By Suzanne Perkins, Canada Regulatory Affairs
Dumping occurs when goods are sold to importers in Canada at prices that are lower than the selling price of comparable goods in the country of export or when goods are sold to Canada at unprofitable prices.
Canada maintains a trade remedy system that provides recourse to Canadian producers injured by dumped or subsidized imports. Anti-dumping duty is an amount collected that offsets the amount of dumping on imported goods.
Subsidizing occurs when goods imported into Canada benefit from foreign government financial assistance. Countervailing duty is an amount collected that offsets the amount of subsidizing on imported goods.
Canada the first country to adopt an anti-dumping law
Canada enacted the world’s first anti-dumping law in 1904. Originally, anti-dumping was mainly regulated under the Customs Tariff, then, in 1969 the Anti-dumping Act came into force. On December 1, 1984, the Special Import Measures Act (SIMA) repealed the Anti-dumping Act and is the regulation under which anti-dumping and countervailing duties are currently governed.
Today, many countries world-wide have implemented anti-dumping proceedings such as the United-States, the European Union and Australia, to name a few.
Potential amendments to SIMA
On April 30, 2016, the Government of Canada initiated consultations seeking stakeholder views regarding potential amendments to the Special Imports Measures Act (SIMA) (The consultation period ended on June 29, 2016.)
The consultation addressed three key areas:
- Calculation of normal values:
Points of Consideration:
- Rejection of prices and costs in the exporting market
- Profit rates
Currently, normal values typically reflect a comparison of export prices against the prevailing price in the exporter’s home market.
Consultations were sought regarding amending SIMA to better account for situations where market situations rendered the exporter’s domestic sales unusable for normal value calculation and that the true cost of an input is properly reflected in the transfer price to an affiliated exporter.
- Enforcement:
Points of Consideration:
- Anti-circumvention proceedings
- Scope proceedings
- Exclusions
Currently, SIMA regulations do not explicitly provide for any formalized proceedings to address circumvention activities, issues of scope, and product exclusions that are difficult to enforce.
Consultations were sought regarding amending SIMA to provide: for anti-circumvention proceedings which would allow the scope of a SIMA finding to address situations of circumvention, to formalize a process for scope rulings in which interested parties could participate, and to narrow the Tribunal’s discretion to grant exclusions based on the product’s end-use.
- Evidentiary standards:
Points of consideration:
- Preliminary determinations
- Expiry reviews
Currently, each SIMA investigation is conducted in stages. The evidentiary standard increases at each stage of the investigation.
Consultations were sought regarding amending SIMA to provide more clarity pertaining to the preliminary determination of injury as well as the initiation of an expiry review.