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Safeguard Investigations

• On June 22, 2001, the U.S. Trade Representative requested the U.S. International Trade Commission (ITC) to conduct a Section 201 safeguard investigation to determine whether the domestic steel industry has been seriously injured by an increase in imports. Unlike anti-dumping or countervailing duty investigations, safeguard or Section 201 investigations focus on all imports, whether fairly or unfairly traded. The purpose of such investigations is to determine whether the domestic industry has been seriously injured by an increase in imports.
• On October 22, the ITC found that imports of 16 out of 33 steel products investigated were seriously injuring the U.S. industry, of which six steel products from Canada were found contributing importantly to that injury.
• The ITC has recommended a remedy, in the form of import action, to the President. The latter has complete discretion as to whether to take action and the type of action to take. A decision must be made by February 17, 2002.

North American Free Trade Agreement (NAFTA)

• Under NAFTA, imports from Canada (and Mexico) can be included in an import remedy if imports from either country are found to be substantial and contributing importantly to injury to the domestic industry. Previously excluded imports can be made subject to a remedy if they surge.
• If import remedies are applied, NAFTA provides that import action must not have the effect of reducing imports below the trend of imports over a recent representative period. There is also an allowance for reasonable growth.
• Canada will be immediately entitled to compensation for any impairment in trade. If there is no agreement on compensation, Canada may retaliate.

The Products

The six steel imports from Canada vulnerable to import action are: