IM-Herman_2023_1128.pub

The Americans reacted earlier to DSTs enacted by Spain, France, the UK and other EU members, threatening to retaliate under the dreaded section 301 of the 1974 Trade A c t, a tool that allows Washington to unilaterally apply trade countermeasures. [...] As to the trade dispute with Washington, as the Business Council of Canada and the Canadian Chamber of Commerce have rightly said, it’s always in Canada’s interest to resolve things with the Americans before getting into a full-blown trade dispute If Canada does move ahead, the key question is whether it could counter US claims that the measure contravenes trade obligations under the World Organiz. [...] The answer revolves around Canada’s obligations under the national treatment rule, one of the foundation blocks of the multilateral trading system. [...] Applying this to the case at hand, for Canada to be offside international trade law, the DST would have to apply to imported US digital services like those provided by Google, Facebook and others, while exempting Canadian services with the same qualities and that compete directly in the same market. [...] Whatever the legal cover for Canada’s DST project, the better route is to reach accommodation with Washington, stay onside with our OECD partners and continue along the multilateral path, deferring implementation of the DST as the talks progress.