On January 6, 2010, the Canadian International Trade Tribunal (CITT) finally rescinded the January 7, 2005 Order against stainless steel screws from Chinese Taipei. I say "finally" because I was involved in the original case in 2004 and was dismayed when the Tribunal made a threat of injury finding on January 7, 2005 in respect of stainless steel screws from Chinese Taipei. The CITT terminated the original investigation in respect of all stainless steel nut and bolts from China and Chinese Taipei and terminated the inquiry in respect of stainless steel screws from China. This has been my quest for 5 years - it has finally happened.
Today, the CITT made the following order:
"Pursuant to subparagraph 76.03(12)(a)(ii) of the Special Import Measures Act, the Canadian International Trade Tribunal hereby rescinds its finding concerning certain stainless steel fasteners originating in or exported from Chinese Taipei."
This means that antidumping duties will not be collected starting tomorrow on stainless steel screws from Chinese Taipei. however, it is not clear whether the Canada Border Services Agency will require that importers (and their brokers) communicate on import documentation that the goods are Code "10" in the SIMA Box (meaning, not subject to SIMA duties).
What is interesting is that the Canada Border Services Agency started a reinvestigation of normal values in the middle of the expiry review proceedings. It is not clear at this moment what the CBSA intends to do in respect of stainless steel screws. The CBSA is in the middle of its verifications.
Go to the following link for the Order- www.citt.gc.ca/dumping/reviews/orders/rr2j001_e.asp. The Reasons are not yet available on the CITT web-site.
I have received a copy of the Reasons. Here are a few of the notable statements:
218. The Tribunal considered the likely level of the prices of the subject stainless steel screws in the absence of the finding by deducting an estimate of the anti-dumping duties from the prices seen during the period of review. Taking into account the results of this analysis, particularly the results for the most recent periods, the Tribunal is of the view, that, if the finding were rescinded, the prices of the subject stainless steel screws would remain the highest in the market, with the exception of U.S. prices. Further, there would still be a significant gap of 32 to 65 percent between the average prices of the non-subject stainless steel screws from China and those of the stainless steel screws from Chinese Taipei
223. Given the above analysis of the price relationships in the market, it is the Tribunal’s view that, if the finding were rescinded, it is unlikely that Chinese Taipei exporters would lower their prices to a level that would cause material injury through either price depression or price suppression.
229. Although the above considerations, if viewed on the their own, might suggest that there would be an increase in the volume of the subject stainless steel screws in the absence of the finding, this is not the Tribunal’s conclusion when other important factors are taken into account.
230. First, the Tribunal does not expect that Chinese Taipei producers would be able to engage in effective price competition with Chinese producers in the absence of the finding, as discussed above. In this regard, the Tribunal notes, among other things, the declining market share for the subject stainless steel screws during the period of review, as discussed above. The Tribunal does not think it likely that the Chinese producers would lower their prices sufficiently to reverse this trend if the finding were rescinded.
231. As discussed above for carbon steel screws, the Tribunal does not consider that the stainless steel screw industry is capital intensive and does not consider that producers in Chinese Taipei will be under pressure to respond to a “production imperative" in terms of their future exports to Canada.
232. Finally, since the EU measure has been in place since 1998, Chinese Taipei producers are likely to have had sufficient time to offset the effect of that measure. Therefore, it is unlikely that the EU measure would lead to a diversion of stainless steel screws from that market to Canada in the event of a rescission of the finding.
233. Considering all the above factors, the Tribunal considers that there will likely be little or no increase in the volume of imports of the subject stainless steel screws.
236. The Tribunal notes that a witness for Leland testified that it is common for certain of its customers to order carbon steel screws and stainless steel screws at the same time. This might suggest that the expiry of the finding concerning stainless steel screws could cause injury to sales of carbon steel screws.
237. Even if there were convincing evidence that this practice were widespread in the market, which there is not, the Tribunal notes that, in this expiry review, it is dealing with two classes of goods. Therefore, the Tribunal is required to base its decision of whether to continue or rescind the finding on stainless steel screws solely on its consideration of the factors relating to those goods, i.e. whether a rescission of the finding on stainless steel screws would injure the domestic stainless steel screw industry. It is not permitted to take into consideration any potential injurious effects of rescinding this finding on the other class of goods, i.e. the domestic carbon steel screw industry.
This decision is a helpful precedent for the future when the goods covered by a CITT Finding represent more than one class of goods.
For more information, please watch Trade Lawyers Blog (as I have more to report) or contact Cyndee Todgham Cherniak at 416-307-4168.