Page 21 - CCCA Magazine Fall 2018

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The surge in proTecTionism, bilaTeralism, punishing sancTions and sweeping

Tariffs under presidenT donald Trump’s adminisTraTion has alarmed
and frusTraTed allies and businesses alike. in a move ThaT only escalaTes

The risk of an ongoing global Trade war, The presidenT imposed hefTy
Tariffs of 25% on sTeel and 10% on aluminum imporTs This summer under

a conTroversial "naTional securiTy" provision of u.s. Trade law—a measure
swifTly meT wiTh reTaliaTory Tariffs by a hosT of naTions, including canada.

hese disputes come after the U.S. administration has walked risk. You really don’t know where the risks are going to come
away from the Trans-Pacifc Partnership trade agreement, from so it’s really hard to prepare and manage those risks.”
tquestioned the merits of the World Trade Organization It’s no surprise then that international trade lawyers are keep-
(WTO) and continues renegotiation talks on the North Ameri- ing busy, felding queries from in-house counsel who want to un-
can Free Trade Agreement (NAFTA). derstand the implications of the trade unrest, with burdensome
Caught in the crossfre are businesses, and their legal advi- tariffs and the fate of NAFTA top of mind. Just as importantly,
sors, who have no idea what to expect next. they are looking for solutions, particularly in the short term. In-
The consequences are beginning to be felt: tightly interwo- deed, some companies are even in crisis management mode.
ven supply chains are under strain, costs are inching up, and
business confdence, though still high, is wavering. The In-  Mitigation
ternational Monetary Fund warned that rising trade tensions However, it is not all gloom and doom. While it will not be easy,
could “undermine business and fnancial market sentiment, companies can implement mitigation strategies to minimize
denting investment and trade.” More ominously, in the longer the harm of this trade uncertainty, according to international
term at least, trade frictions may erode a global commitment to trade lawyers.
the rules-based, liberal trading system that operates under the It begins with the obvious. In-house counsel have to keep up
WTO, which accounts for 98% of world trade. to date on the latest developments.
“We are experiencing actions and reactions all over the world “More than ever this stuff matters to what their companies
which are having a domino effect for Canadian trade and Cana- are doing, their clients, the supply chains—whether you are in
dian production, importing and exporting,” noted Darrel Pear- goods or services,” says John Boscariol, head of the Interna-
son, head of the International Trade Group at Bennett Jones tional Trade and Investment Law Group at McCarthy Tétrault
LLP. “The levels of volatility and the frenzy taking place is un- LLP. “In-house counsel need to be on top of exactly what’s hap-
equalled in anything I have seen before.” pening in these trade wars” before moving on to “really” un-
“In-house counsel deal with risk on a daily basis,” points out derstand the nature of their supply chain—something usually
Cyndee Todgham Cherniak, founder of LexSage Professional outside their purview. That means in-house counsel must have
Corp., a boutique international trade law frm. “[But] this is a a solid grasp of the kinds of components procured and used by
different level of risk than what is normal. It is unpredictable the company, and where they come from.

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