Ltd. in the large diameter line pipe case, and on behalf of Shell Canada Limited in the smaller diameter line pipe case.