Resolving trade disputes between Canada and the United States, case studies in three trade sectors

by Coates, Jon C.

Canada and the United States represent the world's largest and most mutually beneficial trading relationship. But, even the most Fnendly neighbours suf5er the fictions caused by occasionaltrade disputes. Both countries, through their membenhips in NAFTA and the WTO, seek to resolve trade disputes and liberalize their trading relationship in an open and fair manner. This thesis examines four trade disputes in three separate trade secton. The first deals with the dispute over exports of Canadian sothvood lumber. the second examines two disputes in the steel industry and the final case examines the split-run magazine dispute. Therefore, this thesis examines disputes in the trade of traditional staples products. in industrial products and in senices. It also pmvides an examination of the domestic trade discipline systems of Canada and the United States, the operation of bilateral dispute resolution panels operatine under the provisions of the CUSFTA and NAFTA, and the multilateral dispute resolution system of the WTO. This thesis argues that regardless of the dispute settlement mechanism used, in cases where a domestic US trade sector enjoys a suficiently high level of political support, there are few limits American politicians will place on their effortsto advance that sectorTs cause. It will also argue that most solutions created by tmde dispute resolution systems do not produce fiee trade. h fact, it will argue that if the solutions crafied by these panels fail to meet the expectationsof politically wel!-comected complainants, the prospect of renewed trade disputes will be threatened until an expon restriction agreement is reached. The final solution in these cases invariably rewards the special interest group launching the trade cornplaint and penalizes the general public through higher product pnces or higher taxes. List of Abbreviations Used ADD CITT CFCLI CMPA CUSFTA CVD DSB DSU ECC GATS GATT IT A ITC LLP MAI MFN MOU NAFT,\ SIMA SRDS TPM USITC USTR VER VRA WTO Anti-Dumping Duties Canadian International Trade Tribunal Coalition for Fair Canadian Lumber Imports Canadian Magazine Publishers Association Canada -US. Free Trade Agreement Countervailing Duties Dispute Seulement Body (of the WTO) Understanding on Rules and Procedures Governing the Settlement of Disputes Extraordinary Challenge Committee Generd Agreement on Trade in Services General Agreement on Tariffs and Trade International Trade Administration International Trade Commission Limited Liability Partnership Multilateral Agreement on Investments Most Favoured Nation Memorandum of Undentanding North American Free Trade Agreement Special Import Measures Act Symposium on Reliable Distributed System Trigger Pnce Mechanism United States International Trade Commission United States Trade Representative Voluntary Export Restraint Voluutary Restraint Agreement World Trade Organization Great thanks are due to dl of the members of my thesis supervisory group. In particular, 1 wish to extend my profound thanks to Dr. Robert Finbow for his quiet, patient and long-suffenngsupportwhile supervisingrny efforts in writing this thesis. Since no good deed goes unpunished. it is fitting that Dr. Finbow. my fint instructor in my first Politicai Sciencecourse. should also be the person who supewised this work. the final step in my second academic career. also wish to thank Drs. Denis Stairs and GiIbert Winham for their timely encouragementand patience in their rolcs as readen. xii