When Canadian businesses enter into agreements or contracts, or conduct any relations with foreign companies or investors on importing or exporting of goods or products to and from Canada, the laws and rules of international trade apply. Following these laws is important to keep Canadian economy stable while ensuring equity among all players in international trade.
What is the international trade law in Canada?
International trade law is a branch of international law, and it governs the conduct of fair trade or commerce between two businesses from different countries. Among its sources are:
- national, state, or domestic laws and regulations covering international trade, customs, taxation, and dispute resolutions
- international treaties or conventions of the countries of the two contracting businesses that apply to the conduct of their business
- customary international law that applies to international trade
- rules and regulations set by trade organizations and other competent authorities on international trade
In Canada, the rules on international trade law are governed by different laws, such as:
- Export and Import Permits Act: regulates the import licenses for specific goods or products being exported or imported to Canada
- Consumer Packaging and Labelling Act: regulates the proper labelling and packaging of imported goods or products according to certain standards
- Special Import Measures Act: prohibits the practice of dumping and subsidizing of imported goods which can hurt the domestic Canadian industry. Also imposes anti-dumping duties and countervailing duties whenever applicable
- Customs Act: establishes the authority of government bodies to administer and enforce the collection of taxes and other duties
- Customs Tariff: imposes the appropriate rate and tariffs of customs duties and provides for the applicable relief from these duties
- Excise Tax Act: imposes the Goods & Services Tax (GST) and/or Harmonized Sales Tax (HST) on goods and products in Canada
- other regulations covering other aspects of international trade law, such as documentary requirements and importation or exportation procedures.
What is the Canadian International Trade Tribunal?
The Canadian International Trade Tribunal is a quasi-judicial body established in 1988 through the enactment of the Canadian International Trade Tribunal Act (CITTA). It is accountable to the Parliament of Canada through the Minister of Finance.
The Canadian International Trade Tribunal is composed of seven permanent members, including a chairperson and two vice chairpersons. All of them are appointed by the Governor in Council. The tribunal is based in Ottawa, Ontario.
In addition to the CITTA, the Tribunal is also empowered by other Canadian laws which may directly or indirectly affect international trade. These are the Special Import Measures Act, the Customs Act, and the Excise Tax Act, among others.
Mandate of the Canadian International Trade Tribunal
The Canadian International Trade Tribunal is mandated by the CITTA to perform these duties and functions (section 16, CITTA):
- Conduct inquiries and reviews (section 18, CITTA): to review matters that are referred to the Tribunal by the Governor in Council or by the Minister of Finance and report back to them the results of these inquiries;
- Conduct mid-term reviews (section 19.02, CITTA): to review the surtaxes on imported goods from a free trade partner and on goods that must be included in the Import Control List
- Hear complaints from domestic producers (section 23 (1), CITTA): to conduct inquiries and rule on complaints and extension requests filed by domestic producers who might be adversely affected by the importation of certain goods
- Address surge complaints (section 30.01, CITTA): to receive, conduct inquiries, and make decisions on complaints regarding a surge of imported goods as defined in the Act
- Hear appeals: to hear and make determinations on appeals that are referred to the Tribunal pursuant to any other Canadian laws and regulations, e.g., decisions rendered by the Canada Revenue Agency (CRA) and the Canada Border Services Agency (CBSA).
What are the international trade rules in Canada?
Certain international trade rules apply on the importation of goods and products into Canada. These international trade rules, when violated (or alleged to have been committed), may trigger a review or inquiry.
Dumping and Subsidizing
One type of complaint under unfair trade is called dumping and subsidizing. They are prohibited acts under Canadian international trade rules. These acts fall under the Special Import Measures Act (SIMA), which implements these World Trade Organization (WTO) agreements:
- Agreement on the implementation of Article VI of the General Agreement on Tariffs and Trade 1994
- Agreement on Subsidies and Countervailing Measures
If your business is facing the negative effects of dumping and subsidizing, talk to an expert in your area. If you’re based in Ottawa, for example, contact a Lexpert-ranked international trade regulation lawyer in Ontario.
According to SIMA, dumping refers to the importation of goods or products into Canada whose selling price falls way below their normal value or at unprofitable prices, especially when compared to the selling price in the product’s country of origin. These insufficiencies in selling prices are then offset by the imposition of anti-dumping duties (section 5, SIMA).
Subsidizing happens when goods imported into Canada benefit from foreign government financial assistance. These are also offset by collecting countervailing duties (section 6, SIMA).
After a decision is made by the Canadian International Trade Tribunal on the inquiry on dumping or subsidizing, the CBSA is then granted the authority to impose the proper anti-dumping duty or countervailing duty.
Unfair Procurement
Under Canadian international trade tribunal rules, an unfair or discriminatory government procurement for a designated contract will be reviewed by the Tribunal when it violates the governing trade agreements, such as the Canadian Free Trade Agreement (CFTA).
The CFTA promotes equal access of all Canadian suppliers to federal government procurement by prohibiting the discrimination of goods, products, or services of a Canadian province or territory. Other trade agreements include the Revised Agreement on Government Procurement, which is administered by the WTO, and other bilateral agreements between Canada and other countries.
Canada’s 15 #FTA’s offer #CdnBiz exclusive opportunities to start and scale up in international markets. Is your biz taking advantage of them?
— Canada Trade (@CanadaTrade) June 15, 2023
Learn more on how FTAs can benefit you: https://t.co/pzwUXEaOO5#TradeThursdays pic.twitter.com/kThgQvdOIG
After establishing that a complaint against an unfair procurement is valid, the Canadian International Trade Tribunal may order remedies relating to the designated contract (section 30.15 (1), CITTA), such as:
- issuance of the designated contract’s new solicitation
- re-evaluation of its bids
- termination of the designated contract
- awarding of the designated contract to the complainant
- compensation to the complainant
Interested to know more about the work of Canadian International Trade Tribunal? Send us your queries by commenting below or by asking Lexpert’s best-ranked international trade lawyers in Canada.