Interim Reviews (Section 76.01)
LEATHER FOOTWEAR WITH METAL TOE CAPS
Request for Interim Review No. RD-2005-001
Order and reasons issued
Friday, November 25, 2005
TABLE OF CONTENTS
IN THE MATTER OF a request for an interim review, under
subsection 76.01(1) of the Special Import Measures Act, of
the finding made by the Canadian International Trade Tribunal on
December 27, 2001, in Inquiry No. NQ-2001-003, concerning:
LEATHER FOOTWEAR WITH METAL
TOE CAPS ORIGINATING IN OR EXPORTED FROM THE PEOPLE'S REPUBLIC OF
CHINA, EXCLUDING WATERPROOF FOOTWEAR SUBJECT TO THE FINDING MADE BY
THE CANADIAN INTERNATIONAL TRADE TRIBUNAL IN INQUIRY NO.
On August 29, 2005, A.M. Footwear Inc. filed a request for an
interim review of the finding made by the Canadian International
Trade Tribunal in Inquiry No. NQ-2001-003 concerning the
Pursuant to subsections 76.01(3) and 76.01(4) of the Special
Import Measures Act, the Canadian International Trade Tribunal
is not satisfied that an interim review of the above-noted finding
is warranted and, consequently, has decided not to conduct an
Meriel V. M. Bradford
Meriel V. M. Bradford
James A. Ogilvy
James A. Ogilvy
Meriel V. M. Bradford, Presiding Member
Zdenek Kvarda, Member
James A. Ogilvy, Member
Director of Research:
Lead Research Officer:
Counsel for the Tribunal:
Shoe Manufacturers' Association of Canada
Gregory O. Somers
A.M. Footwear Inc.
Please address all communications to:
Canadian International Trade Tribunal
Standard Life Centre
333 Laurier Avenue West
Telephone: (613) 993-3595
Fax: (613) 990-2439
STATEMENT OF REASONS
1. On December 27, 2001, the Canadian International Trade
Tribunal (the Tribunal), in Inquiry No. NQ-2001-003, made a
finding that the dumping of leather footwear with metal toe caps
originating in or exported from the People's Republic of China,
excluding waterproof footwear subject to the finding made by the
Tribunal in Inquiry No. NQ-2000-004, was threatening to cause
material injury to the domestic industry.
2. In the finding made December 27, 2001, the Tribunal excluded
the following products: (1) athletic style and hiking style leather
safety shoes of cement construction;1
and (2) leather boots with
metal toe caps and rubber outsoles, for use in motorcycle riding,
incorporating zippers or buckles and a commonly recognized
motorcycle brand name affixed permanently.
3. On August 29, 2005, A.M. Footwear Inc. (A.M. Footwear) filed
with the Tribunal a request for an interim review of the
above-mentioned finding, pursuant to subsection 76.01(1) of the
Special Import Measures Act.2
A.M. Footwear was seeking an
exclusion for "leather safety footwear imported or sold by AM
Footwear that incorporates a steel toe engineered with Chromium and
Titanium Nitride components in accordance with a Canadian Patent
Pending filed by AM Footwear."
4. On September 22, 2005, the Tribunal decided that the request
was properly documented and, pursuant to subrule 70(2) of the
Canadian International Trade Tribunal Rules,3
to the inquiry were provided with a copy of A.M. Footwear's request
and given an opportunity to make representations. On October 2 and
November 1, 2005, the Shoe Manufacturers' Association of Canada
(SMAC), on behalf of its members,4
filed submissions opposing the
request for an interim review. A.M. Footwear was given
opportunities to respond to SMAC's submissions, and it filed
replies on October 14 and November 7, 2005.
5. A.M. Footwear submitted that an interim review was warranted
given that new facts had arisen since the finding. The relevant
facts cited by A.M. Footwear related to the existence of a new
footwear product that is not produced in Canada and is
distinguishable from the types of footwear available from Canadian
production. According to A.M. Footwear, because it incorporates a
chromium and titanium nitride toe cap for which a patent has been
filed in Canada, this footwear is a new and unique high-end product
that exceeds CSA International (CSA) standards, commands a premium
price and is intended to serve a different market segment. In
addition, the product offers performance that is superior to
traditional steel toe boots in terms of strength, weight, corrosion
resistance and a thinner profile. Furthermore, A.M. Footwear
submitted that SMAC did not claim that the domestic industry is now
producing or plans to commence producing footwear incorporating a
chromium and titanium nitride toe cap.
