Active and concluded State-to-State dispute settlement cases
Table of contents
Active cases
U.S. IEEPA import duties related to the flow of illicit drugs
Parties
Complaining Party – Canada
Responding Party – United States
Other Party – Nil
Summary of the complaint
(Certain legal documents related to this case can be viewed on the Note – registration is required)
On March 4, 2025, Canada filed a request for consultations with the U.S. Government pursuant to CUSMA Article 31.4 (Consultations) with respect to measures adopted by the United States that impose a 25% import duty on Canadian non-energy goods and a 10 percent import duty on Canadian energy goods entering the United States as of March 4, 2025, nominally to address the flow of illicit drugs across the U.S. northern border. Canada considers that the U.S. measures appear to be inconsistent with the following provisions of CUSMA: Articles 2.4.1 and 2.4.2 (Treatment of Customs Duties), Article 2.7.1 (Temporary Admission of Goods), Articles 2.8.1 and 2.8.3 (Goods Re-Entered after Repair or Alteration), Article 2.9 (Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials), Article 2.10.1 (Most-Favored-Nation Rates of Duty on Certain Goods), and Article 7.8.1(f) (Express Shipments).
Recent developments
Consultations with the United States were initiated.
Timeline
- 2025-03-04: Canada requests consultations with the United States.
U.S. Section 232 import duties on steel and aluminum products from Canada
Parties
Complaining Party – Canada
Responding Party – United States
Other Party – Nil
Summary of the complaint
(Certain legal documents related to this case can be viewed on the Note – registration is required)
On March 12, 2025, Canada filed a request for consultations with the U.S. Government regarding measures adopted by the United States pursuant to Section 232 of the Trade Expansion act of 1962 that impose a 25% ad valorem rate of additional import duty on certain steel and aluminum articles, effective March 12, 2025.
Canada considers the U.S. measures appear to be inconsistent with the United States’ obligations under the CUSMA and the November 30, 2018, side letters on Section 232 Tariffs – Future measures. In addition, Canada considers that these import duties have not been adopted and are not being maintained in accordance with the May 17, 2019, Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum.
Recent developments
Consultations with the United States were initiated.
Timeline
- 2025-03-12: Canada requests consultations with the United States.
U.S. Section 232 import duties on automobiles and automobile parts
Parties
Complaining Party – Canada
Responding Party – United States
Other Party – Nil
Summary of the complaint
(Certain legal documents related to this case can be viewed on the Note – registration is required)
On April 3, 2025, Canada filed a request for consultations with the U.S. Government regarding measures adopted by the United States pursuant to Section 232 of the Trade Expansion Act of 1962 that impose a 25% import duty on automobiles, effective April 3, 2025, and a 25% import duty on automobile parts, effective on May 3. Consultations are requested under the agreement between Canada and the United States dated November 30, 2018, concerning the imposition of measures by the United States pursuant to Section 232 of the Trade Expansion Act of 1962, as amended, on passenger vehicles, light trucks, and auto parts (the side letter on autos), which incorporates the CUSMA dispute settlement mechanism.
Canada considers that the U.S. measures appear to be inconsistent with the obligations of the United States under the side letter on autos, specifically, the United States has: (1) imposed a measure with respect to passenger vehicles and certain auto parts without excluding goods from Canada; (2) denied or otherwise frustrated eligibility for CUSMA preferential tariff treatment for covered originating goods; and (3) applied a customs duty in excess of the United States’ Most Favoured Nation applied rate in effect on August 1, 2018, for covered non originating goods.
Recent developments
Consultations with the United States were initiated.
Timeline
- 2025-04-03: Canada requests consultations with the United States.
Measures in the electricity sector
Parties
Complaining Party – Canada
Responding Party – Mexico
Other Party – United States
Summary of the complaint
(Certain legal documents related to this case can be viewed on the Note – registration is required)
On July 20, 2022, Canada filed a request for consultations with the Government of Mexico pursuant to CUSMA articles 31.2 and 31.4 with respect to various measures of Mexico that favour its state-owned Comision Federal de Electricidad (CFE), and negatively impact Canadian companies operating in Mexico and with investments in Mexico’s electricity sector. Canada considers that certain measures taken by Mexico appear to be inconsistent with the following provisions of CUSMA: Article 14.4 (National Treatment), Article 15.8 (Development and Administration of Measures), Article 22.5.2 (Courts and Administrative Bodies) and Article 29.3 (Administrative Proceedings).
