Reforming Anti-Dumping Law:
Balancing the Interests of Consumers
and Domestic Industries
Jean-Marc Leclerc*
In this article, the author examines the rationale for
anti-dumping duties and their potential reform on a domes-
tic and international level. Part I of the article briefly indi-
cates the absence of any reasons based on economic effi-
ciency to support the imposition of anti-dumping duties. In
Part II, the author analyzes whether anti-dumping duties
may be supported on social welfare grounds. He concludes
that anti-dumping duties are not supported by non-
efficiency concerns such as the need to prevent the loss of
jobs in small communities.
Part III of the article shifts to the potential reform of
the Special Imports Measures Act. The author analyzes the
use of the public interest inquiry provisions of the Special
Imports Measures Act and interventions by the Director of
Investigation and Research to determine whether either
route has successfully stemmed the incidence of anti-
dumping duties. Unfortunately, a narrow interpretation of
the words “public interest”, combined with the strict stan-
dard of review that would likely apply to decisions of the
Canadian International Trade Tribunal, has resulted in vir-
tually meaningless public interest inquiries that rarely af-
fect the imposition of anti-dumping duties. Similarly, most
interventions by the Director of Investigation and Research
have been rejected by the Tribunal.
The author concludes by suggesting that the only
hopeful avenue for reforming anti-dumping duties lies in
regional free trade agreements, which have successfully
phased out anti-dumping duties. As such agreements pro-
liferate, countries will
realize the anti-
competitive effects that stem from anti-dumping duties,
which will hopefully result in the world-wide reform of
anti-dumping law.
increasingly
L’auteur 6value dans cet article les raisons qui moti-
vent l’existence des obligations antidumping et examine la
possibilit6 de leur 6ventuelle rforme aux niveaux national
et international. La premiere partie de l’article signale brie-
vement l’absence de tout motif d’efficacit6 6conomique qui
puisse justifier
l’imposition de telles obligations. La
deuxi~me partie analyse la possibilit6 que les obligations
antidumping soient appuy6es an titre du bien public.
L’auteur conclut A ce sujet que les obligations antidumping
ne sont pas motiv es par des intr~ts de non-efficacit6
comme le besoin de prdvenir la perte d’emploi dans les pe-
tites communautds.
La troisi me partie de l’article fait l’examen d’une r6-
forme possible de la Loi sur les mesures spiciales
d’importation. L’auteur analyse l’usage des dispositions
concemant les enqutes d’intdret public dans la Loi sur les
mesures spiciales d’importation et les interventions du Di-
recteur des Enqutes et Recherches, afin de d6terminer si
l’une ou l’autre de ces options a su enrayer avec succ~s la
fr&luence des obligations antidumping. Malheureusement,
l’interprdtation stricte des mots “intdrEt public”, combin~e
avec une norme severe de contrfle pouvant s’appliquer aux
d~cisions du Tribunal canadien du commerce extdrieur, ont
men6 A des enqu~tes d’interet public d~nudes de sens et qui
affectent rarement l’imposition des obligations antidum-
ping. De la m~me faon, la plupart des interventions du Di-
recteur des Enqutes et Recherches ont-6t6 rejetdes par le
Tribunal.
L’auteur conclut en suggdrant que la seule vole vers
une rdforme gagnante des obligations antidumping se
trouve dans les accords de libre-.change qui ont su suppri-
mer progressivement et avec succs les obligations anti-
dumping. Comme de tels accords prolifrent, les pays vont
de plus en plus prendre conscience des effets anti-
concurrentiels qu’engendrent les obligations antidumping,
ce qui rdsultera, avec un peu de chance, en une rdforme des
lois antidumping.
. B.A. (W.L.U.), LL.B. (Queen’s); currently articling at Osler, Hoskin & Harcourt, Toronto. I would
like to thank Professor Bill Flanagan at Queen’s University for his encouragement and help.
McGill Law Journal 1999
Revue de droit de McGill 1999
To be cited as: (1999) 44 McGill W. 111
Mode de refdrence : (1999) 44 R.D. McGill 111
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 44
Introduction
I. Efficiency Rationales for Anti-Dumping Laws
II. Non-Efficiency Rationales for Anti-Dumping Laws
Ill. Reforming the SIMA Regime
A. Procedure in Dumping and Subsidy Investigations Under SIMA
B. Reforming SIMA to Recognize Consumer Welfare Interests
1. Reforming or Repealing SIMA
2. Reforming or Repealing Article 6 of GATT
C. Public Interest Inquiries
1. The Operation of Section 45
2. CITT Interpretation of the Public Interest
3. Legislative Change to Section 45
D. Interventions by the Director of Competition
Conclusion
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J.-M.LECLERC – REFORMING ANTI-DUMPING LAW
Introduction
The global marketplace is expanding very rapidly. Through free trade, companies
can export their products to other countries and gain access to a larger customer base.
These companies make more sales and generate more profits. In addition, consumers
stand to benefit from increased international competition in the form of lower prices
and an increased variety of products to purchase.
To secure these interests, the General Agreement on Tariffs and Trade’ was signed
in 1947. GA7Ts objectives include “developing the full use of the resources of the
world and expanding the production and exchange of goods” by substantially reduc-
ing tariffs and by eliminating “discriminatory treatment in international commerce?”
These objectives are furthered, in large part, by the GATT principles of “most fa-
voured nation treatment” and “national treatment”.’ The most favoured nation princi-
ple, set out in article 1, requires that any trade advantage accorded to one country be
accorded to every other member of GAT. Likewise, article 3 furthers the principle of
national treatment by prohibiting internal taxes from being applied to “imported or
domestic products so as to afford protection to domestic production?” These two basic
principles have created a more open international market than existed during the pre-
war period.
Nevertheless, GAIT continues to permit the imposition of anti-dumping duties on
companies based in member-States who dump products in foreign markets. A product
is dumped if it is sold for a lower price in an export market than it is in a domestic
market. If dumping does occur, anti-dumping duties may only be imposed if “material
injury to a domestic industry”‘ occurs or threatens to occur as a result of the dumping.’
Most commentators agree that these anti-dumping provisions do not serve to
promote free trade.’ Why should a below-cost sale of a Korean car attract punitive du-
ties? Should it not, rather, be welcomed as a transfer of wealth from Korean consum-
ers to Canadian consumers?
Anti-dumping laws have been mainly justified on the basis that they prevent com-
panies from establishing monopolies through the use of predatory pricing.’ Critics of
‘ 30 October 1947, 55 U.N.T.S. 187, Can. T.S. 1947 No. 27 (entered into force 1 January 1948)
[hereinafter GATI.
2 lbid, Preamble.
5/bid, arts. 1,3.
“Ibid, art. 3(l).
‘Special Import Measures Act, R.S.C. 1985, c. S-15, s. 2(1) [hereinafter SIMA].
‘ Ibid., ss. 3(1), 4(1)(a), 5(a), 6(a), 8.
7 See Part I, below.
‘See e.g. R. Bbala, “Rethinking Antidumping Law” (1995) 29 Geo. Wash. J. Int’l L. & Econ. 1 at
11; and A.V. Deardorff, “Economic Perspectives on Antidumping Law” in R.M. Stem, ed., The Mul-
tilateral Trading System: Analysis and Options for Change (Ann Arbor, Mich.: University of Michi-
gan Press, 1993) 135.
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
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anti-dumping legislation, on the other hand, argue that international predatory pricing
is improbable and that anti-dumping rules simply serve to distort what would other-
wise be sound economic decisions by exporters
The domestic implementation of the GATT anti-dumping restrictions in Canada
permits some criticism of the regime. Section 45(1) of the Special Import Measures
Act” allows the Canadian International Trade Tribunal (CITT), before imposing anti-
dumping duties, to consider whether “the imposition of an anti-dumping duty …
would not or might not be in the public interest:’ Section 45(2) permits “any person
interested in an inquiry” to make representations before the CIT’ on what the public
interest actually is. Therefore, the role the CITT accords to the public interest in de-
ciding whether to impose anti-dumping duties, as well as the Tribunal’s responses to
consumer welfare arguments, will help to demonstrate the extent to which SIMA and
the CI’TT have a protectionist bent.
Yet another avenue of criticism of the anti-dumping regime is offered by section
126(1) of the Competition Act.” Under this section, the Director of Investigation and
Research is permitted to make representations before a board where issues relating to
corporate competition are raised.’2 Matthew Kronby, in a recent case comment,’3 out-
lines how important the Director’s interventions are in stemming the incidence of anti-
dumping duties. Kronby argues that in a particular case,” “the representations made
on … [the Director’s] behalf not only bolstered Hyundai’s arguments that the dumping
had not caused material injury to the complainants, but appear to have had consider-
able influence on the Tribunal in their own right”” Therefore, like the public interest
provision of SIMA, section 126(1) allows room for arguments that anti-dumping du-
ties reduce competition and encourage the growth of domestic monopolies.
By examining cases where the public interest has been raised in CITI” decisions,”
as well as cases in which the Director has intervened under section 126(1) of the
9Bhala, ibid at 15-17, n. 57. See generally R. Denton, “(Why) Should Nations Utilize Antidumping
Measures” (1989) 11 Mich. J. of Int’l L. 224 at 225, n. 1; and S. Hutton & M. Trebilcock, “An Em-
pirical Study of the Application of Canadian Anti-Dumping Laws: A Search for Normative Ration-
ales” (1990) 24:3 J. World T. 123 at 123, n. 4.
“Supra note 5.
“R.S.C. 1985 (2nd Supp.), c. 19.
‘Ibid., ss. 2,7(l).
‘3 M. Kronby, “Kicking the Tires: Assessing the Hyundai Anti-Dumping Decision From a Con-
sumer Welfare Perspective” (1991) 18 Can. Bus. L.J. 95.
” Cars Produced By or on Behalf of Hyundai Motor Company (23 March 1988), CIT-13-87
(C.I.T.), [1988] C.I.T. No. 15, online: QL (CT) [hereinafterHyundai].
