International Trade Minister Ed Fast takes part in a interview in his office in East Block of Parliament Hill in Ottawa on Thursday, February 5, 2015.Sean Kilpatrick/The Canadian Press
Canada is ratcheting up a simmering trade feud with China, calling on the World Trade Organization to investigate "discriminatory" duties on Canadian pulp.
China slapped duties of up to 23.7 per cent on dissolving pulp from Canada last April, claiming the product was being illegally dumped.
Ottawa acknowledged Thursday that efforts to resolve the dispute through consultation have failed, prompting it to launch a formal trade challenge in Geneva with a request to set up a dispute panel.
The government rejects China's contention that the specialty pulp – used to make rayon and other man-made fibers – is sold more cheaply there than in Canada.
"Canada's position is that China's investigation was not conducted in accordance with the WTO rules and as a result the conclusions were flawed," Trade Minister Ed Fast said in a statement.
Canadian companies, including Tembec Inc. and Fortress Paper Ltd., exported a total of $317-million worth of dissolving pulp to China in 2013. Roughly half of the 750,000 tonnes produced in Canada is destined for China.
Taking China to a panel is a lengthy and potentially high-risk move by Ottawa, which wants to vastly expand trade to the Asian economic power.
Forest products are Canada's single largest export to China, worth roughly $4-billion a year.
Mr. Fast said he would continue to "consult and work closely" with the Canadian industry on the case.