RESTRICTED
WORLD TRADE G/SG/W/29
27September 1995
ORGANIZATION(95-2821)
Original: English Committee onSafeguards
REPLIES FROM CANADA CONCERNING QUESTIONS
POSED BYTHE EUROPEAN COMMUNITY1CONCERNING
THE NOTIFICATION OFCANADIAN LAWS AND REGULATIONS2
Thefollowing communication, received on15September 1995, hasbeen received from the
Permanent Mission ofCanada.
_______________
A. DOMESTIC INDUSTRY
Q: Theamendments totheCanadian International Trade Tribunal Actintroduce intotheActthe
definitions of"serious injury" and"threat ofserious injury" inrelation tothedetermination
ofprejudice, ascontained inparagraph 1(a)(b) ofArticle 4oftheAgreement onSafeguards,
butnotthedefinition of"domestic industry" setoutinparagraph 1(c)ofthesame Article.
Would Canada indicate thereasons forthisomission?
A:
• Paragraph 1(c)ofArticle 4oftheAgreement onSafeguards defines "domestic industry" as
meaning "theproducers asawhole ofthelikeordirectly competitive products operating within
theterritory ofaMember, orthose whose collective output ofthelikeordirectly competitive
products constitutes amajor proportion ofthetotal domestic production ofthose products."
Noprecision isprovided intheAgreement withrespect tothemeaning ofa"major proportion".
Asinpastcases, theCanadian International Trade Tribunal hasfound thatwhat constitutes
a"major" proportion ofthedomestic industry varies onacase-by-case basis, itwas not
considered necessary toinclude, inCanadian law, thedefinition of"domestic industry".
• Inrecognition oftheAgreement 'srequirement that, indetermining serious injury orthreat
thereof, "domestic industry" shall mean producers asawhole orproducers whose collective
outputconstitutesamajorproportion,theCITTActrequiresthatanyinitialcomplaint(subsection
23(2)(b)), oranyrequest foranextension (subsection 30.05(1)(b)), "state anestimate ofthe
totalpercentage ofCanadian production ofthelikeordirectly competitive goods thatisproduced
bythedomestic producers bywhom oronwhose behalf thecomplaint (orextension request)
isfiled. Submission ofthisinformation isrequired forthecomplaint (orextension request)
tobedeemed "properly documented" bytheTribunal. Infact, subsection 26(1)(b) oftheCITT
Actstates thatbefore commencing aninquiry, theTribunal must besatisfied, among other
1G/SG/W/5
2G/SG/N/1/CAN/1G/SG/W/29
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things, thatthecomplaint ismade byoronbehalf ofdomestic producers whoproduce amajor
proportion ofdomestic production ofthelikeordirectly competitive goods. The WTO
requirements areapplied toanyinjury investigation conducted bytheTribunal.
Q: Inaddition, what construction should beputontheamendment toparagraph 40(b) ofthe
Canadian International trade Tribunal Actwhich confers ontheGovernor inCouncil the
authority todefine "domestic industry"?
A:
• Theauthority provided insubsection 40(b) oftheCITT ActtotheGovernor inCouncil
todefine "domestic industry" hasbeen inplace foryears andwasnotchanged intheWTO
implementing legislation.
• Ithasnotproven necessary fortheGovernor inCouncil tomake useofthisauthority given
that,asnoted,theTribunalmakesitsdeterminationof"amajorproportion"onacase-by-case
basis. TheAgreement onSafeguards does notdefine "major proportion" andthus does
notimpose new obligations inthatregard.
B. SAFEGUARD MEASURES
Q: Would Canada please indicate, anddescribe, thetypeofsafeguard measure thatmaybeadopted
under itslegislation?
A:
• Canadian legislation permits thefollowing tobeimposed asSafeguards measures:
- asurtax (inaddition tonormal duties andtaxes) onallimports oronimports exceeding
aspecified amount (Tariff-rate quota), under authority oftheCustoms Tariff
- aquantitative restriction whereby thegood isplaced ontheImport Control Listunder
theExport andImport Permits Act(EIPA) forthepurpose oflimiting thevolume of
imports ofthegood, or
- both.
