Canada to Ask WTO for Permission to Retaliate Against US

Canada said earlier this week that it intends to ask for World Trade Organization permission to retaliate for the U.S. countervailing measures on supercalendered paper that ended in 2018 but were ruled out of bounds in February 2020 by the WTO appellate body (see 2002060059). Supercalendered paper is glossy paper used in advertising inserts, catalogs and magazines. The U.S. had levied 20.18% and 17.87% countervailing duties on two Canadian companies in 2015.

Because the dispute settlement body at the WTO is not meeting, and Canada's notice said it would wait for meetings to resume, it's not clear how soon retaliation could be authorized. Canada also said it is willing to negotiate a settlement with the U.S. On April 22, the U.S. response was published, and the delegation to Geneva said that the ruling in February “is not a valid Appellate Body report,” both because all three WTO Appellate Body members who authored it were working past the end of their terms and because the U.S. says that the Chinese national was never qualified to be on the body because she works for China's Ministry of Commerce.

The U.S. blocked all appointments to the Appellate Body because of a number of complaints it has with the body's operation, including the fact that members finish up reports after their terms expire.