Government support of Canadian plant to be investigated

Government support of Canadian plant to be investigated
Published: 27 November 2014

Senator Sherrod Brown (D-OH) welcomed the move by the Office of the US Trade Representative to press Canada at the World Trade Organization (WTO) over a financial assistance package provided for a cement plant in Quebec that US cement producers say amount to illegal subsidies of up to US$400m.

"USTR has raised this issue at high levels of Canadian government and is currently reviewing the financial assistance package that Canada provided. Senator Brown is pleased the issue was raised at the WTO committee on subsidies, as he requested," a Brown spokeswoman said. "It is important that USTR investigate the support being offered to McInnis Cement to ensure it is compliant with all of Canada's international trade obligations."

Besides raising the issue at the 29 October meeting of the WTO Committee on Subsidies and Countervailing Measures, USTR has also sought more information about the aid package in bilateral consultations with Canadian federal and provincial officials.

Brown is one of a team of US lawmakers who had pressed USTR to look into Canada's support for the McInnis plant. Brown asked that USTR evaluate the investments "to determine if it would be a prohibited or actionable subsidy" under the WTO Agreement on Subsidies and Countervailing Measures.

Senators Kirsten Gillibrand (D-NY) and Charles Schumer (D-NY) issued a similar request. They also argued that "market conditions in Canada indicate that the McInnis plant's viability would depend on cheap exports to the United States," due to a current overcapacity of 1.3Mt in the current Quebec market.

McInnis representatives have since met with staff of some of the senators to defend their position that the Canadian government's support for the plant is consistent with WTO rules.