Canadian Legislation Notification Document
(G/SG/N/1/CAN/1)
Subsection 59.1 (1)oftheCustoms Tariff Pages 185-186
asamended Page 221
Subsection 5(3)oftheEIPA Page 285G/SG/W/29
Page 3
C. MAXIMUM DURATION OFMEASURES
Q: Would Canada please indicate theprovisions ofitslegislation concerning themaximum
duration ofsafeguard measures?
A:
• Thelegislativeprovisionsgoverningthemaximumdurationofsafeguardmeasuresareasfollows:
• TheCustoms Tariff allows theGovernor inCouncil toimpose aprovisional surtax, onthebasis
ofareport oftheMinister ofFinance, foraperiod notexceeding 200days.
Canadian Legislation Notification Document
(Customs Tariff) (G/SG/N/1/CAN/1)
General authority: Subsection 59.1 (1) Pages 185-186
Duration (200 days) Subsection 59.1 (5) Page 223
• Thefour year maximum fortheapplication ofameasure, asprovided inArticle 7(1) ofthe
Agreement onSafeguards :
Canadian Legislation Notification Document
(G/SG/N/1/CAN/1)
Subsection 59.1 (4)(a)oftheCustoms Tariff Page 222
Subsection 5(7)(a)oftheEIPA Page 288
• Theeight year cumulative maximum (provisional, initial application andanyextension), as
provided inArticle 7(3) oftheAgreement onSafeguards :
Canadian Legislation Notification Document
(G/SG/N/1/CAN/1)
Subsection 59.18. (4)(a)oftheCustoms Tariff Page 226
Subsection 5(3.3)of theEIPA Page 286
D. PHASING OUT OFSAFEGUARD MEASURES
Q: TheAgreement onSafeguards requires safeguard measures ofmore than oneyear'sduration
tobephased out.
Would Canada indicate theprovisions ofitslegislation dealing with thissubject?G/SG/W/29
Page 4
A:
• 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
E. PROVISIONAL MEASURES
Q: Would Canada indicate andgive details ofwhich provisions ofitslegislation deal with the
adoption ofprovisional measures?
More particularly, would Canada please indicate thecircumstances inwhich provisional measures
may beadopted aswell asthetype andmaximum duration ofsuch measures, andwhether these
circumstances areconsistent with those ofArticle 6oftheAgreement onSafeguards?
A:
• Canadian legislative provisions forprovisional safeguard measures fully conform with the
requirements ofArticle 6oftheAgreement onSafeguards .
• Under theCustoms Tariff, theGovernor inCouncil may impose aprovisional surtax, onthe
basis ofareport oftheMinister ofFinance, foraperiod notexceeding 200days.
Canadian Legislation Notification Document
(Customs Tariff) (G/SG/N/1/CAN/1)
General authority: Subsection 59.1 (1) Pages 186
Duration (200 days): Subsection 59.1 (5) Page 223
• TheMinistermayonlyrecommendtheimpositionofaprovisionalsurtaxincriticalcircumstances
orinthecaseofperishable agricultural goods (other than"tariffied" agricultural products which
aresubject tothespecial safeguards intheAgreement onAgriculture ).Asrequired byArticle
6oftheAgreement, inthecaseof"critical circumstances", arecommendation would bebased
onadetermination thatincreased imports have caused orarethreatening tocause serious injury.G/SG/W/29
Page 5
Canadian Legislation Notification Document
(Customs Tariff) (G/SG/N/1/CAN/1)
Critical circumstances: Subsection 59.1 (1.1) Page 186
Exception for"tariffied" agricultural products:
Subsection 59.1(2)(a) Page 222
• Ifaprovisional surtax isimposed, theCustoms Tariff requires thatthematter bereferred
immediately totheCanadian International Trade Tribunal, thecompetent investigative authority,
foraninjury inquiry.