“5 Supra note 13 at 106.
6Re Preformed Fibreglass Pipe Insulation (28 January 1994), PB-93-001 (C.I.T.T.), [1994] C.I.T.T.
[hereinafter Preformed Fibreglass Insulation]; Re Caps, Lids and Jars (26
No. 27, online: QL (CrIT)
February 1996), PB-95-001 (C.I.T.T.), [1996] C.I.T.T. No. 15, online: QL (CITY) [hereinafter Caps,
Lids and Jars]; Re Refined Sugar (4 April 1996), PB-95-002 (C.I.T.T.), [1996] C.I.T.T. No. 125, on-
line: QL (CITI) [hereinafter Refined Sugar]; and Re Faced Rigid Cellular Polyurethane-Modified
1999]
J.-M.LEcLERc – REFORMING ANTI-DUMPING LAW
Competition Act, this article will examine the extent to which the CITr recdgnizes the
illogicality of including anti-dumping rules in a system that is intended to liberalize
trade. When faced with these arguments, does the CITT tend to impose anti-dumping
duties? If so, what hope is there for trade liberalization short of a comprehensive re-
form of GATI? The answers to these questions may help reformers of the current re-
gime to better understand whether their efforts should be directed toward working
within or outside of the current Canadian legislative anti-dumping system.
Part I of this article will examine whether there are any reasons based on eco-
nomic efficiency to support the imposition of anti-dumping duties. In Part II, non-
economic justifications for maintaining the anti-dumping regime will be canvassed in
order to determine whether such concerns are effectively addressed by SIMA. Build-
ing on this base, Part III will address a variety of questions. First, it will outline the
method used to impose anti-dumping duties and then it will consider whether SIMA
or GATT can be reformed to better take into account consumer welfare interests. Fi-
nally, the article will examine whether advocates of consumer welfare can effectively
integrate concerns about economic efficiency into the current anti-dumping scheme
by using the public interest inquiry provisions of SIMA, or by encouraging the Direc-
tor to intervene in Tribunal inquiries and make arguments in favour of consumer in-
terests.
1. Efficiency Rationales for Anti-Dumping Laws
Why does GATT contain restrictions on dumping? Various justifications, both
economic and political, are offered to support anti-dumping legislation. The economic
analysis is uncontroversial and has been replicated by many scholars in the field.”
However, it is important to briefly outline the various ways in which anti-dumping
legislation is economically inefficient in order to provide a basis upon which, in Part
II of this article, recent decisions of the CITr may be criticized.
The most frequently offered justification for anti-dumping laws is the prevention
of predatory pricing.” This argument begins with the premise that monopoly power is
inimical to the proper operation of a market economy. By selling products abroad at
prices below their home market value, foreign companies are able to force domestic
producers out of the marketplace. These foreign producers are then able to establish
Polyisocyanurate Thermal Insulation Board (13 June 1997), PB-97-001 (C.I.T.T.), [1997] C.I.T.T. No.
61, online: QL (CITT) [hereinafter Insulation Board].
“7 See e.g. EL. Warner, “Canada-United States Free Trade: The Case for Replacing Antidumping
with Antitrust” (1992) 23 L. & Pol’y Int’l Bus. 791; Bhala, supra note 8; Deardorff, supra note 8; C.
Krent, “Should Antidumping Laws be Replaced?” (1994) 32 Alta. L. Rev. 722; P Gay, “Unveiling
Protectionism: Anti-Dumping, the GA7T, and Suggestions for Reform” (1997) 6 Dal. J. of Legal
Studies 51; Hutton & Trebilcock, supra note 9; and M. Trebilcock & J. Quinn, “I’he Canadian Anti-
dumping Act: A Reaction to Professor Slayton” (1979) 2 Can.-U.S. LJ. 101.
, Trebilcock & Quinn, ibid. at 104.
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
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international monopolies which permit them to charge inflated prices without fear of
competition.
However, a number of commentators have cast doubt on the likelihood of this
scenario. The barriers to establishing an international monopoly are significant. 9 They
include the difficulty of preventing consumer stockpiling of goods during the preda-
tory pricing phase, as well as the need for quick exit levels, high barriers to entry in
the foreign market,”0 and high home market barriers” in order to permit a dumper to
protect its home market share. Other barriers to using predatory pricing to achieve an
international monopoly include the need for the dumped product to exhibit high ine-
lastic demand in order to prevent consumers from simply switching to a substitute
product.” Finally, international competition simpliciter is a significant barrier to es-
tablishing a world-wide monopoly:’ “a predator must not only drive domestic com-
petitors from the export market, but foreign competitors as well?’ 2′
The cumulative effect of these impediments appears to be that the use of preda-
tory pricing to achieve a monopoly in a domestic market is extremely unlikely. In
their study of thirty cases in which anti-dumping duties were imposed, Hutton and
Trebilcock reject the idea that anti-dumping duties are a justified means of preventing
predatory pricing, since not one case offered a serious opportunity for a dumper to
gain a monopoly in Canada.’
While predatory pricing is extremely unlikely, some commentators suggest that
the Canadian economy can be hurt by dumping in other ways. Anti-dumping duties,
they argue, should be kept not to protect against predatory pricing, but against the
more insidious types of harm produced by the ebb and flow of sporadic dumping.
” See generally Warner, supra note 17; B.S. Yamey, “Predatory Price Cutting: Notes and Com-
ments” (1972) 15 J. L. & Econ. 129; EH. Easterbrook, “The Limits of Antitrust” (1984) 63 Tex. L.
Rev. I; E.R. Easton, Book Review of Anti-Dumping Law in a Liberal Trade Order by R. Dale (1981)
I I Ga. J. Int’l & Comp. L. 390 at 393; Bhala, supra note 8 at 17; Denton, supra note 9 at 256; Gay,
supra note 17 at 57; and FH. Easterbrook, “Predatory Strategies and Counterstrategies” (1981) 48 U.
Chi. L. Rev. 263 at 267, 269 [hereinafter”Predatory Strategies”].
“‘ “Predatory Strategies”, ibid. at 271-72. See also P Areeda & D.. Tmurer, “Predatory Pricing and
Related Practices Under Section 2 of the Sherman Act” (1975) 88 Harv. L. Rev. 697 at 698-99; Krent,
mpra note 17 at 727; Gay, supra note 17 at 56; and Hutton & Trebilcock, supra note 9 at 129.
Disruption: The Incentive Effects of Antidumping Laws” in Stem, supra note 8, 155 at 158-59.
, See Bhala, supra note 8 at 10. See also B.M. Hoekman & M.P. Leidy, “Antidumping and Market
n Hutton & Trebilcock, supra note 9 at 128.
21 Warner, supra note 17 at 827; and Hutton & Trebilcock, ibid at 129.
24 Hutton & Trebilcock, ibid. See also P Nicolaides & R. Van Wijngaarden, “Reform of Anti-
Dumping Regulations: The Case of the EC” (1993) 27:3 J. World T. 31 at 40. Nicolaides & Van
Wijngaarden argue that anti-durmping legislation should take into account imports from other third
countries to determine whether “the existence of independent sources of supply constitute a deterrent
to predatory dumping” (ibid at 47).
“j Hutton & Trebilcock, ibid at 130.
1999]
Jo-M.LECLERC – REFORMING ANTI-DUMPING LAW
117
Sporadic dumping occurs when dumping is not done on a sustained basis: export-
ers dump for a few months at a time, then stop for a few months, then begin dumping
again.” During periods of dumping, domestic producers are forced to exit the market
temporarily or restrict production to fend off the lower-cost imports while they wait
for the dumper to leave the market. Consequently, the domestic producers’ higher
costs for retraining and the expansion of production facilities are passed on to the
consumer once the dumper exits the market? If consumer costs outweigh the benefits
of sporadic dumping, anti-dumping laws may be justified from a consumer welfare
perspective on the basis that sporadic dumping hurts domestic consumers in the long
run.
To better gauge costs and benefits to domestic consumers, it is important to un-
derstand why foreign exporters dump goods on a sporadic basis. Several explanations
have been suggested:
First, an exporter might charge low prices for “experience” or “learning by do-
ing” goods … The exporter’s rationale for such pricing is to increase market
share so that it may profitably sell into the export market. This is pro-
competitive. Second, the exporter might want to maintain economies of scale
by operating at full capacity even in times of slack home-market demand. It
maintains full capacity by dumping its excess output into its export market.”
Therefore, sporadic dumping is motivated by rational business strategies. In these
examples, the foreign exporter is simply acting in an economically efficient manner
that would otherwise be praised if the exporter were a domestic producer. Why, if the
practice is considered fair in a domestic context, does it become unfair in the interna-
tional trade context? GATT is designed to liberalize international trade and seeks to
eliminate artificial distortions of trade imposed by the presence of national borders.”
While domestic consumers in Canada might be hurt by sporadic dumping, overall
global welfare might be improved as a result of the exporter’s gains achieved through
sporadic dumping. Domestic consumers might pay more money for the goods that are
sporadically dumped, but this disadvantage could be more than offset by factors like
higher employment rates in the dumper’s home country where the products are manu-
factured.
2″ Warner, supra note 17 at 830.
27 Hutton & Trebilcock, supra note 9 at 130; and Trebilcock & Quinn, supra note 17 at 108.
Warner, supra note 17 at 830-31. See also Kronby, supra note 13 at 103.
GATT, Agreement Establishing the World Trade Organization (15 April 1994) [hereinafter WTO
Agreement] provides that “relations in the field of trade and economic endeavour should be conducted
with a view to … ensuring … a large and steadily growing volume of real income and effective de-
mand, and expanding the production and trade in goods and services, while allowing for the optimal
use of the world’s resources.’ It concludes that these objectives may be achieved by “entering into …
mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers
to trade and to the elimination of discriminatory treatment in international trade relations” [emphasis
added].
