CANADA ECONOMICS
INTERNATIONAL TRADE
DoC. USITC. 03/13/2018. U.S. Department of Commerce Issues Affirmative Preliminary Antidumping Duty Determination on Uncoated Groundwood Paper from Canada
Today, U.S. Secretary of Commerce Wilbur Ross announced the affirmative preliminary determination in the antidumping duty (AD) investigation of imports of uncoated groundwood paper from Canada.
“President Trump made it clear from the beginning that we will vigorously administer our trade laws to provide U.S. industry with relief from unfair trade practices,” said Secretary Ross. “Today’s decision follows an open and transparent investigation in accordance with the applicable laws, regulations, and administrative practices that ensured a full and fair review of the facts.”
The Commerce Department determined that exporters from Canada have sold uncoated groundwood paper in the United States between 0.00 and 22.16 percent less than fair value – down from the estimated dumping margins alleged by the petitioner of 23.45 to 54.97 percent. This reduction in margins represents the Department’s commitment to a process that is fair for all parties involved.
As a result of today’s decision, Commerce will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits from importers of uncoated groundwood paper from Canada based on these preliminary rates.
In 2016, imports of uncoated groundwood paper from Canada were valued at an estimated $1.27 billion.
The petitioner is North Pacific Paper Company (WA).
Enforcement of U.S. trade law is a prime focus of the Trump administration. From January 20, 2017, through March 13, 2018, the Commerce Department has initiated 102 antidumping and countervailing duty investigations – a 96 percent increase from the same period in 2016-2017.
The AD law provides U.S. businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of unfair pricing of imports into the United States. Commerce currently maintains 424 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade.
Commerce is scheduled to announce the final determination in this investigation on or about August 2, 2018.
If Commerce makes affirmative final determinations of dumping and the U.S. International Trade Commission (ITC) makes an affirmative final injury determination, Commerce will issue an AD order. If Commerce makes a negative final determination of dumping or the ITC makes a negative final determination of injury, the investigation will be terminated and no order will be issued.
The U.S. Department of Commerce’s Enforcement and Compliance unit within the International Trade Administration is responsible for vigorously enforcing U.S. trade laws and does so through an impartial, transparent process that abides by international law and is based solely on factual evidence.
Foreign companies that price their products in the U.S. market below the cost of production or below prices in their home markets are subject to antidumping duties.
Fact sheet: https://enforcement.trade.gov/download/factsheets/factsheet-canada-uncoated-groundwood-paper-ad-prelim-031318.pdf
Global Affairs Canada. March 13, 2018. Statement by Canada on U.S. anti-dumping duties on imports of Canadian uncoated groundwood paper
Ottawa, Ontario - The Honourable Chrystia Freeland, Minister of Foreign Affairs, and the Honourable Jim Carr, Minister of Natural Resources, today issued the following statement regarding the U.S. Department of Commerce’s preliminary determination in its anti-dumping investigation on imports of Canadian uncoated groundwood paper.
“We are disappointed with today’s preliminary anti-dumping determination, which follows preliminary countervailing-duty rates previously announced by the U.S. Department of Commerce on January 9.
“Any duties will have a direct and negative impact on U.S. newspapers, especially those in small cities and towns, and result in job losses in the American printing sector.
“Our government is committed to helping our forest industry enhance existing trade relationships and diversify trade with new international markets.
“Canada’s forest industry sustains good, middle-class jobs and provides economic opportunities for rural and Indigenous communities across our country. We will continue to work with our forest industry, provinces and territories, and communities across Canada to defend this vital sector against unfair and unwarranted U.S. trade measures and practices.”
The Globe and Mail. 14 Mar 2018. U.S. hits most Canadian newsprint producers with hefty anti-dumping duties
BRENT JANG
The Commerce Department said it ‘will instruct U.S. Customs and Border Protection to collect cash deposits from importers of uncoated groundwood paper from Canada based on these preliminary rates.’
The U.S. Department of Commerce has imposed preliminary anti-dumping duties averaging 22.16 per cent against most Canadian newsprint producers that ship into the United States.
The latest tariff is in addition to the average of 6.53 per cent in preliminary countervailing duties levied in January, raising the combined rate to 28.69 per cent against most Canadian producers of uncoated groundwood paper such as newsprint.
