RTA DISPUTES - NORTH AMERICA

1.  Canada-U.S. FTA (1988-1993), Chapter 18

(1) Canada’s Landing Requirement for Pacific Coast Salmon and Herring: Final Report Oct. 16, 1989 (Canadian landing requirement that replaced GATT-inconsistent export restrictions on certain fish). Outcome: landing requirement modified pursuant to bilateral agreement, 1990; modified landing requirement is still in effect as of June 2017 (Pacific Fishery Regulations, 1993 (SOR/93-54), sec. 17-18

(2) Lobsters from CanadaFinal report May 21, 1990 (US ban on interstate transportation or sale of whole live lobsters smaller than a minimum size). Outcome: Panel report upheld US law; later negotiations discussed in William Davey, Pine & Swine: Canada-US Trade Dispute Settlement: the FTA experience and NAFTA Prospects (1996), p. 48-49

(3) Article 304 and the Definition of Direct Cost of Processing or Direct Cost of Assembling: Final report June 8, 1992 (US rule that did not allow certain non-mortgage interest payments to count toward meeting the CUSFTA rules of origin). Outcome: US changed its practice (Davey, p. 52). CUSFTA rules of origin were superseded by the NAFTA rules of origin.

(4) The Interpretation of and Canada’s Compliance with Article 701.3 with respect to Durum Wheat Sales: Final report Feb. 8, 1993. US claimed that Canadian Wheat Board (CWB) sales of durum wheat for export to US violated CUSFTA Art. 701.3 ban on government entity selling products for export at a loss (i.e., at a price below the acquisition price of the goods, plus storage, handling and other costs incurred in respect of those goods). Panel rejected US interpretation of Art. 701.3. Outcome: parties agreed to audit which found that 102 of 105 CWB export sales to US in 1989-92 were consistent with Art. 701.3. Canada later agreed to restrict 1994-95 durum wheat exports to US. (Davey, p. 52-57)   

(5) Puerto Rico Regulations on the Import, Distribution and Sale of UHT Milk from Quebec: Final report June 3, 1993. (Milk standards in Puerto Rico) 

2.  NAFTA (since 1993), Chapter 20 

NAFTA Secretariat main dispute settlement page on disputes under NAFTA and CUSFTA, including overview of NAFTA dispute settlement provisions,  status report on panel proceedingslist of Panel Decisions and Reports, and  Roster Members  (currently only for Chapter 19, not Chapter 20).  Panel reports:

     (1) Tariffs applied by Canada to Certain U.S.-Origin Agricultural Products: Final Report Dec. 2, 1996 (Dispute brought by U.S. against Canada’s maintenance of tariff-rate quotas on certain dairy and poultry products after full tariff elimination; relationship between CUSFTA chapter on agricultural trade, Uruguay Round tariffication of agricultural import quotas, and NAFTA). Outcome: panel found no breach by Canada. Canadian tariffs on dairy and poultry imports remain in place. As of 2018, these tariffs are an issue in agriculture negotiations on NAFTA modernization.

    (2) U.S. safeguard action taken on broom corn brooms from Mexico: Final report Jan. 30, 1998 (Dispute brought by Mexico regarding application of global safeguard action on broom-corn brooms to imports of such brooms from Mexico). Outcome: Mexico imposed rebalancing tariffs on $1.4 million in US exports to Mexico, Dec. 12, 1996; Jan. 30, 1998 NAFTA panel report found US was in breach; US then reviewed global safeguard action and terminated it on Dec. 3, 1998; Mexico then revoked its tariff retaliation.

    (3) Cross-Border Trucking Services, Final report Feb. 6, 2001 (Dispute brought by Mexico; panel found U.S. breach of NAFTA commitment to permit operation of Mexican trucking firms in four U.S. border states). After U.S. Congressional action terminating pilot program for Mexican trucking, on March 19, 2009 Mexico announced suspension of NAFTA concessions (increase in tariffs to MFN levels) on imports of 90 products from United States. Pilot program on cross-border trucking concluded October 2014. Jan. 9, 2015, US Department of Transportation (DOT) announced opportunities for Mexican firms to apply for licenses to conduct long-haul cross-border trucking. DOT factsheet on NAFTA trucking regulations; additional information.

    NEW - US safeguard measure on solar panels:  On July 23, 2018, Canada initiated a dispute under NAFTA Chapter 20 on the Presidential decision to include imports of Canadian solar panels in the January 2018 US safeguard action on solar panels. Global Affairs Canada press release; consultation request coming soon.   

    Other consultation requests which did not result in panel proceedings, due to settlement, abandonment of the claim, or failure of proceedings to move forward: Uranium Exports (U.S. v. Canada, 1994); Import Restrictions on Sugar (Canada v. U.S., 1995); Restrictions on Small Package Delivery (U.S. v. Mexico, 1995); Restrictions on Tomato Imports (Mexico v. U.S., 1996); Helms-Burton Act (Mexico and Canada v. U.S., 1996); Mexican Rebalancing for U.S. Safeguard on Broom-corn Brooms (U.S. v. Mexico, 1996); Restrictions on Sugar Imports (Mexico v. U.S., 1998); Farm Products Blockade (Canada v. U.S., 1998), Bus Service (Mexico v. U.S., 1998); Sportfishing Laws (U.S. v. Canada, 1999); Restrictions on Potatoes (Canada v. U.S., 2001).