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Still, studies have shown that sporadic dumping is unlikely to impose deleterious
effects on importing countries.” For sporadic dumping to have a deleterious effect on
domestic producers, the sporadic dumpers must normally be unable to compete with
domestic manufacturers.” If foreign producers regularly sold their products in a do-
mestic market, consumers would benefit from long-term low prices. In addition, the
success of sporadic dumping relies on the dumper’s ability to “substantially disrupt
domestic production”‘ and on the presence of a consumer group that willingly sub-
stitutes foreign goods for domestic goods as the ebb and flow of sporadic dumping
occurs.” Critics have dismissed these two phenomena as being fairly unlikely.’
Sporadic dumping, therefore, does not appear to be a problem that requires the
application of anti-dumping laws since it is unclear that sporadic dumping occurs with
any frequency. As well, the existence of harm to Canadian consumers might not be
sufficient to justify government intervention in light of the stated objectives of GATT
(inter alia, to improve overall global welfare). However, all of these arguments are ef-
fectively ignored in determining whether to impose anti-dumping duties under SIMA.
SIMA requires a finding of “material injury”” by looking to “dumping margins …
without regard to whether the dumping is temporary or continuous”‘” and by address-
ing “falling domestic share instead of domestic market disruption.”‘
Thus, predatory pricing and sporadic dumping do not appear to be logical eco-
nomic rationales for the current anti-dumping regime. Are there any good reasons for
the current regime that are based on reasons unrelated to economic efficiency?
, See generally R.P. Alford, “Why a Private Right of Action would Violate GAIT’ (1991) 66
N.Y.U. L. Rev. 696 at 704, n. 54.
” M.J. Trebilcock & R. Howse, The Regulation of International Trade (London, England: Rout-
ledge, 1995) at 118. An argument could be made that sporadic dumpers who would ordinarily be able
to compete with domestic manufacturers might choose not to do so to purposely hurt domestic pro-
ducers. If the foreign producer has deeper pockets than the domestic producer, it could successfully
do so. In these circumstances, the foreign producer benefits not because it has a better product, nor
because it is more efficient, but simply because it has access to more resources than does the domestic
producer. In these quasi-anti-trust circumstances, a stronger argument can be made for using anti-
dumping legislation to restrict sporadic dumping.
32 Ibid.
“Ibid.
34 Ibid. See also Trebilcock & Quinn, supra note 17 at 106.
“SIMA, ss. 2(l), 42(1). See also WTO Agreement, supra note 29, Annex IA, s. 8: ‘Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994” at art. 3 [herein-
after hnplementation Agreement].
“1 SIMA, s. 2(l). “Dumped” means that “the normal value of the goods exceeds the export price
thereof” See also ss. 15-23, 29-30.
” Warner, supra note 17 at 833. See also Implementation Agreement, supra note 35 at art. 3.4 where
the examination of the impact of the dumped imports, while including “all relevant economic factors:’
specifically outlines “actual and potential decline in sales, profits, market share” and does not limit the
inquiry to domestic market disruption having a deleterious impact on domestic consumers.
1999]
J.-M.LEcLERc – REFORMING ANTI-DUMPING LAW
119
II. Non-Efficiency Rationales for Anti-Dumping Laws
Some kinds of government policy are not based on economic concerns, but rather
on shared concerns for social welfare. Consider, for instance, the pricing scheme used
by Canada Post. A letter sent from Toronto to Montreal costs the same amount as a
letter sent from Toronto to Whitehorse. This scheme cannot be justified on the basis
of economic efficiency; rather, it relies on decidedly non-economic concerns like “na-
tionhood”, “communitarianism”, or “fairness”.” Similarly, to confine an analysis of
anti-dumping law to concerns of economic efficiency alone would ignore these less
tangible values that arguably form the very basis of what it means to be a Canadian.
Hutton and Trebilcock describe this perspective as focusing on
the private non-pecuniary costs of the community and individual disruption
which ensues when domestic production is displaced by low-priced foreign
goods. The theory recognizes that personal identity derives in large part from
various social and community attachments. To disturb too many of these at-
tachments, or to radically alter the nature of a community, may impair the wel-
fare of individuals as social beings. In our modem, rapidly-changing society,
individuals are often left with comparatively few traditional attachments to in-
stitutions such as family and religion, and job displacement may be particularly
traumatic to the individuals and communities concerned. 9
The harm is not confined to workers having to move elsewhere to find jobs; entire
communities can be devastated by the loss of only a few jobs, since unemployed
workers no longer have incomes to purchase goods and services from local industries.
Additional jobs may also be lost in those industries, forcing even more people to
move elsewhere to find employment.
A study performed by Hutton and Trebilcock examined a series of thirty cases
where anti-dumping duties were eventually imposed by the C1T. The authors exam-
ined the effects of the duties to determine whether any cases could be justified on
communitarian grounds. They discovered that most of these thirty cases involved
workers centred around large communities like Toronto or Montreal.’ Since workers
in large cities are more likely than workers in small communities to find employment
without relocating, worker disclocation in those cities should not engage communi-
tarian concerns.’ Hutton and Trebilcock’s study did discover five cases that “involved
communities which arguably could not absorb the loss of jobs without serious disrup-
tion to the quality and character of life in the community’ 2 Here too, though, the
authors criticized the imposition of anti-dumping duties because “in each of these five
cases, [the application of anti-dumping duties] also protected jobs in prosperous and
For a discussion of “fairness” in anti-dumping cases, see Warner, ibid. at 834 and 834-35, n. 262-
67.
” Hutton & Trebilcock, supra note 9 at 135.
40 Ibid. at 137.
41 Ibid
41Ibid. at 143.
120
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diverse economic centres … where laid-off workers could most easily be re-absorbed
and communitarian values are the least implicated by a lay-off?”‘4
The administration of SIMA itself also militates against a system designed to
protect less-fortunate communities. An anti-dumping inquiry involves, among other
things, finding “injury, retardation or a threat to cause injury?'” “Injury” is defined as
“material injury to a domestic industry?”4’ “Domestic industry” means “domestic pro-
ducers as a whole of the like goods or those domestic producers whose collective
production of the like goods constitutes a major proportion of the total domestic pro-
duction of the like goods?'” SIMA envisages harm to Canada as a whole, and not on a
community-by-community basis. Unless the community depends on an industry that
produces the “whole of the like goods” or whose production “constitutes a major pro-
portion of the total domestic production,” entire communities can be left in the lurch.
SIMA does contemplate a situation where a regional producer is deleteriously af-
fected by dumping while others in the rest of the country are not. Anti-dumping duties
may be imposed in these types of situations if “the producers in the market sell all or
almost all of their production of like goods in the market” and “the demand in the
market is not to any substantial degree supplied by producers of like goods located
elsewhere in Canada?” There must also be material injury “to all or almost all of the
production of like goods in the regional market”” stemming from “a concentration of
… goods into the regional market?” “‘It is not clear whether this type of provision
would help a small community whose employment needs revolve around one indus-
try. If that industry sold a good portion of its products outside of the market, that
small-town industry would fall outside the ambit of section 2(1.1). If any of the other
three criteria are not met, its bid would also fail. It might then lay off employees or
shut down completely, and throw the town into chaos. For SIMA not to respond to
such a blatant example of the need to protect communities suggests that if it is prem-
ised on the need to protect fragile communities, it at least does so imperfectly.
111. Reforming the SIMA Regime
The analysis in Part I of this article demonstrates that anti-dumping duties do not
appear to be motivated by economic concerns such as the growth of monopolies
through predatory pricing or sporadic dumping. Part II demonstrates that communi-
tarian values are also not the motivation behind the anti-dumping regime. It follows,
therefore, that decisions of the CIT, operating within the framework of SIMA, would
also not be motivated by either of these types of concerns. Even if SIMA is, in fact,
43 Ibid.
44 SIMA, s. 42(1).
“Ibid., s. 2(1).
“Ibid. [emphasis added].
” Ibid., ss. 2(1.1)(a), (b).
41 Ibid., s. 42(5)(b).
49 Ibid., s. 42(5)(a).
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premised on economic or communitarian interests, the current anti-dumping mecha-
nism addresses these problems in either an overly broad or imperfect manner. Preda-
tory pricing seldom, if ever, has the effect of giving the predator a monopoly position,
and sporadic dumping is an infrequent phenomenon. Moreover, anti-dumping duties
sometimes help communities and workers who need them least, rather than those who
need them most.
Part I of this article will now examine how anti-dumping duties are imposed.
The intention here is to determine whether the structure of SIMA iavours domestic
producers at the expense of domestic consumers. Next, it will consider the feasibility
of reforming SIMA or GATT to take better account of consumers’ interests. Finally,
this article will analyze what, if anything, consumer interest advocates can do to fur-
ther their cause under the current regime if substantive legislative reform is improb-
able.
A. Procedure in Dumping and Subsidy Investigations Under SIMA
SIMA outlines the complex procedure by which the Deputy Minister of Revenue
can impose anti-dumping duties. In the first phase, the Deputy Minister determines
whether to initiate an investigation. Investigations may begin in one of two ways: the
Deputy Minister can act on his or her own initiative, or an investigation may be initi-
ated as a result of a written complaint submitted to the Deputy Minister by a domestic
producer.’ Once a “preliminary determination”” of dumping is made by the Deputy
Minister, the Tribunal must hold an inquiry to determine whether the dumping “has
caused material injury”‘ “Injury” is defined in section 2(1) of SIMA as “material in-
jury to a domestic industry” If the Tribunal concludes that material injury has oc-
curred, it must advise the Deputy Minister that the dumped goods have caused in-
jury.” An anti-dumping duty in the amount equal to the “margin of dumping of the
imported goods”‘ is then imposed, which is generally equivalent to the difference
between the price at which the goods are imported into Canada and the price for
which the goods are sold in the exporter’s home market.”
s0Ibid, s. 31(1); s. 31(2) limits the circumstances under which a written complaint may be made,
since the complaint must be supported by “domestic producers whose production represents more
than 50 percent of the total production of like goods by those domestic producers who express either
support for or opposition to the complaint.” Of those domestic producers who do support the com-
plaint, their production must represent 25% or more of the total production of “like goods by the do-
mestic industry.”
