What to Do If You Suspect Unfair Trade Practices in Your Industry?
If a competitor is able to provide unusually low prices and you suspect this is due to unfair trade practices of a foreign company or country, there is legislation to address this problem. In Canada, the Special Import Measures Act (SIMA) protects industries from injury caused by goods that have been dumped or subsidized in their country of export. SIMA reflects Canada’s implementation of the World Trade Organization’s (WTO) Agreement on the implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the Anti-Dumping Agreement) and the Agreement on Subsidies and Countervailing Measures.
Let’s begin with definitions of dumped and subsidized goods:
Dumped goods occurs when imported goods are sold in Canada at prices lower than when they are sold in the country of export or sold to Canada at unprofitable prices. SIMA addresses this by adding an additional duty, called an anti-dumping duty.
Subsidized goods occurs when imported goods have been subsidized in the country of export. Subsidies could include loans made to foreign manufacturers at preferential rates, grants and/or tax incentives. An application of a countervailing duty can be set to offset this advantage.
In order to initiate an investigation, you can contact the Trade and Anti-dumping Programs Directorate of the Canada Border Services Agency (CBSA). The complaint must represent at least 25% of Canadian production and the number of producers supporting the claim must be greater than the number of producers opposed.
The complaint process follows this timeline:
CBSA will determine if the complaint has been properly documented within 21 business days.
CBSA then has 30 days to make a decision as to whether start the investigation or not. If an investigation is warranted, a notice will be published in the Canada Gazette, Part 1.
Investigation will either end or a preliminary determination of dumping or subsidizing will be made in the next 90 days. A provisional duty may be imposed on the imported goods in question at this point (this duty will end and be returned if no injury is found in the next step).
Finally, if a preliminary determination of dumping/subsidizing is made, the Canadian International Trade Tribunal (CITT) will begin its inquiry into injury within 120 days.
CITT will then issue a statement of reasons explaining its finding in 15 days.
For more information regarding the complaint process, please go to CBSA’s website at https://www.cbsa-asfc.gc.ca/sima-lmsi/brochure-eng.html.
Find information regarding the current Measures in Force (list of goods subject to anti-dumping and countervailing duties) here: https://www.cbsa-asfc.gc.ca/sima-lmsi/mif-mev/menu-eng.html.