Weekly Trade Briefing: Nov. 22 – 26, 2021

Trade Update • NOVEMBER 29, 2021

Aweekly roundup of news reports, government announcements, and other information about current and emerging developments in international trade and customs compliance.

TC Energy Seeking $15B from U.S. for Costs of Cancelling Keystone Pipeline

On Nov. 22, Calgary-based TC Energy Inc. announced that it has filed a formal request for arbitration under NAFTA rules, seeking $15 billion in compensation from the U.S. government for its investment in the Keystone XL pipeline, which the Biden administration canceled in January. The government of Alberta has also indicated that it intends to pursue its own claim to recover an estimated $1 billion the province spent developing the pipeline. Both claims are widely viewed by legal experts as having little chance of success in view of certain provisions in the permit granted by the previous administration, together with the fact that the U.S. has never lost a Chapter 11 case and paid damages.

Canada Looking to Join with Mexico in Fight Over USMCA Auto Rules

Bloomberg reports that “Canada is leaning toward forming a common front with Mexico in a fight with the U.S. over how to interpret rules governing the origin of vehicle parts.” According to Global Affairs Canada, trilateral talks regarding the application and interpretation of certain elements of the rules of origin that apply to motor vehicles under the USMCA (see here for more details) have failed to produce a resolution. Recently, Trade minister Mary Ng and Industry Minister Francois-Philippe Champagne convened a meeting with Canadian business leaders, the auto sector, and organized labour last week to discuss the EV tax credit issue and other Buy American provisions in President Joe Biden’s wide-ranging infrastructure bill.

DOJ Granted Extension in Tariff Authority Dispute

The U.S. Department of Justice on Nov. 23 was granted a motion for a month-long extension to prepare its response to a dispute over whether the president acted outside the authority of Sec. 232 in connection with the tariffs imposed on steel imports from Turkey in 2018. The petition for a writ of certiorari filed earlier this month by Transpacific Steel seeks to have the U.S. Supreme Court overturn a U.S. Court of Appeals decision that eliminated mandatory deadlines for presidential action. The importer argues that the Federal Circuit’s decision was an unconstitutional delegation of legislative power to the president in violation of the Constitution and the principle of separation of powers because it cedes to the president the virtually unbounded power to tax and otherwise regulate imports.

USITC Votes To Extend Solar Safeguard Tariffs

On Nov. 24, the U.S. International Trade Commission determined that the current safeguard measure on solar products remains necessary to protect the domestic industry after it expires on February 6, 2022. While noting that domestic producers are “making a positive adjustment to import competition,” the ITC determined the safeguard measure “continues to be necessary to prevent or remedy serious injury to the U.S. industry.” The commission’s full public report and findings will be sent to President Biden, who will make the final decision on whether to continue the measure in some form.

Commerce Restricts Exports From Nearly 30 Entities Over Security Concerns

The Commerce Department’s Bureau of Industry and Security on Nov. 24 issued a final rule adding twenty-seven foreign entities and individuals to the Entity List for engaging in activities that are contrary to the national security or foreign policy interests of the United States. More specifically, the concerns involve the entities’ support of China’s military quantum computing application, Pakistan’s “unsafeguarded” nuclear activities or ballistic missile program, and Russia’s military.

CBSA Makes Final Determination re Dumping of Small Power Transformers

On Nov. 25, the Canada Border Services Agency made a final determination of dumping concerning certain small power transformers of 8504.22.00.20 and 8504.23.00.10 originating in or exported from Austria, Taiwan, Chinese Taipei, and South Korea (excluding exports from IEN Hanchang Co., Ltd., that were determined not have been dumped). With certain exceptions, the subject goods were found to have been dumped at a margin of 73.1%. On June 14, the Canadian International Trade Tribunal preliminarily determined that the dumping of the subject goods has caused injury or is threatening to cause injury to Canadian transformer manufacturers.

WTO Postpones MC12 Due to COVID-19 Variant Travel Restrictions

In the wake of numerous countries suddenly imposing travel restrictions in response to the omicron coronavirus variant, the World Trade Organization on Nov. 26 announced that it would, for the second time this year, be postponing the upcoming 12th ministerial conference. The MC12 was due to start on Nov. 30 and run until Dec. 3. The WTO said it would reconvene the ministerial “as soon as possible when conditions allow.” Director-General Ngozi Okonjo-Iweala insisted that negotiations would continue and urged delegations in Geneva to “close as many gaps as possible,” in the meantime.