51 Ibid., s. 38.
“Ibid, s. 42(1)(a).
Ibid., s. 43(1).
N4 s. 3(1)(a).
“Ibid., s. 2(1) defines “margin of dumping” as “the amount by which the normal value of the goods
exceeds the export price of the goods.” “Export price’ (the price at which goods are imported into
Canada) is also defined in s. 2(1) and involves making calculations outlined in ss. 24-30; “normal
value” is calculated in accordance with ss. 15-23, 29, 30 and generally involves determining the price
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One of the most critical stages of this process is the Tribunal’s determination of
whether “injury to a domestic industry” has occurred. Section 37.1(1) of the Special
hnport Measures Regulations” prescribes several relevant factors for the Tribunal to
consider:
(a) the volume of the dumped … goods;
(b) the effect of the dumped … goods on the price of like goods, and … whether
the dumped … goods have significantly undercut, depressed or suppressed
the price of like goods …;
(c) the resulting impact of the dumped … goods on the state of the domestic
industry and, in particular, all relevant economic factors and indices that
have a bearing on the state of the domestic industry …; [and]
(d) any other factors that are relevant in the circumstances.
The Tribunal’s main focus, therefore, is on the dumped goods’ effect on domestic in-
dustry. “Domestic industry”, according to section 2(1) of SIMA, is limited to domes-
tic producers of like goods. If the notion of domestic industry was given a broad defi-
nition to include an examination of the effects of dumping on the entire economy, the
Tribunal would be required to inquire into factors like potential savings to consumers
and commercial users of the dumped products or the resulting benefits to the Cana-
dian economy as a whole. These considerations, coupled with an economic analysis
similar to the one performed in Part I of this article, might lead the Tribunal to impose
anti-dumping duties in only the most extreme circumstances. Anti-dumping duties
might only be imposed if a foreign producer successfully engaged in predatory pric-
ing or if it succeeded in harming domestic consumers through sporadic dumping. In-
stead, “domestic industry” is limited to “domestic producers as a whole of the like
goods or … whose collective production … constitutes a major proportion of the total
domestic production of the like goods.”” SIMA seems to either assume that harm to a
domestic industry is in and of itself harmful to Canada’s overall economic welfare, or
treats Canada’s overall economic welfare as irrelevant to the determination of harm
(and the consequent imposition of anti-dumping duties).
B. Reforming SIMA to Recognize Consumer Welfare Interests
Given the absence of any economic or political rationale for anti-dumping duties,
SIMA would better reflect efficient liberalized trade needs if it recognized a broader
range of interests before the CITIT could make a finding of injury. Unfortunately, po-
litical reform of anti-dumping duties is unlikely. This portion of the article will assess
of the goods when they are sold during a sixty day period (s. 15(d)), “at the place from which the
goods (are] shipped directly to Canada” (s. 15(e)) to an arm’s length purchaser (s. 15(a)(i)) in the
same or substantially the same quantities as the sale in Canada (s. 15(b)) in the ordinary course of
trade (s. 15(c)). If these conditions are not met, alternative methods of pricing the goods are provided
for in ss. 16-23, 29, 30.
‘6 S.O.R./84-927.
“SIMA, s. 2(l).
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the likelihood of political reform of anti-dumping legislation on a domestic and inter-
national level.
1. Reforming or Repealing SIMA
Attempts by other countries to repeal their domestic anti-dumping legislation
have been unsuccessful. For instance, in Australia such proposals amounted to “easy
prey for opposing political interests” who questioned why Australia should be de-
prived of protection permitted under GATT, since the country’s trading partners were
not also repealing their dumping laws.” In the end, “the Australian government was
not prepared to provide Australian industry with a lesser safeguard against unfair
competition than those provided by these other countries.” ‘5 The Canadian govern-
ment appears no more enthusiastic about the idea. A Parliamentary Sub-Committee
review of SIMA in 1996 used similar logic as Australian opponents of the idea to con-
clude that anti-dumping laws should not be repealed. The Sub-Committee’s report
stated:
Although Canada would like to eliminate anti-dumping remedies in the context
of free trade areas … the Sub-Committees are of the opinion, after having heard
testimonies on this subject, that the elimination of anti-dumping remedies even
though this would be the ideal, is unrealistic in the short and medium term
without endangering Canadian industries. Thus far, the U.S. government and
U.S. industry have not been receptive to Canadian efforts to seek altemative ar-
rangements or substantive reforms to existing trade remedy laws.’
Therefore, the Sub-Committee declined to follow a course that it felt was ideal be-
cause it feared that other countries would not follow suit.
Ironically, the same type of argument was used by protectionists during the mid-
nineteenth century who thought that lowering trade barriers without requiring other
countries to do the same would result in economic suicide. However, despite these ar-
guments, Britain repealed its Corn laws in 1846 to permit the importation of corn
without requiring other countries to remove their trade restrictions on British goods.”
This policy “reflected the insights of classical trade theory that unilateral trade liber-
alization enhanced national welfare over the protectionist base case” The benefits
thought to accrue to Britain as a result of unilateral trade liberalization stem from
58Gay, supra note 17 at 68.
59Ibid., quoting H.K.C. Steele, ‘The Australian Antidumping System” in J. Jackson & E. Vermlust,
eds., Antidumping Law and Practice (Ann Arbour, Mich.: University of Michigan Press, 1989) 223 at
230.
, Canada, Minutes of Proceedings of the Sub-Committee on the Review of the Special Import
Measures Act (SIMA) of the Standing Committee on Finance (Ottawa: House of Commons, 1996) at 5
[emphasis added] [hereinafter Sub-Committee Report].
61Trebilcock & Howse, supra note 31 at 18.
1 IbM. [emphasis in original].
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Adam Smith’s theory of absolute advantage. According to Smith, it is economically
efficient for
every prudent master of a family, never to attempt to make at home what it will
cost him more to make than to buy. The taylor does not attempt to make his
own shoes, but buys them of the shoemaker. … The shoemaker does not at-
tempt to make his own cloaths, but employs a taylor. All of them find it for
their interest to employ their whole industry in a way in which they have some
advantage over their neighbours, and to purchase with a part of its produce …
whatever else they have occasion for.’
Nations that lower trade barriers benefit from more efficiently-produced foreign
goods, and can concentrate instead on producing goods for which the country has an
absolute advantage. Why not do the same with anti-dumping laws? For example,
Canada might benefit from more cheaply-produced foreign fresh grapes, and could
instead focus its own grape manufacturing efforts on growing apples for cider pro-
duction. In this example, the margin of dumping (i.e., the difference in price between
the grapes sold for export to Canada and the cost of the grapes in the exporter’s home
market) is effectively transformed into a subsidy given by a foreign industry to the
Canadian apple industry. Assuming the risk of predatory pricing is negligible, Can-
ada’s economy would be more efficient and more profitable if it welcomed the effec-
tive subsidy and used it for more profitable purposes.” The conclusions of the Parlia-
mentary Sub-Committee, while appearing equitable and fair at first glance, are unper-
suasive and not in Canada’s long-term economic interests.
2. Reforming or Repealing Article 6 of GATT
Since the unilateral reform of anti-dumping laws is seen as unfair to domestic
producers without a concomitant obligation on its trading partners to do the same, ef-
forts at reform might be better directed to the international reform of anti-dumping
agreements. However, reform does not appear any more likely on the international
front. The most compelling argument in favour of retaining anti-dumping provisions
in GATT is that they provide a useful “safety valve” for governments who are faced
with intense competitive pressure from foreign imports.’ Without anti-dumping pro-
visions, countervailing duties, etc., governments would not sign on to GA7T and the
3A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. by R.H. Campbell
& A.S. Skinner (Oxford: Clarendon Press, 1976) vol. 1 at 456-457. Note that I have retained the
original language and spelling used by Smith in his text.
” Of course, eventually the transfer of wealth from one country to another will be so great that the
dumping will have to stop if the foreign producer acts in a rational, self-interested way. This makes it
risky for the recipient of the dumped products to rely on a “subsidy” that could instantly vanish.
Beneficiaries of subsidies, therefore, would be best advised to use the effective subsidy in projects that
are not capital intensive and do not require significant sunk costs and start-up expenses that would
take years to recoup.
‘6 See generally Gay, supra note 17 at 66-67; and J. Bhagwati, Protectionism (Cambridge, Mass.:
M.I.T. Press, 1988) at 35.
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end goal of worldwide trade liberalization (and its resulting benefits) would not oc-
cur.” Viewed from this perspective, anti-dumping duties are simply a means to
achieving liberalized trade, negotiated through compromise.
GA7T is replete with similar instances of compromise. For example, articles 22
and 23, which set out rules governing dispute settlement mechanisms, underline the
importance of negotiation by stating that the “aim of the dispute settlement mecha-
nism is to secure a positive solution to a dispute?’ The preferred solution to any dis-
pute is “a solution mutually acceptable to the parties … and consistent with the cov-
ered agreements”” Each party must “accord sympathetic consideration to [and] afford
adequate opportunity for consultation”
if disputes arise under GATT. Realistically,
with over 120 different States now members of GATT, it is difficult to achieve consen-
sus on any matter of international trade without some form of compromise:
The GAIT system has very few intellectually pure principles and most of the
time represents a compromise between opposing factions. Allowing nations to
react against dumping would satisfy those that wished to condemn dumping,
whereas conditioning such a reaction upon certain findings-in particular, in-
jury-would please those nations that wished to see no control of dumping.
Simply making dumping actions obligatory would not have represented a com-
promise at all.’
