REPORT TO THE MINISTER OF FINANCE
REQUEST FOR TARIFF RELIEF BY ALBANY INTERNATIONAL CANADA INC.
REGARDING PERLON MONOFILAMENTS
December 8, 1999
TABLE OF CONTENTS
Request No. : TR-99-002
Tribunal Member: Arthur B. Trudeau, Presiding Member
Research Director: Réal Roy
Research Officer: Peter Rakowski
Counsel for the Tribunal: Michèle Hurteau
Distribution Officer: Gillian Burnett
Address all communications to:
Canadian International Trade Tribunal
Standard Life Centre
333 Laurier Avenue West
On July 14, 1994, the Canadian International Trade Tribunal (the
Tribunal) received terms of reference  from the Minister of Finance (the Minister)
pursuant to section 19 of the Canadian International Trade
Tribunal Act. 
The Minister directed the Tribunal to investigate requests from
domestic producers for tariff relief on imported textile inputs for
use in their manufacturing operations and to make recommendations
in respect of those requests to the Minister.
Pursuant to the Minister’s reference, on June 16, 1999, the
Tribunal received a request from Albany International Canada Inc.
(Albany) of Cowansville, Quebec, for the removal, for an
indeterminate period of time, of the customs duty on the
importation from all countries of monofilaments, solely of nylon,
for use in the manufacture of paper-making machine felts (the
subject yarn). As part of its request, Albany sought tariff relief
retroactive to June 11, 1999.
On September 20, 1999, the Tribunal, being satisfied that the
request was properly documented, issued a notice of commencement of
investigation, which was widely distributed and published in the
October 2, 1999, edition of the Canada Gazette
As part of the investigation, the Tribunal’s research staff sent
questionnaires to potential producers of yarn identical to or
substitutable for the subject yarn. A request for information was
also sent to potential importers of the subject yarn. A letter was
sent to the Department of National Revenue (Revenue Canada) (now
Canada Customs and Revenue Agency) requesting information on the
tariff classification of the subject yarn, and samples were
provided for laboratory analysis. Letters were also sent to a
number of other government departments requesting information and
A staff investigation report was not necessary for the purposes
of this investigation, since potential producers of yarn identical
to or substitutable for the subject yarn did not oppose the
A public hearing was not held for this investigation.
The subject yarn is described as a Perlon  monofilament and is imported from
Germany. According to Albany, the subject yarn has mechanical and
thermal resistance because of the use of stabilisers in the
production of the yarn. It is these properties that allow it to be
suitable for manufacturing paper-making machine felts.
Revenue Canada has indicated that the subject yarn is classified
under classification No. 5404.10.90.31 of the Customs Tariff
 and is presently
dutiable at 10.0 percent ad valorem under the MFN tariff and
at 5.0 percent ad valorem under the GPT and is free under
the US tariff, the Mexico tariff, the Chile tariff, the Least
Developed Country tariff and the Canada-Israel Agreement
Albany is a manufacturer of paper-making machine felts and
fabrics, serving the pulp and paper industry in Canada and across
the world. Albany has three manufacturing plants in Canada: one in
Perth, Ontario, and two in Cowansville. The plant located in Perth
manufactures fabrics for the forming section of paper-making
machines. One plant in Cowansville makes the press section of
paper-making machines, and the other plant produces fabrics for the
dryer section of these machines and for selected equipment in the
Albany submitted that there is no Canadian producer of an
identical or similar product and that it has not been approached by
any producers of yarn with any product comparable to Perlon. It
also stated that a similar product is available from sources in
Europe and the United States. However, according to Albany, Perlon
is different from that product because of the following:
• it has a high molecular weight;
• it has a heat stabiliser required in the monofilaments used in
the manufacture of paper-making felts;
• it has a unique spin finish (proprietary to Bayer), which
results in less damage and less dust, and produces a quality
• it is a consistently high-quality product.
Because Bayer and Albany have developed into research and
development partners, the end product is better suited to Albany’s
Finally, Albany submitted that Bayer ships the subject yarn
directly to the plant in Cowansville, with the result that Albany
has a continuous supply of Perlon.
The Department of Foreign Affairs and International Trade
(DFAIT) informed the Tribunal that Canada maintains a quota
restraint on other man-made filaments imported from Taiwan.
Accordingly, this coverage includes monofilaments of classification
No. 5404.10.90.31. The bilateral agreement between the Government
of Canada and the Taiwan Textile Federation has been in place since
DFAIT also indicated that it will consider requests for ex-quota
entry on textile inputs where a recommendation has been made by the
Tribunal to remove customs duties on the basis of non-availability.
Ex-quota treatment will be granted only in cases where it can be
demonstrated that there is an extra charge for using products under
quota or where goods are not otherwise available in Canada.
Revenue Canada has indicated that there would be no additional
costs, over and above those already incurred by it, to administer
the tariff relief requested on the subject yarn.
The Minister’s terms of reference direct the Tribunal to assess
the economic impact on domestic textile and downstream producers of
reducing or removing a tariff and, in so doing, to take into
account all relevant factors, including the substitutability of an
imported yarn for a domestic yarn and the ability of domestic
producers to serve the Canadian downstream industries.
Consequently, the Tribunal’s decision to recommend tariff relief is
based on the extent to which it considers that such tariff relief
would provide net economic gains for Canada.
Albany claimed that there is no domestic production of yarns
identical to or substitutable for the subject yarn. This claim was
not contested by any domestic yarn producer. Therefore, other than
the corresponding duty revenues forgone by the government, the
Tribunal does not believe that there will be any direct costs
associated with the removal of the customs duty on the importation
of the subject yarn.
On the basis of the information available to the Tribunal,
granting tariff relief would result in yearly benefits to Albany in
excess of $100,000. In addition, tariff relief will allow Albany to
remain competitive with offshore competitors and increase
production and employment levels in Canada.
In summary, the Tribunal finds that the granting of duty relief
would provide net economic gains to Canada.
With respect to Albany’s request for retroactive tariff relief,
the Tribunal has stated, in previous cases, that it will not
consider recommending such relief other than in exceptional
circumstances. Albany has provided no evidence to justify such a
request. The Tribunal, therefore, is not persuaded that the current
circumstances are so exceptional as to warrant a recommendation for
The Tribunal hereby recommends to the Minister that tariff
relief be granted, for an indeterminate period of time, on
importations from all countries, of monofilaments solely of nylon,
of subheading No. 5404.10, for use in the manufacture of
paper-making machine felts.
Arthur B. Trudeau
Arthur B. Trudeau
1. On March 20 and
July 24, 1996, on November 26, 1997, and on August 19, 1999, the
Minister of Finance revised the terms of reference.
2. R.S.C. 1985, c. 47
3. According to
Albany, Perlon, made by Bayer AG, in Germany, has special
characteristics, such as a high molecular weight, a heat
stabiliser, a unique finish proprietary to Bayer, and quality and
4. R.S.C. 1985 (3d
Supp.), c. 41.
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Initial publication: December 9, 1999