NTC to contest Novatex case with CBSA

National Tariff Commission (NTC) is to contest the case of M/s Novatex with Canadian Border Services Agency (CBSA) aimed at securing maximum relief for the company against imposition of 45.6 per cent provisional duty on export of PET bottle grade resin, sources close to Chairman NTC told Business Recorder.
A delegation led by Chairman NTC, Qasim Niaz had meetings with the CBSA in Ottawa during which 14 alleged subsidy schemes/measures of the Government of Pakistan came under discussion. The schemes were as follows: (i) Export Long Term Fixed Rate Financing Scheme; (ii) Long Term Financing for Export Oriented Projects; (iii) Manufacturing Bond Scheme; (iv) imports of plant machinery and equipment in manufacturing bond (SRO No. 554(I)/98); (v) Final Tax Regime (FTR); (vi) compliance certificate scheme; (vii) Export Processing Zones (EPZ) incentives and benefits; (viii) land at concessionary rates in industrial estates and EPZs; (ix) warehousing scheme; (x) trade loan facility under FE 25 scheme (Import and Export); (xi) Export Finance Scheme or Export Refinance Scheme (Part I & II) (EFS) ; (xii) Non Interest Cash Finance (NICF) scheme; (xiii) Export Finance Scheme (FAPE I & II) and; (xiv) Duties and Tax Remission for Export (DTRE) scheme.
The sources said NTC focused on disputing the CBSA claim that these programs were non permissible subsidies and that Pakistan's exporters of PET to Canada had in any way unfairly benefited from them, making them liable to imposition of countervailing duties by CBSA. Accordingly, during these meetings in Ottawa Pakistani delegation mounted a vigorous defence with a view to convincing the Canadian side of the correctness of its view.
After return of NTC delegation from Canada, the CBSA on November 16, 2017 announced its Preliminary Determination (PD) in this investigation which besides Pakistan is also targeting China, India and Oman. "We have managed to achieve best possible outcome vis-a-vis the anti-subsidy investigation at this stage of the proceedings. This is because no provisional countervailing duty has been imposed on Novatex. CBSA and other investigating authorities invariably tend to support the unverified claims of their respective local industries and impose provisional duties to provide them some temporary relief," the sources added.
On the other hand CBSA has gone ahead and imposed provisional countervailing duties on India (3.9% to 31.1%) and China (22.8%) which of course is in addition to provisional anti-dumping duties imposed on India (34 to 45.6%), China (3.3 to 17.4%) and Oman (22.2 to 41.3%).
However as regards anti-dumping, the CBSA has imposed provisional duty of 45.6% on Novatex as well, in line with its uniform policy of giving benefit of doubt to its domestic industry vis-a-vis all foreign exporters under investigation. However, CBSA's decision has not been in accordance with its legal obligations under the relevant WTO agreements. This is because CBSA has not taken into account the detailed information submitted to CBSA by Novatex and its Canadian lawyer with the help of NTC.
Instead CBSA's imposition of 45.6% Anti-Dumping duty (i.e. the highest duty imposed on Indian exporters) has been done on the pretext that the information provided on behalf of Novatex had some deficiencies. The legally correct course for CBSA in this case would have been to give Novatex due benefit on all aspects where the information was sufficient and only withhold credit on issues where supposedly there were information gaps.
NTC, sources said, will write to CBSA pointing out the legal flaws and underline the fact that in this respect they are in violation of the WTO Agreements and continue using other opportunities to convince them. In this context comprehensive documentation was prepared in coordination with relevant Government agencies and Novatex to rebut various allegations brought before CBSA by Canadian domestic industry.
"Our main focus from now on will be to work in coordination with Novatex with a view to ensuring that in the Final Determination CBSA decides to substantially reduce if not completely eliminate the Anti-Dumping duty on Novatex," the sources maintained.