In the end, the development of trade policy “is primarily a political exercise”
Reformers must understand that while anti-dumping actions may not be economically
efficient, the alternative of a pre-GATT world of extreme trade restrictions would be
far worse. On the other hand, political probl6ms like anti-dumping call for political
solutions in the form of negotiations and compromise, both of which are subject to the
vagaries of “back-room deals”. Should critics of the system be content to leave reform
to politicians and diplomats, or can other methods of reform be found by working
within the parameters of SIMA?
C. Public Interest Inquiries
1. The Operation of Section 45
While SIMA adopts as its primary aim the protection of domestic producers, there
is still one avenue through which critics of the scheme may argue in favour of con-
sumer interests. Section 45(1) of SIMA, the “public interest” provision, permits the
“Gay paraphrases Bhagwati in saying “the existence of some form of trade barrier is a political ne-
cessity in order to allow for the removal of trade barriers in other areas” (ibid.).
” WTO Agreement, supra note 29, Annex 2: “Understanding on Rules and Procedures Governing
the Settlement of Disputes” at art. 3.7.
6Ibid.
” GAT, art. 22.
7
0 Denton, supra note 9 at 248.
7′ Gay, supra note 17 at 66.
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Tribunal to determine whether the imposition of anti-dumping duties would be in the
public interest. Section 45 states:
45(1) Where, as a result of an inquiry referred to in section 42 …. the Tribu-
nal makes an order or finding [of material injury] … and the Tribunal
is of the opinion that the imposition of an anti-dumping or counter-
vailing duty, or the imposition of such a duty in the full amount pro-
vided for by any of those sections, in respect of the goods would not
or might not be in the public interest, the Tribunal shall, forthwith af-
ter making the order or finding,
(a)
report to the Minister of Finance that it is of that opinion and
provide him with a statement of the facts and reasons that caused
it to be of that opinion; …
45(2) Where any person interested in an inquiry referred to in subsection (1)
makes a request to the Tribunal for an opportunity to make represen-
tations to the Tribunal … [on the public interest question], the Tribunal
shall afford that person an opportunity to make representations to the
Tribunal on that question orally or in writing, or both, as the Tribunal
directs in the case of that inquiry.
Regulations developed under SIMA limit “person[s] interested in an inquiry” to per-
sons engaged in the production, purchase, sale or trade of goods currently the subject
of an investigation; persons engaged in the production of like goods that are the sub-
ject of an investigation; persons authorized by Parliament or the legislatures to inter-
vene in the process; a user of any like goods subject to an investigation; and “any as-
sociation whose purpose is to advocate the interests of consumers in Canada.”” Inter-
estingly, the words “public interest” are not defined in either SIMA or the Regulations.
Given the impediments to advocates of the public interest, how successful has
section 45 been in restricting the instances where anti-dumping duties are imposed?
An examination of recent decisions of the CITr shows that the provision has been
used infrequently, and that when it is used, anti-dumping duties are seldom reduced.
Between 1992 and 1997, only five public interest inquiries have been held,’ while
twenty-seven section 42 inquiries were held during the same period.” Not one of
those five public interest inquiries resulted in the Tribunal reversing its initial decision
to impose anti-dumping duties. Since 1984, only two public interest inquiries have re-
sulted in a request that a duty of less than the full margin of dumping be imposed.”
” SIMA, s. 41.
“See online: Canadian International Trade Tribunal
ClTr’s web page and counting the number of public interest inquiry decisions available in that data-
base. The same methodology was used to determine the number of s. 42 inquiries in infra note 75.
” See online: Canadian International Trade Tribunal
” Gay, supra note 17 at 71. The cases in which a lower margin of dumping was recommended were
Grain Corn (1987), 14 C.E.R. 1 (CIT), [1987] C.I.T. No. 4, online: QL (CM; and Re Beer (2 October
1991), NQ-91-002 (C.I.T.T.), [1991] C.I.T.T. No. 56, online: QL (CITr).
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2. CITT Interpretation of the Public Interest
Why has section 45 of SIMA been so unsuccessful at limiting the circumstances
under which anti-dumping duties are imposed? When the provision was first intro-
duced, it was thought to be a way of balancing producer interests with consumer in-
terests:
The public interest provision was enacted in 1984 at the suggestion of the Con-
sumers’ Association of Canada, and followed a House of Commons Report
which found that “concentration on producer interests is too narrow a focus and
the consumer interest must be considered’ 7′
Subsequent decisions of the C1TT, however, have severely limited the effect of the
public interest provision. During the Grain Corn” public inquiry hearings in 1987, the
Canadian Import Tribunal (the predecessor to the CITI) outlined circumstances under
which public interest considerations should affect the imposition of anti-dumping du-
ties. The Tribunal’s judgment stated:
Section 45 … is to be applied on an exceptional basis as, for instance, when the
relief provided producers causes a substantial and possibly unnecessary burden
to users, downstream producers and consumers of the product … The tribunal is
not charged with a broad responsibility for trading of benefits to one group
against injury to another.”‘
More recent public interest inquiries of the CITT have continued to apply public
interest considerations narrowly. The CITT requires “compelling or special circum-
stances that necessitate a consideration of the public interest” or “a sufficiently com-
pelling public interest issue to warrant a departure from the primary object of SIMA”
before the Tribunal proceeds to a public interest investigation. Since the Tribunal has
held that SIMA’s “primary purpose … is to protect Canadian producers from injury
caused by imports of dumped or subsidized goods,”” arguments in favour of con-
sumer welfare are often rejected by the Tribunal. Presumably, although it does not say
so, the CITT considers that an overly broad interpretation of the public interest rule
that would give equal consideration to consumer welfare interests would make SIMA
ineffective, since the imposition of anti-dumping duties, by definition, is simply an
equal trade-off between domestic producers and domestic consumers. For instance, if
two dollars worth of anti-dumping duties are imposed on a product, the domestic pro-
ducer derives a corresponding benefit of two dollars. Accordingly, domestic consum-
ers suffer a loss of at least two dollars. Viewed from this perspective, it would be
much more difficult to establish “material injury to a domestic industry” if anti-
76 Warner, supra note 17 at 812 quoting Canada, House of Commons Sub-Committee on Import
Policy, Report on the Special Measures Import Act (Ottawa: Queen’s Printer, 1982) at 27.
” Supra note 75.
7’ Gay, supra note 17 at 71, quoting Grain Corn, ibid.
79Insulation Board, supra note 16 at para. 19.
‘0 Preformed Fibreglass Insulation, supra note 16 at para. 14.
” Insulation Board, supra note 16 at para. 19.
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dumping duties are considered to be a transfer of wealth from consumers to produc-
ers. If the Tribunal also considered the interests of end users or those of the dumper,
the arguments for avoiding the use of anti-dumping duties canvassed in Part I of this
article would begin to wind their way into the proceedings. For instance, the Tribunal
might consider whether it is economically efficient for foreign producers to dump
their products sporadically in Canada, whether predatory pricing is realistic, whether
small communities truly benefit from the imposition of anti-dumping duties, and so
on. The end result would likely be that anti-dumping duties would only be imposed in
the rarest of circumstances. SIMA, and to a lesser degree the CITI, would lose their
raison d’etre as consumer welfare interests gained equal importance with domestic
producers’ interests.
However, these types of arguments would likely not influence the CITI, given its
narrow reading of the public interest provision. The Tribunal would have to be per-
suaded that its interpretation of the meaning of “public interest” is wrong. Is the CITT
correct in only applying the public interest provision in “exceptional circumstances”?
Should the words “public interest” be given a broader meaning? The CIIT’s inter-
pretation of the public interest can theoretically be challenged on administrative law
grounds: one can argue that the CITT’s interpretation of the public interest is incor-
rect, and that a court should substitute its broader interpretation of the provision for
that of the Tribunal.
The first hurdle for an applicant using this line of argument would be section
62(1) of SIMA, which provides that a person may appeal a decision of the CITIF “on
any question of law.” A court would likely interpret the words “public interest” as a
matter of opinion, not a question of fact or law, and would refuse to interfere with the
Tribunal’s exercise of judgment.’2 Even if the applicant could overcome that hurdle,
the standard of review applicable to the decision of the CT would likely prevent an
appellate court from overturning the CITT’s decision. A court faced with an appeal
from a statutory tribunal will not simply consider whether the tribunal decided the
case correctly. Instead, a court will first consider the standard of review that applies to
that particular tribunal’s decision. As was stated in Pezim v. British Columbia (Super-
intendent of Brokers),’3 standards range from “the standard of reasonableness to that
of correctness.” The reasonableness standard, “where deference is at its highest, [is
See generally Union Gas Co. of Canada v. Syndenham Gas and Petroleum Co., [1957] S.C.R.
185, 7 D.L.R. (2d) 65 [hereinafter cited to S.C.R.]. In that case, the Court considered whether a right
of appeal on any question of fact or law gave a court the right to set aside an administrative tribunal’s
decision that was based on the tribunal’s assessment of “public convenience”. The Court held that a
right of appeal on questions of fact or law did not extend to questions of “public convenience’ as “the
determintation of public convenience [is not a question of fact]. … [I]t is not an objective existence to
be ascertained; the determination is the formulation of an opinion” (ibid at 190). Absent a right of
appeal on matters of opinion, the words “public interest” in SIMA are likely to be viewed as suffi-
ciently similar to “public convenience” that a court would refuse to interfere with the tribunal’s as-
sessment of the public interest.
“3 [1994] 2 S.C.R. 557 at 590, 114 D.L.R. (4th) 385 [hereinafter Pezim cited to S.C.R.].
