Backgrounder - Canada’s request for CUSMA dispute settlement consultations regarding Canadian solar products

Backgrounder

On December 22, 2020, the Government of Canada requested dispute settlement consultations with the United States under Chapter 31 of the Canada-United States-Mexico Agreement (CUSMA) to address the continued imposition of U.S. safeguard tariffs on Canadian solar products.

U.S. Section 201 global safeguard investigation on imports of solar products

  • On May 23, 2017, the U.S. International Trade Commission (USITC) initiated a Section 201 global safeguard investigation on imports of solar photovoltaic products (cells, modules, panels, laminates) from all countries, including Canada.
  • On September 22, 2017, the USITC found that solar imports have caused serious injury to the U.S. solar industry. However, the USITC also ruled that Canadian imports were not a substantial share of total imports and did not contribute importantly to the serious injury. As a result, the United States was required under the North American Free Trade Agreement (NAFTA) (and now CUSMA) to exclude Canada from its safeguard tariffs on solar products.
  • Nonetheless, the United States imposed a 30% tariff on imports of solar products from Canada on January 22, 2018, and, despite numerous interventions by Canada, the United States continues to impose these illegal tariffs on imports from Canada.
  • Since early 2018, the U.S. safeguard tariffs have caused Canada’s exports of solar products to the United States to decline by as much as 82%.
  • On July 23, 2018, Canada requested NAFTA dispute settlement consultations with the United States. However, the United States also blocked Canada’s attempts to resolve this issue under NAFTA. Under the terms of CUSMA, the United States is unable to block dispute settlement proceedings requested by other CUMSA parties.
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