February 6, 2020 / 5:11 PM / in 12 days

WTO sides against U.S. over its tariffs on Canadian paper

FILE PHOTO: A logo is pictured outside the World Trade Organization (WTO) headquarters next to a red traffic light in Geneva, Switzerland, October 2, 2018. REUTERS/Denis Balibouse/File Photo

GENEVA (Reuters) - World Trade Organization arbiters sided against the United States on Thursday over duties it had applied on Canadian paper in one of the final verdicts of the WTO’s appeals body.

Canada had in 2016 challenged U.S. duties applied to Canadian exports of “supercalendered” paper, which is used in glossy magazines and catalogs. A WTO panel in July 2018 had largely backed Canada’s claim, prompting a U.S. appeal.

At issue was a U.S. practice of asking Canadian exporters what forms of assistance they had received. If the companies responded that they had not received “other forms of assistance” and the U.S. had information to the contrary, it would mechanically apply duties.

Canada said this was an ongoing practice in the United States, citing nine U.S. cases of duties applied in this way, including to Chinese solar cell, tire and PET resin makers and Indian stainless steel pipe producers.

The WTO appeals body recommended in its conclusion that the United States bring its measures into conformity with global trading rules.

The U.S. subsidy investigation into paper had resulted in import duties for Canadian firms Port Hawkesbury Paper LP, Resolute FP, Irving Paper Ltd and Catalyst Paper Corp, and claims that other firms had received subsidies.

The U.S.-Canada ruling is one of only four the Appellate Body will deliver after its formal demise in December, when the mandates of two of its three members expired.

The United States has been blocking appointments to the WTO’s appeals body for two years, leaving it with too few members to make rulings. However, the two departing members have been allowed to stay on to rule on four outstanding cases.

Reporting by Philip Blenkinsop; Editing by Alexandra Hudson

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