6. SMAC submitted that some of its members produce, in Canada,
leather footwear with metal toe caps which meets or exceeds CSA
standards. It argued that A.M. Footwear's product, rather than
establishing a new market, will simply compete directly with all
other CSA certified work boots currently available in the Canadian
market. In addition, SMAC noted that the comparison of test results
shows that the strength and safety aspect of A.M. Footwear's
product position it to compete directly with Canadian production of
leather safety footwear. SMAC concluded that it opposes the request
for an interim review and argued that the threshold for initiating
an interim review is very high and, absent a fundamental change in
circumstances, that a finding should remain undisturbed for five
years. Finally, SMAC submitted that, rather than requesting an
interim review, a more appropriate procedure would be for A.M.
Footwear to request a product exclusion during the expiry review of
the finding that could take place in 2006 if the Tribunal decides
that such a review is warranted.
7. Subsection 76.01(1) of SIMA provides that the Tribunal
may conduct an interim review of an order or finding. Such an
interim review may concern the whole order or finding or any aspect
of the order or finding. Pursuant to subsection 76.01(3), the
Tribunal shall not conduct an interim review unless the requester
satisfies the Tribunal that the review is warranted.
8. Having determined, as indicated above, that the request was
properly documented, the Tribunal must decide if an interim review
is warranted. In light of subsection 76.01(3) of SIMA,
interim reviews should be undertaken only when there are
sufficiently compelling reasons to persuade the Tribunal to do so.
New facts or changes of circumstances are not, in and of
themselves, enough to warrant an interim review. It is reasonably
expected that new facts will arise and circumstances will change
over the course of a finding.
9. However, as indicated in the Tribunal's Guideline on
Interim Reviews (the Guideline), the question is whether
there are sufficient new facts or changes of circumstances to
warrant an interim review, or whether an interim review is
warranted due to facts that were not put into evidence during the
original inquiry and not discoverable by the exercise of reasonable
diligence at the time.
10. Basing its conclusion on the submissions and replies it
received, the Tribunal is of the view that an interim review is not
warranted. The Tribunal grants product exclusions only in
exceptional circumstances. The Guideline provides examples
of sufficient new facts or changes of circumstances illustrating
the likely impact on a finding that these must have in order to
warrant an interim review. It refers to situations in which the
domestic industry has ceased production of like goods or where
foreign subsidies have been terminated.
11. In this case, the domestic industry still produces and sells
leather safety footwear with metal toe caps in the Canadian market.
On the basis of the submissions filed by the parties, the Tribunal
is of the view that A.M. Footwear has not demonstrated that the
product for which it is requesting an exclusion is sufficiently
different from domestically produced like goods to warrant an
interim review in order to obtain an exclusion from the
12. The Tribunal is also of the view that the footwear for which
the exclusion is requested would compete with domestic production,
if present in the Canadian market. In this regard,
A.M. Footwear's allegation that its product would command a
premium has convinced the Tribunal that, if the exclusion were
granted, A.M. Footwear's product would simply vie for the same
customers as those that would otherwise purchase footwear from
domestic production. Cannibalization of a portion of the domestic
industry's market would likely occur. This constitutes a threat of
injury to the domestic industry.
13. For the foregoing reasons, pursuant to subsections 76.01(3)
and 76.01(4) of SIMA, the Tribunal is not satisfied that an
interim review of the finding is warranted and, consequently, has
decided not to conduct an interim review.
1 . For
greater clarity, "shoes" are defined as footwear worn below the
ankle, and "cement construction" refers to a process where the
outsole is cemented to the bottom of a lasted upper.
2 . R.S.C.
1985, c.S-15 [SIMA].
3 . S.O.R.
4 . The
following members of SMAC participated in Inquiry No. NQ-2001-003:
G.A. Boulet Inc., Canada West Shoe Manufacturing Inc., L.P. Royer
Inc., STC Footwear, Tatra Shoe Manufacturing and Terra
5 . This
portion of the text is intended only to outline a number of key
submissions made by the parties. It is not intended to be