Recent developments
Consultations with Mexico with respect to certain measures in Mexico’s electricity sector began on August 23, 2022.
Timeline
- 2022-08-23: Consultations begin.
- 2022-07-27: Canada and the United States notify their intention to participate in each other’s consultations as third Parties.
- 2022-07-20: Canada and the United States submit separate requests for consultations with Mexico.
Automotive rules of origin
Parties
Complaining Party – Mexico
Responding Party – United States
Other Party – Canada, as a complaining Party
Summary of the complaint
(Certain legal documents related to this case can be viewed on the Note – registration is required)
A difference of interpretation has arisen in relation to the implementation of the regional value content (RVC) requirements associated with the rules of origin for key automotive parts, known as “core parts”. The CUSMA allows producers to use certain alternative methodologies when calculating a core part’s RVC. Canada and Mexico are of the view that if a good is originating on this basis, it should be considered originating when determining the RVC of a vehicle. The United States is of the view that a separate RVC calculation, using the standard RVC methodology, must be performed on a core part to determine if it is originating when calculating the vehicle RVC.
Recent developments
The panel decided in Mexico’s and Canada’s favor, and the final report was made public on January 11, 2023. The Parties are now working on implementing the panel’s findings.
Timeline
- 2022-08-15: Parties respond to panel’s written questions.
- 2022-08-2,3: A hearing is held in Washington, D.C.
- 2022-07-25: The United States files its rebuttal submission.
- 2022-06-10: Canada and Mexico file their rebuttal submissions.
- 2022-05-20: The United States files its initial written submission.
- 2022-03-29: Canada and Mexico file their initial written submissions.
- 2022-01-13: Canada notifies of its intention to join as a complaining Party.
- 2022-01-06: Mexico requests the establishment of a panel.
- 2021-09-24: Consultations are held virtually.
- 2021-08-26: Canada notifies of its intention to participate in the consultations as a third Party.
- 2021-08-20: Mexico requests consultations with the United States.
Concluded cases
Dairy tariff rate quota allocation measures 2023 (second dispute)
Parties
Complaining Party – United States
Responding Party – Canada
Other Party – Mexico, as a third Party
Summary of the complaint
(Certain legal documents related to this case can be viewed on the Note – registration is required)
On January 31, 2023, the United States requested the establishment of a dispute settlement panel regarding Canada’s dairy Tariff Rate Quotas (TRQs) measures under CUSMA. The United States alleges that Canada’s measures appear to be inconsistent with the Agreement under four areas: 1) the continued exclusion of retailers and food service from TRQ eligibility; 2) the 12-month activity requirement; 3) the methodology and criteria for calculating individual allocations, and; 4) the TRQ return and reallocation measures.
Specifically, the United States made claims of violation under paragraph 3(c) of Section A of Appendix 2 (Tariff Rate Quotas) of Annex 2-B and Articles 3.A.2.4(b), 3.A.2.6, 3.A.2.6(a), 3.A.2.10, 3.A.2.11(b), (c) and (e), and 3.A.2.15 of CUSMA.
Recent developments
The final report was made public on November 24, 2023. The panel found in Canada’s favour on all claims made by the United States
Timeline
- 2023-07-31: Parties provide written answers to outstanding panel questions.
- 2023-07-19,20: A hearing is held in Ottawa.
- 2023-06-30: Canada files its rebuttal submission.
- 2023-06-02: The United States files its rebuttal submission.
- 2023-05-05: Canada files its initial written submission.
- 2023-03-20: The United States files its initial written submission.
- 2023-02-08: Mexico notifies of its intention to participate as a third Party.
- 2023-01-31: The United States requests the establishment of a panel.
- 2023-01-17: Additional consultations are held in Ottawa.
- 2022-12-20: The United States submits an additional request for consultations.
- 2022-06-09: Consultations are held virtually.
- 2022-05-25: The United States requests consultations.
Mexico’s measures concerning genetically engineered corn
Parties
Complaining Party – United States
Responding Party – Mexico
Other Party – Canada, as a third Party
Summary of the complaint
(Certain legal documents related to this case can be viewed on the Note – registration is required)
Canada participated as a third Party in the United States-led dispute challenging two measures reflected in Mexico’s Presidential Decree concerning genetically engineered corn. The United States has alleged that Mexico’s measures were inconsistent with the following provisions of CUSMA: Articles 9.6.3, 9.6.6 (a), 9.6.6(b), 9.6.7, 9.6.8, 9.6.10 (Science and Risk Analysis) and Article 2.11 (Import and Export Restrictions).
