Canada in U.S. sanctions move

Press, 1 April 1989, Page 30

Canada in U.S. sanctions move

NZPA-AP Ottawa Trade Minister, Mr John Crosbie, has announced that Canada will impose trade sanctions against the United States in retaliation for a U.S. oil import tax which has been ruled discriminatory under world trade rules. The action was seen as an escalation of a U.S.-Canadian dispute over Canadian fish export regulations. Mr Crosbie said in a statement that Canada had lost patience with the failure of the U.S. to comply with a General Agreement on Tariffs and Trade (GATT) 1987 ruling that the so-called superfund oil tax, imposed to help pay for environmental protection, violates world trade rules. The move came two days after U.S. Trade Representative, Carla Hills, said the United States would retaliate against regulations that protected Canada’s west coast herring and salmon processing industry. “I would call it a tit-for-tat move,” said one U.S. official. Spokeswoman, Danielle Ayotte, of the External Affairs Department, however, denied any link between the disputes. Ayotte said Canada had no option but to seek formal authority from GATT to remove U.S. trading privileges. But another U.S. official said Canada, irritated that Washington retaliated against Canadian fish products without GATT approval, might want to teach the U.S. a lesson. Canada said it would replace the export restrictions on raw herring and salmon with new conservation regulations that will conform to GATT.

Although Canada supported the principle of the superfund, it complained to GATT because the US tax was 11.7 c per barrel while the tax on oil produced in the U.S. was only 8.2 c.