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14 January 2018, 12:08 | Kara Nash
Kevin Dietsch SIPA Newscom
"Canada's claims are unfounded and could only lower USA confidence that Canada is committed to mutually beneficial trade", Lighthizer said in a statement.
The irony here is that Canada is making the same complaint about the United States.
Under WTO dispute resolution rules, other countries named in the complaint can decide to take part in consultations after an initial reading.
The move was denounced by the USA and had some trade experts worrying it could derail already tense negotiations to renew the North American Free Trade Agreement.
Canada's complaint coincides with separate trilateral negotiations to revise NAFTA, which created an open trading system between the United States, Canada and Mexico. This goes for trade negotiations with China, with Comprehensive Progressive Trans-Pacific Partnership parties, and with the United States.
It also might result in a flood of imports from other countries - if the complaint successfully have American tariffs removed - and cost Canada billions of dollars in exports to the US, Lighthizer said.
Second, Canada may be more strategic than we think.
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The thinly veiled threat gives new rise to concerns for positive progress in the ongoing NAFTA renegotiations ahead of the next round of talks set for January 23 in Montreal. One of the United States' demands in the NAFTA renegotiation is chapter 19's elimination.
With the list of trade irritants between Canada and the United States growing day by day, Ottawa has launched a wide-ranging trade complaint against its southern neighbour, over Washington's increasingly protectionist trade practices, according to a World Trade Organization filing dated December 20 and published Wednesday.
With its WTO filing, Canada is forcing the United States to put its logic to the test.
In other words, Canada is trying to show that the United States cannot have it both ways; they can't eliminate chapter 19 and disregard the WTO's authority to judge the US trade remedy system and its decisions. "This is effectively Canada bringing a dispute on behalf of all exporters in the world - the Europeans, Japan, China - because they're making a systemic challenge".
The WTO revealed on Wednesday that Canada had filed a complaint last month accusing the USA of unfairly imposing countervailing and anti-dumping duties, not only on Canadian softwood lumber but also on goods from many other countries.
Ideally, Canada would want to keep both chapter 19 and the United States' commitment to the WTO, since it gives it more ammunition in disputes.
On Wednesday the country requested that the World Trade Organization step in to review certain US trade actions and whether they're in accordance with its obligations as a member of the WTO.
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