Canada has a strong systemic interest in ensuring the correct interpretation of the Sanitary and Phytosanitary (SPS) obligations under the Agreement, namely that SPS measures are based on scientific principles, relevant international standards, guidelines or recommendations, or appropriate risk assessments.
Recent developments
On December 20, 2024, the Panel released its final report. The Panel decided in favor on all claims made by the United States. Mexico is now working on implementing the Panel’s findings.
Timeline
- 2024-07-15: Parties provide written responses to questions from the panel.
- 2023-06-26,27: A hearing is held in Mexico City.
- 2024-05-28: Mexico files its rebuttal submission.
- 2024-04-02: The United States files its rebuttal submission.
- 2024-03-15: Canada files its third Party written submission.
- 2024-01-15: Mexico files its initial written submission.
- 2023-10-25: The United States files its initial written submission.
- 2023-08-25: Canada notifies its intention to participate in the panel proceedings as a third Party.
- 2023-08-17: The United States requests the establishment of a panel.
- 2023-06-09: Canada notifies its intention to participate in the consultations as a third Party.
- 2023-06-02: The United States requests consultations with Mexico.
Crystalline silicon photovoltaic cells safeguard measure
Parties
Complaining Party – Canada
Responding Party – United States
Other Party – Mexico, as a third Party
Summary of the complaint
(Certain legal documents related to this case can be viewed on the Note – registration is required)
Canada requested the establishment of a dispute settlement panel regarding the United States’ application of a solar safeguard measure on imports of crystalline silicon photovoltaic products (CSPV) from Canada. Canada alleged that the measure, imposed on January 23, 2018, nullified or impaired benefits accruing to Canada directly or indirectly under CUSMA. Specifically, Canada alleged the imposition and continuance of the measure was inconsistent with the United States’ obligations under CUSMA Articles 2.4.1, 2.4.2, 10.2.1, 10.2.2, 10.2.5, and 10.3.
Recent developments
On February 15, 2022, the CUSMA Panel released its final report concluding that the United States’ application of the safeguard measure to imports of solar products from Canada violates the United States’ obligations under the CUSMA. On July 8, 2022, Canada and the United States signed a Memorandum of Understanding to facilitate the U.S. implementation of the panel result and enable the suspension of the U.S. safeguard tariff on solar products from Canada.
Timeline
- 2022-02-15: Panel releases its final report.
- 2021-11-22: Parties provide written responses to outstanding Panel questions.
- 2021-11-10: Hearing is held.
- 2021-10-27: The United States files its rebuttal submission.
- 2021-10-06: Canada files its rebuttal submission.
- 2021-10-04: Mexico files its initial written submission.
- 2021-09-15: The United States files its initial written submission.
- 2021-08-10: Canada files its initial written submission.
- 2021-06-25: Mexico notifies of its intention to join as a third Party
- 2021-06-18: Canada requests the establishment of a panel.
- 2021-01-28: Consultations are held.
- 2020-12-22: Canada requests consultations with the United States.
Dairy tariff rate quota allocation measures (first dispute)
Parties
Complaining Party – United States
Responding Party – Canada
Other Party – Mexico, as a third Party
Summary of the complaint
(Certain legal documents related to this case can be viewed on the Note – registration is required)
The United States requested the establishment of a dispute settlement panel regarding Canada’s allocation and administration of its dairy TRQs under CUSMA. Specifically, the United States alleged that Canada’s practice of creating processor pools appeared to violate Articles 3.A.2.4(b), 3.A.2.6(a), 3.A.2.11(b), (c), and (e) of the agreement.
Recent developments
On May 16, 2022, Canada published new CUSMA dairy TRQ allocation and administration policies. The new policies end the use of processor-specific pool, addressing the Panel’s finding that it was inconsistent with the agreement.
Timeline
- 2022-01-04: Panel releases its final report.
- 2021-11-03: Parties provide written answers to outstanding panel questions.
- 2021-10-25 to 2021-10-26: Hearing is held in Ottawa.
- 2021-10-01: Canada files its rebuttal submission.
- 2021-09-10: The United States files its rebuttal submission.
- 2021-08-20: Canada files its initial written submission.
- 2021-07-12: The United States files its initial written submission.
- 2021-05-31: Mexico notifies of its intention to join as a third Party.
- 2021-05-25: The United States requests the establishment of a panel.
- 2020-12-21: Consultations are held.
- 2020-12-09: The United States requests consultations.
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