International Trade and Investment Dispute Settlement
Canada pursues a strong rules-based trading system in part by establishing mechanisms for dispute settlement in its multilateral, regional, and bilateral trade and investment agreements. These mechanisms are intended to ensure the rules of the agreements are respected. They typically allow the parties to a dispute to attempt to resolve their concerns amicably before pursuing a more binding form of dispute settlement. The parties to a dispute are usually two States, but are sometimes a State and an individual investor. This page provides an overview of the various dispute settlement mechanisms in Canada’s international trade and investment agreements.
World Trade Organization dispute settlement
Canada has been an active participant in many World Trade Organization (WTO) disputes, including as a:
- third party
Participating in WTO dispute settlement is a key way to help ensure the rights of Canadian traders are protected and contributes to maintaining the integrity of the dispute-settlement system as a whole.
For information on the WTO dispute settlement process, see the WTO page on dispute settlement.
The WTO maintains a full list of all disputes involving its Members and a repository of publicly available documents related to each case. The full list, including instances in which Canada is a third party, can be obtained on the WTO website, where disputes are listed by Member.
Given that the Appellate Body has not been able to hear appeals of panel decisions since December 2019 given ongoing vacancies, Canada and several other WTO Members have developed the Multi-Party Interim Appeal-Arbitration Arrangement (the MPIA). In disputes between participant Members, the MPIA safeguards access to a fully functioning dispute settlement system within the WTO that includes access to an independent appeal stage of panel decisions. The MPIA is open to all WTO Members and will be in place only until the Appellate Body is functional again.
Read the full text of the MPIA (PDF).
Regional trade agreement dispute settlement
Canada is also a Party to many regional and bilateral free trade agreements. Each of these agreements has its own dispute settlement procedures for resolving disagreements between States and, in some cases, between investors and States. In addition, the Canada-United States-Mexico Agreement (CUSMA), which replaced the North American Free Trade Agreement (NAFTA), has special provisions for bi-national panel review of certain trade remedy decisions. Read more about the dispute settlement mechanisms in the regional trade agreements below:
- CUSMA dispute settlement
- Canada-European Union Comprehensive Economic and Trade Agreement (CETA)
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) dispute settlement
- Bilateral Free Trade Agreements
Investor-State dispute settlement
Canada’s free trade agreements and foreign investment promotion and protection agreements contain a framework of rules and disciplines that provide Canadian and trading partner investors with a predictable, rules-based investment climate. These agreements also feature dispute settlement procedures that are designed to provide timely recourse to an impartial tribunal.
For information about past and ongoing disputes filed against Canada, please consult the following:
- The North American Free Trade Agreement (NAFTA) - Chapter 11 - Investment
- Other Free Trade Agreements: no investor-State claim has been initiated against Canada under Canada’s other free trade agreements
- Foreign Investment Promotion and Protection Agreements
Foreign trade remedy investigations
Canadian exports can be subject to the following foreign trade remedy investigations:
- anti-dumping investigations
- subsidy investigations
- global safeguard investigations
These investigations can lead the investigating country to impose border measures to protect the industries in that country that are deemed to be injured or threatened with injury by allegedly dumped and/or subsidized imports. Border measures can also be applied to address a sudden, significant increase in fairly traded imports that is deemed to cause serious injury.
The following are types of border measures that can be imposed as a result of trade remedy investigations.
Anti-dumping duties are meant to counteract the injurious dumping of imported products. Dumping relates to the pricing practices of companies and occurs when goods are exported at prices that are lower than the selling price of comparable goods in the country of export. Dumping also occur when goods are exported at unprofitable prices.
Countervailing duties are meant to offset the injurious subsidization of imports. Subsidization occurs when the production, sale, or export of goods benefits from a financial contribution by a government or a public body. Some types of subsidies are prohibited by international agreements, whereas others are actionable if they cause adverse effects. More information on subsidies can be found on the WTO website.
Global safeguards provide temporary relief to allow domestic industry to adjust to surges in imports in situations of fair competition. Unlike anti-dumping and subsidy investigations, global safeguards apply to imports of a product from all trading partners. Certain free trade agreements exempt partner countries from global safeguard measures.
Learn more about Canada's involvement in foreign trade remedy investigations.
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