This item is part of Watching Washington, a regular dispatch from CBC News correspondents reporting on U.S. politics and developments that affect Canadians.
What’s new
Canada has lost the first-ever dispute case under the new North American trade agreement, with a panel siding with the U.S. and saying Ottawa flouted part of its obligation to open the dairy market.
The three-member panel — made up of a Uruguayan diplomat who was once ambassador to Canada, a Canadian trade lawyer based in the U.S., and a U.S. trade lawyer named to the panel by Canada — agreed that Canada violated its promise to allow slightly more dairy imports by imposing unfairly complicated rules.
The U.S. says Canada now has a few weeks to comply with the ruling, or face the possibility of a trade penalty such as a tariff.
The finding comes amid a succession of trade disputes between the countries that risk souring the bilateral relationship.
“We prevailed — as we thought we would,” a senior official in the U.S. Trade Representative’s office told reporters in a briefing Tuesday.
“Now the goal is to work with Canada.… The end goal is not to put retaliatory tariffs in place.”
The report was released to the countries in a full confidential version just before the holidays, on Dec. 20; a 53-page public version was released Tuesday.
The Canadian government also claimed a partial victory: It noted that the panel otherwise upheld Canada’s system of supply management of its dairy sector.
What’s the context
Dairy was one of the hardest-fought issues in negotiating the new Canada-U.S.-Mexico Agreement on trade (CUSMA), and was resolved in the final days of negotiating.
The Canadian government worked to prevent new imports, under pressure from producers concentrated in Central Canada.
They argued that Canada’s tightly controlled system allows for stable farming communities without the wild price fluctuations that have periodically battered U.S. farms.
For the U.S., exporting more dairy was a top priority.
Its allies argued that the tight Canadian controls unfairly shut out competition, and innovation, and can lead to higher prices for consumers.
In the end, the U.S. gained a small opening.
A series of measures in Chapter 3 of the new trade agreement allowed the U.S. some additional exports to the tune of more than three per cent of Canada’s market.
But when it came time to implement the agreement, Canada left domestic processors in charge of allocating import permissions, known as tariff-rate quotas.
This angered the U.S. industry and government: both the Trump administration and the Biden administration moved forward with a case against Canada.
They argued that by giving Canadian producers control over 80 per cent of the import quotas they created an undue hurdle to cross-border sales.
One USTR official put it this way in Tuesday’s briefing: an American producer would hope to talk directly to their customer in Canada, say a grocery store, about import rights, instead of their competitors.
He said those buyers in Canada, and their customers, have an incentive to allow imports to flow — unlike the producers.
The first panel decision under the new trade pact agreed with the U.S.; it said Canada violated Article 3.A.2.11(b) of the agreement, which says tariff-rate quotas should not be allocated to producer groups.
WATCH | Canada threatens U.S. with tariffs over EV tax credit dispute:
Canada threatens U.S. with tariffs over EV tax credit dispute
25 days ago
Duration 2:01
In a letter to top U.S. senators, Deputy Prime Minister Chrystia Freeland and Trade Minister Mary Ng threatened to impose tariffs on American goods and suspend parts of the USMCA trade agreement unless U.S. officials scrap a proposed electric vehicle tax credit. 2:01
What’s next
The U.S. says Canada has 45 days to comply, from the time it received the confidential panel report. In other words, until Feb. 3, 2022.
After that, the U.S. says it would have the right to impose penalties — perhaps a tariff.
The scope of that penalty would have to be equivalent to the value of the damage allegedly done to American dairy producers.
It would be up to the U.S. to calculate that dollar amount, and if Canada disagrees it could further challenge the U.S. calculation.
“Of course we hope not to go down that path,” said a U.S. official at Tuesday’s briefing. “We obviously want to talk to them. And find a positive solution to the dispute.”
The Americans at the briefing stressed that the U.S. otherwise has a great relationship with Canada, in other areas.
However, this dispute decision comes at a stormy moment in the relationship.
Canada has, itself, threatened to suspend pieces of the new trade deal that are dear to the U.S.
Ottawa is furious about Buy American-type provisions related to electric vehicles in a large budget bill and promising retaliation if the idea proceeds.
That separate dispute is currently in limbo: one senator, Joe Manchin, has blown up talks over the budget bill and wants to start all over.
The Canadian government said in a statement that it has “taken note” of the decision, takes its obligations seriously under trade agreements and will work with the Canadian dairy industry on next steps.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
