Mr. Speaker, I thank the House for the opportunity to comment on the private member's bill tabled by the member for Terrebonne—Blainville calling on the government to amend the Special Import Measures Act.
The bill proposes an amendment to section 20 of the Special Import Measures Act. The amendment would set out the conditions required for deeming whether domestic prices in a country are substantially determined by the government of that country and whether there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market.
The Special Import Measures Act, or SIMA, is Canada's principal legal instrument that governs the application of anti-dumping and countervailing duties to imports of dumped or subsidized goods that are found to cause injury to domestic producers.
Under SIMA, a Canadian industry is entitled to trade remedy protection if it is established through a formal investigation that the imports are being dumped or subsidized and that the dumping or subsidizing has caused or threatens to cause injury to that industry.
In such a case, definitive anti-dumping or countervailing duties are normally levied on all imported subject goods for a period of five years, with the possibility of an extension if Canada's administrating authorities, those being the Canada Border Services Agency and the Canadian International Trade Tribunal, determine that there is likely to be a continuation or a recurrence of dumping or subsidization and injury if the duties are removed.
SIMA implements Canada's rights and obligations under two WTO agreements: the anti-dumping agreement and an agreement on subsidies and countervailing measures.
Key provisions of these agreements include methods for determining the existence of dumping and countervailable subsidies, requirements for the initiation of investigations, obligations respecting procedural fairness, the duration of orders and the transparency in the decision making.
In addition, these agreements set out the economic factors to be considered in determining whether injury exists and whether or not such injury is caused by dumped or subsidized imports.
As originally drafted in 1984, SIMA represents a balance of interests between those parties requiring protection from injuriously dumped or subsidized imports and those requiring secure access to imports to ensure profitability for their economic activities.
The importance of this balance between imports and production concerns continues to be relevant as the dependence of Canadian manufacturers on imported inputs has increased substantially since 1984.
Today, imported inputs make up 34% of the content of goods manufactured in Canada.
When SIMA was reviewed by the subcommittees of the Standing Committee on Finance and the Standing Committee on Foreign Affairs and International Trade in 1996, the subcommittees' conclusion was that the basic circumstances that motivated Canada to establish SIMA continued to exist; that is to say, the law provides basic protection to Canadian producers while limiting unnecessary collateral damage to downstream users of the products in question.
During the 1996 review of SIMA, a large number of interested parties representing a wide cross-section of the Canadian economy appeared before the subcommittees to present their views. The witnesses commented on whether the legislation continued to adequately serve Canada's national economic interests, including industries that benefit from trade remedy protection and industry associations that must import goods as a normal course of business.
Following the completion of this review, Canadian industries also took advantage of the opportunity to make their views on these issues known to the government in the context of the Doha round of trade negotiations at the WTO.
As part of the extensive consultation process related to the WTO, the government received 23 submissions from industry and provincial governments that provided input for developing Canada's position on the negotiations, which aim to clarify and improve disciplines related to the WTO anti-dumping and subsidy agreements.
The government takes the consultation process very seriously an regularly updates industry on the status of negotiations. Extensive consultations are critical for developing and maintaining an effective multilateral negotiating position and are equally important in the consideration of unilateral changes to Canada's domestic trade laws.
In fact, the government has recently received recommendations from two parliamentary standing committees that call for the government to conduct a review of Canada's trade remedy system. The first recommendation came in the February 2007 report of the Standing Committee on Industry, Science and Technology entitled “Manufacturing: Moving Forward--Rising to the Challenge”.
Two of the recommendations were trade policy related, one of which recommended that the government conduct an internal review of Canadian anti-dumping countervail and safeguard policies, practices and their applications to ensure that Canada's trade remedy laws and practices remain current and effective.
This review would also include comparisons with other WTO members such as the EU and the U.S. This recommendation was based on the standing committee's observation that the growing economies of countries such as China and India represent a challenge for Canadian producers to both their domestic and American export markets. As well, the standing committee noted the concern expressed by some industries regarding an apparent divergence between Canadian trade law and its application, and it believed more information was required. This led to the recommendation for a review of Canada's trade remedy system.
Following this report came an April 2007 report of the Standing Committee on International Trade entitled “Ten Steps to a Better Trade Policy”. Among the recommendations in the report was a call for the government to immediately review its trade remedy system to ensure that critically valued imports, needed as inputs by companies who subsequently export products out of the country, are not unnecessarily blocked.
The standing committee was told that Canada's trade remedy system needs a different mindset, that is not to assume that all imports from China are bad because for some manufacturers such imports are critical. In fact, one witness noted that, “it’s the only way they’re going to be in the game.”
The government intends to table responses to these recommendations shortly. It is interesting that these standing committees made identical recommendations within two months of each other, namely that the government conduct a review of Canada's trade remedy system. However, these recommendations were made for quite different reasons.
The industry committee recommends a review to ensure that Canada's trade remedy system remains effective to deal with dumped or subsidized imports. The international trade committee recommends a review to ensure that Canadian manufacturers have stable and predictable access to global supply chains.
Although these two standing committees had opposing views on the role and impact of Canada's trade remedy system on Canadian manufacturers, they made identical recommendations. Because they agree that the government must consider the trade remedy system as a whole and to take into account the view of all stakeholders before considering changes to the system, the government supports the view of the standing committees that all stakeholders must have an opportunity to put forth their views on the legislation as a whole.
SIMA has been amended several times to reflect changes in international agreements and to implement the recommendations of the 1996 parliamentary review. However, there has never been an amendment to a single provision of the legislation without broader consideration being taken into account.
Bill C-411 would have us take a piecemeal approach to the Special Import Measures Act that would be contrary to ensuring this law reflects a proper balance of interests.