Tax & Trade Blog
Gypsum Board Finding Continued!
On November 3, 2022, the Canadian International Trade Tribunal (“CITT”) released reasons in respect of its October 19th Expiry Review Order. The Order continued the CITT’s original 2017 finding that the dumping of gypsum board originating in or exported from the United States has caused injury to Canadian domestic injury.
The Order effectively means that the current anti-dumping duties (“ADDs”) of up to 324.1% will remain in place for Subject Goods originating in or exported from the United States.
Subject Goods are defined in the Order as follows, subject to certain exclusions:
“Gypsum board, sheet, or panel (“gypsum board”) originating in or exported from the United States of America, imported into Canada for use or consumption in the provinces of British Columbia, Alberta, Saskatchewan, and Manitoba, as well as the Yukon and Northwest Territories, composed primarily of a gypsum core and faced or reinforced with paper or paperboard, including gypsum board meeting or supplied to meet ASTM C 1396 or ASTM C 1396M or equivalent standards, regardless of end use, edge-finish, thickness, width, or length.
All dimensions are plus or minus allowable tolerances in applicable standards.”
Canada Border Services Agency (“CBSA”) originally initiated an investigation on April 18, 2016 in response to a complaint from Canadian producer CertainTeed Gypsum Canada Inc. about exports from the United States. Notably, the allegations were limited to imports of gypsum board for use of consumption in British Columbia, Alberta, Saskatchewan, Manitoba, the Yukon, and Northwest Territories.
On December 5, 2016, the CBSA made a final determination that Subject Goods were being dumped. Three exporters that cooperated with CBSA in its investigation were assigned specific normal values in respect of their products. Curiously, one of these exporters was closely related to the Canadian complainant!
On January 4, 2017, the CITT issued a finding that the dumping of the Subject Goods (as defined in the finding) from the listed countries had caused injury to the Canadian domestic industry. As a result of this finding, the ADDs determined by the CBSA came into effect (replacing earlier provisional duties) in respect of Subject Goods from the listed countries.
On October 13, 2016, the Government of Canada asked the CITT to investigate whether full imposition of ADDs was in Canada’s best interests. CITT considered the government’s request and issued a number of recommendations, including recommending that the final anti-dumping duties be reduced.
In light of the CITT’s recommendations, Cabinet issued a remission order reducing ADDs by allowing for refunds of amounts in excess of certain “reference values”. This was done to prevent shortages and protect supply chains, while still “encouraging” exporters to increase prices.
Given that gypsum board (i.e., drywall) is used in Canada’s construction industry, this kind of measure, while unusual, is perhaps to be expected!
The CITT conducted an expiry review after 5 years, as required by section 76.03 of the Special Import Measures Act, and on October 19, 2022, continued its finding (and the ADDs) in respect of Subject Goods.
The gypsum board ADDs are a prime example of the nuance that can arise in Canadian anti-dumping measures – being applicable to imports destined to only a subset of the country, as well as a remission order meant to blunt the impact of the base ADDs!
Businesses importing goods that may fall within the definition of Subject Goods should seek legal advice before importing any goods, otherwise they could find themselves paying massive anti-dumping duties and/or countervailing duties!
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