Changes in Canada's trade defense laws

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As a country with a large export turnover, Vietnam also faces an increasing number of trade defense investigations. Photo: Ha Phuong

Trend of stricter trade defense investigations

According to the Vietnam Trade Office in Canada, as of September 2024, Canada has initiated nineteen trade defense investigations on Vietnamese export goods, including twelfth anti-dumping (AD) cases, five anti-subsidy cases and two defense cases.

Notably, of the nineteen cases related to Vietnam, eight cases are subject to trade defense measures or are being investigated or re-investigated for extension.

Ms. Tran Thu Quynh, Trade Counselor, Vietnam Trade Office in Canada, said that Canada is conducting anti-dumping investigations on a number of imported goods from China in which Vietnamese enterprises have strengths, such as tractor chassis/container chassis and wind towers (wind turbines).

In addition, the Trade Office has received information that there will be a new investigation related to Vietnamese fabric-covered office furniture products and the risk that the Canada Border Services Agency (CBSA) will conduct an investigation into wind towers and solar panels exported from Vietnam.

For investigated products that are not produced by Vietnamese manufacturers but are sold to Canada by Vietnamese exporters, CBSA will send a notice letter to the Vietnamese side for coordination.

According to the Vietnam Trade Office in Canada, when investigating a product, Canada often considers the import flow from all related countries, even if the export volume may be insignificant.

In addition, when being "targeted", products are investigated for both anti-dumping and countervailing duties.

Therefore, some other high-risk products of Vietnam may be: hot-rolled steel coils, steel screws/joints, steel mesh floors, copper pipes, coolers, heaters, industrial wood flooring, drill pipes, pile pipes and aluminum profiles...

The Vietnam Trade Office in Canada further informed that recently, Canada has made some legislative changes to anti-dumping and countervailing measures.

Assessing this issue, the Department of Trade Remedies, Ministry of Industry and Trade said that the trend of trade defense investigations is becoming more and more stringent. Foreign investigating agencies have made high demands in many aspects for the Government and enterprises under investigation such as: response time, request for additional information, difficulty in requesting extensions...

For example, in the case of upholstered chairs, the Department of Trade Remedies sent a letter requesting the Canadian investigating agency to extend the response time. However, this agency did not agree. In addition, Canada also requires information on the materials used to manufacture sofa products.

Being proactive in Initiating Investigations

Businesses should be aware of legislative changes in Canada’s Trade Remedies sector. Specifically, legislative changes to anti-dumping and countervailing measures, including the Special Import Measures Act (SIMA), the Canadian International Trade Tribunal Act, the Special Import Measures Regulations (SIMR), and the Canadian International Trade Tribunal Rules, etc.

These amendments relate to anti-circumvention investigations, dealing with large imports, expiry reviews, and the rights of labour unions to file trade remedy complaints.

The anti-circumvention rules are intended to address the situation where foreign producers change their business and trade practices to circumvent the law in order to avoid paying Canadian anti-dumping or countervailing duties.

Recently, Canada has changed the time limit for notifying the exporting country of its decision to initiate an investigation.

Previously, Canada notified relevant Governments thirty days before deciding to investigate. Currently, the regulation has been revised to only notify seven days in advance for complaints related to dumping and twenty days for complaints related to subsidies.

In addition, Canada has allowed trade unions to file complaints about anti-dumping and countervailing duties to increase workers' participation in the country's trade defense system.

Therefore, the Vietnam Trade Office in Canada recommends that Vietnamese manufacturing enterprises monitor warning information, grasp trends and situations of trade defense cases related to their products, including those of other countries, and when being investigated, actively cooperate to provide information to avoid being imposed with high taxes.

From the perspective of foreign trade agencies, to help businesses proactively avoid accusations of dumping and evading trade defense measures, the Vietnam Trade Office in Canada informed that it has been organizing many events to disseminate the CPTPP Agreement, understand the principles of origin and how to exploit the principle of cumulative origin in production... and mobilize the Canadian Government to fund the project to develop a database of input products associated with the supply capacity that meets the standards of origin to effectively and sustainably exploit free trade agreements.