Canada's Prime Minister Stephen Harper
Canada's Prime Minister Stephen Harper stands to vote in favour of a government motion to participate in U.S.-led air strikes against Islamic State militants operating in Iraq, in the House of Commons on Parliament Hill in Ottawa October 7, 2014. Reuters/Chris Wattie

Close on the heels of ratifying the FIPA trade deal with China, Canada has approached the World Trade Organisation in a victim's role complaining against China for its anti-dumping duties on its dissolving pulp exports.

It is a cellulosic material used in producing rayon with applications in end user industries such as apparel, textiles and automotive sectors. In a complaint to WTO, lodged on last Wednesday, Canada alleged that the duties imposed in November 2013 and April 2014 broke the WTO rules.

Canadian Exporters Harmed

Explaining the matter, Shannon Gutoskie, spokeswoman for Canada's Minister of International Trade Ed Fast, told media persons that China's action was "discriminatory" and harmful to the Canadian exporters, reports Reuters. China used to import more than $300 million worth of "dissolving pulp" in the past few years, according to the data of International Trade Centre. Canada's total production of pulp is 750,000 tonnes. Nearly half of it was exported to China last year. Canada wants the issue resolved within 60 days, else it would escalate the dispute by seeking adjudication.

Producers In Distress

Reuters in its latest update added that Canada's leading pulp producers have urged the federal government to exert more pressure on China to withdraw the anti-dumping duties on the pulp. One of the leading producers, Vancouver -based Fortress Paper, said it urged the Canadian government to petition China on behalf of the local pulp industry, to find a solution to the dispute.

Canada said China broke the WTO rules by repeatedly imposing duties in November and April, the trade body said. Fortress noted the anti-dumping duty of China on dissolving pulp hit the producers in Canada, the United States and Brazil. Cumulatively, it would lead to a loss of Canadian dollar 20 million ($17.7 million) annually by way of lost revenue.

Job Loss

Fortress also said the unjustified duties have put thousands of Canadian jobs at risk, including 300 of its mill in Québec. The company fears that in the long-term, Canada will lose its edge in this industry as nations unaffected by the duties will take advantage. The company alleged that the arbitrary duties not only broke international law but failed to add any positive benefit to its local price in China. Meanwhile, another Canadian pulp producer Tembec Inc joined the chorus and called up Canadian Trade Minister Ed Fast to engage China in WTO discussions to solve the dispute amicably.