Canada has "thrown a grenade" at the USA filing a complaint with the World Trade Organisation (WTO) against its southern neighbour's use of trade sanctions, which might wreck their current North American Free Trade Agreement (NAFTA) negotiations, said an worldwide trade law expert.
"These rates tabled lby the USA on uncoated groundwood paper represent the third action that stands to hurt hard working men and women in our mill communities across Canada", says Derek Nighbor, CEO, Forest Products Association of Canada.
There have been similar trade disputes between the two countries over lumber and dairy.
WASHINGTON-Canada has launched a wide-ranging attack against American trade practices in a broad global complaint over that country's use of punitive duties-a move the United States is calling "broad and ill-advised".
"Canada and the US enjoy one of the most productive trading relationships in the world".
"This sends a signal to the Trump administration that if NAFTA is going to end, and we are going to be treated no better than other countries in the world, then this is the kind of treatment you can expect to receive in return", said Mr. Bown, a former official in the Obama administration and at the World Bank. Sands, who said the move may have come because Canadian trade negotiators and politicians believe the strategy of playing nice with the Trump administration has not paid dividends.
"Canada's claims are unfounded and could only lower US confidence that Canada is committed to mutually beneficial trade", he said.
Even so, any complaint before the WTO will take years, and the effort is further complicated by the fact that the Trump administration is blocking new appointments to the WTO's appellate body.
Washington was quick to respond, with U.S. Trade Representative Robert Lighthizer issuing a statement Wednesday that called the filing a "broad and ill-advised attack on the U.S. trade remedies system".
The WTO revealed on Wednesday that Canada had filed a complaint last month accusing the U.S. of unfairly imposing countervailing and anti-dumping duties, not only on Canadian softwood lumber but also on goods from many other countries. "But with the Trump administration being relatively new, and because of the protectionist noises we've been hearing from them, it's not at all clear what sort of reaction the USA might have". The United States strongly criticized the Canadian action on Wednesday, warning it will end up backfiring against Canada because, were it to succeed, it could lead to a flood of imports from China into the United States that would displace other countries' products.
"Canada is acting against its own workers' and businesses' interests", Lighthizer added.
"This WTO action is part of our broader litigation to defend the hundreds of thousands of good, middle class forestry jobs across our country", said Chrystia Freeland, Canada's minister of foreign affairs, in a statement".
While Canada continues to hope for the best from the NAFTA renegotiation, Freeland says it is also preparing for the worst-case scenario - a decision by President Donald Trump to withdraw from the three-way, continental trade pact.