Canadian Legislation Notification Document
(Customs Tariff) (G/SG/N/1/CAN/1)
Subsection 59.1 (4.1) Page 187
• IftheTribunal does notdetermine serious injury orthreat thereof todomestic producers, any
surtaxes collected under theprovisional measure must berefunded.
Canadian Legislation Notification Document
(Customs Tariff) (G/SG/N/1/CAN/1)
Subsection 59.1 (4.2) Page 223
• Ameasure canonly beextended beyond 200days iftheTribunal reports thatthegood isbeing
imported intoCanada under such conditions astocause orthreaten serious injury todomestic
producers oflikeordirectly competitive goods, inwhich casethemeasure mayremain ineffect
foraperiod notexceeding four years.
Canadian Legislation Notification Document
(Customs Tariff) (G/SG/N/1/CAN/1)
Subsection 59.1 (5) Page 223
F. EXTENSION OFMEASURES
Q: TheCanadian legislation provides forappropriate procedures forapplication fortheextension
ofsafeguard measures.
Would Canada please indicate theprovisions concerning themaximum extension period?
A:
• AsArticle 7oftheAgreement onSafeguards does notspecify amaximum duration foran
extension ofasafeguard measure (beyond theeight yearlimit forthetotal period ofapplication
ofasafeguard measure), Canadian legislation does notprescribe limits forthemaximum period
foranextension.G/SG/W/29
Page 6
• Canadian legislation restricts themaximum total period fortheapplication ofasafeguard
measure, including extension, toeight years.
Canadian Legislation Notification Document
(G/SG/N/1/CAN/1)
Subsection 59.1 (8.4)(a) oftheCustoms Tariff Page 226
Subsection 5(3.3) oftheEIPA Page 286
G. PAUSE BETWEEN TWO SAFEGUARD MEASURES
Q: Article 7,paragraph 5,oftheAgreement onSafeguards states that, ingeneral, nonewsafeguard
measures maybeapplied totheimport ofaproduct which hasbeen subject tosuch ameasure
foraperiod oftimeequal tothatduring which such measure hadbeen previously applied, and
thattheperiod ofnon-application may notbelessthan twoyears.
Would Canada please indicate whether thelegislation toimplement theAgreement reflects this
provision?
A:
• Canadian legislation, inconformity with therequirements ofArticle 7(5)oftheAgreement,
specifies thetime frames which must berespected before alapsed measure canbere-applied.
Specifically, nomeasure may betaken unless aperiod, equal tothegreater oftwoyears and
thetotal period during which themeasures were ineffect, haselapsed.
Canadian Legislation Notification Document
(G/SG/N/1/CAN/1)
Subsection 59.1 (3.1) oftheCustoms Tariff Page 222
Subsection 5(3.1) oftheEIPA Page 285
H. ADMINISTRATIVE PROCEDURES CONCERNING SAFEGUARD MEASURES
Q: Canadahasnotifiedprovisionsconcerningtheadministrativeprocedureforsafeguardmeasures.
Would Canada please indicate theimpact ofthisprocedure ontheapplication ofsafeguard
measures?
Would Canada please state whether such aprocedure hasbeen published intheOfficial Journal
(Canada Gazette)?G/SG/W/29
Page 7
A:
• Thetextwhich wasnotified (pages 314to318ofthenotification document) isanarrative
explanation prepared bytheCanadian International Trade Tribunal forthepurpose ofinforming
theCommittee oftheprocedures tobefollowed intheconduct ofasafeguard inquiry inCanada.
• Thetextessentially provides anoverview ofthelegislative framework forsafeguard measures
whichissetoutintheCanadianInternationalTradeTribunalActandaccompanyingregulations.
• These procedures have notbeen published intheCanada Gazette ,however, theTribunal is
considering issuing apublic information pamphlet describing theprocess.