September 13, 2018

Canada requests WTO consultations with China on compliance with pulp duties ruling

Canada has requested consultations with China regarding China's alleged non-compliance with the recommendations and rulings of the World Trade Organization (WTO) Dispute Settlement Body in the dispute concerning Chinese anti-dumping duties on imports of Canadian cellulose pulp.

China's Ministry of Commerce made a determination of dumping, in April 2014, imposing anti-dumping duty on importations of the pulp into China from Canada. This type of wood pulp is used to make cloth, cellophane, tires and other products.

The WTO panel ruled in April 2017 that China had failed to determine whether Canadian exports of dissolving pulp had caused injury to the Chinese domestic industry in a manner consistent with China's WTO obligations.

Following the ruling, on 1 June 2017 Canada and China agreed that the reasonable period of time for China to implement the recommendations would be 11 months from 22 May 2017.

On 20 April 2018, instead of stopping its anti-dumping duties as agreed, China issued a Reinvestigation Determination which continues the imposition of anti-dumping duties on imports of cellulose pulp from Canada. The reasonable period of time expired on 22 April 2018.

Canada claims that China still failed to demonstrate, through an objective examination based on positive evidence, the causal relationship between the subject imports and any injury to the domestic industry.

In its request for consultations under Article 21.5 of the Dispute Settlement Understanding, Canada said the measures are inconsistent with the WTO's Anti-Dumping Agreement.