66 LEXPERT MAGAZINE
|
JUNE 2018
might even include an obligation
to ensure that Canadian com-
panies don't morph prohibited
materials into products that sim-
ply bear another name.
"Canadian processors who use
aluminum and steel are looking
at these developments with con-
cern," Pearson says. "e upshot
is that Canadian lawyers are
busy and will continue to be busy
with related circumvention and
NAFTA issues."
e steel and aluminum tariffs
could also direct a fair share of
exports to Canada that would otherwise
have made their way to the US from the af-
fected countries. "If they do make their way
to Canada and result in reduced prices that
cause substantial injury to Canadian con-
cerns, we could see the type of safeguard ac-
tions that fuel work for international trade
lawyers," Pearson says.
e signs are already there. At press
time, the federal government was in the
process of implementing new provisions
to make enforcement of safeguard actions,
such as anti-dumping measures, more
rigorous. "e Canadian steel lobby was a
huge force behind these changes," he adds.
"You could swear that they were written by
the lobby itself."
Import surges that result from tariffs on
the additional US$100 billion worth of
products that are also threatened objects of
the US-China trade war will also fuel the
movement toward safeguarding. "Not only
will there be a host of new trade remedy
cases involving dumping and subsidiza-
tion, but existing cases are more likely to be
rigorously enforced," says Pearson.
As well, circumvention and trade rem-
edy cases are becoming much more com-
plicated, with an increasing number are
finding their way to the Federal Court of
Appeal. "I used to appear in the FCA once
a year," Pearson says. "Now it's three or four
times annually."
Otherwise, the uncertainties mean
that international supply chains are under
threat. "More than ever before, inter-
national trade lawyers and their clients
— who quite understandably regarded
the sowood lumber dispute as a big deal
— have to be on top of developments and
stay aware of what is a new and much larger
scale phenomenon," says John Boscariol,
the Toronto-based head of McCarthy Té-
trault LLP's international trade and invest-
ment law group. "At the same time, we have
to come up with solutions for clients that
work in a short-term environment."
Still, Boscariol says he's advising clients
to avoid radical redesign of their supply
chains. "ey should be taking steps to
look at new markets on both the supply
and demand ends, and evaluating potential
new sources and customers."
Boscariol, who says practising inter-
national trade law is "a lot more hectic"
these days, believes it will become even
more so. "e whole world will be reacting
to the superpowers' actions," he says. "As
countries find it increasingly challenging
to keep their markets open, the protect-
ive measures they take will feed right into
trade lawyers' bailiwick."
Even capital-markets and M&A lawyers,
who regard slowing economic growth as
anathema to their practices, are optimis-
tic. "In the past, we found that trade wars
and regulatory barriers elsewhere can shi
capital to Canada," says Mark Trachuk, the
Toronto-based chair of Osler, Hoskin &
Harcourt LLP's corporate practice group.
"Some of that happened, for example,
when the US instituted draconian compli-
ance rules under the Dodd-Frank Act."
EVEN AS THE US and China ramped
up their trade war rhetoric, international
trade lawyer Darrel Pearson found him-
self busier than he's ever been in his 36
years of practice.
"We anticipate that the workload will
continue to increase," says the Toronto-
based co-head of Bennett Jones LLP's
international trade group, which has 12
dedicated full-time lawyers.
Pearson's experience, however, may
well be counterintuitive, because trade
wars and their anticipated effect on eco-
nomic growth would not seem to augur
well for the workloads of international
trade practitioners.
But, as Pearson points out, Canada is
not a direct party to this particular war.
And in some ways, that gives the inter-
national trade bar in this country reason
for optimism.
For example, Canada is for the time be-
ing exempt from the steel and aluminum
tariffs imposed on US imports from a
number of countries, including China.
Still, the US will likely ramp up its scrutiny
of Canadian products that include alum-
inum and steel components originating
in the countries affected. A new NAFTA
Lawyers are advising their clients to look at new markets on both the supply and demand ends BY JULIUS MELNITZER
Will the US trade wars affect Canada?
PHOTO:
SHUTTERSTOCK
| TRADE WARS |
THE BORDER