RESTRICTED
WORLD TRADE G/SG/W/32
27September 1995
ORGANIZATION(95-2824)
Original: English Committee onSafeguards
REPLIES FROM CANADA CONCERNING QUESTIONS
POSED BYTHE UNITED STATES1CONCERNING THE
NOTIFICATION OFCANADIAN LAWS AND REGULATIONS2
Thefollowing communication, received on15September 1995, hasbeen received from the
Permanent Mission ofCanada.
_______________
Q1: Critical circumstances/perishable agricultural products
Determinations apparently aremade bytheMinister ofFinance under section 59oftheCustoms
Tariff, asamended. How isitdetermined when anaction istobetaken? Forexample, is
arequest filed withtheMinister, isareport included inapetition filed withtheCITT andthen
forwarded totheMinister bytheCITT, etc.? Isanyadvance notice provided thatthetaking
ofaprovisional measure isbeing considered? What isthestandard used? How istheterm
"perishableagriculturalproduct"defined?Istherearequirementforawrittenreportdescribing
theaction taken andthebasis therefor?
A:
• Although subsection 59.1(1)(a) oftheCustoms Tariff hasexisted forsome time, there have
been fewrequests forprovisional safeguard action. Those received have been submitted directly
totheMinister ofFinance, nottheCITT. Ofcourse, should theMinister decide that
circumstances warrant aprovisional surtax, heisobliged torefer thematter immediately to
theCITT forreview. Canada would, ofcourse, notify theCommittee onSafeguards, pursuant
toparagraph 4ofArticle 12oftheAgreement onSafeguards ,ofitsintention totakeaprovisional
safeguard measure.
• Thestandard of"critical circumstances" isnotdefined inlawsince itmayvary onacase-by-case
basis. Asfor"perishable agricultural product", thisterm generally covers fresh fruits and
vegetables.
• While theMinister isnotrequired topublish areport onhisfindings ifaction istaken, hewould
nodoubt issue apress release explaining therationale fortheaction. Inaddition, hemust
refer thematter totheCITT, which would publish thereport ofitsinvestigation intheCanada
Gazette .
1G/SG/W/18
2G/SG/N/1/CAN/1G/SG/W/32
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Q2: Quantitative restrictions
Article 5setsoutcertain rules applicable inthecase ofsafeguard measures intheform of
quantitative restrictions, forexample, thatnoquantitative restriction shall reduce thequantity
ofimports below thelevel ofarecent period which shall betheaverage ofimports inthelast
three representative years forwhich statistics areavailable. Does Canada have legislation that
implements these rules?
A:
• There isnospecific provision intheExport andImport Permits Act,thelegislation under which
quantitative restrictions would beimposed, which determines, orsets outguidelines for
determining, theappropriate level ofrestriction. However, anyquantitative restriction on
imports ofagood pursuant tosubsection 5(3)oftheActwillconform fully toourobligations
under Article 5oftheAgreement onSafeguards .
Q3: Digressivity
Does Canadian lawcontain arequirement implementing Article 7.4oftheAgreement providing
forprogressive liberalization ofsafeguard measures ofmore than oneyear'sduration?
• Canadian legislation does notexpressly require, orspecify theterms fortheprogressive
liberalization ofsafeguard measures because thenature andpace ofsuch liberalization will
vary according tothecircumstances ofeach case.
• Inconformity with Canada 'sobligations under Article 7(4), progressive liberalization willbe
effected pursuant tolegislative provisions which provide theability toinvoke, amend orrevoke
measures, specifically:
Canadian Legislation Notification Document
(G/SG/N/1/CAN/1)
Customs Tariff:
Initial: Subsection 59.1(4)(b) Page 223
Extension: Subsection 59.1(8.4)(b) Page 226
EIPA Subsection 5(4.04) Page 287
Q4: Standards fordecision
Please explain therelationship between thefollowing four standards found inCanadian law
pertaining todeterminations insafeguard investigations andimposition ofsafeguard measures:
- Section 27(1) oftheCITT actprovides thattheTribunal shall determine whether
subject goods "are being imported insuch increased quantities andunder such
conditions astobeaprincipal cause ofserious injury orthreat thereof ...etc."
(emphasis added)
- Section 59.1(1) oftheCustoms Tariff provides thattheGovernor inCouncil
may impose asurtax ifitappears tohisorhersatisfaction thatgoods "are
being imported intoCanada under such conditions astocause orthreatenG/SG/W/32
Page 3
serious injury ...etc." This makes nomention ofincreased quantities or
principal cause.
- Section 59.1(5) provides thatwhere asurtax isimposed based onareport from
theMinister ofFinance, theorder ceases tohave effect in200days, unless
theCITT reports thatthegoods "are being imported intoCanada from the
country named inthereport under such conditions astocause orthreaten
serious injury". Again, nomention ofincreased quantities orprincipal cause.
- Section 5(3)oftheExport andImport Permits Actprovides thattheGovernor
inCouncil may include agood ontheImport Control Listifheorsheis
satisfied that goods "are being imported orarelikely tobeimported into
Canada atsuch prices, insuch quantities andunder such conditions astocause
orthreaten serious injury...etc." This also makes nomention ofincreased
quantities orprincipal cause, and adds inthephrase "are likely tobe
imported".
A:
• Theterm "increased quantities" isused intheCanadian International Trade Tribunal Actin
conformity with Article 2oftheAgreement onSafeguards .Theterm "principal cause" isused
inorder toensure thatfindings ofserious injury arebased onclear andunambiguous evidence
thatincreased imports areacause nolessimportant than anyother cause oftheserious injury
orthreat thereof. This reflects theobligation toprove acausal linkbetween increased imports
andserious injury orthreat thereof assetoutinArticle 4.2(b) oftheAgreement onSafeguards .
Furthermore, nosafeguard action under theCustoms Tariff ortheExport andImport Permit
Actmay beapplied unless theCITT hasfound thattheimports inquestion arecausing orare
likely tocause serious injury.
• With theexception ofprovisional surtax measures, anyorder made under subsection 59.1(1)
oftheCustoms Tariff (pages 185-186), including anyorder pursuant tosubsection 59.1(5)
(page 223), oranyorder made under subsection 5(3) oftheExport andImport Permits Act
(page 285) would bedone onthebasis ofareport bytheTribunal and, therefore,
subsection 27(1) oftheCanadian International Trade Tribunal Actrequiring theapplication
ofthestandards ofincreased quantities andprincipal cause willgovern allsuch determinations
bytheTribunal. Inthecase ofprovisional measures, anydetermination thatwould notfully
meet therequirements oftheAgreement would notbeconfirmed bytheTribunal inits
subsequent inquiry andanymeasures taken would thenbeterminated andtheprovisional duties
refunded.