1999]
J.-M.LECLERC – REFORMING ANTI-DUMPING LAW
applied in] those cases where a tribunal protected by a true privative clause, is decid-
ing a matter within its jurisdiction and where there is no statutory right of appeal”
The correctness standard, on the other hand, applies to tribunals that have “no greater
expertise on the issue in question “”
Which standard of review would apply to decisions of the CYLT? A case close on
point is Pezim. In that case, the Supreme Court considered “the appropriate standard
of review for an appellate court reviewing a decision of a securities commission not
protected by a privative clause when there exists a statutory right of appeal and where
the case turns on a question of interpretation.”‘ The Securities Commission was given
authority to make its decision in virtue of the Securities Act,” which, like SIMA, does
not contain a privative clause. In determining the appropriate standard of review, the
Supreme Court considered a number of different factors. Among these were sections
14 and 144 of the British Columbia Securities Act, which provided the Securities
Commission with a broad power to make orders it considered to be “in the public in-
terest?’ The British Columbia Securities Act, like SIMA, does not contain a definition
of the “public interest”. lacobucci J., for a unanimous court, found that these public
interest provisions revealed “the breadth of the Commission’s public interest man-
date” which demonstrated “the legislature’s intention to give the Commission a very
broad discretion to determine what is in the public’s interest,”‘ This, in the court’s
opinion, was “an additional basis for judicial deference.”
The Supreme Court had previously considered the standard of review applicable
in National Corn Growers Association v. Canada (Import Tribunal), ‘
to the CIT
where the majority appeared to assume that since SIMA contained a privative clause,
the standard of review applicable to the Tribunal’s decisions was that of patent unrea-
sonableness. ‘ Since that case was decided, however, the privative clause has been re-
moved from SIMA. Therefore, Pezim and other cases which involve review of a tri-
bunal’s decision in the absence of a privative clause and where there is a statutory
right of appeal are still important cases for assessing the standard of review that will
be applicable to the Tribunal’s decisions. In Pezim, the Court held that “even where
there is no privative clause and where there is a statutory right of appeal, the concept
“Ibid
bid. at 588.
R.S.B.C. 1990, c. 418.
Pezim, supra note 83 at 594.
“Ibid. at 595.
Ibid
9 [1990] 2 S.C.R. 1324,74 D.L.R. (4th) 449 [hereinafter cited to S.C.R.].
“Ibid at 1370.
9’ See Re Synthetic Baler Twine With a Knot Strength of 200 LBS or less, Originating in or Exported
from the United States ofAmerica (United States v. Canada) (1995), CDA-94-1904-02 (Ch. 19 Panel)
at 7-8, online: NAFTA Secretariat
cessed: 29 January 1999) [hereinafter Baler Twine].
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
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of the specialization of duties requires that deference be shown to decisions of spe-
cialized tribunals on matters which fall squarely within the tribunal’s expertise.””
Given the Supreme Court’s decision in Pezim, and given that an international trade
tribunal is likely to be seen as a specialized tribunal, deference will likely be shown to
the CITT’s narrow interpretation of the public interest provisions of SIMA. The words
“public interest” are capable of “almost infinite extension”,” and a court will likely be
reluctant to wade into the debate without good reason. Determining the meaning of
“public interest” requires, at a minimum, intimate knowledge of SIMA, its purposes,
and the administration of international economic law-skills that an appellate court
would not have.
3. Legislative Change to Section 45
Since a direct challenge to the CIT’s interpretation of the public interest provi-
sions of SIMA is unlikely to succeed, and a repeal of SIMA is unlikely, is there any
hope for the reform of SIMA? One possible avenue might lie in changes proposed to
section 45 of SIMA by the Sub-Committee Report of 1996. The changes appear moti-
vated, at least in part, by the observations of former CITr Vice-Chairman MacMillan.
During the Sub-Committee hearing, she admitted that “[t]he statute provides no guid-
ance as to what the public interest is. The criteria for public interest should be articu-
lated more clearly, in a broader sense.”‘ To this end, the Sub-Committee recom-
mended a series of reforms to section 45. The most important recommendation was
that “a non-exclusive list of factors be included in section 45 of SIMA that would
guide the CITT respecting whether and how to conduct a public interest inquiry.”
The Sub-Committee Report continued by proposing the type of factors the CITT
ought to consider in its assessment of the public interest. The report stated:
Public interest is a term that should receive as clear an operational definition as
do the terms dumping or subsidy, which are defined in law, or the term injury,
which is largely defined in regulations. Factors that might form a test for public
interest could include: significant damage to downstream users; problems of
access to inputs due to the imposition of the full duty; restriction of competition
in domestic market; significant impact on choice or availability of products to
consumers; elimination of competition in the marketplace; and so forth. It is
understood that any criteria or facts expressed in legislative language would
take precedence over previous CITr practice, such as the “exceptional basis”
test applied in the Grain Corn case.9’
Whether these proposed changes will make any difference to the public interest
process is unclear. To a certain extent, the Tribunal has already considered these fac-
tors in its public interest investigations, and has still rejected the elimination or reduc-
‘” Pezim, supra note 83 at 591.
9,R. v. Zundel, [1992] 2 S.C.R. 731 at 774,95 D.L.R. (4th) 202.
9Sub-Comninittee Report, supra note 60 at 34.
9 Ibid. at 35.
98 Ibid.
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J.-M.LECLERC – REFORMING ANTI-DUMPING LAW
tion of anti-dumping duties. In Refined Sugar, the Tribunal considered the impact that
anti-dumping duties would have on downstream users and consumers, and concluded
that “the margin increases will not likely have a significant adverse effect on industrial
users, re-sellers and consumers over this period'”” Likewise, the Tribunal extensively
considered the effects anti-dumping duties would have on competition in the market-
place. Despite testimony that the “domestic sugar refining industry is highly concen-
trated [and] is characterized by high fixed costs “”” the CITT found that recent in-
creases in competition in the domestic market, ‘ the tendency of large industrial users
of sugar to shield themselves from higher prices by signing multi-year contracts,”‘ the
sheer purchasing power of some industrial users,”‘ the ability to substitute sugar with
other sweeteners,”‘ and the ability to import sugar from countries not subject to anti-
dumping duties”‘ would mitigate any excessive competitive advantage domestic pro-
ducers might otherwise have gained from the imposition of anti-dumping duties. The
CITT in Refined Sugar appears to have addressed virtually every one of the consid-
erations suggested in the Sub-Committee Report, but still refused to reduce the anti-
dumping duties imposed.
Moreover, the addition of these supposedly “new” factors might actually aggra-
vate the interests of consumers. Some of the wording proposed by the Sub-Committee
harks back to the “exceptional basis” test used in Grain Corn: “significant damage to
downstream users; problems of access to inputs; significant impact on choice or avail-
ability of products to consumers; and elimination of competition in the market-
place. “” This language is not, in the Sub-Committee’s words, “as clear an operational
definition as … the terms dumping or subsidy,”‘” which have precise and definite
meanings. Is “significant” different from “exceptional”? If so, in what way? Does
“elimination” of competition mean anti-dumping duties can be reduced if there is
some reduction in competition, or does “elimination” mean the complete withdrawal
of all competition?” Far from improving consumers’ lot, the addition of these factors
might actually increase the threshold needed before anti-dumping duties are reduced,
‘9 Refined Sugar, supra note 16 at para. 152.
‘ Ibid. at para. 103.
l01 Ibid. at para. 106.
0’ Ibid. at para. 107.
..3 Ibid. at para. 113.
‘I4bid. at para. 118.
‘ Ibid. at para. 122.
’06Sub-Committee Report, supra note 60 at 35 [emphasis added].
107 Ibid.
“”‘Elimination of competition” would appear to require an end to all competition before anti-
dumping duties could be reduced or eliminated. The Merriam Webster dictionary defines “to elimi-
nate” as “to eradicate” or “to remove”. “Eradicate”, in turn, is defined as “to pull up by the roots” or
“to do away with as completely as if by pulling up the roots” “Remove” is defined as “to get rid of:
eliminate”, and suggests the sentence “remove a tumor surgically” as an example of its proper use.
See online: Merriam-Webster online
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
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making section 45 even less effective for advocates of consumer welfare than it cur-
rently is.
In addition to these guiding factors, the Sub-Committee made two other recom-
mendations of note. First, it recommended that the C1IT’s decision “that an anti-
dumping … duty might not be in the public interest … should be a formal decision re-
viewable by a Federal Court.””‘ The Sub-Committee also recommended that the
“lesser duty concept” (the idea that an anti-dumping duty should not simply reflect
the difference between the normal and export prices but should instead only be ap-
plied to the extent required to remedy the injury) should “be incorporated in section
45 of SIMA ”
The recommendation that an anti-dumping duty should be reviewable by the Fed-
eral Court is not a very clear proposal for reform. If the Sub-Committee proposes to
apply a broader right of appeal to the Federal Court of Appeal, where questions of
fact and law and opinion may be appealed, will this new method of appeal only apply
to public interest investigations? If a broader right of appeal is, in fact, what the Sub-
Committee recommends, will this make a court change the standard of review it has
applied to the Tribunal’s decisions in the past? Or will courts simply reason that not-
withstanding the broader right of appeal, courts should apply a high standard of def-
erence toward decisions of the CITr since it deals with highly complex questions of
trade with unique policy considerations, all administered by a group of experts? The
Sub-Committee leaves these questions unanswered, and is content simply to propose
that the Tribunal’s decision should be reviewable by the Federal Court. The wording
of these revisions will be significant, and their interpretation by courts will determine
the extent to which these proposed changes are substantive or simply “smoke and mir-
rors”.
The lesser duty concept, on the other hand, appears to be a worthwhile change
that will, if nothing else, at least alleviate some of the harm caused to consumers by
the imposition of anti-dumping duties. Currently, the WTO Anti-Dumping Agreement
states that “it is desirable that the imposition of the duty be less than the margin [of
dumping], if such lesser duty would be adequate to remove injury to the domestic in-
dustry.’ This does not, therefore, appear to be a mandatory provision of GATT, since
the provision uses exhortatory language instead of compulsory words like “shall” or
“must”. Nor is the lesser duty concept contained in SIMA. Nevertheless, it has been
argued during public interest inquiries that the CITi should apply the lesser duty con-
cept. To date, however, the Tribunal has refused to apply the concept. In response to
arguments made by industrial users of sugar in Refined Sugar, the CITT remarked:
Contrary to the submissions of certain parties, the Tribunal is not required un-
der Canadian law to employ a “lesser duty” approach in considering the public
interest under section 45 of SIMA. The Tribunal is of the view, however, that
“‘Sub-Committee Report, supra note 60 at 35.
