Tribunal Rules on US Gypsum Board Imports
January 6, 2017
An inquiry has made a series of recommendations about import duties after hearing about the injury caused to Canada’s industry by the pricing regime for gypsum board brought in from the USA.
The Canadian International Trade Tribunal carried out the investigation following a complaint by CertainTeed Gypsum Canada Inc, of Mississauga, Ontario. The case concerned the impact of anti-dumping duties on the construction sector across Western Canada and on the Canadian economy.
The tribunal found that the imposition of provisional duties or duties applicable to gypsum board imported from the USA, in their full amount, is contrary to Canada’s economic, trade or commercial interests. Specifically, it found that the imposition has the effect of substantially reducing competition in those markets or causing significant harm to consumers of those goods or to businesses that use them.
The Western Canada Alliance of Wall & Ceiling Contractors extended its gratitude to finance minister Bill Morneau and his staff for their work that has been done regarding the imposition of anti-dumping duties on gypsum board exported from United States.
"If it were not for the creative and thoughtful efforts by the Minister and his staff, we would not have had the opportunity to be heard by the Tribunal on the downstream harm caused to our industry by the imposition of the stark and harmful price increases which took effect overnight following the imposition of preliminary duties," said Neal Pollock, of TDL Drywall. "The minister immediately recognized the need to understand the downstream impact of the duties on users including small and medium sized contractors in Western Canada. He acted quickly to set up a process before the Canadian International Trade Tribunal whereby their views could be heard. No previous Ministers of Finance have supported small and medium-sized businesses as much as the Minister has done in this case."
The tribunal’s report said: “It is a well-recognized feature of the trade remedy system that imposing anti-dumping and/or countervailing duties on a particular good will affect the Canadian market price and may impose higher costs on the downstream industry that uses those goods. However, there may be consequences on the downstream industry that are either unintended or unwanted. This inquiry process provided a public forum for interested parties to express their concerns and inform the Tribunal of their views or experience about unintended or unwanted consequences that arose from the imposition of the provisional duties and that might arise from the imposition of final duties.”
Anti-dumping duties will be collected by the Canada Border Services Agency, subject to the implementation of the Tribunal’s recommendations.
Among the tribunal’s recommendations is that provisional duties collected be retained by the federal government and used to refund, either wholly or in part, the higher costs for imported and domestically produced gypsum board purchased in the period between 6 September 6, 2016 up to but not including 4 January 2017.
It also recommends a process so that all of the final duties imposed on cooperating exporters be remitted to them through a simplified process. This temporary elimination of the duties would give time for the downstream market participants (especially drywall installers) to perform existing fixed-price contracts and, going forward, to give them an opportunity to reflect the duties in new contracts.
Another of the recommendations is that final duties for any cooperating exporters on any export transaction involving subject gypsum board to Canada should not exceed 43% of the export price at any time on and after the earlier of 5 July 5 2017, or the date the imports reach a maximum volume of 229 million square feet.
The Tribunal will issue the reasons for its findings and recommendations on 19 January 2017.
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