Canada requested the establishment of a dispute settlement panel under the USMCA on safeguards measures from the United States to imports of solar panels.
The safeguard measure imposed by the United States consisted of an additional import duty of 30% on imports of solar panels (certain products of crystalline silicon photovoltaic cells -CSPV-).
Pursuant to Proclamation 9693, the duty rate was reduced to 25% in 2019 and to 20% in 2020.
The measure also included a 0% duty rate quota for imported CSPV cells, up to 2.5 GW per year, amounts above which CSPV cells are subject to the additional import duty.
Following the USITC‘s midterm review of the safeguard measure, on October 13, 2020, the President decided to continue and modify the safeguard measure.
Specifically, in Proclamation 10101, the President made additional determinations to revoke the previous exclusion of certain solar panels from the measure, and increase the safeguard duty rate during the fourth year of application of the measure, from 15 to 18%, to all CSPV products covered by the measure.
Since the imposition of safeguard tariffs by the United States in early 2018, exports of solar products from Canada to the United States have declined by as much as 82 percent.
Solar panel imports
Canada requested consultations with the United States under Chapter 31 of the T-MEC on December 22, 2020.
Canada and the United States held consultations on January 28, 2021.
According to the timetable provided by the USMCA, the dispute resolution panel is expected to issue a report in early 2022.
Canada considers that the adoption of safeguard measures by the United States is inconsistent with the USMCA because the United States set tariffs on imports of solar panels from Canada, in violation of articles 2.4.1 and 2.4.2 of the USMCA.
Canada argued that the United States did not exclude Canada from the application of safeguard measures, despite the fact that Canadian solar panel imports do not represent a substantial share and do not contribute significantly to the injury to US industry.