In a statement late on Tuesday, the Commerce Department said it “will instruct U.S. Customs and Border Protection to collect cash deposits from importers of uncoated groundwood paper from Canada based on these preliminary rates.”
Canadian firms sent an estimated US$1.27-billion worth of uncoated groundwood paper to the United States in 2016.
Enforcing U.S. trade laws is a major focus of President Donald Trump, U.S. Commerce Secretary Wilbur Ross said in a statement.
“President Trump made it clear from the beginning that we will vigorously administer our trade laws to provide U.S. industry with relief from unfair trade practices,” Mr. Ross said. “Today’s decision follows an open and transparent investigation in accordance with the applicable laws, regulations and administrative practices that ensured a full and fair review of the facts.”
Groundwood from Canada is subsidized and being dumped at less than fair value, according to complaints filed to the Commerce Department in August by U.S. producer North Pacific Paper Co., also known as Norpac. Norpac argues U.S. paper makers are being hurt by Canadian shipments of groundwood.
Montreal-based Resolute Forest Products Inc. and Catalyst Paper Corp. of Richmond, B.C., are the two mandatory respondents in the anti-dumping case. Connecticut-based White Birch Paper Co., which has three Quebec paper mills through its Canadian unit, is the voluntary respondent in both the countervailing and anti-dumping cases.
The Commerce Department already slapped a duty rate of 6.09 per cent against Catalyst in January. With the addition of 22.16 per cent in countervailing duties, that raises the B.C.-based firm’s combined tariff to 28.25 per cent.
Resolute, Catalyst and Montreal-based Kruger Inc. are the three mandatory respondents in the countervailing investigation.
The Commerce Department hit Resolute with countervailing rate of 4.42 per cent in January but did not impose an anti-dumping tariff.
Kruger, however, must now pay 32.09 per cent in total tariffs – 9.93 per cent for the countervailing rate and 22.16 per cent for the anti-dumping portion.
White Birch escaped being hit with any anti-dumping penalties, and since its countervailing duty is only 0.65 per cent, the company isn’t on the hook for cash deposits because the January tariff is under the threshold required for the United States to collect duties.
US TARIFFS ON STEEL AND ALUMINIUM
PM. Itinerary for Wednesday, March 14, 2018 Ottawa, Ontario - March 13, 2018
Itinerary for the Prime Minister, Justin Trudeau, for Wednesday, March 14, 2018:
Sault Ste. Marie, Ontario
6:45 a.m. The Prime Minister will meet with the workers of Algoma.
Gate 2
Algoma
105 West Street
Note to media:
Pooled photo opportunity
8:30 a.m. The Prime Minister will participate in a brief tour of Algoma’s Direct Strip Production Complex.
Algoma
105 West Street
Notes to media:
Pooled photo opportunity of the tour
Attire: Long pants, long sleeve shirts, flat soled, closed shoes must be worn. Appropriate personal protective equipment will be provided.
10:30 a.m. The Prime Minister will participate in a roundtable with steel industry leaders.
Mezzanine
The Machine Shop
83 Huron Street
Notes to media:
Photo opportunity at the beginning of the roundtable
Media are asked to arrive no later than 10 a.m.at the Mill Steakhouse entrance.
Regina, Saskatchewan
Note: All times local.
1:40 p.m. The Prime Minister will meet with the mayor of Regina, Michael Fougere.
Regina City Hall
2476 Victoria Ave
Notes to media:
Photo opportunity at the beginning of the meeting
Media are asked to arrive no later than 1 p.m. in the lobby.
2:20 p.m. The Prime Minister will participate in a tour and meet with workers of EVRAZ Regina.
Mill 5
EVRAZ Regina
100 Armour Road
Notes to media:
Pooled photo opportunity
Attire: Long pants, long sleeve shirts, flat soled, closed shoes must be worn. Appropriate personal protective equipment will be provided.
3:30 p.m. The Prime Minister will participate in a roundtable with steel industry leaders.
Training Room
The Turvey Center
100 Armour Road
Notes to media:
Photo opportunity at the beginning of the roundtable
Media are asked to arrive no later than 3 p.m. in the lobby of the Turvey Center.
4:20 p.m. The Prime Minister will hold a brief media availability.
