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USTR Report Identifies Canadian Barriers to Trade

Posted April 05, 2016

The Obama administration recently published the final version of the National Trade Estimate (NTE), an annual report in which the Office of the U.S. Trade Representative (USTR) seeks to identify “significant barriers to U.S. exports of goods, services, and U.S. foreign direct investment.”

Touting its record of “unprecedented trade enforcement efforts” a statement issued by the USTR highlights the fact that the current administration “has brought more enforcement cases at the WTO than any other member, used pre-dispute engagement to push trading partners to live up to their obligations, and strengthened U.S. government enforcement capacity through creation of the Interagency Trade Enforcement Center.”

According to a fact sheet released by the USTR, the most noteworthy changes in the last year, both positive and negative, in the barriers to U.S. exports concern developments in South Africa, Turkey, Ecquador, Honduras, Mexico, Korea, China, India, Laos, Philippines, and Indonesia. 

Regarding Canada, the report details 9 pages of alleged barriers to trade, many of which are perennial complaints such as the use of supply-management systems to regulate Canadian dairy, chicken, turkey, and egg industries. Other Canadian trade barriers identified in the report include:

  • Geographic indications agreed to between Canada and the European Union as part of the Canada- EU Comprehensive Economic and Trade Agreement.
  • Restrictions on U.S. grain exports which limit the ability of U.S. wheat and barley exporters to receive a premium grade, including the provisions of the Canada Grain Act and Seeds Act.  
  • Low personal duty exemption levels that U.S. retailers contend have a detrimental effect on purchases by Canadians on short trips to the United States.
  • High provincial taxes on personal imports of U.S. wines and spirits, together with the market access barriers in provinces operating liquor control boards, as well as certain other retail sales regulations in B.C. and Ontario that U.S. wineries feel may be discriminatory.  
  • Domestic support measures in the aerospace industry, particularly regarding federal and provincial financial aid to the Bombardier aircraft company.
  • Intellectual property rights protection with respect to pharmaceuticals, where the U.S. continues to have serious concerns about the impact of the patent utility requirements that Canadian courts have adopted. The report also states that the U.S. is “disappointed” that Canada didn’t amend the Combating Counterfeit Products Act to allow for inspection of in-transit counterfeit trademark goods and pirated copyright goods entering Canada destined for the United States.

Additional barriers in the report deal with services such as those regarding telecommunications, Canadian-content rules in broadcasting, certain investment restrictions and “cross-border trade flows” pertaining to a proposed consolidation of federal government information technology services that may preclude U.S.-based “cloud” computing suppliers from participating.