    3.  Canadian Free Trade Agreement (since July 1, 2017) and earlier Agreement on Internal Trade (AIT)

    On July 1, 2017, the new Canadian Free Trade Agreement entered into force between its parties (the Canadian Federal, provincial and territorial governments). The CFTA covers almost all areas of economic activity such as goods, services and energy, dealing with trade, regulatory barriers and government procurement. Any exceptions are clearly identified. The CFTA provides for future negotiations on financial services and trade in alcoholic beverages. It provides for dispute avoidance and resolution under Chapter Ten

    The CFTA succeeds the Agreement on Internal Trade, which provided for disputes under Chapter 17, including (1) government-to-government disputes between the AIT Parties (Federal, provincial and territorial governments), and (2) person-to-government disputes brought by a person of a Party against another Party. Person-to-government disputes may only be brought if the person has been notified that a Party will not bring a dispute on its behalf (or will not seek a panel) and they are subject to an expert screening procedure. The AIT dispute resolution archive page includes documents from disputes brought under the AIT, including screener reports and the following panel reports or participants submissions.

    AIT Disputes:

    Dispute between Artisan Ales Consulting Inc. and Alberta regarding beer mark-ups:

    Dispute between Saskatchewan and Quebec concerning Quebec Food Products Act provisions on dairy blends, dairy analogues and dairy alternatives:

    Dispute between Saskatchewan and Quebec concerning edible oil products, dairy blends and dairy analogues

    Dispute by Mr. X, a private person from Quebec, and Ontario regarding a crane operator certification

    • Panel report, 23 February 2012 (found that Ontario measures restricting access to occupation authorized to operate tower cranes have impaired internal trade and caused injury to the complainant; awarded costs to complainant in the amount of C$1,500)

    Dispute between Manitoba and Ontario concerning Ontario notice of measure with respect to public accountants (2012)

    Dispute between New Brunswick Certified General Accountants Association and Quebec regarding Quebec measures governing practice of public accounting (2005)

    • Panel Report, August 19, 2005  (Quebec Chartered Accountants Act restricted the performance of audits and reviews for some entities to Chartered Accountants (CAs); panel found that selection of CA occupational standard for public accounting was not in itself inconsistent with AIT, but application of this standard to non-CA accountants from other jurisdictions where those qualifications have already been recognized does not relate principally to competence and is inconsistent with AIT Articles 707(1)(a) and 708; these measures cannot be justified under AIT Article 709.  Found that Quebec public accounting measures that restrict access to the practice of public accounting by non-CA accountants recognized in other jurisdictions as qualified to practice public accounting have impaired internal trade and have caused
      injury. Costs of C$31,191 awarded to complainant; tribunal costs divided between parties.)

    Dispute Between Alberta and Quebec Regarding Quebec’s Measure Governing the Sale in Quebec of Coloured Margarine

    • Panel Report, June 23, 2005 (found that Quebec's ban on margarine having the same color as butter was inconsistent with AIT Article 401 (non-discrimination for like, directly competitive or substitutable goods, e.g. margarine from Alberta) and Article 403 (ban on creating obstacles to internal trade) but not AIT Article 402 (freedom of movement of goods across provincial boundaries); also that the measure was not justified under AIT Article 404. Found that the measure had impaired internal trade and caused injury to margarine producers and their upstream suppliers. Recommended that Quebec repeal the measure by September 1, 2005 and allow sale in Quebec of margarine colored the same as butter by that date. Costs allocated 50% to Quebec, 40% to Alberta, 5% each to intervenors Manitoba and Saskatchewan.)  

    Dispute between Alberta + British Columbia and Ontario concerning Ontario measures governing dairy analogs and dairy blends

    Dispute Between Alberta and Canada Regarding the Federal Bank Act – Cost of Borrowing (Banks) Regulations: Panel Report (2004)

    Dispute Between Farmers Co-Operative Dairy Limited of Nova Scotia and New Brunswick Regarding New Brunswick’s Fluid Milk Distribution Licensing Measures:   Panel Report (2002)

    Dispute Between the Certified General Accountants Association of Manitoba and Ontario Regarding the Public Accountancy Act (R.S.O., 1990, Chapter P-37) and RegulationsPanel Report (2001)

    Dispute Between Nova Scotia and Prince Edward Island Regarding Amendments to the Dairy Industry Act RegulationsPanel  Report (2000)

    Dispute Between Alberta and Canada Regarding the Manganese-Based Fuel Additives Act:  Panel Report (1998)

    Last updated: March 14, 2018