Roll Shop
EVRAZ Regina
Note to media:
Open coverage
Media appearances
An interview with the Prime Minister will air on Country 104.3 and on KiSS 100.5 at 8:30 a.m.
The Globe and Mail. 14 Mar 2018. Positive reinforcement: Trudeau reassures steel industry that Canada won’t become dumping ground. PM tours producers of steel, aluminum in wake of Canada’s exemption from U.S. tariffs. Prime Minister Justin Trudeau met with workers at the ArcelorMittal Dofasco steel plant in Hamilton, as well as steel-industry executives, labour representatives and city officials. Steel: Ottawa must act without going through a lengthy WTO process, veteran trade lawyer says
GREG KEENAN, STEEL INDUSTRY REPORTER HAMILTON
Ahead of actually applying border measures on offshore steel, there is a need for the Trudeau government to state its clear policy in dealing with steel diversion.
LARRY HERMAN TRADE LAWYER
Ships loaded with cheap offshore steel are believed to be headed for Canada, but the government will work to make sure it does not become a back door for producers trying to enter the U.S. market, Prime Minister Justin Trudeau said Tuesday on his tour of Canadian steel and aluminum producing regions.
“That’s a concern that we share with the Americans,” Mr. Trudeau said in Hamilton, the second stop on a journey that began Monday in Quebec and will take him to Sault Ste. Marie, Ont., and Regina this week.
The trip comes after Canada won an exemption from tariffs on the two metals that the administration of U.S. President Donald Trump will levy on all countries except Canada and Mexico.
Mr. Trudeau would not specify what actions the federal government will take to shut out offshore steel.
“We have a whole suite of tariff and countervailing duties that are at our disposal to move forward and ensure that we are not accepting in unfairly produced or sold steel into Canada,” he said.
Mr. Trudeau spoke to reporters and a group of ArcelorMittal Dofasco employees after touring one of the steel maker’s steel galvanizing mills in Hamilton.
Mr. Trudeau noted that the integration of the Canadian and U.S. economies is particularly evident in the steel sector where $12-billion worth of the metal crosses the Canada-U.S. border annually.
PETER POWER/REUTERS
A Canadian flag flutters in Hamilton as an ArcelorMittal Dofasco facility looms behind it last Friday. The company’s president says the steel industry is worried about Canada becoming a back door for producers trying to enter the U.S. market.
“Our aluminum is in their fighter jets; our steel … goes into their armoured vehicles,” Mr. Trudeau said.
ArcelorMittal Dofasco president Sean Donnelly said the industry is also worried about Canada becoming a back door.
“The boats are already on the way,” Mr. Donnelly said.
“We need tools to deal with this surge,” he said, but added that the federal government can’t wait for the traditional method of the industry taking cases to the Canadian International Trade Tribunal.
That process can take two years or longer and actions need to be taken more quickly than that, he said.
Mr. Trudeau met with steel-industry executives, labour representatives and city officials in Hamilton as part of his tour.
The Trump administration plans to slap tariffs of 25 per cent on steel shipped into the United States and 10 per cent on aluminum imports, but has exempted Canada and Mexico – at least temporarily.
Mr. Trump has stated that the tariffs could be extended to two NAFTA partners if Canada and Mexico do not bend to U.S. demands in the renegotiation of that trade agreement.
Mr. Trudeau and members of his cabinet have insisted that the two issues are not linked and that extending the tariffs to steel and aluminum imported from Canada would harm the U.S. economy.
A heavy lobbying blitz by Canada after the tariffs were first announced March 1 helped convince the U.S. administration to exempt Canadian steel when the final announcement was made last week.
But the U.S. government also wants to confirm that cheap steel brought into North America by Brazil, South Korea, China and other countries doesn’t enter the United States through a Canadian back door.
Steel makers in Canada are pressing the federal government to ensure Canada doesn’t become a dumping ground for offshore steel originally destined for the U.S. market.
Veteran trade lawyer Larry Herman said Ottawa needs to act without going through a lengthy process at the World Trade Organization.
“Ahead of actually applying border measures on offshore steel, there is a need for the Trudeau government to state its clear policy in dealing with steel diversion,” Mr. Herman wrote in a memo to clients on Monday.
“That policy should inform the world that Canada will be taking responsive measures, the details – and covered products – to be announced shortly.”
