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Active and concluded State-to-State dispute settlement cases

Active cases

Mexico’s measures concerning genetically engineered corn

Parties

Complaining Party – United States

Responding Party – Mexico

Other Party – Canada, as a third Party

Summary of the complaint

(Certain legal documents related to this case can be viewed on the TAS e-filing system Note – registration is required)

On August 25, 2023, Canada notified Mexico and the United States, pursuant to CUSMA Article 31.14, that it intends to participate as a third Party in the panel proceedings requested by the United States on August 17 with respect to measures of Mexico concerning genetically engineered corn. The United States alleges that Mexico’s measures appear to be inconsistent with several obligations under Chapter 9 (Sanitary and Phytosanitary Measures) and Chapter 2 (National Treatment and Market Access for Goods) of CUSMA.

Canada has a strong systemic interest in ensuring the correct interpretation of the Sanitary and Phytosanitary (SPS) obligations under the Agreement, namely that SPS measures are based on scientific principles, relevant international standards, guidelines or recommendations, or appropriate risk assessments.

Recent developments

On August 25, 2023, Canada notified of its intention to participate in the panel proceedings as a third Party.

Timeline

Dairy tariff rate quota allocation measures 2023 (second dispute)

Parties

Complaining Party – United States

Responding Party – Canada

Other Party – Mexico, as a third Party

Summary of the complaint

(Certain legal documents related to this case can be viewed on the TAS e-filing system Note – registration is required)

On January 31, 2023, the United States requested the establishment of a dispute settlement panel regarding Canada’s dairy Tariff Rate Quotas (TRQs) measures under CUSMA. The United States alleges that Canada’s measures appear to be inconsistent with the Agreement under four areas: 1) the continued exclusion of retailers and food service from TRQ eligibility; 2) the 12-month activity requirement; 3) the methodology and criteria for calculating individual allocations, and; 4) the TRQ return and reallocation measures.

Specifically, the United States made claims of violation under paragraph 3(c) of Section A of Appendix 2 (Tariff Rate Quotas) of Annex 2-B and Articles 3.A.2.4(b), 3.A.2.6, 3.A.2.6(a), 3.A.2.10, 3.A.2.11(b), (c) and (e), and 3.A.2.15 of CUSMA.

Recent developments

The final report was made public on November 24, 2023. The panel found in Canada’s favour on all claims made by the United States

Timeline

Measures in the electricity sector

Parties

Complaining Party – Canada

Responding Party – Mexico

Other Party – United States

Summary of the complaint

(Certain legal documents related to this case can be viewed on the TAS e-filing system Note – registration is required)

On July 20, 2022, Canada filed a request for consultations with the Government of Mexico pursuant to CUSMA articles 31.2 and 31.4 with respect to various measures of Mexico that favour its state-owned Comision Federal de Electricidad (CFE), and negatively impact Canadian companies operating in Mexico and with investments in Mexico’s electricity sector. Canada considers that certain measures taken by Mexico appear to be inconsistent with the following provisions of CUSMA: Article 14.4 (National Treatment), Article 15.8 (Development and Administration of Measures), Article 22.5.2 (Courts and Administrative Bodies) and Article 29.3 (Administrative Proceedings).

Recent developments

Consultations with Mexico with respect to certain measures in Mexico’s electricity sector began on August 23, 2022.

Timeline

Automotive rules of origin

Parties

Complaining Party – Mexico

Responding Party – United States

Other Party – Canada, as a complaining Party

Summary of the complaint

(Certain legal documents related to this case can be viewed on the TAS e-filing system Note – registration is required)

A difference of interpretation has arisen in relation to the implementation of the regional value content (RVC) requirements associated with the rules of origin for key automotive parts, known as “core parts”. The CUSMA allows producers to use certain alternative methodologies when calculating a core part’s RVC. Canada and Mexico are of the view that if a good is originating on this basis, it should be considered originating when determining the RVC of a vehicle. The United States is of the view that a separate RVC calculation, using the standard RVC methodology, must be performed on a core part to determine if it is originating when calculating the vehicle RVC.

Recent developments

The panel decided in Mexico’s and Canada’s favor, and the final report was made public on January 11, 2023. The Parties are now working on implementing the panel’s findings.

Timeline

Concluded cases

Crystalline silicon photovoltaic cells safeguard measure

Parties

Complaining Party – Canada

Responding Party – United States

Other Party – Mexico, as a third Party

Summary of the complaint

(Certain legal documents related to this case can be viewed on the TAS e-filing system Note – registration is required)

Canada requested the establishment of a dispute settlement panel regarding the United States’ application of a solar safeguard measure on imports of crystalline silicon photovoltaic products (CSPV) from Canada. Canada alleged that the measure, imposed on January 23, 2018, nullified or impaired benefits accruing to Canada directly or indirectly under CUSMA. Specifically, Canada alleged the imposition and continuance of the measure was inconsistent with the United States’ obligations under CUSMA Articles 2.4.1, 2.4.2, 10.2.1, 10.2.2, 10.2.5, and 10.3.

Recent developments

On February 15, 2022, the CUSMA Panel released its final report concluding that the United States’ application of the safeguard measure to imports of solar products from Canada violates the United States’ obligations under the CUSMA. On July 8, 2022, Canada and the United States signed a Memorandum of Understanding to facilitate the U.S. implementation of the panel result and enable the suspension of the U.S. safeguard tariff on solar products from Canada.

Timeline

Dairy tariff rate quota allocation measures (first dispute)

Parties

Complaining Party – United States

Responding Party – Canada

Other Party – Mexico, as a third Party

Summary of the complaint

(Certain legal documents related to this case can be viewed on the TAS e-filing system Note – registration is required)

The United States requested the establishment of a dispute settlement panel regarding Canada’s allocation and administration of its dairy TRQs under CUSMA. Specifically, the United States alleged that Canada’s practice of creating processor pools appeared to violate Articles 3.A.2.4(b), 3.A.2.6(a), 3.A.2.11(b), (c), and (e) of the agreement.

Recent developments

On May 16, 2022, Canada published new CUSMA dairy TRQ allocation and administration policies. The new policies end the use of processor-specific pool, addressing the Panel’s finding that it was inconsistent with the agreement.

Timeline

Note

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