Taiwan Challenges Canadian Steel Tariffs at WTO
Taiwan opened dispute consultations with Canada at the World Trade Organization regarding Canada's tariff rate quotas and surtax on certain steel goods and its global duty on certain steel derivative goods, the WTO announced. The consultations request formally opens a WTO dispute and gives the parties 60 days to resolve it, after which it will be sent to adjudication before a panel.
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In June, Canada imposed TRQs on five categories of steel imports and a 50% surtax on imports that exceeded a threshold of 100% of 2024 import levels. Canada amended the measures the next month and set the annual quota amounts for free trade agreement and non-FTA partners. For non-FTA countries, the in-quota threshold was dropped to 50% of 2024 imports, while FTA partners held steady at 100% of 2024 levels. The amendments also expanded the TRQs to cover 23 steel products.
In November, Canada then dropped the TRQs for FTA partners from 100% to 75% of 2024 levels, and it dropped the quotas for non-FTA partners to only 20% of 2024 levels. Concurrently, Canada announced it would apply a 25% global tariff on the "full value of listed steel derivative products (such as wind towers, prefabricated buildings, fasteners, and wires)," Taiwan said.
In its dispute consultations request, Taiwan said the TRQs violate Articles I, II, X, XI and XIII of the General Agreement on Tariffs and Trade 1994 and Articles 3.2 and 3.5 of the Import Licensing Agreement. Among other things, the quotas provide an advantage to FTA partners that isn't accorded to non-FTA partners, exceed Canada's WTO tariff concessions and haven't been administered in a "uniform, impartial and reasonable manner," the complaint said.
The surtax and TRQ measures also require importers to get "shipment-specific import licenses" to benefit from in-quota tariff rates. Since the licenses are "non-automatic," they seemingly fail to comply with the "non-restrictive and reasonable-administration requirements" of the Import Licensing Agreement, the complaint said.
Separately, Taiwan challenged the 25% derivative tariff under Articles II and X of the GATT 1994, since the tariff exceeds Canada's tariff concessions, violates the most favored nation principle and hasn't been administered in a "uniform, impartial and reasonable manner."