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Co-Chairs' Foreword

On May 17, 1996, Finance Minister Paul Martin asked the Standing Committees on Finance and on Foreign Affairs and International Trade of the House of Commons to jointly review the Special Import Measures Act (SIMA) and to advise the Government if any changes should be made to the law. The Standing Committee on Finance subsequently struck the Sub-Committee on SIMA Review, and the Standing Committee on Foreign Affairs and International Trade assigned its Sub-Committee on Trade Disputes to work jointly with the Sub-Committee on SIMA Review to carry out this task.

SIMA governs the application of anti-dumping and countervailing duties to imports of dumped and subsidized goods that are found to cause injury to domestic producers. Anti-dumping duties are additional duties designed to offset an exporter's under pricing in an importing country's market. Countervailing duties are designed to offset the effects of foreign subsidies on imported products. The SIMA legislation is an important component of Canadian import policy.

Since the establishment of SIMA in 1984, Canada's trading regime has undergone significant changes. These result from the increasing globalization that affects all national economies, and from the completion of three historic international trade agreements. Following the Canada-U.S. Free Trade Agreement (FTA) and the North American Free Trade Agreement (NAFTA), Canada moved to implement into legislation the unique binational review procedures on anti-dumping and countervailing duties contained in those agreements. After the Uruguay Round of Multilateral Trade Negotiations, Canada implemented the international codes on anti-dumping and subsidy practices concluded in that negotiation. Given these changes and the decade or more of experience with the current legislative framework, a review of SIMA is timely to determine whether it is still relevant to the competitive needs of all segments of the Canadian business community.

As drafted in 1984, SIMA represented a balance of interests between those parties requiring protection from injurious dumped or subsidized imports, and those requiring access to imports to ensure profitability of their economic activities. The main question we address is whether the current law adequately serves those firms that are being injured by dumped or subsidized imports, as well as those domestic interests that may be adversely affected by anti-dumping or countervailing duty actions. In short, we sought to establish whether the balance struck in 1984 continues to be appropriate in the new economic situation of the 1990s.

Our conclusion, which will be elaborated below, is that the basic circumstances that motivated Canada to establish SIMA continue to exist, and that the legislation continues to respond to those circumstances. The Law provides basic protection to Canadian producers while limiting unnecessary collateral damage to downstream users. During our hearings and deliberations, we became aware of several areas where adjustments might make the legislation more efficient or more responsive to Canada's economic needs, and we have focused our recommendations on these areas. These recommendations constitute suggestions for incremental improvements to legislation that is already adequately serving Canada's national economic interests.

We are grateful to the members of the Sub-Committee on the SIMA Review, and to the members of the Sub-Committee on Trade Disputes, and to other members of the House of Commons, who assisted with this report. These individuals include: Barry Campbell, Parliamentary Secretary to the Minister of Finance; Ron MacDonald, Parliamentary Secretary to the Minister of International Trade; Bill Graham, Sarkis Assoudourian, Brent St. Denis, Susan Whelan, Roy Cullen, Bob Speller, Yvan Loubier, Benoît Sauvageau, Herb Grubel and Charlie Penson. We appreciate the efforts of those who either appeared before us or submitted briefs; these individuals or organizations are noted in Appendices A and B. We acknowledge with thanks the efforts of staff who contributed to this report, namely our Clerk, Georges Etoka and our consultant Gilbert Winham, assisted by our research officer from the Library of Parliament, Me Daniel Dupras.

We submit this report in the expectation that it is but one step in the continuing process of adjusting Canada's internal legislation and administrative practices to an evolving external environment. The Government should be prepared to revisit this subject as needed to keep Canadian policies abreast of a changing international economy and the potential for reform of national practices.

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