Gary Howe, president of local 1005 of the United Steelworkers union, said his members who work at Stelco Holdings Inc. are taking the tariff issue in stride, having lived through the cutbacks and job cuts generated by two trips through protection under the Companies’ Creditors Arrangement Act since 2004.
Employment at the Stelco mill in Hamilton is about 550 people, said Mr. Howe, who attended the meeting Mr. Trudeau held with steel industry stakeholders in Hamilton.
INVESTMENT
StatCan. 2018-03-14. Canada's international investment position, fourth quarter 2017
- Canada's net international investment position: $400.7 billion, Fourth quarter 2017
- Source(s): CANSIM table 376-0142: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=3760142&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=
Canada's net foreign asset position rose by $115.4 billion to a record $400.7 billion in the fourth quarter. This increase mainly reflected the stronger performance of foreign stock markets relative to the Canadian stock market. Over the quarter, the US stock market rose 6.8% while the Canadian stock market increased 3.7%.
The revaluation effect (+$20.3 billion) of a depreciating Canadian dollar against all major foreign currencies also contributed to the growth in Canada's net foreign asset position. At the end of 2017, 97% of Canada's international assets were denominated in foreign currencies, compared with a share of 38% for international liabilities. Over the quarter, the Canadian dollar lost 0.5% against the US dollar, 2.1% against the euro, 1.4% against the British pound and 0.4% against the Japanese yen.
However, the increase was moderated by net borrowings of $9.7 billion from international financial transactions to finance the current account deficit.
Chart 1: Canada's net international investment position
For the year, Canada's net foreign asset position increased by $191.9 billion, led by the stronger increase of foreign equity prices over Canadian equity prices. Net borrowings of $56.5 billion from abroad and the revaluation effect (-$101.6 billion) of an appreciating Canadian dollar, mostly against the US dollar, moderated the overall increase in the year. In comparison, Canada's net foreign asset position declined by $162.5 billion in 2016, mainly due to the revaluation effect (-$111.6 billion) of the appreciating Canadian dollar.
Chart 2: Contributors to the change in the net international investment position
Canada's international assets up on higher foreign stock prices
Canada's international financial assets were up $294.7 billion to $4,760.7 billion at the end of the fourth quarter. The growth in foreign stock prices, combined with sizable cross-border investments, were mainly responsible for the overall increase. The upward revaluation of $30.3 billion in Canada's international assets due to the depreciation of the Canadian dollar against major foreign currencies also contributed to the rise.
On an instrument type basis, Canadian holdings of foreign equity instruments increased by $237.8 billion to $3,416.6 billion in the fourth quarter. In addition to higher foreign stock prices, investment by Canadian investors in foreign equities contributed to the growth. More specifically, Canadian holdings of US portfolio shares increased by $92.0 billion to $981.6 billion in the quarter, reflecting higher prices and strong purchases by Canadian investors. Meanwhile, Canadian holdings of foreign debt instruments were up by $56.9 billion to $1,344.1 billion, mainly on higher deposit and loan assets.
Chart 3: International assets and liabilities
Large inflows push Canada's international liabilities up
Canada's international liabilities were up $179.3 billion to $4,360.0 billion in the fourth quarter. The increase mainly resulted from large funds injected in Canada by foreign investors, mainly in debt instruments. Higher Canadian stock prices and, to a lesser extent, a weaker Canadian dollar also contributed to the increase in international liabilities over the quarter.
Canadian equity instruments held by foreign direct and portfolio investors increased by $68.2 billion to $1,903.3 billion at the end of the quarter, led by higher equity prices. Foreign holdings of Canadian debt instruments, also referred to as Canada's gross external debt, were up by $111.1 billion to $2,456.7 billion in the fourth quarter. The increase mainly resulted from strong foreign investments in Canadian bonds and from higher deposits held by non-residents in Canada. Almost 90% of the increase was in corporate debt owed to non-residents.
FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/180314/dq180314a-eng.pdf
BUDGET
Employment and Social Development Canada. 2018-03-14. Minister Duclos to discuss Budget 2018 with Canadians in London
London, ON - The Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development, on March 15, 2018, 9:30 a.m., will visit an organization to highlight the Budget 2018 measures that will better support families with young children.
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