,o Ibid. at 36.
“‘WTO Agreement, supra note 29 at art. 9.1 [emphasis added].
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J.-M.LECLERC – REFORMING ANTI-DUMPING LAW
the relevant provisions of the GATT and WTO agreements provide a useful
backdrop against which to consider the balancing of the various interests af-
fected by the imposition of the anti-dumping and countervailing duties.”‘
However, the Tribunal concluded its analysis by holding that “the public interest does
not warrant the reduction or elimination of the duties””‘3 Would the inclusion of a re-
quirement to incorporate the lesser duty concept in section 45 have changed the Tri-
bunal’s conclusion? Again, like the recommendation that the public interest decision
of the Tribunal be reviewable by the Federal Court, it depends how the concept is in-
tegrated into SIMA. If SIMA is changed to require the Tribunal to apply duties only to
the extent needed to remedy the harm to domestic industries, the change will be a
substantive one. It would force the Tribunal to quantify harm caused to domestic in-
dustry and to apply duties only to the extent required to eliminate that harm. Con-
versely, if the lesser duty concept is simply a factor for the Tribunal to consider, it
might not affect the Tribunal’s final decision, since the Tribunal already appears to
consider, to a certain extent, the lesser duty concept. In Refined Sugar, however, this
did not have the effect of reducing anti-dumping duties.
D. Interventions by the Director of Competition
Since section 45 is ineffective whether in its present or proposed amended form to
promote consumer welfare interests, is there any hope for consumer welfare interests
to make their way into the proceedings? Section 126(1) of the Competition Act might
offer one means of criticizing the imposition of anti-dumping duties. This section
permits the Director of Competition to appear before boards and tribunals to “make
representations”. So far, the Director has intervened in six of the reported cases heard
by the Tribunal.”‘ Some commentators, such as Matthew Kronby, praise the Director’s
intervention,”‘ arguing that the Director’s submissions have considerable influence on
the Tribunal’s decision as to whether material injury has occurred. However, it ap-
pears that in most cases in which the Director intervened, the Tribunal still imposed
anti-dumping duties.
In one of the more recent public interest inquiries, the Director opposed the impo-
sition of anti-dumping duties on home canning products imported from the United
States that were found under section 43(1) of SIMA to have caused material injury to
the domestic industry.”‘ The Director argued that imposing anti-dumping duties on
these imports “would result in the complete elimination of competition in the supply
of caps, lids and jars in Canada!”‘ due to the “withdrawal of domestic and foreign
suppliers of the … goods over the recent past, the maturity of the market and the high
“1 Refined Sugar, supra note 16 at para. 10.
“‘ Ibid at para. 156.
1,4 See generally supra note 16.
“‘ Kronby, supra note 13.
.1 Caps, Lids and Jars, supra note 16 at para. 1.
… Ibid. at para. 8.
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cost of entry.””‘ Thus, even if prices increased in the domestic market as a result of
anti-dumping duties, there would be little motivation for competitors to enter the in-
dustry and skim off the excess profits. The Director also appeared to challenge inter-
pretations of the “public interest” made by the Tribunal in previous cases. The Tribu-
nal summarized the Director’s submissions in this respect:
[T]he public’s interest in free competition is the controlling feature of this case,
and this interest is supported by legislation and judicial statements of principle.
In [the Director’s] view, the “public interest” requires a balancing of the inter-
ests of the domestic producers with the interests of consumers and users. The
Director submitted that, if the Tribunal does not conclude that the anti-dumping
duties should be removed altogether, it should entertain submissions … to de-
termine whether or not a reduction of anti-dumping duties to a level sufficient
to permit price competition to continue … would be appropriate.””
In response, the Tribunal first addressed the meaning of “public interest” and the
circumstances required before a recommendation could be made that anti-dumping
duties be reduced or not imposed. Contrary to the Director’s submissions and consis-
tent with its previous decisions, the Tribunal held that “the primary purpose of SIMA
is to protect Canadian producers from injury.”‘ The Tribunal did not agree with the
Director’s argument that the public interest involves a balancing of the interests of
domestic producers with those of consumers. Instead, it relied on its previous inter-
pretation of the public interest in holding that the Tribunal requires “compelling or
special circumstances””‘ to warrant overriding the primary purpose of SIMA. In other
words, consumer interests are not balanced against producer interests as a matter of
course; for consumer interests to be considered, “compelling or special circum-
stances” must exist. The Director’s first submission on the meaning of “public inter-
est” was therefore rejected.
In considering whether “compelling or special circumstances” were present in the
case, the Tribunal did hypothesize that “a potential public interest might” relate to the
potential for one company in Canada to gain a monopoly over the production and
distribution of caps, lids, and jars in the country.'” The Tribunal then addressed the
Director’s arguments on this issue and rejected them one by one. The Tribunal was
not convinced that no alternative suppliers for canning products existed, since there
were other active manufacturers in Canada, the United States and Mexico. Any
temptation for the domestic producer to raise its prices in response to anti-dumping
duties would therefore be held in check by these potential competitors. The Tribunal
appeared to reject the Director’s arguments about the difficulty domestic or foreign
competitors might have in entering the Canadian market due to the high cost of entry
and the maturity of the market.
Ibid. at para. 9 [emphasis added].
‘Ibid.
1 Ibid. at para. 17.
Ibid.
121
,’ Ibid. at para. 18.
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J.-M.LECLERC – REFORMING ANTI-DUMPING LAW
The Tribunal also addressed the question of whether anti-dumping duties would
result in a price increase. It agreed with the Director that prices would increase as a
result of the anti-dumping duties; indeed, it found this was “a natural consequence of
an injury finding”‘” However, it considered that factors like foreign competition, the
bargaining power of large retailers and the potential to switch to alternative food pres-
ervation methods would limit the prices charged by domestic producers of canning
products. Again, the Director’s arguments were rejected, and the Tribunal considered
that a compelling public interest did not exist which would warrant a report being is-
sued to the Minister of Finance.
Interestingly, the Tribunal’s arguments in Caps, Lids and Jars appear to belie its
initial decision to impose anti-dumping duties. One of the main arguments in support
of anti-dumping duties is the prevention of predatory pricing.” In this case, the Tribu-
nal agreed that there was no danger of a company gaining a monopoly hold on the
market; foreign competitors were healthy, and consumers could switch to alternative
methods of canning if monopoly prices were charged. Moreover, in the Tribunal’s
opinion, even if monopoly prices were charged, “purchases of caps, lids and jars ac-
count for only a small proportion of overall consumer expenditures.”” Why, if a do-
mestic producer would find it difficult to establish a monopoly, would it be any less
difficult for a foreign producer to do so? If the foreign dumper did gain a monopoly
on production, would it really matter since canning products are not a significant con-
sumer expenditure? Stripped of its otherwise useful purpose (that is, to prevent
predatory pricing), SIMA appears simply to protect domestic producers from injury,
and harm to consumers (even when advocated by an impartial government spokesper-
son) is only assessed in exceptional circumstances.
Caps, Lids and Jars is even more interesting since it appears that, by deciding to
impose anti-dumping duties on American exports, the Tribunal did not meet its own
stated objective of protecting Canadian industry. Certainly, domestic consumers were
hurt by the decision, since the Tribunal acknowledged that prices of canning products
would rise in response to the anti-dumping duties. However, a careful reading of the
case reveals an interesting picture of potential anti-competitive practice within the
domestic industry which does not appear to have been considered by the Tribunal.
The facts of the case, as summarized by the Tribunal, reveal that on November 1,
1994 (seven months before the Tribunal’s hearing), one of the Canadian complain-
ants, Bernardin, was sold to the American dumper, Ailtrista. The Tribunal notes that
“subsequent to its acquisition of Bernardin, … [Alltrista] withdrew from the Canadian
market”‘ By purchasing Bernardin, Alltrista to a large extent ensured it would bene-
fit no matter how the case was decided. If anti-dumping duties were assessed against
‘2Ibid. at para. 21.
See generally Part I, above.
Caps, Lids and Jars, supra note 16 at para. 19.
.. Re Home Canning Products (20 October 1995), NQ-95-001 (C.I.T.T.), [1995] C.I.T.T. No. 72 at
para. 19, online: QL (CITT).
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Alltrista’s exports, its American rival, Kerr, would suffer the same fate. However,
since Alltrista withdrew from the market, its exports could not be subject to anti-
dumping duties. By purchasing Bemardin, Alltrista acquired a competitive edge in
Canada that would allow it to extract even higher profits from Canadian consumers,
since Bernardin (now owned by Alltrista) would be shielded by anti-dumping duties.
Kerr’s inability to continue dumping in Canada might make it a weaker rival for All-
trista in its home market. For example, Kerr might be unable to maintain full produc-
tion to achieve economies of scale because it could no longer dump its products in
Canada. Whatever its reasons for dumping its products, Kerr would be deprived of the
benefits of its rational, self-interested behaviour with the imposition of anti-dumping
duties. The argument that Alltrista simply wanted to hurt its American rival and gain
additional profits from Canadian consumers is reinforced by the fact that Bemardin
still participated in the Tribunal’s proceedings and argued that dumping had resulted
in material injury to a domestic industry. Why would Bemardin (now owned by All-
trista) argue a position that might hurt its parent company? While the Tribunal consid-
ered the impact of Alltrista’s dumped products in determining that material injury had
been caused to a domestic industry, it does not appear that Alltrista participated in the
hearing, since its arguments are not reproduced in the Tribunal’s decision.
Kerr may indeed have been weakened by the anti-dumping duties since, in 1997,
it was purchased by Alltrista.'” The circumstances under which Kerr was acquired
and the reasons for which Bemardin was acquired by Alltrista are speculative. None-
theless, it seems fair to suggest that Bemardin (and consequently, Alitrista) benefited
from the imposition of anti-dumping duties. However, whether these speculations are
accurate is less important than the fact that the Tribunal did not even stop to consider
them. Instead, it considered only whether material injury to a domestic industry had
occurred, and recommended the imposition of anti-dumping duties. This recommen-
dation may have helped Alltrista to reduce competition in the United States and may
have harmed Canadian consumers. If the Tribunal at least considered Alltrista’s acqui-
sition, it might have concluded that Kerr’s continued competition in the market was
warranted, or that Alltrista’s acquisition of Bemardin suggested that Bemardin would
raise is prices to super-profitable levels once anti-dumping duties were imposed.
Finally, how effective can SIMA be if it can be circumvented by simply purchas-
ing a domestic complainant? Since the purpose of SIMA is to protect domestic indus-
try, the Tribunal examines indicia like the loss of sales, loss of employment, and so
on, to determine whether material injury has been caused.'” If loss of employment,
though, can be achieved by purchasing the complainant and closing down its Cana-
dian manufacturing plants (which did not occur here, but could have), how realistic is
22 See online: Securities and Exchange Commission
fers to Alltrista’s acquisition of “certain assets from Kerr Group, Inc. related to their home food
preservation products.”
I2 See generally Part liA., above.
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J.-M.LECLERC – REFORMING ANTI-DUMPING LAW
the premise that the Tribunal is genuinely concerned with the protection of domestic
industry?
The Preformed Fibreglass Insulation public interest inquiry was another case in
which the Director intervened to argue in favour of consumer interests. As in Caps,
Lids, and Jars, the Director argued “that the imposition of anti-dumping duties …
would curtail effective import competition, would confer a benefit to [the domestic
producer] beyond the elimination of material injury and would likely reduce eco-
nomic welfare in Canada.” However, unlike Caps, Lids and Jars, the Tribunal ac-
knowledged that Manson, the domestic producer, was the sole producer of the goods
subject to anti-dumping duties, that there were no readily available substitutes for the
goods, and that there was “little likelihood of competition from the subject goods pro-
duced in countries other than the United States [i.e., the country potentially subject to
the anti-dumping duties].”‘ The Tribunal also recognized that the price of domestic
goods would rise if anti-dumping duties were imposed.
As in Caps, Lids and Jars, the Tribunal rejected the suggestion that anti-dumping
duties should not be imposed simply because it is likely that prices for the goods
would rise. The Tribunal held that a price increase “is a natural consequence of the
regulatory scheme … [and such an argument] would lead to the conclusion that it is in
the public interest not to apply anti-dumping duties in the full amount in virtually
every case that comes before the Tribunal” 3’ The Tribunal also rejected the contention
that anti-dumping duties would give Manson “a more dominant position in the market
and possibly enable it to abuse that position.””‘3 The Tribunal felt it could not “forecast
with certainty what precise events may unfold in the marketplace'” Instead, it pre-
ferred to leave the question of any anti-competitive activities to the Director, who had
“the proper authority to address them”‘” The Tribunal also surmised that since Man-
son’s plant capacity was limited, and since anti-dumping duties could only be im-
posed for a period of five years (at which time the order is reviewed), it would not be
in Manson’s interest to further expand its plant capacity to serve the entire domestic
market. American goods, while higher in price, could therefore still supply the Cana-
dian market to pick up on Manson’s shortfall.
It is surprising that the Director’s arguments regarding Manson’s incentives to
abuse its dominant position were dismissed by the Tribunal. The Tribunal admitted
that Manson was the only supplier of the goods, that little foreign competition was
likely, and that no close substitutes existed for the subject goods. Moreover, the com-
plainant in the case had, in an unrelated case, been previously found guilty of the tort
‘” Preforned Fibreglass Insulation, supra note 16 at para. 4.
“0 Ibid. at para. 16.
,,Ibid. at para 23.
Ibid at para. 24.
I33
ibid.
” Ibid.
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of conspiracy, and had damages totalling $180,000 assessed against it.”‘ The tort of
conspiracy requires that “the predominant purpose of the defendants’ conduct be to
cause injury to” a competitor.” This information is difficult to reconcile with the Tri-
bunal’s opinion that Manson’s dominant position in the market would not be abused.
Manson could have sought to expand its plant capacity quickly and concentrate on
signing long-term contracts at inflated prices to cement its dominant position beyond
the five-year period in which the duties are imposed. The Tribunal did not address
Manson’s previous conduct in determining whether to reduce the anti-dumping duties
to encourage continued competition between Manson and United States exporters. In-
stead, the Tribunal simply supported the imposition of anti-dumping duties to the ex-
tent that normal prices in the United States exceed export prices, and left any “specu-
lative anti-competitive activities” to the Director to sort out. Is it really so speculative
to think that a company found guilty of a tort requiring an intention to injure a com-
petitor would likely exploit its dominant position once anti-dumping duties gave it a
privileged position in the marketplace?
Contrary to Kronby’s assessment that “the active and successful involvement of
the [Director] will help to offset the consequences of the protectionist legislative
framework within which such disputes are currently resolved,””‘ the involvement of
the Director in both public interest inquiries and section 42 hearings in the post-
Hyundai period appears to have been unsuccessful. Either the Director’s arguments
were rejected as out of tune with the purpose of SIMA, or the Tribunal took the posi-
tion that it is the Director’s responsibility to oversee any anti-competitive conduct.
Conclusion
While GATT has been largely successful in reducing barriers to trade, anti-
dumping provisions remain a significant obstacle to liberalized trade that would bene-
fit consumers. Numerous studies, canvassed in Part I of this paper, demonstrate the
extent to which anti-dumping legislation does not appear to be motivated by anything
other than protectionism. It does not prevent predatory pricing, since predatory pric-
ing is an improbable phenomenon at best; nor does it prevent the alleged harm caused
by sporadic dumping, since that too is unlikely. Even if consumers are harmed by spo-
radic dumping, this may not be a valid reason to prohibit the practice, since it is ra-
tiohal, pro-competitive behaviour on an international scale. Moreover, anti-dumping
legislation cannot be supported on non-efficiency grounds, since the protection of
small communities and less fortunate people are usually not the focus of an anti-
dumping investigation.
… Wallace Construction Specialties Ltd. v. Manson Insulation Inc. (1993), 113 Sask. R. 161, 106
D.L.R. (4th) 169 (C.A.) [hereinafter cited to Sask. R.].
116 Ibid. at 167, quoting Canada Cement Lafarge Ltd v. British Columbia Lightweight Aggregate
Ltd., [1983] 1 S.C.R. 452,47 N.R. 191.
“‘ Supra note 13 at 117.
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J.-M.LECLERc – REFORMING ANTI-DUMPING LAW
Despite these conclusions, however, there does not appear to be a realistic chance
of reform of either GATT or SIMA in the near future. Any chance for reform is caught
in a “catch-22” situation. Domestic legislatures are unwilling to drop protectionist
measures unless their trading partners do likewise. Hence, SIMA seems out of reach.
GATT does not appear ripe for reform either, since without anti-dumping laws, many
countries would balk at further liberalized trade. Finally, any opportunity for advo-
cates of consumer welfare interests to work within the system, whether under section
45 of SIMA or through representations made by the Director of Competition, have ef-
fectively been denied by the CITT’s narrow reading of the purpose of anti-dumping
laws. Even recommendations made by Parliamentary Sub-Committees charged with
the task of reforming SIMA are far removed from real reform which would balance
the interests of consumers against domestic industries faced with dumping.
Perhaps the only hope that consumer welfare advocates can find in this state of af-
fairs is in regional free trade agreements. The European Union, for instance, no longer
engages in anti-dumping actions against its trade partners, and limits any investiga-
tions of unfair trade through dumping to instances where predatory pricing is at issue.
However, in the NAFTA’ 3′ context, the United States “has shown extreme unwilling-
ness to participate in any meaningful negotiations to eliminate the use of anti-
dumping … laws”’39 On a bright note, Canada has succeeded in “phasing out the use
of anti-dumping remedies in the recently concluded Canada-Chile Free Trade Agree-
ment.” ‘ Furthermore, since the United States is unwilling to compromise its anti-
dumping duties within NAFTA, recent reports have suggested that Canada and Mexico
are considering exempting each other from the application of their respective anti-
dumping laws.” While they will first seek an agreement between themselves, reports
say they apparently hope to later include the United States in the agreement.’ 2
As regional trade agreements proliferate, and as countries realize that repealing
anti-dumping laws does not hurt their economies, perhaps the trend to eliminate anti-
dumping laws in regional trade agreements will extend itself to GATT. For instance, if
Canada does not feel threatened by Chile dumping its products into Canada, why
would it feel the need to protect against dumped products from a country like Spain?
Also, if it is true that Canada does not feel threatened by dumped products originating
from its largest trading partner, would it feel threatened by dumped products coming
from smaller trading partners? Through incremental changes in regional trade agree-
‘ North American Free Trade Agreement Between the Government of Canada, the Government of
Mexico and the Government of the United States, 17 December 1992, Can. T.S. 1994 No. 2, 32 I.L.M.
289 (entered into force 1 January 1994) [hereinafter NAFTA].
” R. Dattu & J.W. Boscariol, “Changes to Canada’s Trade Remedy Laws on the Way” (1997)
McCarthy T~trault Legal Update at para. 3, online: McCarthy T~trault
‘ IbiL
141 R. Palmer, “Canada, Mexico to discuss killing anti-dumping provisions” The Financial Post (8
12 Ibid.
June 1996) 38.
140
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ments, countries like Canada will increasingly realize that national economies (and
consumers in particular) benefit from dumping. Hopefully an understanding that arti-
cle 6 of GATT is veiled protectionism, devoid of valid economic or political rationale,
will follow.
